As filed with the Securities and Exchange Commission on March 25, 1998
Registration No. 333-45415
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE EQUITABLE COMPANIES INCORPORATED DELAWARE 13-3623351
EQ CAPITAL TRUST I DELAWARE 13-7142764
EQ CAPITAL TRUST II DELAWARE 13-7142765
EQ CAPITAL TRUST II DELAWARE 13-7142767
EQ CAPITAL TRUST IV DELAWARE 13-7142768
(Exact name of Registrant as (State or other (I.R.S. employer
specified in its charter) jurisdiction of identification
incorporation or numbers)
organization)
1290 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10104
(212) 554-1234
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
ROBERT E. GARBER
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
THE EQUITABLE COMPANIES INCORPORATED
1290 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10104
(212) 554-1234
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
COPIES TO:
MICHAEL W. BLAIR
DEBEVOISE & PLIMPTON
875 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 909-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after this Registration Statement becomes effective.
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, or 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, check the following box and list the
Securities Act registration statement number of earlier effective registration
statement for the same offering. [ ]
<PAGE>
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. [ ]
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS 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, AS AMENDED OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two forms of Prospectuses to be used in
connection with offerings of the following securities: (1) debt securities (both
senior and subordinated) of The Equitable Companies Incorporated and (2)
preferred securities of EQ Capital Trust I, II, III and IV, severally, junior
subordinated debt securities of The Equitable Companies Incorporated and
Guarantees by The Equitable Companies Incorporated of preferred securities
issued by EQ Capital Trust I, II, III and IV. Each offering of securities made
under this Registration Statement will be made pursuant to one of these
Prospectuses, with the specifications of the securities offered thereby set
forth in an accompanying Prospectus Supplement.
In addition, this Registration Statement contains separate prospectus pages
relating to certain market-making transactions in (1) the debt securities of The
Equitable Companies Incorporated and (2) the preferred securities of EQ Capital
Trust I, II, III and IV, the junior subordinated debt securities of The
Equitable Companies Incorporated and Guarantees by The Equitable Companies
Incorporated of preferred securities issued by EQ Capital Trust I, II, III and
IV.
The complete Prospectus for the offering of the debt securities (both senior and
subordinated) of The Equitable Companies Incorporated follows immediately after
this Explanatory Note, which is then immediately followed by the complete
Prospectus for the offering of the preferred securities of EQ Capital Trust I,
II, III and IV, the junior subordinated debt securities of The Equitable
Companies Incorporated and Guarantees by The Equitable Companies Incorporated or
preferred securities issued by EQ Capital Trust I, II, III and IV. Following
such Prospectuses are certain portions of such Prospectuses relating to
market-making transactions, which include an alternate front and back cover
page, an alternate "Use of Proceeds" section and an alternate "Plan of
Distribution" section. All other sections of the respective Prospectus for the
initial sale of the debt securities of The Equitable Companies Incorporated and
the preferred securities of EQ Capital Trust I, II, III and IV, the junior
subordinated debt securities of The Equitable Companies Incorporated and
Guarantees by The Equitable Companies Incorporated of preferred securities
issued by EQ Capital Trust I, II, III and IV, are to be used in the respective
Prospectus relating to market-making transactions.
<PAGE>
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.
SUBJECT TO COMPLETION DATED MARCH 25, 1998
PROSPECTUS
$1,000,000,000
THE EQUITABLE COMPANIES INCORPORATED
DEBT SECURITIES
The Equitable Companies Incorporated (the "Company") may from time to
time offer senior or subordinated debt securities (the "Senior Debt Securities"
and the "Subordinated Debt Securities" respectively, and collectively, the "Debt
Securities").
The Debt Securities offered pursuant to this Prospectus may be issued
in one or more series or issuances in U.S. dollars or in one or more foreign
currencies or currency units. By separate prospectus, the form of which is
included in the Registration Statement of which this Prospectus forms a part,
four Delaware statutory business trusts (the "Trusts"), which are wholly owned
subsidiaries of the Company, may from time to time severally offer preferred
securities guaranteed by the Company to the extent set forth therein and the
Company may offer from time to time junior subordinated debt securities to a
Trust. The aggregate initial public offering price of the securities to be
offered by this Prospectus and such other prospectus shall not exceed
$1,000,000,000 (or its equivalent in one or more foreign currencies or currency
units).
Specific terms of the particular series of Debt Securities in respect
of which this Prospectus is being delivered (the "Offered Securities") will be
set forth in an accompanying Prospectus Supplement (the "Prospectus
Supplement"), which will describe, without limitation and where applicable, the
following: the ranking as senior or subordinated debt securities, the specific
designation, aggregate principal amount, denominations, maturity, premium, if
any, interest rate (which may be fixed or variable) or method of calculating
interest, if any, place or places where principal, premium, if any, and
interest, if any, will be payable, currency in which principal, premium, if any,
and interest, if any, will be payable, any terms of redemption, any sinking fund
provisions, any listing on a securities exchange, initial public offering or
purchase price, conversion rights, methods of distribution and other specific
terms of the offering.
The Prospectus Supplement will contain information about certain United
States federal income tax considerations relating to the Debt Securities, if
applicable.
The Debt Securities will be unsecured and, because the Company is a
non-operating holding company, will be effectively subordinated to all
liabilities of the Company's subsidiaries, including liabilities under contracts
of insurance and annuities written by the Company's insurance subsidiaries.
Accordingly, holders of the Debt Securities should look only to the assets of
the Company for payments of interest and principal. Unless otherwise specified
in a Prospectus Supplement, the Senior Debt Securities will rank equally with
all other unsecured and unsubordinated indebtedness of the Company. The
Subordinated Debt Securities will be subordinated in right of payment to all
Senior Debt (as defined herein) of the Company to the extent described herein
and in the Prospectus Supplement relating thereto. The Debt Securities may be
issued in registered form or bearer form, or both. If so specified in the
applicable Prospectus Supplement, Debt Securities of a series may be issued in
whole or in part in the form of one or more temporary or permanent global
securities.
The Offered Securities may be offered directly, through agents
designated from time to time, through dealers or through underwriters. Such
agents or underwriters may act alone or with other agents or underwriters. See
"Plan of Distribution." Any such agents, dealers or underwriters will be set
forth in a Prospectus Supplement. If an agent of the Company, or a dealer or
underwriter is involved in the offering of the Offered Securities, the agent's
commission, dealer's purchase price, underwriter's discount and net proceeds to
the Company, as the case may be, will be set forth in, or may be calculated
from, the Prospectus Supplement. Any underwriters, dealers or agents
participating in the offering may be deemed "underwriters" within the meaning of
the Securities Act of 1933, as amended.
This Prospectus may not be used to consummate sales of Offered
Securities unless accompanied by a Prospectus Supplement.
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<PAGE>
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.
The date of this Prospectus is _________, 1998
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<PAGE>
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"). The registration
statement of which this Prospectus forms a part, as well as reports, proxy
statements and other information filed by the Company, may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549; 7 World
Trade Center, 13th Floor, Suite 1300, New York, New York 10048; and Suite 1400,
Northwestern Atrium Center, 14th Floor, 500 West Madison Street, Chicago,
Illinois 60611. Copies of such material can be obtained at prescribed rates from
the Public Reference Section of the Commission at Room 1024, 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549. Such material may also be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov. The Company's common stock, par value $0.01 per share
(the "Common Stock"), is listed on the New York Stock Exchange, Inc. and reports
and other information concerning the Company can also be inspected at the office
of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of the Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Offered Securities. This
Prospectus does not contain all of the information set forth in such
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Reference is made to such
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the Offered Securities. Any
statements contained herein concerning the provisions of any document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission
or incorporated by reference herein are not necessarily complete, and in each
instance reference is made to the copy of such document so filed for a more
complete description of the matter involved. Each such statement is qualified in
its entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December
31, 1997 and 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), each previously
filed by the Company with the Commission, are incorporated by reference in this
Prospectus.
All documents filed by the Company after the date of this Prospectus
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the termination of the offering of the Offered Securities offered hereby, shall
be deemed to be incorporated herein by reference and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
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 statements as modified or superseded shall
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon written or oral request of such person, a
copy of any or all of the documents referred to above which have been or may be
incorporated by reference in this Prospectus (other than certain exhibits to
such documents). Requests for such documents should be directed to The Equitable
Companies Incorporated, 1290 Avenue of the Americas, New York, New York 10104,
Attention: Corporate Secretary (Telephone: (212) 314-3914).
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, OR ANY UNDERWRITER, AGENT
OR DEALER. 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 COMPANY 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. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
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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 its subsidiaries distribute a
variety of insurance, annuity and investment products.
At December 31, 1997, the Company's holdings in its investment
subsidiaries included an approximately 72% interest in Donaldson, Lufkin &
Jenrette, Inc. ("DLJ") and an approximately 58% interest in Alliance Capital
Management L.P. ("Alliance"). The Company's investment subsidiaries provide
investment management and investment banking services to institutional and
individual clients, including the Company's insurance subsidiaries.
AXA is the Company's largest stockholder, beneficially owning at
December 31, 1997 approximately 59% of the outstanding shares of common stock,
par value $.01, of the Company (the "Common Stock"). The Company is a Delaware
corporation with its principal headquarters located at 1290 Avenue of the
Americas, New York, New York 10104 (Telephone: (212) 554-1234).
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement,
proceeds from the sale of the Offered Securities will be used by the Company for
general corporate purposes and initially may be temporarily invested in
short-term securities.
RATIOS OF EARNINGS
TO FIXED CHARGES AND EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges
and earnings to combined fixed charges and preferred stock dividends for the
Company for the periods indicated.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
------------------------
1993 1994 1995 1996 1997
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges (1).. 1.287 1.294 1.239 1.174 1.263
Ratio of earnings to combined fixed
charges and preferred stock
dividends (1)........................ 1.212 1.229 1.222 1.159 1.256
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For purposes of determining the historical ratios of earnings to fixed
charges, and of earnings to combined fixed charges and preferred stock
dividends, earnings consist of earnings from continuing operations before
Federal income taxes, minority interest and cumulative effect of accounting
change adjusted for (i) excess of equity in income of unconsolidated
investees over distributed income and (ii) equity in losses of
unconsolidated investees, plus fixed charges. Fixed charges consist of
interest expense on long and short-term debt, amortization of deferred debt
expenses plus the portion of operating lease rentals, net of income from
subleases, representative of the interest factor. The inclusion of Interest
Credited to Policyholders' Account Balances in the ratios presented above
would not have a material effect on such ratios.
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<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities offered hereby are to be issued in one or
more series under the Senior Indenture, dated as of December 1, 1993, as
supplemented (as so supplemented, the "Senior Indenture"), between the Company
and The Chase Manhattan Bank, formerly known as Chemical Bank, as trustee (the
"Trustee"). The Subordinated Debt Securities offered hereby are to be issued
under the Subordinated Indenture, dated as of October 22, 1994 (the
"Subordinated Indenture" and, together with the Senior Indenture, the
"Indentures"), between the Company and State Street Bank and Trust Company, as
successor to Shawmut Bank Connecticut, National Association, as trustee (the
"Trustee"), copies of which have been incorporated by reference as exhibits to
the Registration Statement of which this Prospectus forms a part.
The statements herein relating to the Debt Securities and the following
summaries of certain provisions of the Indentures do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all the
provisions of the Indentures (as they may be amended or supplemented from time
to time) and the Trust Indenture Act of 1939, as amended (the "TIA"). Whenever
particular sections or defined terms of the Indentures (as they may be amended
or supplemented from time to time) are referred to herein or in a Prospectus
Supplement, such sections or defined terms are incorporated herein or therein by
reference.
GENERAL
The Debt Securities will be unsecured obligations of the Company. The
Senior Debt Securities will be unsecured and will rank on a parity with all
other unsecured and unsubordinated obligations of the Company. The Subordinated
Debt Securities will be subordinate and junior in right of payment to the extent
and in the manner set forth in the Subordinated Indenture to all Senior Debt (as
defined below) of the Company. As of December 31, 1997, the Company had $ 569.0
million aggregate principal amount of Senior Debt outstanding and no
Subordinated Debt Securities were outstanding. As a non-operating holding
company most of the assets of the Company are owned by its subsidiaries.
Accordingly, the Debt Securities will be effectively subordinated to all
existing and future liabilities of the Company's subsidiaries, including
liabilities under contracts of insurance and annuities written by the Company's
insurance subsidiaries, primarily Equitable Life, and holders of Debt Securities
should look only to the assets of the Company for payments of interest and
principal. The Indentures do not limit the aggregate amount of Debt Securities
which may be issued thereunder. Except as otherwise provided in the applicable
Prospectus Supplement, the Indentures, as they apply to any series of Debt
Securities, also do not limit the amount of other secured or unsecured debt
which may be issued or incurred by the Company. See " -- Certain Covenants" and
" -- Subordination of Subordinated Debt" and the Prospectus Supplement relating
to any offering of Subordinated Debt.
The Debt Securities will be issuable in one or more series pursuant to
an indenture supplemental to the Senior Indenture or the Subordinated Indenture,
as the case may be, or a resolution of the Company's Board of Directors or a
committee thereof. (Section 3.1 of each Indenture.)
Reference is made to the applicable Prospectus Supplement which will
accompany this Prospectus for a description of the specific series of Debt
Securities being offered thereby, including: (1) the title of such Debt
Securities; (2) any limit upon the aggregate principal amount of such Debt
Securities; (3) the date or dates on which the principal of and premium, if any,
on such Debt Securities will mature or the method of determining such date or
dates; (4) the rate or rates (which may be fixed or variable) at which such Debt
Securities will bear interest, if any, or the method of calculating such rate or
rates; (5) the date or dates from which interest, if any, will accrue or the
method by which such date or dates will be determined; (6) the date or dates on
which interest, if any, will be payable and the record date or dates therefor;
(7) the place or places where principal of, premium, if any, and interest, if
any, on such Debt Securities will be payable; (8) the period or periods within
which, the price or prices at which, the currency or currencies (including
currency unit or units) in which, and the terms and conditions upon which, such
Debt Securities may be redeemed, in whole or in part, at the option of the
Company; (9) the obligation, if any, of the Company to redeem or purchase such
Debt Securities pursuant to any sinking fund or analogous provisions or upon the
happening of a specified event or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the other terms
and conditions upon which, such Debt Securities shall be redeemed or purchased,
in whole or in part, pursuant to such obligation; (10) the denominations in
which such Debt Securities are authorized to be issued; (11) the currency or
currency unit for which Debt Securities may be purchased or in which Debt
Securities may be denominated and/or the currency or currencies (including
currency unit or units) in which principal of, premium, if any, and interest, if
any, on such Debt Securities will be payable and whether the Company or the
holders of any such Debt Securities may elect to receive payments in respect of
such Debt Securities in a currency or currency unit other than that in which
such Debt Securities are stated to be payable; (12) if the amount of principal
of, or any premium or interest on, any of such Debt Securities may be determined
with reference to an index or pursuant to a formula, the manner in which such
amounts will be determined; (13) if other than the principal amount thereof, the
portion of the principal amount of such Debt Securities which will be payable
upon declaration of the acceleration of the maturity thereof or the method by
which such portion shall be determined; (14) any addition to, or modification or
deletion of, any Event of Default or any covenant of the Company specified in
the Indenture with respect to such Debt Securities; (15) the application, if
any, of such means of defeasance or covenant defeasance as may be specified for
such Debt Securities; (16) whether such Debt Securities are to be issued in
whole or in part in the form of one or more temporary or permanent global
securities and, if so, the identity of the depository for such global security
or securities; (17) in the case of the Subordinated Indenture, the relative
degree to which such Debt Securities of the
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<PAGE>
Series shall be senior to or be subordinated to other series of such Debt
Securities in right of payment, whether such other series of Debt Securities are
outstanding or not; (18) in the case of the Subordinated Indenture, the terms,
if any, upon which such Debt Securities may be converted or exchanged, at the
option of the holders thereof, into or for Common Stock of the Company or other
securities or property; and (19) any other terms not inconsistent with the terms
of the Indentures pertaining to such Debt Securities. (Section 3.1 of each
Indenture.)
Unless otherwise specified in the applicable Prospectus Supplement,
Debt Securities will be issued in fully-registered form without coupons in
denominations of $1,000 or any integral multiples of $1,000. (Section 3.2 of
each Indenture.) Where Debt Securities of any series are issued in bearer form,
the special restrictions and considerations, including special offering
restrictions and special federal income tax considerations, applicable to any
such Debt Securities and to payment on and transfer and exchange of such Debt
Securities will be described in the applicable Prospectus Supplement. Bearer
Debt Securities will be transferable by delivery. (Section 3.5 of each
Indenture.)
Debt Securities may be sold at a substantial discount below their
stated principal amount, bearing no interest or interest at a rate which at the
time of issuance is below market rates. Certain federal income tax consequences
and special considerations applicable to any such Debt Securities will be
described in the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is payable in one
or more foreign currencies or currency units or if any Debt Securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any Debt Securities is
payable in one or more foreign currencies or currency units, the restrictions,
elections, certain federal income tax considerations, specific terms and other
information with respect to such issue of Debt Securities and such foreign
currencies or currency units will be set forth in the applicable Prospectus
Supplement.
If any index is used to determine the amount of payments of principal
of, premium, if any, or interest on any series of Debt Securities, special
federal income tax, accounting and other considerations applicable thereto will
be described in the applicable Prospectus Supplement.
The general provisions of the Indentures do not afford holders of the
Debt Securities protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect holders of the Debt
Securities.
PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Unless otherwise provided in the applicable Prospectus Supplement,
payments in respect of the Debt Securities will be made in the designated
currency at the office or agency of the Company maintained for that purpose as
the Company may designate from time to time, except that, at the option of the
Company, interest payments, if any, on Debt Securities in registered form may be
made (i) by checks mailed to the holders of Debt Securities entitled thereto at
their registered addresses or (ii) by wire transfer to an account maintained by
the person entitled thereto as specified in the Register. (Sections 3.7(a) and
9.2 of each Indenture.) Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Debt Securities in
registered form will be made to the person in whose name such Debt Security is
registered at the close of business on the regular record date for such
interest. (Section 3.7(a) of each Indenture.)
Payment in respect of Debt Securities in bearer form will be made in
the currency and in the manner designated in the Prospectus Supplement, subject
to any applicable laws and regulations, at such paying agencies outside the
United States as the Company may appoint from time to time. The paying agents
outside the United States, if any, initially appointed by the Company for a
series of Debt Securities will be named in the Prospectus Supplement. The
Company may at any time designate additional paying agents or rescind the
designation of any paying agents, except that, if Debt Securities of a series
are issuable as Registered Securities, the Company will be required to maintain
at least one paying agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as Bearer Securities, the Company will be
required to maintain a paying agent in a Place of Payment outside the United
States where Debt Securities of such series and any coupons appertaining thereto
may be presented and surrendered for payment. (Section 9.2 of each Indenture.)
Unless otherwise provided in the applicable Prospectus Supplement, Debt
Securities in registered form will be transferable or exchangeable at the agency
of the Company maintained for such purpose as designated by the Company from
time to time. (Sections 3.5 and 9.2 of each Indenture.) Debt Securities may be
transferred or exchanged without service charge, other than any tax or other
governmental charge imposed in connection therewith. (Section 3.5 of each
Indenture.)
BOOK-ENTRY SYSTEM
If so specified in the accompanying Prospectus Supplement, Debt
Securities of any series may be issued under a book-entry system in the form of
one or more global Debt Securities (each a "Global Security"). Each Global
Security will be deposited with, or on behalf of a depositary, which, unless
otherwise specified in the accompanying Prospectus Supplement, will be The
Depository Trust Company, New York, New York (the "Depositary"). The Global
Securities will be registered in the name of the Depositary or its nominee.
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<PAGE>
The Depositary has advised the Company that the Depositary is a limited
purpose trust company organized under the laws of the State of New York, a
"banking organization" within the meaning of the New York banking law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. The Depositary
was created to hold securities of its participants and to facilitate the
clearance and settlement of securities transactions among its participants
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly.
Upon the issuance of a Global Security in registered form, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of participants. The accounts to be credited will be
designated by the underwriters, dealers or agents. Ownership of beneficial
interests in the Global Security will be limited to participants or persons that
may hold interests through participants. Ownership of beneficial interests by
participants in the Global Security will be shown on, and the transfer of that
ownership interest will be effected only through, records maintained by such
participants. The laws of some jurisdictions may require that certain purchasers
of securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to own, transfer or pledge beneficial interest in a
Global Security.
So long as the Depositary or its nominee is the registered owner of a
Global Security, it will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as set forth below, owners of a beneficial interest
in such Global Security will not be entitled to have the Debt Securities
represented thereby registered in their names, will not receive or be entitled
to receive physical delivery of certificates representing the Debt Securities
represented thereby and will not be considered the owners or holders thereof
under the applicable Indenture. Accordingly, each person owning a beneficial
interest in such Global Security must rely on the procedures of the Depositary
and, if such person is not a participant, on the procedures of the participant
through which such person owns its interest, to exercise any rights of a holder
under the applicable Indenture. The Company understands that under existing
practice, in the event that the Company requests any action of a holder or a
beneficial owner desires to take any action a holder is entitled to take, the
Depositary would act upon the instructions of, or authorize, the participant to
take such action.
Payment of principal of, and interest on, the Debt Securities will be
made to the Depositary or its nominee, as the case may be, as the registered
owner and holder of the Global Security representing such Debt Securities. None
of the Company, the Trustee, any paying agent or registrar for the Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company has been advised by the Depositary that the Depositary will
credit participants' accounts with payments of principal or interest on the
payment date thereof in amounts proportionate to their respective beneficial
interests in the principal amount of the Global Security as shown on the records
of the Depositary. The Company expects that payments by participants to owners
of beneficial interests in the Global Security held through such participants
will be governed by standing instructions and customary practices, as is now the
case with securities held for the accounts of customers registered in "street
name," and will be the responsibility of such participants.
A Global Security may not be transferred except as a whole by the
Depositary to a nominee or successor of the Depositary or by a nominee of the
Depositary to another nominee of the Depositary. A Global Security representing
all but not part of the Debt Securities being offered pursuant to the applicable
Prospectus Supplement is exchangeable for Debt Securities in definitive form of
like tenor and terms if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as depositary for such Global Security or if at
any time the Depositary is no longer eligible to be, or is not in good standing
as, a clearing agency registered under the Exchange Act, and in either case, a
successor depositary is not appointed by the Company within 90 days of receipt
by the Company of such notice or of the Company becoming aware of such
ineligibility, or (ii) the Company in its sole discretion at any time determines
not to have all of the Debt Securities represented by a Global Security and
notifies the Trustee thereof. A Global Security exchangeable pursuant to the
preceding sentence shall be exchangeable for Debt Securities registered in such
names and in such authorized denominations as the Depositary for such Global
Security shall direct.
The Debt Securities of a series may also be issued in whole or in part
in the form of one or more bearer global securities (a "Bearer Global Security")
that will be deposited with a depository, or with a nominee for such depository,
identified in the applicable Prospectus Supplement. Any such Bearer Global
Securities may be issued in temporary or permanent form. (Section 3.4 of each
Indenture.) The specific terms and procedures, including the specific terms of
the depository arrangement, with respect to any portion of a series of Debt
Securities to be represented by one or more Bearer Global Securities will be
described in the applicable Prospectus Supplement.
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CERTAIN DEFINITIONS APPLICABLE TO COVENANTS AND EVENTS OF DEFAULT
"Consolidated Tangible Net Worth" shall mean, at any date, the total
assets appearing on the most recently prepared consolidated balance sheet of the
Company and its consolidated subsidiaries as at the end of a fiscal quarter of
the Company, prepared in accordance with generally accepted accounting
principles, less (a) the total liabilities appearing on such balance sheets and
(b) intangible assets. "Intangible assets" means the value, as shown on or
reflected in such balance sheet, of (i) all trade names, trademarks, licenses,
patents, copyrights and goodwill, (ii) organizational costs and (iii)
unamortized debt discount and expense, less unamortized premium.
"Designated Subsidiary" shall mean each of Equitable Life, DLJ and
Donaldson, Lufkin & Jenrette Securities Corporation, so long as any such entity
remains a subsidiary, any consolidated subsidiary of the Company the assets of
which constitute 10% or more of the Total Assets, and any subsidiary which is a
successor to all or a principal part of the business or properties of such
subsidiaries.
"Total Assets" shall mean, at any date, the total assets (including
assets held in Separate Accounts) appearing on the most recently prepared
consolidated balance sheet of the Company and its consolidated subsidiaries as
at the end of a fiscal quarter of the Company, prepared in accordance with
generally accepted accounting principles.
CERTAIN COVENANTS
Limitation on Liens. The Senior Indenture provides that for the benefit
of the holders of the Senior Debt Securities issued thereunder, the Company will
not, nor will it permit any Designated Subsidiary to, incur, issue, assume or
guarantee any indebtedness for money borrowed (hereinafter called
"Indebtedness") if such Indebtedness is secured by a pledge, mortgage, deed of
trust or other lien on any shares of stock or Indebtedness of any Designated
Subsidiary (such pledges, mortgages, deeds of trust and other liens being
hereinafter called a "Lien"), without effectively providing that any Senior Debt
Securities (together with, if the Company shall so determine, any other
Indebtedness (or any bonds, debentures, notes or other similar evidences of
indebtedness whether or not for borrowed money) of the Company or such
Designated Subsidiary then existing or thereafter created which is not
subordinate to such Senior Debt Securities) shall be secured equally and ratably
with (or prior to) such secured Indebtedness, so long as such secured
Indebtedness shall be so secured unless, after giving effect thereto, the
aggregate principal amount of all such secured Indebtedness which would
otherwise be prohibited would not exceed 15% of Consolidated Tangible Net Worth;
provided, however, that these restrictions shall not apply to and there shall be
excluded from secured Indebtedness in any computation under these restrictions,
Indebtedness secured by: (i) Liens on any shares of stock or Indebtedness
acquired from a corporation merged with or into the Company or a Designated
Subsidiary, (ii) Liens to secure Indebtedness of a Designated Subsidiary to the
Company or another Designated Subsidiary but only as long as such Indebtedness
is owned or held by the Company or a Designated Subsidiary and (iii) any
extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any Lien referred to in the foregoing
clauses (i) and (ii). (Section 9.8 of the Senior Indenture.)
Consolidation, Merger, Sale, Conveyance and Lease. The Indentures
permit the Company to consolidate or merge with or into any other entity or
entities, or to sell, convey or lease all or substantially all of its property
to any other entity; provided, however, (i) that the person (if other than the
Company) formed by such consolidation, or into which the Company is merged or
which acquires or leases substantially all of the property of the Company, is a
corporation or other entity organized under the laws of the United States, any
state thereof or the District of Columbia and expressly assumes the Company's
obligations on the Debt Securities and under the Indenture and (ii) immediately
after giving effect to such transaction, no Event of Default exists. (Section
7.1 of each Indenture.)
EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
Except as otherwise provided in a Prospectus Supplement relating to the
Debt Securities of a particular series, Events of Default with respect to Debt
Securities of any series are defined in each Indenture as (a) default in the
payment of any interest on any Debt Security of that series, and the continuance
of such default for a period of 30 days; (b) default in the payment of any
installment of the principal of or any premium on any Debt Security of that
series when due, whether at maturity, upon redemption, by declaration or
otherwise; (c) default in any material respect by the Company in the performance
of any other covenant or agreement contained in the Indenture under which the
Debt Securities of that series were issued and the continuance of such default
for a period of 90 days after written notice as provided in such Indenture; (d)
certain events of bankruptcy, insolvency and reorganization of the Company; and
(e) in the case of the Senior Indenture only, default by the Company or any
Designated Subsidiary in the payment of outstanding indebtedness for borrowed
money when due (and after expiration of any applicable grace periods) or default
by the Company or any Designated Subsidiary under any indenture or other
instrument under which any indebtedness for borrowed money has been issued or by
which it is governed as a result of which such indebtedness shall have been
accelerated, and such failure to pay is not cured or such acceleration is not
rescinded, cured or annulled within 30 days after written notice thereof to the
Company by the Trustee for such series or to the Company and the Trustee of such
series by the holders of 25% of the aggregate principal amount of the Debt
Securities of such series then outstanding, provided that such Event of Default
will be cured or waived if the payment of outstanding debt is made or the
default that resulted in the acceleration of such other indebtedness is cured or
waived, as the case may be, and provided further, that the foregoing shall not
apply to (x) any indebtedness for borrowed money under which the obligee has
recourse to the general assets of the Company or a Designated Subsidiary so long
as the aggregate principal amount of such recourse debt (other than with respect
to ancillary matters such as environmental indemnities, misapplication of funds,
costs of enforcement and the like) so due is $25,000,000 or
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less, (y) any secured indebtedness for borrowed money under which the obligee
has recourse (exclusive of recourse for ancillary matters such as environmental
indemnities, misapplication of funds, costs of enforcement and the like) only to
the collateral pledged for repayment so long as the fair market value of such
collateral does not exceed 2% of Total Assets at the time of the default and (z)
any indebtedness for borrowed money under which the obligee has recourse only to
assets held in Separate Accounts. (Section 5.1 of each Indenture.) Events of
Default with respect to a specified series of Debt Securities may be added to
the Indenture and, if so added, will be described in the applicable Prospectus
Supplement. (Sections 3.1 and 5.1 of each Indenture.)
Each Indenture provides that the Trustee will, within 90 days after the
occurrence of a Default with respect to the Debt Securities of any series, give
to the holders of the Debt Securities of that series notice of all Defaults
known to it unless such Default shall have been cured or waived; provided that
except in the case of a Default in payment of principal (and premium, if any) or
interest on the Debt Securities of that series, the Trustee shall be protected
in withholding such notice if it in good faith determines that withholding such
notice is in the interests of all holders of the Debt Securities of that series.
(Section 6.6 of each Indenture.) "Default" means any event which is, or after
notice or passage of time, or both, would be, an Event of Default. (Section 1.1
of each Indenture.)
Each Indenture provides that, if an Event of Default specified therein
occurs with respect to the Debt Securities of any series and is continuing, the
Trustee for such series or the holders of 25% in aggregate principal amount of
all outstanding Debt Securities of that series (calculated as provided for in
each Indenture) may declare the principal of (or, if the Debt Securities of that
series are Original Issue Discount Securities or Indexed Securities, such
portion of the principal amount specified in the Prospectus Supplement) and
accrued interest, if any, on all the Debt Securities of that series to be due
and payable (provided, with respect to any Debt Securities issued under the
Subordinated Indenture, that the payment of principal and interest on such Debt
Securities shall remain subordinated to the extent provided in Article 12 of the
Subordinated Indenture). (Section 5.2 of each Indenture.)
Each Indenture provides that the holders of a majority in aggregate
principal amount of any series of Debt Securities by written notice to the
Trustee for such series may waive, on behalf of the holders of all Debt
Securities of such series, any past Default or Event of Default with respect to
that series and its consequences except a Default or Event of Default in the
payment of the principal of, premium, if any, or interest, if any, on any Debt
Security or with respect to a covenant or provision that cannot be amended or
modified without consent of the holders of each series of Debt Securities
adversely affected. (Section 5.7 of each Indenture.)
Each Indenture provides that, if a default or an Event of Default shall
have occurred and be continuing, the holders of not less than a majority in
aggregate principal amount of the Debt Securities of each series affected (with
each such series voting as a class) may, subject to certain limited conditions,
direct the time, method and place of conducting any proceeding or any remedy
available to the Trustee for such series, or exercising any trust or power
conferred on such Trustee. (Section 5.8 of each Indenture.)
Each Indenture includes a covenant that the Company will file annually
with the Trustee a certificate as to the presence or absence of certain defaults
under the terms of such Indenture. (Section 9.6 of each Indenture.)
MODIFICATION OF THE INDENTURES
Each Indenture contains provisions permitting the Company and the
Trustee to enter into one or more supplemental indentures without the consent of
the holders of any of the Debt Securities in order (i) to evidence the
succession of another corporation to the Company and the assumption of the
covenants of the Company by a successor to the Company; (ii) to add to the
covenants of the Company or surrender any right or power of the Company; (iii)
to add additional Events of Default with respect to any series of Debt
Securities; (iv) to add to or change any provisions to such extent as necessary
to permit and facilitate the issuance of Debt Securities in bearer form or to
facilitate the issuance of Debt Securities in global form; (v) to change or
eliminate any provision affecting only Debt Securities not yet issued; (vi) to
secure the Debt Securities; (vii) to establish the form or terms of Debt
Securities; (viii) to evidence and provide for successor Trustees or to add or
change any provisions to such extent as necessary to permit and facilitate the
appointment of a separate Trustee or Trustees for specific series of Debt
Securities; (ix) to permit payment in respect of Debt Securities in bearer form
in the United States; (x) to correct any defect or supplement any inconsistent
provisions or to make any other provisions with respect to matters or questions
arising under such Indenture, provided that any such action does not adversely
affect the interests of any holder of Debt Securities of any series then
Outstanding; (xi) to cure any ambiguity or correct any mistake; (xii) in the
case of the Subordinated Indenture, to modify the subordination provisions
thereof in a manner not adverse to the holders of Subordinated Debentures of any
series then Outstanding or (xiii) in the case of the Subordinated Indenture, to
make provision with respect to any conversion or exchange rights of holders not
adverse to the holders of any Subordinated Debt Securities of any series,
including providing for the conversion or exchange of Subordinated Debt
Securities into Equity Securities or property of the Company. (Section 8.1 of
each Indenture.)
Each Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the outstanding Debt Securities affected by such supplemental
indenture (with the Debt Securities of each series voting as a class), to
execute supplemental indentures adding any provisions to or changing or
eliminating any of the provisions of such Indenture or any supplemental
indenture or modifying the rights of the holders of Debt Securities of such
series, except that, without the consent of the holder of each Debt Security so
affected, no such supplemental indenture may: (i) change the time for payment of
principal or premium, if any, or interest on any Debt Security; (ii) reduce the
principal on any Debt Security, or change the manner in which the amount of any
of the foregoing is determined; (iii) reduce the interest rate, or the amount of
premium, if any, payable
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upon the redemption of any Debt Security; (iv) reduce the amount of principal
payable upon acceleration of the maturity of any Original Issue Discount or
Indexed Security; (v) change the currency or currency unit in which any Debt
Security or any premium or interest thereon is payable; (vi) impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
Security; (vii) reduce the percentage in principal amount of the outstanding
Debt Securities affected thereby, the consent of whose holders is required for
modification or amendment of such Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults; (viii)
change the obligation of the Company to maintain an office or agency in the
places and for the purposes specified in such Indenture; (ix) in the case of the
Subordinated Indenture, modify the subordination provisions thereof in a manner
adverse to the holders of Subordinated Debentures of any series then
Outstanding; (x) modify the provisions relating to waiver of certain defaults or
any of the foregoing provisions or (xi) in the case of the Subordinated
Indenture, make any change adversely affecting the rights of the holders to
convert or exchange the Debt Securities. (Section 8.2 of each Indenture.)
SUBORDINATION OF SUBORDINATED DEBT
In the Subordinated Indenture, the Company has covenanted and agreed
that any Subordinated Debt Securities issued thereunder are subordinate and
junior in right of payment to all Senior Debt to the extent provided in the
Subordinated Indenture. Upon any payment or distribution of assets to creditors
upon any liquidation, dissolution, winding up, reorganization, assignment for
the benefit of creditors, marshaling of assets or any bankruptcy, insolvency,
debt restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, the holders of Senior Debt will first be
entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt before the holders of Subordinated Debt
Securities will be entitled to receive or retain any payment in respect of the
principal of (and premium, if any) or interest, if any, on the Subordinated Debt
Securities. (Section 12.2 of the Subordinated Indenture.)
In the event of the acceleration of the maturity of any Subordinated
Debt Securities, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon (including any amounts due upon acceleration) before the holders of
Subordinated Debt Securities will be entitled to receive any payment upon the
principal of (or premium, if any) or interest, if any, on the Subordinated Debt
Securities. (Section 12.3 of the Subordinated Indenture.)
No payments on account of principal (or premium, if any) or interest,
if any, in respect of the Subordinated Debt Securities may be made if there
shall have occurred and be continuing a default in any payment with respect to
Senior Debt, or an event of default with respect to any Senior Debt resulting in
the acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default. For purposes of the subordination
provisions, the payment, issuance and delivery of cash, property or securities
(other than stock and certain subordinated securities of the Company) upon
conversion of any Subordinated Debt Security will be deemed to constitute
payment on account of the principal of such Subordinated Debt Security.
(Sections 12.4 and 12.16 of the Subordinated Indenture.)
"Debt" means with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Subordinated Debt Securities or to other
Debt which is pari passu with, or subordinated to, the Subordinated Debt
Securities; provided, however, that Senior Debt shall not be deemed to include
(a) any Debt of the Company which when incurred and without respect to any
election under Section 1111(b) of the Bankruptcy code, was without recourse to
the Company, (b) any Debt of the Company to any of its subsidiaries, (c) Debt to
any employee of the Company, (d) any liability for taxes and (e) indebtedness or
monetary obligations to trade creditors created or assumed by the Company or any
of its subsidiaries in the ordinary course of business in connection with the
obtaining of materials or services.
The Company is a non-operating holding company and most of the assets
of the Company are owned by its subsidiaries. Accordingly, the Subordinated Debt
Securities will be effectively subordinated to all existing and future
liabilities of the Company's subsidiaries, including liabilities under contracts
of insurance and annuities written by the Company's insurance subsidiaries,
primarily Equitable Life, and holders of Subordinated Debt Securities should
look only to the assets of the Company for payments of interest and principal.
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The Subordinated Indenture places no limitation on the amount of
additional Senior Debt that may be incurred by the Company. The Company expects
from time to time to incur additional indebtedness constituting Senior Debt. As
of December 31, 1997, the Company had $ 569.0 million aggregate principal amount
of Senior Debt outstanding and no Subordinated Debt Securities were outstanding.
The Subordinated Indenture provides that the foregoing subordination
provisions, insofar as they relate to any particular issue of Subordinated Debt
Securities, may be changed prior to such issuance. Any such change would be
described in the Prospectus Supplement relating to such Subordinated Debt
Securities. (Section 3.1 of the Subordinated Indenture.)
DEFEASANCE AND COVENANT DEFEASANCE
Defeasance and Discharge. Each Indenture provides that the Company will
be discharged from any and all obligations in respect of the Debt Securities of
or within any series (except for certain obligations to register the transfer or
exchange of Debt Securities, to replace stolen, lost or mutilated Debt
Securities, to maintain paying agencies and to hold monies for payment in trust
and for obligations in connection with a conversion of Debt Securities) upon the
deposit with the Trustee, in trust, of money and/or U.S. Government Obligations
(as defined in each Indenture) which through the payment of interest and
principal in respect thereof in accordance with their terms will provide money
in an amount sufficient to pay the principal of and each installment of interest
on such Debt Securities on the stated maturity of such payments in accordance
with the terms of such Indenture and such Debt Securities. (Sections 3.1 and 4.4
of each Indenture.) Such a trust may only be established if, among other things,
the Company delivers to the relevant Trustee an Officers' Certificate and
opinion of counsel (who may be counsel to the Company) stating that either (i)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (ii) since the date of the Indenture there has been
a change in the applicable Federal income tax law, to the effect that holders of
such Debt Securities will not recognize income, gain or loss for Federal income
tax purposes as a result of such defeasance and will be subject to Federal
income tax on the same amount and in the same manner and at the same times, as
would have been the case if such defeasance had not occurred. (Section 4.6 of
each Indenture.)
Defeasance of Certain Covenants and Certain Events of Default. Each
Indenture provides that the Company may omit to comply with certain covenants
applicable to the Debt Securities of or within any series and any such
non-compliance shall not constitute an event of default described in clause (c)
under the caption "Events of Default, Notice and Certain Rights on Default"
above, upon the deposit with the relevant Trustee, in trust, of money and/or
U.S. Government Obligations which through the payment of interest and principal
in respect thereof in accordance with their terms will provide money in an
amount sufficient to pay the principal of and each installment of interest on
such Debt Securities on the stated maturity of such payments in accordance with
the terms of such Indenture and such Debt Securities. The obligations of the
Company under such Indenture and such Debt Securities, other than with respect
to the covenants referred to above, and the Events of Default, other than the
Events of Default referred to above, shall remain in full force and effect.
(Sections 3.1 and 4.5 of each Indenture.) Such a trust may only be established
if, among other things, the Company has delivered to the relevant Trustee an
opinion of counsel (who may be counsel to the Company) to the effect that
holders of such Debt Securities will not recognize income, gain, or loss for
Federal income tax purposes as a result of such defeasance of certain covenants
and Events of Default and will be subject to Federal income tax on the same
amounts and in the same manner and at the same times, as would have been the
case if such deposit and defeasance had not occurred. (Section 4.6 of each
Indenture.)
In addition, with respect to the Subordinated Indenture, it is a
condition to defeasance and covenant defeasance that no default in the payment
of principal of (or premium, if any) or interest on any Senior Debt shall have
occurred or be continuing or no other Event of Default with respect to the
Senior Debt shall have occurred or be continuing and shall have resulted in such
Senior Debt becoming or being declared due and payable prior to the date it
would have become due and payable. (Section 4.6 of the Subordinated Indenture.)
In the event the Company exercises its option to omit compliance with
certain covenants of the Indenture with respect to such Debt Securities as
described in the preceding paragraphs and such Debt Securities are declared due
and payable because of the occurrence of any Event of Default other than an
Event of Default described in clause (c) under the caption "Events of Default,
Notice and Certain Rights on Default" above, the amount of money and U.S.
Government Obligations on deposit with the relevant Trustee will be sufficient
to pay amounts due on such Debt Securities at the time of their stated maturity
but may not be sufficient to pay amounts due on such Debt Securities at the time
of the acceleration resulting from such Event of Default. However, the Company
would remain liable for any such deficiency.
NOTICES
Notices to holders of registered Debt Securities will be given by mail
to the addresses of such holders as they may appear in the Register. (Section
1.6 of each Indenture.)
TITLE
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name a Debt Security is registered as the absolute
owner thereof (whether or not such Debt Security may be overdue) for the purpose
of receiving payment and for all other purposes. (Section 3.8 of each
Indenture.)
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GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York. (Section 1.11
of each Indenture.)
THE TRUSTEES
The Chase Manhattan Bank, formerly known as Chemical Bank, is the
Trustee under the Senior Indenture. State Street Bank and Trust Company, as
successor to Shawmut Bank Connecticut, National Association is the Trustee under
the Subordinated Indenture. The Company and its subsidiaries currently conduct
banking and other commercial relationships with The Chase Manhattan Bank and
State Street Bank and Trust Company in the ordinary course of business. The
Indentures contain certain limitations on the right of each Trustee, should it
become a creditor of the Company, to obtain payment of claims in certain cases,
or to realize for its own account on certain property received in respect of any
such claim as security or otherwise. Each Trustee will be permitted to engage in
certain other transactions; however, if it acquires any conflicting interest and
there is a default under the Debt Securities, it must eliminate such conflict or
resign.
PLAN OF DISTRIBUTION
The Company may sell any of the Debt Securities offered hereby in any
one or more of the following ways from time to time: (i) through agents, (ii) to
or through underwriters, (iii) through dealers and (iv) directly by the Company
to purchasers.
The distribution of the Debt Securities 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.
Offers to purchase Debt Securities may be solicited by agents
designated by the Company from time to time. Any such agent involved in the
offer or sale of the Offered Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company to such
agent will be set forth, in the applicable Prospectus Supplement. Unless
otherwise indicated in such Prospectus Supplement, any such agent will be acting
on a reasonable best efforts basis for the period of its appointment. Any such
agent may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the Debt Securities so offered and sold.
If Debt Securities are sold by means of an underwritten offering, the
Company will execute an underwriting agreement with an underwriter or
underwriters at the time an agreement for such sale is reached, and the names of
the specific managing underwriter or underwriters, as well as any other
underwriters, and the terms of the transaction, including commissions, discounts
and any other compensation of the underwriters and dealers, if any, will be set
forth in the Prospectus Supplement which will be used by the underwriters to
make resales of the Debt Securities in respect of which this Prospectus is
delivered to the public. If underwriters are utilized in the sale of the Debt
Securities in respect of which this Prospectus is delivered, the Debt Securities
will be acquired by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at fixed public offering prices or at varying prices determined by
the underwriter at the time of sale. Debt Securities may be offered to the
public either through underwriting syndicates represented by managing
underwriters or directly by the managing underwriters. If any underwriter or
underwriters are utilized in the sale of the Debt Securities, unless otherwise
indicated in the Prospectus Supplement, the underwriting agreement will provide
that the obligations of the underwriters are subject to certain conditions
precedent and that the underwriters with respect to a sale of Debt Securities
will be obligated to purchase all such Debt Securities if any are purchased.
If a dealer is utilized in the sale of the Debt Securities in respect
of which this Prospectus is delivered, the Company will sell such Debt
Securities to the dealer as principal. The dealer may then resell such Debt
Securities to the public at varying prices to be determined by such dealer at
the time of resale. Any such dealer may be deemed to be an underwriter, as such
term is defined in the Securities Act, of the Debt Securities so offered and
sold. The name of the dealer and the terms of the transaction will be set forth
in the Prospectus Supplement relating thereto.
Offers to purchase Debt Securities may be solicited directly by the
Company and the sale thereof may be made by the Company 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 terms
of any such sales will be described in the Prospectus Supplement relating
thereto.
Agents, underwriters and dealers may be entitled under relevant
agreements with the Company to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such agents, underwriters and dealers may be
required to make in respect thereof.
Each series of Debt Securities will be a new issue with no established
trading market. The Company may elect to list any series of Debt Securities on
an exchange, but the Company shall not be obligated to do so. It is possible
that one or more underwriters may make a market in a series of Debt Securities,
but will not be obligated to do so and may discontinue any market making at any
time without notice. Therefore, no assurance can be given as to the liquidity of
the trading market for the Debt Securities.
Agents, underwriters and dealers may be customers of, engage in
transactions with, or perform services for, the Company and its subsidiaries in
the ordinary course of business.
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<PAGE>
This Prospectus, together with the Prospectus Supplement, may also be
used by Donaldson, Lufkin and Jenrette Securities Corporation ("DLJSC") in
connection with offers and sales of Offered Securities related to market-making
transactions by and through DLJSC, at negotiated prices related to prevailing
market prices at the time of sale or otherwise. DLJSC may act as principal or
agent in such transactions.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Offered Securities will be passed upon for the Company by
Debevoise & Plimpton, New York, New York. Debevoise & Plimpton from time to time
provides legal services to the Company and its subsidiaries.
EXPERTS
The consolidated financial statements and consolidated financial
statement schedules of the Company as of December 31, 1997 and 1996 and for each
of the years in the three-year period ended December 31, 1997 have been
incorporated by reference herein and in the Registration Statement in reliance
upon the report of Price Waterhouse LLP, independent certified public
accountants, incorporated herein by reference, and upon the authority of said
firm as experts in accounting and auditing.
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<PAGE>
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.
SUBJECT TO COMPLETION, DATED MARCH 25, 1998
PROSPECTUS
THE EQUITABLE COMPANIES INCORPORATED
JUNIOR SUBORDINATED DEBT SECURITIES
EQ CAPITAL TRUST I
EQ CAPITAL TRUST II
EQ CAPITAL TRUST III
EQ CAPITAL TRUST IV
PREFERRED SECURITIES GUARANTEED TO THE EXTENT SET FORTH
HEREIN BY THE EQUITABLE COMPANIES INCORPORATED
The Equitable Companies Incorporated (the "Company") may from time to
time offer unsecured junior subordinated debt securities (the "Junior
Subordinated Debt Securities") consisting of debentures, notes or other
evidences of indebtedness in one or more series and in amounts, at prices and on
terms to be determined at or prior to the time of any such offering.
EQ Capital Trust I, EQ Capital Trust II, EQ Capital Trust III and EQ
Capital Trust IV (the "EQ Trusts"), each a statutory business trust formed under
the laws of the State of Delaware, may offer and sell, from time to time,
preferred securities representing undivided beneficial interests in the assets
of the respective EQ Trust ("Preferred Securities"). The payment of periodic
cash distributions ("distributions") with respect to Preferred Securities of
each of the EQ Trusts out of moneys held by the Property Trustee (as defined
herein) of each of the EQ Trusts, and payments on liquidation of each EQ Trust
and on redemption of Preferred Securities of such EQ Trust, will be guaranteed
by the Company as and to the extent described herein (each such guarantee a
"Preferred Securities Guarantee"). See "Description of the Preferred Securities
Guarantees." The Company's obligation under each Preferred Securities Guarantee
is an unsecured obligation of the Company and will rank (i) pari passu with the
Junior Subordinated Debt Securities, and (ii) senior to all capital stock now or
hereafter issued by the Company and to any guarantee now or hereafter entered
into by the Company in respect of any of its capital stock. Junior Subordinated
Debt Securities may be issued and sold from time to time in one or more series
by the Company to an EQ Trust, or a trustee of such trust, in connection with
the investment of the proceeds from the offering of Preferred Securities and
Common Securities (as defined herein) of such EQ Trust. The Junior Subordinated
Debt Securities purchased by an EQ Trust may be subsequently distributed pro
rata to holders of Preferred Securities and Common Securities in connection with
the dissolution of such EQ Trust, upon the occurrence of certain events as may
be described in an accompanying Prospectus Supplement.
Specific terms of the particular series of Junior Subordinated Debt
Securities of any series or the Preferred Securities of any EQ Trust in respect
of which this Prospectus is being delivered (the "Offered Securities") will be
set forth in an accompanying Prospectus Supplement (the "Prospectus Supplement")
with respect to such Offered Securities, which will describe, without limitation
and where applicable, the following: (i) in the case of Junior Subordinated Debt
Securities, the specific designation, aggregate principal amount, denominations,
maturity, premium, if any, interest rate (which may be fixed or variable) or
method of calculating interest, if any, place or places where principal,
premium, if any, and interest, if any, will be payable, any terms of redemption,
any sinking fund provisions, the right of the Company, if any, to defer payment
of interest on the Junior Subordinated Debt Securities and the maximum length of
such deferral period, and any listing on a securities exchange, methods of
distribution and other specific terms of the offering; and (ii) in the case of
Preferred Securities, the specific designation, number of securities,
liquidation amount per security, initial public offering or purchase price, and
any listing on a securities exchange, distribution rate (or method of
calculation thereof), dates on which distributions shall be payable and dates
from which distributions shall accrue, voting rights (if any), any redemption or
sinking fund provisions, any other rights, preferences, privileges, limitations
or restrictions relating to the Preferred Securities and the terms upon which
the proceeds of the sale of the Preferred Securities shall be used to purchase a
specific series of Junior Subordinated Debt Securities of the Company.
The Offered Securities may be offered in amounts, at prices and on
terms to be determined at the time of offering. Any Prospectus Supplement
relating to any series of Offered Securities will contain information concerning
certain United States Federal income tax considerations applicable to the
Offered Securities. By separate prospectus, the form of which is included in the
Registration Statement
-1-
<PAGE>
of which this Prospectus is a part, the Company may offer from time to time debt
securities. The aggregate initial public offering price of the securities to be
offered by this Prospectus and such other prospectus shall not exceed
$1,000,000,000.
The Junior Subordinated Debt Securities will be unsecured and, because
the Company is a non-operating holding company, will be effectively subordinated
to all liabilities of the Company's subsidiaries, including liabilities under
contracts of insurance and annuities written by the Company's insurance
subsidiaries. Accordingly, holders of the Junior Subordinated Debt Securities
should look only to the assets of the Company for payments of interest and
principal. The Junior Subordinated Debt Securities will be subordinated in right
of payment to all Senior Debt (as defined herein) of the Company to the extent
described herein and in the Prospectus Supplement relating thereto. If so
specified in the applicable Prospectus Supplement, Junior Subordinated Debt
Securities of a series may be issued in whole or in part in the form of one or
more temporary or permanent global securities.
The Offered Securities may be offered directly through agents
designated from time to time, through dealers or through underwriters. Such
agents or underwriters may act alone or with other agents or underwriters. See
"Plan of Distribution." Any such agents, dealers or underwriters will be set
forth in a Prospectus Supplement. If an agent of the Company and/or any EQ
Trust, or a dealer or underwriter is involved in the offering of the Offered
Securities, the agent's commission, dealer's purchase price, underwriter's
discount and net proceeds to the Company or to the EQ Trust, as the case may be,
will be set forth in, or may be calculated from, the Prospectus Supplement. Any
underwriters, dealers or agents participating in the offering may be deemed
"underwriters" within the meaning of the Securities Act of 1933.
This Prospectus may not be used to consummate sales of Offered
Securities unless accompanied by a Prospectus Supplement.
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.
The date of this Prospectus is_____________, 1998.
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<PAGE>
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"). The registration
statement of which this Prospectus forms a part, as well as reports, proxy
statements and other information filed by the Company, may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, 7 World
Trade Center, 13th Floor, Suite 1300, New York, New York 10048; and Suite 1400,
Northwestern Atrium Center, 14th Floor, 500 West Madison Street, Chicago,
Illinois 60611. Copies of such material can be obtained at prescribed rates from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549. Such material may also be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov. The Company's common stock, par value $0.01 per share (the
"Common Stock") is listed on the New York Stock Exchange, Inc. and reports and
other information concerning the Company can also be inspected at the office of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of the Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed with the Commission under the Securities Act of 1933 (the
"Securities Act") with respect to the Offered Securities. This Prospectus does
not contain all of the information set forth in such Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. Reference is made to such Registration Statement and to the
exhibits relating thereto for further information with respect to the Company,
the EQ Trusts and the Offered Securities. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission or incorporated by
reference herein are not necessarily complete, and in each instance reference is
made to the copy of such document so filed for a more complete description of
the matter involved. Each such statement is qualified in its entirety by such
reference.
No separate financial statements of any of the EQ Trusts have been
included or incorporated by reference herein. The Company and the EQ Trusts do
not consider that such financial statements would be material to holders of the
Preferred Securities because (i) all of the voting securities of each EQ Trust
will be owned, directly or indirectly, by the Company, a reporting company under
the Exchange Act, (ii) each of the EQ Trusts is a newly formed special purpose
entity, has no operating history, has no independent operations and is not
engaged in, and does not propose to engage in, any activity other than issuing
Trust Securities (as defined herein) representing undivided beneficial interests
in the assets of such EQ Trust and investing the proceeds thereof in Junior
Subordinated Debt Securities issued by the Company and (iii) the Company's
obligations described herein and in any accompanying Prospectus Supplement under
the Declaration (as defined herein) of an EQ Trust, the Preferred Securities
Guarantee with respect to the Preferred Securities issued by such EQ Trust, the
Junior Subordinated Debt Securities purchased by such EQ Trust and the related
Indenture, taken together, constitute a full and unconditional guarantee of
payments due on the Preferred Securities of such EQ Trust. See "The EQ Trusts,"
"Description of the Preferred Securities," "Description of the Preferred
Securities Guarantees" and "Description of the Junior Subordinated Debt
Securities." The EQ Trusts are statutory business trusts formed under the laws
of the State of Delaware. The Company, as of the date of this Prospectus,
beneficially owns all of the beneficial interests in each EQ Trust.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December
31, 1997, previously filed by the Company with the Commission, is incorporated
by reference in this Prospectus.
All documents filed by the Company after the date of this Prospectus
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the termination of the offering of the Offered Securities offered hereby, shall
be deemed to be incorporated herein by reference and to be a part hereof from
the date of such documents. Any statement contained in a document 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 statements as modified or superseded shall be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon written or oral request of such person, a
copy of any or all of the documents referred to above which have been or may be
incorporated by reference in this Prospectus (other than certain exhibits to
such documents). Requests for such documents should be directed to The Equitable
Companies Incorporated, 1290 Avenue of the Americas, New York, New York 10104,
Attention: Corporate Secretary (Telephone: (212) 314-3914).
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<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, IN CONNECTION WITH ANY OFFERING
CONTEMPLATED HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, OR THE EQ
TRUSTS, OR ANY UNDERWRITER, AGENT OR DEALER. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF.
NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT SHALL CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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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 its subsidiaries distribute a
variety of insurance, annuity and investment products.
At December 31, 1997, the Company's holdings in its investment
subsidiaries included an approximately 72% interest in Donaldson, Lufkin &
Jenrette, Inc. ("DLJ") and an approximately 58% interest in Alliance Capital
Management L.P. ("Alliance"). The Company's investment subsidiaries provide
investment management and investment banking services to institutional and
individual clients, including the Company's insurance subsidiaries.
AXA is the Company's largest stockholder, beneficially owning at
December 31, 1997 approximately 59% of the outstanding shares of common stock,
par value $.01, of the Company (the "Common Stock"). The Company is a Delaware
corporation with its principal headquarters located at 1290 Avenue of the
Americas, New York, New York 10104 (Telephone: (212) 554-1234).
USE OF PROCEEDS
Each EQ Trust will use all proceeds received from the sale of its Trust
Securities to purchase Junior Subordinated Debt Securities from the Company.
Unless otherwise set forth in the applicable Prospectus Supplement,
proceeds from the sale of Junior Subordinated Debt Securities will be used by
the Company for general corporate purposes and initially may be temporarily
invested in short-term securities.
RATIOS OF EARNINGS
TO FIXED CHARGES AND EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges
and earnings to combined fixed charges and preferred stock dividends for the
Company for the periods indicated.
<TABLE>
<CAPTION>
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YEARS ENDED DECEMBER 31,
------------------------
1993 1994 1995 1996 1997
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges (1).. 1.287 1.294 1.239 1.174 1.263
Ratio of earnings to combined fixed charges and
preferred stock dividends (1)........ 1.212 1.229 1.222 1.159 1.256
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</TABLE>
(1) For purposes of determining the historical ratios of earnings to fixed
charges and of earnings to combined fixed charges and preferred stock
dividends, earnings consist of earnings from continuing operations before
Federal income taxes, minority interest and cumulative effect of accounting
change adjusted for (i) excess of equity in income of unconsolidated
investees over distributed income and (ii) equity in losses of
unconsolidated investees, plus fixed charges. Fixed charges consist of
interest expense on long- and short-term debt, amortization of deferred
debt expenses plus the portion of operating lease rentals, net of income
from subleases, representative of the interest factor. The inclusion of
Interest Credited to Policyholders' Account Balances in the ratios
presented above would not have a material effect on such ratios.
THE EQ TRUSTS
Each of EQ Capital Trust I, EQ Capital Trust II, EQ Capital Trust III
and EQ Capital Trust IV is a statutory business trust formed on January 16, 1998
under the Delaware Business Trust Act (the "Business Trust Act") pursuant to a
separate declaration of trust among the Trustees (as defined herein) of such EQ
Trust and the Company and the filing of a certificate of trust with the
Secretary of State of the State of Delaware. Such declaration will be amended
and restated in its entirety (as so amended and restated, the "Declaration")
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus forms a part, as of the date the Preferred Securities of
such EQ Trust are initially issued. Each Declaration will be qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
This description summarizes the material terms of the Declarations and
is qualified in its entirety by reference to the form of Declaration, which has
been filed as an exhibit to the Registration Statement of which this Prospectus
is a part, and the Trust Indenture Act.
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<PAGE>
TRUST SECURITIES
Upon issuance of any Preferred Securities by an EQ Trust, the holders
thereof will own all of the issued and outstanding Preferred Securities of such
EQ Trust. The Company will acquire securities representing common undivided
beneficial interests in the assets of each EQ Trust (the "Common Securities"
and, together with the Preferred Securities, the "Trust Securities") in an
amount equal to at least 3% of the total capital of such EQ Trust and will own,
directly or indirectly, all of the issued and outstanding Common Securities of
each EQ Trust. The Preferred Securities and the Common Securities will rank pari
passu with each other and will have equivalent terms; provided that (i) if a
Declaration Event of Default (as defined herein) under the Declaration of an EQ
Trust occurs and is continuing, the holders of Preferred Securities of such EQ
Trust will have a priority over holders of the Common Securities of such EQ
Trust with respect to payments in respect of distributions and payments upon
liquidation, redemption and maturity and (ii) holders of Common Securities have
the exclusive right (subject to the terms of the Declaration) to appoint, remove
or replace the Trustees and to increase or decrease the number of Trustees. Each
EQ Trust exists for the purpose of (a) issuing its Preferred Securities, (b)
issuing its Common Securities to the Company, (c) investing the gross proceeds
from the sale of the Trust Securities in Junior Subordinated Debt Securities of
the Company and (d) engaging in only such other activities as are necessary,
convenient or incidental thereto. The rights of the holders of the Preferred
Securities, including economic rights, rights to information and voting rights,
are set forth in the applicable Declaration, the Business Trust Act and the
Trust Indenture Act.
POWERS AND DUTIES OF TRUSTEES
The number of trustees (the "Trustees") of each EQ Trust shall
initially be five. Three of such Trustees (the "Regular Trustees") are
individuals who are employees or officers of the Company or its subsidiaries.
The fourth such trustee will be The Bank of New York, which is unaffiliated with
the Company and which will serve as the property trustee (the "Property
Trustee") and act as the indenture trustee for purposes of the Trust Indenture
Act. The fifth such trustee is an affiliate of The Bank of New York that has its
principal place of business in the State of Delaware (the "Delaware Trustee").
Pursuant to each Declaration, legal title to the Junior Subordinated Debt
Securities purchased by an EQ Trust will be held by the Property Trustee for the
benefit of the holders of the Trust Securities of such EQ Trust, and the
Property Trustee will have the power to exercise all rights, powers and
privileges under the Indenture (as defined under "Description of the Junior
Subordinated Debt Securities") with respect to the Junior Subordinated Debt
Securities. In addition, the Property Trustee will maintain exclusive control of
a segregated non-interest bearing bank account (the "Property Account") to hold
all payments in respect of the Junior Subordinated Debt Securities purchased by
an EQ Trust for the benefit of the holders of Trust Securities of such EQ Trust.
The Property Trustee will promptly make distributions to the holders of the
Trust Securities out of funds from the Property Account. The Preferred
Securities Guarantees are separately qualified under the Trust Indenture Act and
will be held by The Bank of New York, acting in its capacity as indenture
trustee with respect thereto, for the benefit of the holders of the applicable
Preferred Securities. As used in this Prospectus and any accompanying Prospectus
Supplement, the term "Property Trustee" with respect to an EQ Trust refers to
The Bank of New York acting either in its capacity as a Trustee under the
relevant Declaration and the holder of legal title to the Junior Subordinated
Debt Securities purchased by that Trust or in its capacity as indenture trustee
under, and the holder of, the applicable Preferred Securities Guarantee, as the
context may require. The Company, as the direct or indirect owner of all of the
Common Securities of each EQ Trust, will have the exclusive right (subject to
the terms of the related Declaration) to appoint, remove or replace Trustees and
to increase or decrease the number of Trustees, provided that the number of
Trustees shall be at least five and the majority of Trustees shall be Regular
Trustees. The term of an EQ Trust will be set forth in the Prospectus
Supplement, but may terminate earlier as provided in such Declaration.
The duties and obligations of the Trustees of an EQ Trust shall be
governed by the Declaration of such EQ Trust. Under its Declaration, each EQ
Trust shall not, and the Trustees shall cause such EQ Trust not to, engage in
any activity other than in connection with the purposes of such EQ Trust or
other than as required or authorized by the related Declaration. In particular,
each EQ Trust shall not and the Trustees shall not (a) invest any proceeds
received by such EQ Trust from holding the Junior Subordinated Debt Securities
purchased by such EQ Trust but shall promptly distribute from the Property
Account all such proceeds to holders of Trust Securities pursuant to the terms
of the related Declaration and of the Trust Securities; (b) acquire any assets
other than as expressly provided in the related Declaration; (c) possess Trust
property for other than a Trust purpose; (d) make any loans, other than loans
represented by the Junior Subordinated Debt Securities; (e) possess any power or
otherwise act in such a way as to vary the assets of such EQ Trust or the terms
of its Trust Securities in any way whatsoever; (f) issue any securities or other
evidences of beneficial ownership of, or beneficial interests in, such EQ Trust
other than its Trust Securities; (g) incur any indebtedness for borrowed money
or (h)(i) direct the time, method and place of exercising any trust or power
conferred upon the Indenture Trustee (as defined under "Description of the
Junior Subordinated Debt Securities") with respect to the Junior Subordinated
Debt Securities deposited in that EQ Trust as trust assets or upon the Property
Trustee of that EQ Trust with respect to its Preferred Securities, (ii) waive
any past default that is waivable under the Indenture or the Declaration, (iii)
exercise any right to rescind or annul any declaration that the principal of all
of the Junior Subordinated Debt Securities deposited in that EQ Trust as trust
assets shall be due and payable or (iv) consent to any amendment, modification
or termination of the Indenture or such Junior Subordinated Debt Securities or
the Declaration, in each case where such consent shall be required, unless in
the case of this clause (h) the Property Trustee shall have received a written
opinion of nationally recognized independent tax counsel recognized as expert in
such matters to the effect that such action will not cause such EQ Trust to fail
to be classified as a grantor trust for United States Federal income tax
purposes.
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<PAGE>
BOOKS AND RECORDS
The books and records of each EQ Trust will be maintained at the
principal office of such EQ Trust and will be open for inspection by a holder of
Preferred Securities of such EQ Trust or his representative for any purpose
reasonably related to his interest in such EQ Trust during normal business
hours. Each holder of Preferred Securities will be furnished annually with
unaudited financial statements of the applicable EQ Trust as soon as available
after the end of such EQ Trust's fiscal year.
VOTING
Except as provided under the Business Trust Act, the Declaration and
the Trust Indenture Act, holders of Preferred Securities will have no voting
rights.
THE PROPERTY TRUSTEE
The Property Trustee, for the benefit of the holders of the Trust
Securities of an EQ Trust, is authorized under each Declaration to exercise all
rights under the Indenture with respect to the Junior Subordinated Debt
Securities deposited in such EQ Trust as trust assets, including its rights as
the holder of such Junior Subordinated Debt Securities to enforce the Company's
obligations under such Junior Subordinated Debt Securities upon the occurrence
of an Event of Default under the Indenture (as such terms are defined under
"Description of the Junior Subordinated Debt Securities," and such an Event of
Default, an "Indenture Event of Default"). The Property Trustee shall also be
authorized to enforce the rights of holders of Preferred Securities of an EQ
Trust under the related Preferred Securities Guarantee. If any EQ Trust's
failure to make distributions on the Preferred Securities of an EQ Trust is a
consequence of the Company's exercise of any right under the terms of the Junior
Subordinated Debt Securities deposited in such EQ Trust as trust assets to
extend the interest payment period for such Junior Subordinated Debt Securities,
the Property Trustee will have no right to enforce the payment of distributions
on such Preferred Securities until a Declaration Event of Default shall have
occurred. Holders of at least a majority in liquidation amount of the Preferred
Securities held by an EQ Trust will have the right to direct the Property
Trustee for that EQ Trust with respect to certain matters under the Declaration
for that EQ Trust and the related Preferred Securities Guarantee. If the
Property Trustee fails to enforce its rights under the Indenture or fails to
enforce the Preferred Securities Guarantee, to the extent permitted by
applicable law, any holder of Preferred Securities may institute a legal
proceeding against the Company to enforce such rights or the Preferred
Securities Guarantee, as the case may be. In addition, the holders of at least
25% in aggregate liquidation preference of the outstanding Preferred Securities
would have the right to directly institute proceedings for enforcement of
payment to such holders of principal of, or premium, if any, or interest on the
Junior Subordinated Debentures having a principal amount equal to the aggregate
liquidation preference of the Preferred Securities of such holders.
DISTRIBUTIONS
Pursuant to each Declaration, distributions on the Preferred Securities
of an EQ Trust must be paid on the dates payable to the extent that the Property
Trustee for that EQ Trust has cash on hand in the applicable Property Account to
permit such payment. The funds available for distribution to the holders of the
Preferred Securities of an EQ Trust will be limited to payments received by the
Property Trustee in respect of the Junior Subordinated Debt Securities that are
deposited in the EQ Trust as trust assets. If the Company does not make interest
payments on the Junior Subordinated Debt Securities deposited in an EQ Trust as
trust assets, the Property Trustee will not make distributions on the Preferred
Securities of such EQ Trust. Under the Declaration, if and to the extent the
Company does make interest payments on the Junior Subordinated Debt Securities
deposited in an EQ Trust as trust assets, the Property Trustee is obligated to
make distributions on the Trust Securities of such EQ Trust on a Pro Rata Basis
(as defined below). The payment of distributions on the Preferred Securities of
an EQ Trust is guaranteed by the Company on a subordinated basis as and to the
extent set forth under "Description of the Preferred Securities Guarantee." A
Preferred Securities Guarantee is a full and unconditional guarantee from the
time of issuance of the applicable Preferred Securities, but the Preferred
Securities Guarantee covers distributions and other payments on the applicable
Preferred Securities only if and to the extent that the Company has made a
payment to the Property Trustee of interest or principal on the Junior
Subordinated Debt Securities deposited in the EQ Trust as trust assets. As used
in this Prospectus, the term "Pro Rata Basis" shall mean pro rata to each holder
of Trust Securities of an EQ Trust according to the aggregate liquidation amount
of the Trust Securities of such EQ Trust held by the relevant holder in relation
to the aggregate liquidation amount of all Trust Securities of such EQ Trust
outstanding unless, in relation to a payment, a Declaration Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each holder of the
Preferred Securities of such EQ Trust pro rata according to the aggregate
liquidation amount of the Preferred Securities held by the relevant holder in
relation to the aggregate liquidation amount of all the Preferred Securities of
such EQ Trust outstanding, and only after satisfaction of all amounts owed to
the holders of such Preferred Securities, to each holder of Common Securities of
such EQ Trust pro rata according to the aggregate liquidation amount of such
Common Securities held by the relevant holder in relation to the aggregate
liquidation amount of all Common Securities of such EQ Trust outstanding.
DECLARATION EVENTS OF DEFAULT
If an Indenture Event of Default occurs and is continuing with respect
to Junior Subordinated Debt Securities deposited in an EQ Trust as trust assets,
an Event of Default under the Declaration (a "Declaration Event of Default") of
such EQ Trust will occur and be continuing with respect to any outstanding Trust
Securities of such EQ Trust. In such event, each Declaration provides that the
holders of
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Common Securities of such EQ Trust will be deemed to have waived any
such Declaration Event of Default with respect to the Common Securities until
all Declaration Events of Default with respect to the Preferred Securities of
such EQ Trust have been cured or waived. Until all such Declaration Events of
Default with respect to the Preferred Securities of such EQ Trust have been so
cured or waived, the Property Trustee will be deemed to be acting solely on
behalf of the holders of the Preferred Securities of such EQ Trust and only the
holders of such Preferred Securities will have the right to direct the Property
Trustee with respect to certain matters under such Declaration and consequently
under the Indenture. In the event that any Declaration Event of Default with
respect to the Preferred Securities of such EQ Trust is waived by the holders of
the Preferred Securities of such EQ Trust as provided in the Declaration, the
holders of Common Securities pursuant to such Declaration have agreed that such
waiver also constitutes a waiver of such Declaration Event of Default with
respect to the Common Securities for all purposes under the Declaration without
any further act, vote or consent of the holders of the Common Securities.
RECORD HOLDERS
Each Declaration provides that the Trustees of such EQ Trust may treat
the person in whose name a certificate representing its Preferred Securities is
registered on the books and records of such EQ Trust as the sole holder thereof
and of the Preferred Securities represented thereby for purposes of receiving
distributions and for all other purposes and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such certificate or in
the Preferred Securities represented thereby on the part of any person, whether
or not such EQ Trust shall have actual or other notice thereof. Preferred
Securities will be issued in fully registered form. Unless otherwise specified
in a Prospectus Supplement, Preferred Securities will be represented by a global
certificate registered on the books and records of such EQ Trust in the name of
a depositary (the "Depositary") named in an accompanying Prospectus Supplement
or its nominee. Under each Declaration:
(i) such EQ Trust and the Trustees thereof shall be entitled to deal with
the Depositary (or any successor depositary) for all purposes, including
the payment of distributions and receiving approvals, votes or consents
under the related Declaration, and except as set forth in the related
Declaration with respect to the Property Trustee, shall have no obligation
to persons owning a beneficial interest in Preferred Securities ("Preferred
Security Beneficial Owners") registered in the name of and held by the
Depositary or its nominee; and
(ii) the rights of Preferred Security Beneficial Owners shall be exercised
only through the Depositary (or any successor depositary) and shall be
limited to those established by law and agreements between such Preferred
Security Beneficial Owners and the Depositary and/or its participants. With
respect to Preferred Securities registered in the name of and held by the
Depositary or its nominee, all notices and other communications required
under each Declaration shall be given to, and all distributions on such
Preferred Securities shall be given or made to, the Depositary (or its
successor).
The specific terms of the depositary arrangement with respect to the
Preferred Securities will be disclosed in the applicable Prospectus Supplement.
DEBTS AND OBLIGATIONS OF AN EQ TRUST
In the Indenture, the Company, in its capacity as issuer of the Junior
Subordinated Debt Securities, has agreed to pay for all debts and obligations
(other than with respect to the Trust Securities) and all costs and expenses of
the applicable EQ Trust, including the fees and expenses of its Trustees and any
taxes and all costs and expenses with respect thereto, to which such EQ Trust
may become subject, except for United States withholding taxes.
The business address of each EQ Trust is c/o The Equitable Companies
Incorporated, 1290 Avenue of the Americas, New York, New York 10104, telephone
number (212) 554-1234.
DESCRIPTION OF THE PREFERRED SECURITIES
Each EQ Trust may issue, from time to time, only one series of
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each EQ Trust authorizes the Regular
Trustees of such EQ Trust to issue on behalf of such EQ Trust one series of
Preferred Securities. Each Declaration will be qualified as an indenture under
the Trust Indenture Act. The Preferred Securities will have such terms,
including distributions, redemption, voting, liquidation rights and such other
preferred, deferred or other special rights or such restrictions as shall be set
forth in the related Declaration or made part of such Declaration by the Trust
Indenture Act. Reference is made to the Prospectus Supplement relating to the
Preferred Securities of an EQ Trust for specific terms, including (i) the
specific designation of such Preferred Securities, (ii) the number of Preferred
Securities issued by such EQ Trust, (iii) the annual distribution rate (or
method of calculation thereof) for Preferred Securities issued by such EQ Trust,
the date or dates upon which such distributions shall be payable and the record
date or dates for the payment of such distributions, (iv) whether distributions
on Preferred Securities issued by such EQ Trust shall be cumulative, and, in the
case of Preferred Securities having such cumulative distribution rights, the
date or dates or method of determining the date or dates from which
distributions on Preferred Securities issued by such EQ Trust shall be
cumulative, (v) the amount or amounts which shall be paid out of the assets of
such EQ Trust to the holders of Preferred Securities of such EQ Trust upon
voluntary or involuntary dissolution, winding-up or termination of such EQ
Trust, (vi) the obligation or right, if any, of such EQ Trust to purchase or
redeem Preferred Securities issued by such EQ Trust and the price or prices at
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which, the period or periods within which and the terms and conditions upon
which Preferred Securities issued by such EQ Trust shall or may be purchased or
redeemed, in whole or in part, pursuant to such obligation or right, (vii) the
voting rights, if any, of Preferred Securities issued by such EQ Trust in
addition to those required by law, including the number of votes per Preferred
Security and any requirement for the approval by the holders of Preferred
Securities, or of Preferred Securities issued by one or more EQ Trusts, or of
both, as a condition to specified actions or amendments to the Declaration of
such EQ Trust, and (viii) any other relevant rights, preferences, privileges,
limitations or restrictions of Preferred Securities issued by such EQ Trust
consistent with the Declaration of such EQ Trust or with applicable law. All
Preferred Securities offered hereby will be guaranteed by the Company as and to
the extent set forth below under "Description of the Preferred Securities
Guarantees." Certain United States Federal income tax considerations applicable
to any offering of Preferred Securities will be described in the Prospectus
Supplement relating thereto.
In connection with the issuance of Preferred Securities, each EQ Trust
will issue one series of Common Securities. The Declaration of each EQ Trust
authorizes the Regular Trustees of such trust to issue on behalf of such EQ
Trust one series of Common Securities having such terms including distributions,
redemption, voting, liquidation rights or such restrictions as shall be set
forth therein. The terms of the Common Securities issued by an EQ Trust will be
substantially identical to the terms of the Preferred Securities issued by such
EQ Trust and the Common Securities will rank pari passu, and payments will be
made thereon on a Pro Rata Basis with the Preferred Securities except that if a
Declaration Event of Default occurs and is continuing, the rights of the holders
of such Common Securities to payment in respect of distributions and payments
upon liquidation, redemption and maturity will be subordinated to the rights of
the holders of such Preferred Securities. Except in certain limited
circumstances, the Common Securities issued by an EQ Trust will also carry the
right to vote and to appoint, remove or replace any of the Trustees of that EQ
Trust. All of the Common Securities of an EQ Trust will be directly or
indirectly owned by the Company.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of information concerning the Preferred
Securities Guarantees that will be executed and delivered by the Company for the
benefit of the holders from time to time of Preferred Securities. Each Preferred
Security Guarantee will be separately qualified under the Trust Indenture Act
and will be held by The Bank of New York, acting in its capacity as indenture
trustee with respect thereto, for the benefit of holders of the Preferred
Securities of the applicable EQ Trust. The terms of each Preferred Securities
Guarantee will be those set forth in such Preferred Securities Guarantee and
those made part of such Guarantee by the Trust Indenture Act. This description
summarizes the material terms of the Preferred Securities Guarantees and is
qualified in its entirety by reference to the form of Preferred Securities
Guarantee, which is filed as an exhibit to the Registration Statement of which
this Prospectus forms a part, and the Trust Indenture Act. Section and Article
references used herein are references to the provisions of the form of Preferred
Securities Guarantee.
GENERAL
Pursuant to each Preferred Securities Guarantee, the Company will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities issued by an EQ Trust, the
Guarantee Payments (as defined herein) (without duplication of amounts
theretofore paid by such EQ Trust), regardless of any defense, right of set-off
or counterclaim that such EQ Trust may have or assert. The following payments or
distributions with respect to Preferred Securities issued by an EQ Trust to the
extent not paid or made by such EQ Trust (the "Guarantee Payments"), will be
subject to the Preferred Securities Guarantee (without duplication): (i) any
accrued and unpaid distributions on such Preferred Securities, and the
redemption price, including all accrued and unpaid distributions to the date of
redemption, with respect to any Preferred Securities called for redemption by
such EQ Trust but if and only to the extent that in each case the Company has
made a payment to the related Property Trustee of interest or principal on the
Junior Subordinated Debt Securities deposited in such EQ Trust as trust assets
and (ii) upon a voluntary or involuntary dissolution, winding-up or termination
of such EQ Trust (other than in connection with the distribution of such Junior
Subordinated Debt Securities to the holders of Preferred Securities or the
redemption of all of the Preferred Securities upon the maturity or redemption of
such Junior Subordinated Debt Securities) the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on such Preferred
Securities to the date of payment, to the extent such EQ Trust has funds
available therefor or (b) the amount of assets of such EQ Trust remaining
available for distribution to holders of such Preferred Securities in
liquidation of such EQ Trust. The Company's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Company to the holders of Preferred Securities or by causing the applicable EQ
Trust to pay such amounts to such holders.
The Preferred Securities Guarantee is a full and unconditional
guarantee from the time of issuance of the applicable Preferred Securities, but
the Preferred Securities Guarantee covers distributions and other payments on
such Preferred Securities only if and to the extent that the Company has made a
payment to the Property Trustee of interest or principal on the Junior
Subordinated Debt Securities deposited in the applicable EQ Trust as trust
assets. If the Company does not make interest or principal payments on the
Junior Subordinated Debt Securities deposited in the applicable EQ Trust as
trust assets, the Property Trustee will not make distributions of the Preferred
Securities of such EQ Trust and the EQ Trust will not have funds available
therefor.
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The Company's obligations under the Declaration for each Trust, the
Preferred Securities Guarantee issued with respect to Preferred Securities
issued by that Trust, the Junior Subordinated Debt Securities purchased by that
Trust and the related Indenture (as defined below) in the aggregate will provide
a full and unconditional guarantee on a subordinated basis by the Company of
payments due on the Preferred Securities issued by that Trust.
CERTAIN COVENANTS OF THE COMPANY
Unless otherwise provided in the applicable Prospectus Supplement, in
each Preferred Securities Guarantee, the Company will covenant and agree that,
so long as any Preferred Securities issued by the applicable EQ Trust remain
outstanding, the Company will not declare or pay any dividends on, or redeem,
purchase, acquire or make any distribution, liquidation or guarantee payment
with respect to its capital stock, if at any time, (i) the Company shall have
failed to make any payment of interest, principal or premium on the related
Junior Subordinated Debt Securities when due (after giving effect to any grace
period for payment thereof as provided in Section 5.1 of the Indenture), (ii)
the Company shall have given notice of its election to defer payments of
interest on such Junior Subordinated Debt Securities held by such EQ Trust as
trust assets by extending the interest payment period as provided in the terms
of the Junior Subordinated Debt Securities and such period, or any extension
thereof, is continuing, or (iii) the Company shall be in default with respect to
its Guarantee Payments under the related Preferred Securities Guarantee;
provided, that the Company may (a) make redemptions, purchases, retirements,
acquisitions or distributions in shares of capital stock of the Company or
redemptions, purchases or acquisitions of shares of Common Stock of the Company
for purposes of any employee benefit plan or program of the Company or any
subsidiary and (b) pay accrued dividends (and cash in lieu of fractional shares)
upon the conversion of any preferred stock of the Company as may be outstanding
from time to time, in accordance with the terms of such stock. The term "capital
stock" shall include the Company's Common Stock and any issue of preferred stock
from time to time outstanding but shall not include any indebtedness of any
kind, whether or not convertible or exchangeable for shares of Common Stock or
preferred stock. In addition, so long as any Preferred Securities remain
outstanding, the Company has agreed (i) to remain the sole direct or indirect
owner of all of the outstanding Common Securities issued by the applicable EQ
Trust and shall not cause or permit the Common Securities to be transferred
except to the extent permitted by the related Declaration; provided that any
permitted successor of the Company under the Indenture may succeed to the
Company's ownership of the Common Securities issued by the applicable EQ Trust
and (ii) to use reasonable efforts to cause such EQ Trust to continue to be
treated as a grantor trust for United States Federal income tax purposes except
in connection with a distribution of Junior Subordinated Debt Securities.
(Section 6.1 of the Indenture.)
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not adversely affect the
rights of holders of Preferred Securities (in which case no consent will be
required), each Preferred Securities Guarantee may be amended only with the
prior approval of the holders of not less than 66 2/3% in liquidation amount of
the outstanding Preferred Securities issued by the applicable EQ Trust. (Section
9.2 of the Indenture.) The manner of obtaining any such approval of holders of
such Preferred Securities will be set forth in an accompanying Prospectus
Supplement. All guarantees and agreements contained in a Preferred Securities
Guarantee shall bind the successors, assignees, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the Preferred Securities of the applicable EQ Trust then outstanding. Except in
connection with a consolidation, merger or sale involving the Company that is
permitted under the Indenture, the Company may not assign its obligations under
any Preferred Securities Guarantee. (Section 9.1 of the Indenture.)
TERMINATION OF THE PREFERRED SECURITIES GUARANTEES
Each Preferred Securities Guarantee will terminate and be of no further
force and effect as to the Preferred Securities issued by the applicable EQ
Trust (a) upon full payment of the redemption price of all Preferred Securities
of such EQ Trust, (b) upon distribution of the Junior Subordinated Debt
Securities to the holders of the Preferred Securities of such EQ Trust in
exchange for all of the Preferred Securities issued by such EQ Trust, or (c)
upon full payment of the amounts payable upon liquidation of such EQ Trust.
Notwithstanding the foregoing, each Preferred Securities Guarantee will continue
to be effective or will be reinstated, as the case may be, if at any time any
holder of Preferred Securities issued by the applicable EQ Trust must restore
payment of any sums paid under such Preferred Securities or such Guarantee.
(Section 7.1 of the Indenture.)
STATUS OF THE PREFERRED SECURITIES GUARANTEES
The Company's obligations under each Preferred Securities Guarantee to
make the Guarantee Payments will constitute an unsecured obligation of the
Company and will rank (i) pari passu with the Junior Subordinated Debt
Securities, and (ii) senior to all capital stock now or hereafter issued by the
Company and to any guarantee now or hereafter entered into by the Company in
respect of any of its capital stock. The Company's obligations under each
Preferred Securities Guarantee will rank pari passu with each other Preferred
Securities Guarantee. (Section 6.2) The Preferred Securities Guarantee will be
unsecured and, because the Company is a non-operating holding company, will be
effectively subordinated to all liabilities of the Company's subsidiaries,
including liabilities under contracts of insurance and annuities written by the
Company's insurance subsidiaries. Accordingly, holders of the Preferred
Securities Guarantees should look only to the assets of the Company for payment
of the Guarantee Payments. Each Declaration provides that each holder of
Preferred Securities issued by the applicable EQ Trust by acceptance thereof
agrees to the subordination provisions and other terms of the related Preferred
Securities Guarantee.
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Each Preferred Securities Guarantee will constitute a guarantee of
payment and not of collection (that is, the guaranteed party may institute a
legal proceeding directly against the guarantor to enforce its rights under the
guarantee without first instituting a legal proceeding against any other person
or entity). Each Preferred Securities Guarantee will be deposited with The Bank
of New York, as indenture trustee, to be held for the benefit of the holders of
the Preferred Securities issued by the applicable EQ Trust. The Bank of New York
shall enforce the Preferred Securities Guarantee on behalf of the holders of the
Preferred Securities issued by the applicable EQ Trust. The holders of not less
than a majority in aggregate liquidation amount of the Preferred Securities
issued by the applicable EQ Trust have the right to direct the time, method and
place of conducting any proceeding for any remedy available in respect of the
related Preferred Securities Guarantee, including the giving of directions to
The Bank of New York. If The Bank of New York fails to enforce such Preferred
Securities Guarantee as above provided, any holder of Preferred Securities
issued by the applicable EQ Trust may institute a legal proceeding directly
against the Company to enforce its rights under such Preferred Securities
Guarantee, without first instituting a legal proceeding against the applicable
EQ Trust or any other person or entity.
MISCELLANEOUS
The Company will be required to provide annually to The Bank of New
York a statement as to the performance by the Company of certain of its
obligations under the Preferred Securities Guarantees and as to any default in
such performance. The Company is required to file annually with The Bank of New
York an officer's certificate as to the Company's compliance with all conditions
under Preferred Securities Guarantees. (Section 2.4 of the Indenture.)
The Bank of New York, prior to the occurrence of a default, undertakes
to perform only such duties as are specifically set forth in the applicable
Preferred Securities Guarantee and, after default with respect to a Preferred
Securities Guarantee, shall exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
such provision, The Bank of New York is under no obligation to exercise any of
the powers vested in it by a Preferred Securities Guarantee at the request of
any holder of Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
(Section 3.2 of the Indenture.)
GOVERNING LAW
The Preferred Securities Guarantees will be governed by, and construed
in accordance with, the laws of the State of New York.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
The Junior Subordinated Debt Securities offered hereby are to be issued
in one or more series under the Junior Subordinated Indenture (the "Indenture")
to be entered into between the Company and The Bank of New York, as trustee (the
"Trustee"), the form of which has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
The statements herein relating to the Junior Subordinated Debt
Securities and the following summaries of certain provisions of the Indenture do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Indenture (as it may be
amended or supplemented from time to time), and the Trust Indenture Act.
Whenever particular sections or defined terms of the Indenture (as it may be
amended or supplemented from time to time) are referred to herein or in a
Prospectus Supplement, such sections or defined terms are incorporated herein or
therein by reference.
GENERAL
The Junior Subordinated Debt Securities will be unsecured obligations
of the Company and will be subordinate and junior in right of payment to the
extent and in the manner set forth in the Indenture to all Senior Debt (as
defined below) of the Company. As of December 31, 1997, the Company had $569.0
million aggregate principal amount of Senior Debt outstanding, and no Junior
Subordinated Debt Securities were outstanding. As a non-operating holding
company most of the assets of the Company are owned by its subsidiaries.
Accordingly, the Junior Subordinated Debt Securities will be effectively
subordinated to all existing and future liabilities of the Company's
subsidiaries, including liabilities under contracts of insurance and annuities
written by the Company's insurance subsidiaries, and holders of Junior
Subordinated Debt Securities should look only to the assets of the Company for
payments of interest and principal. The Indenture does not limit the aggregate
amount of Junior Subordinated Debt Securities which may be issued thereunder.
Except as otherwise provided in the applicable Prospectus Supplement, the
Indenture, as it applies to any series of Junior Subordinated Debt Securities,
also does not limit the amount of other secured or unsecured debt which may be
issued or incurred by the Company. See "--Subordination under the Junior
Subordinated Indenture" and the Prospectus Supplement relating to any offering
of Junior Subordinated Debt Securities.
The Junior Subordinated Debt Securities will be issuable in one or more
series pursuant to an indenture supplemental to the Indenture, or a resolution
of the Company's Board of Directors or a committee thereof. (Section 3.1 of the
Indenture.)
Reference is made to the applicable Prospectus Supplement which will
accompany this Prospectus for a description of the specific series of Junior
Subordinated Debt Securities being offered thereby, including: (1) the title of
such Junior Subordinated Debt Securities; (2) any limit upon the aggregate
principal amount of such Junior Subordinated Debt Securities; (3) the date or
dates on which the principal of and premium, if any, on such Junior Subordinated
Debt Securities will mature or the
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method of determining such date or dates; (4) the rate or rates (which
may be fixed or variable) at which such Junior Subordinated Debt Securities will
bear interest, if any, or the method of calculating such rate or rates; (5) the
date or dates from which interest, if any, will accrue or the method by which
such date or dates will be determined; (6) the date or dates on which interest,
if any, will be payable, the right, if any, of the Company to defer or extend an
interest payment date and the duration of such deferral or extension and the
record date or dates therefor; (7) the place or places where principal of,
premium, if any, and interest, if any, on such Junior Subordinated Debt
Securities will be payable; (8) the period or periods within which, the price or
prices at which, and the terms and conditions upon which, such Junior
Subordinated Debt Securities may be redeemed, in whole or in part, at the option
of the Company; (9) the obligation, if any, of the Company to redeem or purchase
such Junior Subordinated Debt Securities pursuant to any sinking fund or
analogous provisions or upon the happening of a specified event or at the option
of a Holder thereof and the period or periods within which, the price or prices
at which and the other terms and conditions upon which, such Junior Subordinated
Debt Securities shall be redeemed or purchased, in whole or in part, pursuant to
such obligation; (10) the denominations in which such Junior Subordinated Debt
Securities are authorized to be issued; (11) if the amount of principal of, or
any premium or interest on, any of such Junior Subordinated Debt Securities may
be determined with reference to an index or pursuant to a formula, the manner in
which such amounts will be determined; (12) if other than the principal amount
thereof, the portion of the principal amount of such Junior Subordinated Debt
Securities which will be payable upon declaration of the acceleration of the
maturity thereof or the method by which such portion shall be determined; (13)
any addition to, or modification or deletion of, any Event of Default or any
covenant of the Company specified in the Indenture; (14) the application, if
any, of such means of defeasance or covenant defeasance as may be specified for
such Junior Subordinated Debt Securities; (15) whether such Junior Subordinated
Debt Securities are to be issued in whole or in part in the form of one or more
temporary or permanent global securities and, if so, the identity of the
depository for such global security or securities; (16) the relative degree to
which such Junior Subordinated Debt Securities of the series shall be senior to
or be subordinated to other series of such Junior Subordinated Debt Securities
in right of payment, whether such other series of Junior Subordinated Debt
Securities are outstanding or not; and (17) any other terms not inconsistent
with the terms of the Indenture. (Section 3.1 of the Indenture.) Unless
otherwise specified in the applicable Prospectus Supplement, the Junior
Subordinated Debt Securities will not be listed on any securities exchange.
Unless otherwise specified in the applicable Prospectus Supplement,
Junior Subordinated Debt Securities will be issued in fully registered form
without coupons in denominations of $25 or any integral multiples of $25.
(Section 3.2 of the Indenture.)
Junior Subordinated Debt Securities may be sold at a substantial
discount below their stated principal amount, bearing no interest or interest at
a rate which at the time of issuance is below market rates. Certain Federal
income tax consequences and special considerations applicable to any such Junior
Subordinated Debt Securities will be described in the applicable Prospectus
Supplement.
If any index is used to determine the amount of payments of principal
of, premium, if any, or interest on any series of Junior Subordinated Debt
Securities, special Federal income tax, accounting and other considerations
applicable thereto will be described in the applicable Prospectus Supplement.
The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debt Securities protection in the event of a highly
leveraged or other transaction involving the Company that may adversely affect
holders of the Junior Subordinated Debt Securities.
PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Unless otherwise provided in the applicable Prospectus Supplement,
payments in respect of the Junior Subordinated Debt Securities will be made at
the office or agency of the Company maintained for that purpose as the Company
may designate from time to time, except that, at the option of the Company,
interest payments, if any, on Junior Subordinated Debt Securities in registered
form may be made (i) by checks mailed to the holders of Junior Subordinated Debt
Securities entitled thereto at their registered addresses or (ii) by wire
transfer to an account maintained by the person entitled thereto as specified in
the Register. (Sections 3.7(a) and 9.2 of the Indenture.) Unless otherwise
indicated in an applicable Prospectus Supplement, payment of any installment of
interest on Junior Subordinated Debt Securities in registered form will be made
to the person in whose name such Junior Subordinated Debt Security is registered
at the close of business on the regular record date for such interest. (Section
3.7(a) of the Indenture.) Notwithstanding the foregoing, so long as the Property
Trustee is the legal owner and record holder of the Junior Subordinated Debt
Securities, the payment of the principal of and interest (including Compounded
Interest, if any) on the Junior Subordinated Debt Securities held by the
Property Trustee will be made by the Company in immediately available funds on
the payment date therefor to the Property Account (as defined in the Declaration
of Trust) established and maintained by the Property Trustee pursuant to the
Declaration of Trust. Interest payable on any Junior Subordinated Debt Security
that is not punctually paid or duly provided for on any Interest Payment Date
will forthwith cease to be payable to the person in whose name such Junior
Subordinated Debt Security is registered on the relevant Record Date, and such
defaulted interest will instead be payable to the person in whose name such
Junior Subordinated Debt Security is registered on the special record date or
other specified date determined in accordance with the Indenture; provided,
however, that interest shall not be considered payable by the Company on any
Interest Payment Date falling within an Extension Period unless the Company has
elected to make a full or partial payment of interest accrued on the Junior
Subordinated Debt Securities on such Interest Payment Date.
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Unless otherwise provided in the applicable Prospectus Supplement,
Junior Subordinated Debt Securities in registered form will be transferable or
exchangeable at the agency of the Company maintained for such purpose as
designated by the Company from time to time. (Sections 3.5 and 9.2 of the
Indenture.) Junior Subordinated Debt Securities may be transferred or exchanged
without service charge, other than any tax or other governmental charge imposed
in connection therewith.(Section 3.5 of the Indenture.)
CERTAIN COVENANTS OF THE COMPANY APPLICABLE TO THE JUNIOR SUBORDINATED DEBT
SECURITIES
Limitation on Certain Transactions. Unless otherwise provided in the
applicable Prospectus Supplement, if Junior Subordinated Debt Securities are
issued to an EQ Trust in connection with the issuance of Trust Securities by
such EQ Trust, in the Indenture, the Company will covenant and agree that, so
long as any of such Junior Subordinated Debt Securities remain outstanding, the
Company will not declare or pay any dividends on, or redeem, purchase, acquire
or make any distribution, liquidation or guarantee payment with respect to its
capital stock, if at any time, (i) the Company shall have failed to make any
payment of interest, principal or premium on the related Junior Subordinated
Debt Securities when due (after giving effect to any grace period for payment
thereof as provided in Section 5.1 of the Indenture), (ii) the Company shall
have given notice of its election to defer payments of interest on such Junior
Subordinated Debt Securities held by such EQ Trust as trust assets by extending
the interest payment period as provided in the terms of the Junior Subordinated
Debt Securities and such period, or any extension thereof, is continuing, or
(iii) the Company shall be in default with respect to its Guarantee Payments
under the related Preferred Securities Guarantee; provided, that the Company may
(a) make redemptions, purchases, retirements, acquisitions or distributions in
shares of capital stock of the Company or redemptions, purchases or acquisitions
of shares of Common Stock of the Company, for purposes of any employee benefit
plan or program of the Company or any subsidiary and (b) pay accrued dividends
(and cash in lieu of fractional shares) upon the conversion of any preferred
stock of the Company as may be outstanding from time to time, in accordance with
the terms of such stock. The term "capital stock" shall include the Company's
Common Stock and any issue of preferred stock from time to time outstanding but
shall not include any indebtedness of any kind, whether or not convertible or
exchangeable for shares of Common Stock or preferred stock.
Consolidation, Merger or Sale by the Company. The Indenture permits the
Company to consolidate or merge with or into any other entity or entities, or to
sell, convey or lease all or substantially all of its property to any other
entity; provided, however, (i) the person (if other than the Company) formed by
such consolidation, or into which the Company is merged or which acquires or
leases substantially all of the property of the Company is a corporation or
other entity organized under the laws of the United States, any state thereof,
or the District of Columbia and expressly assumes the Company's obligations on
the Junior Subordinated Debt Securities and under the Indenture and (ii)
immediately after giving effect to such transaction, no Event of Default exists.
(Section 7.1 of the Indenture.)
SUBORDINATION UNDER THE JUNIOR SUBORDINATED INDENTURE
In the Indenture, the Company has covenanted and agreed that any Junior
Subordinated Debt Securities issued thereunder are subordinate and junior in
right of payment to all Senior Debt to the extent provided in the Indenture.
Upon any payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, the holders of Senior Debt will first be
entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt before the holders of Junior Subordinated
Debt Securities will be entitled to receive or retain any payment in respect of
the principal of (and premium, if any) or interest, if any, on the Junior
Subordinated Debt Securities. (Section 12.2 of the Indenture.)
In the event of the acceleration of the maturity of any Junior
Subordinated Debt Securities, the holders of all Senior Debt outstanding at the
time of such acceleration will first be entitled to receive payment in full of
all amounts due thereon (including any amounts due upon acceleration) before the
holders of the Junior Subordinated Debt Securities will be entitled to receive
any payment in respect of the principal of (or premium, if any) or interest on
the Junior Subordinated Debt Securities. (Section 12.3 of the Indenture.)
No payments on account of principal (or premium, if any) or interest in
respect of the Junior Subordinated Debt Securities may be made if there shall
have occurred and be continuing a default in any payment with respect to Senior
Debt, or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default. (Section 12.4 of the Indenture.)
"Debt" means with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or for which such Person is responsible or liable,
directly or indirectly, as obligor or otherwise.
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"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Junior Subordinated Debt Securities or to
other Debt which is pari passu with, or subordinated to, the Junior Subordinated
Debt Securities; provided, however, that Senior Debt shall not be deemed to
include (a) any Debt of the Company which when incurred and without respect to
any election under Section 1111(b) of the Bankruptcy code, was without recourse
to the Company, (b) any Debt of the Company to any of its subsidiaries, (c) Debt
to any employee of the Company, (d) any liability for taxes, (e) Debt or other
monetary obligations to trade creditors created or assumed by the Company or any
of its subsidiaries in the ordinary course of business in connection with the
obtaining of materials or services and (f) the Junior Subordinated Debt
Securities. Indebtedness issued under the Company's Subordinated Indenture dated
October 22, 1994 between the Company and State Street Bank and Trust Company
constitutes Senior Debt for the purposes of the Indenture.
The Company is a non-operating holding company and most of the assets
of the Company are owned by its subsidiaries. Accordingly, the Junior
Subordinated Debt Securities will be effectively subordinated to all existing
and future liabilities of the Company's subsidiaries, including liabilities
under contracts of insurance and annuities written by the Company's insurance
subsidiaries, and holders of Junior Subordinated Debt Securities should look
only to the assets of the Company for payments of interest and principal.
The Indenture places no limitation on the amount of additional Senior
Debt that may be incurred by the Company. The Company expects from time to time
to incur additional indebtedness constituting Senior Debt. As of December 31,
1997, the Company had $569.0 million aggregate principal amount of Senior Debt
outstanding and no Junior Subordinated Debt Securities were outstanding.
The Indenture provides that the foregoing subordination provisions,
insofar as they relate to any particular issue of Junior Subordinated Debt
Securities, may be changed prior to such issuance. Any such change would be
described in the Prospectus Supplement relating to such Junior Subordinated Debt
Securities. (Section 3.1 of the Indenture.)
VOTING RIGHTS
The holders of the Junior Subordinated Debt Securities will have no
voting rights.
EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
Except as otherwise provided in a Prospectus Supplement relating to the
Junior Subordinated Debt Securities of a particular series, Events of Default
with respect to Junior Subordinated Debt Securities of any series are defined in
the Indenture as (a) default in the payment of any interest on any Junior
Subordinated Debt Security of that series, and the continuance of such default
for a period of 30 days; (b) default in the payment of any installment of the
principal of or any premium on any Junior Subordinated Debt Security of that
series when due, whether at maturity, upon redemption, by declaration or
otherwise; (c) default in any material respect by the Company in the performance
of any other covenant or agreement contained in the Indenture under which the
Junior Subordinated Debt Securities of that series were issued and the
continuance of such default for a period of 90 days after written notice as
provided in such Indenture; and (d) certain events of bankruptcy, insolvency and
reorganization of the Company. (Section 5.1 of the Indenture.)
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a Default with respect to the Junior Subordinated Debt Securities
of any series, give to the holders of the Junior Subordinated Debt Securities of
that series notice of all Defaults known to it unless such Default shall have
been cured or waived; provided that except in the case of a Default in payment
of principal (and premium, if any) or interest on the Junior Subordinated Debt
Securities of that series, the Trustee shall be protected in withholding such
notice if it in good faith determines that withholding such notice is in the
interests of all holders of the Junior Subordinated Debt Securities of that
series. (Section 6.6 of the Indenture.) "Default" means any event which is, or
after notice or passage of time, or both, would be, an Event of Default.
(Section 1.1 of the Indenture.)
The Indenture provides that, if an Event of Default specified therein
occurs with respect to the Junior Subordinated Debt Securities of any series and
is continuing, the Trustee for such series or the holders of 25% in aggregate
principal amount of all outstanding Junior Subordinated Debt Securities of that
series (calculated as provided for in the Indenture) may declare the principal
of (or, if the Junior Subordinated Debt Securities of that series are Original
Issue Discount Securities or Indexed Securities, such portion of the principal
amount specified in the Prospectus Supplement) and accrued interest, if any, on
all the Junior Subordinated Debt Securities of that series to be due and payable
(provided, with respect to any Junior Subordinated Debt Securities issued under
the Indenture, that the payment of principal and interest on such Junior
Subordinated Debt Securities shall remain subordinated to the extent provided in
Article 12 of the Indenture). (Section 5.2 of the Indenture.)
The Indenture provides that the holders of a majority in aggregate
principal amount of any series of Junior Subordinated Debt Securities by written
notice to the Trustee for such series may waive, on behalf of the holders of all
Junior Subordinated Debt Securities of such series, any past Default or Event of
Default with respect to that series and its consequences except a Default or
Event of Default in the payment of the principal of, premium, if any, or
interest, if any, on any Junior Subordinated Debt Security or with respect to a
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covenant or provision that cannot be amended or modified without consent of the
holders of each series of Junior Subordinated Debt Securities adversely
affected. (Section 5.7 of the Indenture.)
The Indenture provides that, if a default or an Event of Default shall
have occurred and be continuing, the holders of not less than a majority in
aggregate principal amount of the Junior Subordinated Debt Securities of each
series affected (with each such series voting as a class) may, subject to
certain limited conditions, direct the time, method and place of conducting any
proceeding or any remedy available to the Trustee for such series, or exercising
any trust or power conferred on such Trustee. (Section 5.8 of the Indenture.)
The Indenture includes a covenant that the Company will file annually
with the Trustee a certificate as to the presence or absence of certain defaults
under the terms of the Indenture. (Section 9.6 of the Indenture.)
DEFEASANCE AND COVENANT DEFEASANCE
Defeasance and Discharge. The Indenture provides that the Company will
be discharged from any and all obligations in respect of the Junior Subordinated
Debt Securities of or within any series (except for certain obligations to
register the transfer or exchange of Junior Subordinated Debt Securities, to
replace stolen, lost or mutilated Junior Subordinated Debt Securities, to
maintain paying agencies and to hold monies for payment in trust) upon the
deposit with the Trustee, in trust, of money and/or U.S. Government Obligations
(as defined in the Indenture) which through the payment of interest and
principal in respect thereof in accordance with their terms will provide money
in an amount sufficient to pay the principal of and each installment of interest
(including interest accruing during any Extension Period specified at the time
of the establishment of the trust) on the Junior Subordinated Debt Securities on
the stated maturity of such payments in accordance with the terms of the
Indenture and Junior Subordinated Debt Securities. Such a trust may only be
established if, among other things, the Company delivers to the Trustee an
opinion of counsel (who may be counsel to the Company) stating that either (i)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (ii) since the date of the Indenture there has been
a change in the applicable Federal income tax law, to the effect that holders of
the Junior Subordinated Debt Securities will not recognize income, gain or loss
for Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amount and in the same manner and at
the same times, as would have been the case if such defeasance had not occurred.
If the Company establishes such a trust, it shall be permitted at the date of
establishment to extend the interest payment period for only one Extension
Period (including any Extension Period outstanding at the date of such
establishment).
Defeasance of Certain Covenants and Certain Events of Default. The
Indenture provides that the Company may omit to comply with certain covenants
applicable to the Junior Subordinated Debt Securities of or within any series
and any such noncompliance shall not constitute an event of default described in
clause (c) under the caption "Events of Default, Notice and Certain Rights on
Default" above, upon the deposit with the Trustee, in trust, of money and/or
U.S. Government Obligations which through the payment of interest and principal
in respect thereof in accordance with their terms will provide money in an
amount sufficient to pay the principal of and each installment of interest
(including interest accruing during any Extension Period specified at the time
of the establishment of the trust) on the Junior Subordinated Debt Securities on
the stated maturity of such payments in accordance with the terms of the
Indenture and the Junior Subordinated Debt Securities. The obligations of the
Company under the Indenture and the Junior Subordinated Debt Securities, other
than with respect to the covenants referred to above, and the Events of Default,
other than the Events of Default referred to above, shall remain in full force
and effect. Such a trust may only be established if, among other things, the
Company has delivered to the Trustee an opinion of counsel (who may be counsel
to the Company) to the effect that holders of the Junior Subordinated Debt
Securities will not recognize income, gain, or loss for Federal income tax
purposes as a result of such defeasance of certain covenants and Events of
Default and will be subject to Federal income tax on the same amounts and in the
same manner and at the same times, as would have been the case if such deposit
and defeasance had not occurred. If the Company establishes such a trust, it
shall be permitted at the date of establishment to extend the interest payment
period for only one Extension Period (including any Extension Period outstanding
at the date of such establishment).
In addition, with respect to the Indenture, it is a condition to
defeasance and covenant defeasance that no default in the payment of principal
of (or premium, if any) or interest on any Senior Debt shall have occurred or be
continuing or no other Event of Default with respect to the Senior Debt shall
have occurred or be continuing and shall have resulted in such Senior Debt
becoming or being declared due and payable prior to the date it would have
become due and payable. (Section 4.6 of the Indenture.)
In the event the Company exercises its option to omit compliance with
certain covenants of the Indenture with respect to the Junior Subordinated Debt
Securities as described in the preceding paragraphs and such Junior Subordinated
Debt Securities are declared due and payable because of the occurrence of any
Event of Default other than an Event of Default described in clause (c) under
the caption "Events of Default, Notice and Certain Rights on Default" above, the
amount of money and U.S. Government Obligations on deposit with the Trustee will
be sufficient to pay amounts due on the Junior Subordinated Debt Securities at
the time of their stated maturity but may not be sufficient to pay amounts due
on the Junior Subordinated Debt Securities at the time of the acceleration
resulting from such Event of Default.
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MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the
Trustee to enter into one or more supplemental indentures without the consent of
the holders of any of the Junior Subordinated Debt Securities in order (i) to
evidence the succession of another corporation to the Company and the assumption
of the covenants of the Company by a successor to the Company; (ii) to add to
the covenants of the Company or surrender any right or power of the Company;
(iii) to add additional Events of Default with respect to any series of Junior
Subordinated Debt Securities; (iv) to add to or change any provisions to such
extent as necessary to permit and facilitate the issuance of Junior Subordinated
Debt Securities in bearer form or to facilitate the issuance of Junior
Subordinated Debt Securities in global form; (v) to change or eliminate any
provision affecting only Junior Subordinated Debt Securities not yet issued;
(vi) to secure the Junior Subordinated Debt Securities; (vii) to establish the
form or terms of Junior Subordinated Debt Securities; (viii) to evidence and
provide for successor Trustees or to add or change any provisions to such extent
as necessary to permit and facilitate the appointment of a separate Trustee or
Trustees for specific series of Junior Subordinated Debt Securities; (ix) to
correct any defect or supplement any inconsistent provisions or to make any
other provisions with respect to matters or questions arising under such
Indenture, provided that any such action does not adversely affect the interests
of any holder of Junior Subordinated Debt Securities of any series then
Outstanding; (x) to cure any ambiguity or correct any mistake; or (xi) to modify
the subordination provisions thereof in a manner not adverse to the holders of
Junior Subordinated Debt Securities of any series then Outstanding. (Section 8.1
of the Indenture.)
The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the outstanding Junior Subordinated Debt Securities affected by such
supplemental indenture (with the Junior Subordinated Debt Securities of each
series voting as a class), to execute supplemental indentures adding any
provisions to or changing or eliminating any of the provisions of such Indenture
or any supplemental indenture or modifying the rights of the holders of Junior
Subordinated Debt Securities of such series, except that, without the consent of
the holder of each Junior Subordinated Debt Security so affected, no such
supplemental indenture may: (i) change the time for payment of principal or
premium, if any, or interest on any Junior Subordinated Debt Security; (ii)
reduce the principal on any Junior Subordinated Debt Security, or change the
manner in which the amount of any of the foregoing is determined; (iii) reduce
the interest rate, or the amount of premium, if any, payable upon the redemption
of any Junior Subordinated Debt Security; (iv) reduce the amount of principal
payable upon acceleration of the maturity of any Original Issue Discount or
Indexed Security; (v) change the currency or currency unit in which any Junior
Subordinated Debt Security or any premium or interest thereon is payable; (vi)
impair the right to institute suit for the enforcement of any payment on or with
respect to any Junior Subordinated Debt Security; (vii) reduce the percentage in
principal amount of the outstanding Junior Subordinated Debt Securities affected
thereby, the consent of whose holders is required for modification or amendment
of such Indenture or for waiver of compliance with certain provisions of the
Indenture or for waiver of certain defaults; (viii) change the obligation of the
Company to maintain an office or agency in the places and for the purposes
specified in such Indenture; (ix) modify the subordination provisions thereof in
a manner adverse to the holders of Junior Subordinated Debt Securities of any
series then Outstanding; or (x) modify the provisions relating to waiver of
certain defaults or any of the foregoing provisions. (Section 8.2 of the
Indenture.)
BOOK-ENTRY AND SETTLEMENT
If any Junior Subordinated Debt Securities of a series are represented
by one or more global securities (each, a "Global Security"), the applicable
Prospectus Supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such Global Security may exchange such
interests for Junior Subordinated Debt Securities of such series and of like
tenor and principal amount in any authorized form and denomination. Principal of
and any premium and interest on a Global Security will be payable in the manner
described in the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Junior Subordinated Debt Securities to be represented by
a Global Security will be described in the applicable Prospectus Supplement.
NOTICES
Notices to holders of registered Junior Subordinated Debt Securities
will be given by mail to the addresses of such holders as they may appear in the
Register. (Section 1.6 of the Indenture.)
TITLE
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name a Junior Subordinated Debt Security is
registered as the absolute owner thereof (whether or not such Junior
Subordinated Debt Security may be overdue) for the purpose of receiving payment
and for all other purposes. (Section 3.8 of the Indenture.)
GOVERNING LAW
The Indenture and the Junior Subordinated Debt Securities will be
governed by, and construed in accordance with, the laws of the State of New
York. (Section 1.11 of the Indenture.)
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THE TRUSTEE
The Bank of New York is the Trustee under the Indenture. The Company
and its subsidiaries currently conduct banking and other commercial
relationships with The Bank of New York in the ordinary course of business. The
Indenture contains certain limitations on the right of the Trustee, should it
become a creditor of the Company, to obtain payment of claims in certain cases,
or to realize for its own account on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage in
certain other transactions; however, if it acquires any conflicting interest and
there is a default under the Junior Subordinated Debt Securities, it must
eliminate such conflict or resign.
PLAN OF DISTRIBUTION
The Company may sell any of the Junior Subordinated Debt Securities,
and the EQ Trusts may sell the Preferred Securities offered hereby in any one or
more of the following ways from time to time: (i) through agents; (ii) to or
through underwriters; (iii) through dealers; and (iv) directly to purchasers.
The distribution of the Offered Securities 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.
Offers to purchase Offered Securities may be solicited by agents
designated by the Company and the EQ Trusts from time to time. Any such agent
involved in the offer or sale of the Offered Securities in respect of which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the applicable Prospectus
Supplement. Unless otherwise indicated in such Prospectus Supplement, any such
agent will be acting on a reasonable best efforts basis for the period of its
appointment. Any such agent may be deemed to be an underwriter, as that term is
defined in the Securities Act, of the Offered Securities so offered and sold.
If Offered Securities are sold by means of an underwritten offering,
the Company and the issuing EQ Trust will execute an underwriting agreement with
an underwriter or underwriters at the time an agreement for such sale is
reached, and the names of the specific managing underwriter or underwriters, as
well as any other underwriters, and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in the Prospectus Supplement which will be
used by the underwriters to make resales of the Offered Securities in respect of
which this Prospectus is delivered to the public. If underwriters are utilized
in the sale of the Offered Securities in respect of which this Prospectus is
delivered, the Offered Securities will be acquired by the underwriters for their
own account and may be resold from time to time on one or more transactions,
including negotiated transactions, at fixed public offering prices or at varying
prices determined by the underwriters at the time of sale. Offered Securities
may be offered to the public either through underwriting syndicates represented
by managing underwriters or directly by the managing underwriters. If any
underwriter or underwriters are utilized in the sale of the Offered Securities,
unless otherwise indicated in the Prospectus Supplement, the underwriting
agreement will provide that the obligations of the underwriters are subject to
certain conditions precedent and that the underwriters with respect to a sale of
Offered Securities will be obligated to purchase all such Offered Securities if
any are purchased.
If a dealer is utilized in the sale of the Offered Securities in
respect of which the Prospectus is delivered, the Company and the issuing EQ
Trust will sell such Offered Securities to the dealer as principal. The dealer
may then resell such Offered Securities to the public at varying prices to be
determined by such dealer at the time of resale. Any such dealer may be deemed
to be an underwriter, as such term is defined in the Securities Act, of the
Offered Securities so offered and sold. The name of the dealer and the terms of
the transaction will be set forth in the Prospectus Supplement relating thereto.
Offers to purchase Offered Securities may be solicited directly by the
Company and the issuing EQ Trust and the sale thereof may be made by the Company
and the issuing EQ 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 terms of any such sales will be described in
the Prospectus Supplement relating thereto.
Agents, underwriters and dealers may be entitled under relevant
agreements with the Company and the issuing EQ Trust to indemnification by the
Company against certain liabilities, including liabilities under the Securities
Act, or to contribution with respect to payments which such agents, underwriters
and dealers may be required to make in respect thereof.
Each series of Offered Securities will be a new issue with no
established trading market. The Company and the issuing EQ Trust may elect to
list any series of Offered Securities on an exchange, but the Company and the
issuing EQ Trust shall not be obligated to do so. It is possible that one or
more underwriters may make a market in a series of Offered Securities, but will
not be obligated to do so and may discontinue any market making at any time
without notice. Therefore, no assurance can be given as to the liquidity of the
trading market for the Offered Securities.
Agents, underwriters and dealers may be customers of, engage in
transactions with, or perform services for, the Company and its subsidiaries in
the ordinary course of business.
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This Prospectus, together with the Prospectus Supplement, may also be
used by Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC") in
connection with offers and sales of Offered Securities related to market-making
transactions by and through DLJSC, at negotiated prices related to prevailing
market prices at the time of sale or otherwise. DLJSC may act as principal or
agent in such transactions.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement,
certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon for the EQ Trusts and the Company by Richards,
Layton & Finger, P.A., Wilmington, Delaware, special Delaware counsel to the EQ
Trusts and the Company. The validity of the Preferred Securities Guarantees and
the Junior Subordinated Debt Securities and certain other matters will be passed
upon for the EQ Trusts and the Company by Debevoise & Plimpton, New York, New
York. Richards, Layton & Finger, P.A. and Debevoise & Plimpton from time to time
provide legal services to the Company and its subsidiaries.
EXPERTS
The consolidated financial statements and consolidated financial
statement schedules of the Company as of December 31, 1997 and 1996 and for each
of the years in the three-year period ended December 31, 1997 have been
incorporated by reference herein and in the Registration Statement in reliance
upon the report of Price Waterhouse LLP, independent certified public
accountants, incorporated herein by reference, and upon the authority of said
firm as experts in accounting and auditing.
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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.
ALTERNATE TO DEBT SECURITIES PROSPECTUS
SUBJECT TO COMPLETION, DATED MARCH 25, 1998
PROSPECTUS
$1,000,000,000
THE EQUITABLE COMPANIES INCORPORATED
DEBT SECURITIES
The Equitable Companies Incorporated (the "Company") may from time to
time offer senior or subordinated debt securities (the "Senior Debt Securities"
and the "Subordinated Debt Securities" respectively, and collectively, the "Debt
Securities").
The Debt Securities offered pursuant to this Prospectus may be issued
in one or more series or issuances in U.S. dollars or in one or more foreign
currencies or currency units. By separate prospectus, the form of which is
included in the Registration Statement of which this Prospectus forms a part,
four Delaware statutory business trusts (the "Trusts"), which are wholly owned
subsidiaries of the Company, may from time to time severally offer preferred
securities guaranteed by the Company to the extent set forth therein and the
Company may offer from time to time junior subordinated debt securities to a
Trust. The aggregate initial public offering price of the securities to be
offered by this Prospectus and such other prospectus shall not exceed
$1,000,000,000 (or its equivalent in one or more foreign currencies, or currency
units).
Specific terms of the particular Debt Securities in respect of which
this Prospectus is being delivered (the "Offered Securities") will be set forth
in an accompanying Prospectus Supplement (the "Prospectus Supplement"), which
will describe, without limitation and where applicable, the following: the
ranking as senior or subordinated debt securities, the specific designation,
aggregate principal amount, denominations, maturity, premium, if any, interest
rate (which may be fixed or variable) or method of calculating interest, if any,
place or places where principal, premium, if any, and interest, if any, will be
payable, currency in which principal, premium, if any, and interest, if any,
will be payable, any terms of redemption, any sinking fund provisions, any
listing on a securities exchange, initial public offering or purchase price,
conversion rights, methods of distribution and other specific terms of the
offering.
The Debt Securities will be unsecured and, because the Company is a
non-operating holding company, will be effectively subordinated to all
liabilities of the Company's subsidiaries, including liabilities under contracts
of insurance and annuities written by the Company's insurance subsidiaries.
Accordingly, holders of the Debt Securities should look only to the assets of
the Company for payments of interest and principal. Unless otherwise specified
in a Prospectus Supplement, the Senior Debt Securities will rank equally with
all other unsecured and unsubordinated indebtedness of the Company. The
Subordinated Debt Securities will be subordinated in right of payment to all
Senior Debt (as defined herein) of the Company to the extent described herein
and in the Prospectus Supplement relating thereto.
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.
This Prospectus has been prepared for use by Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJSC") in connection with offers and sales of
the Offered Securities which may be made by it from time to time in
market-making transactions at negotiated prices relating to prevailing market
prices at the time of sale. The Company has been advised by DLJSC that it
currently intends to make a market in the Offered Securities; however, it is not
obligated to do so. Any such market-making may be discontinued at any time, and
there is no assurance as to the liquidity of, or trading market for, the Offered
Securities. DLJSC may act as principal or agent in such
<PAGE>
transactions. See "Plan of Distribution." This Prospectus may not be used to
consummate sales of Offered Securities unless accompanied by a Prospectus
Supplement.
The date of this Prospectus is _________, 1998
Alt-1
<PAGE>
ALTERNATE TO DEBT SECURITIES PROSPECTUS
USE OF PROCEEDS
The Equitable Companies Incorporated will not receive any proceeds from
the sale of the Offered Securities in any market-making transaction with which
this Prospectus may be delivered.
Alt-2
<PAGE>
ALTERNATE TO DEBT SECURITIES PROSPECTUS
PLAN OF DISTRIBUTION
This Prospectus has been prepared for use by DLJSC in connection with
offers and sales of the Offered Securities in market-making transactions at
negotiated prices related to prevailing market prices at the time of the sale.
DLJSC may act as principal or agent in such transactions. DLJSC has advised the
Company that it currently intends to make a market in the Offered Securities,
but it is not obligated to do so and may discontinue any such market-making at
any time without notice. Accordingly, no assurance can be given as to the
liquidity of, or the trading market for, the Offered Securities.
Alt-3
<PAGE>
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 IS
DECLARED 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.
ALTERNATE TO JUNIOR SUBORDINATED DEBT SECURITIES, PREFERRED SECURITIES
AND RELATED GUARANTEES PROSPECTUS
SUBJECT TO COMPLETION, DATED MARCH 25, 1998
PROSPECTUS
THE EQUITABLE COMPANIES INCORPORATED
JUNIOR SUBORDINATED DEBT SECURITIES
EQ CAPITAL TRUST I
EQ CAPITAL TRUST II
EQ CAPITAL TRUST III
EQ CAPITAL TRUST IV
PREFERRED SECURITIES GUARANTEED TO THE EXTENT SET FORTH
HEREIN BY THE EQUITABLE COMPANIES INCORPORATED
The Equitable Companies Incorporated (the "Company") may from time to
time offer unsecured junior subordinated debt securities (the "Junior
Subordinated Debt Securities") consisting of debentures, notes or other
evidences of indebtedness in one or more series and in amounts, at prices and on
terms to be determined at or prior to the time of any such offering.
EQ Capital Trust I, EQ Capital Trust II, EQ Capital Trust III and EQ
Capital Trust IV (the "EQ Trusts"), each a statutory business trust formed under
the laws of the State of Delaware, may offer and sell, from time to time,
preferred securities representing undivided beneficial interests in the assets
of the respective EQ Trust ("Preferred Securities"). The payment of periodic
cash distributions ("distributions") with respect to Preferred Securities of
each of the EQ Trusts out of moneys held by the Property Trustee (as defined
herein) of each of the EQ Trusts, and payments on liquidation of each EQ Trust
and on redemption of Preferred Securities of such EQ Trust, will be guaranteed
by the Company as and to the extent described herein (each such guarantee a
"Preferred Securities Guarantee"). See "Description of the Preferred Securities
Guarantees." The Company's obligation under each Preferred Securities Guarantee
is an unsecured obligation of the Company and will rank (i) pari passu with the
Junior Subordinated Debt Securities, and (ii) senior to all capital stock now or
hereafter issued by the Company and to any guarantee now or hereafter entered
into by the Company in respect of any of its capital stock. Junior Subordinated
Debt Securities may be issued and sold from time to time in one or more series
by the Company to an EQ Trust, or a trustee of such trust, in connection with
the investment of the proceeds from the offering of Preferred Securities and
Common Securities (as defined herein) of such EQ Trust. The Junior Subordinated
Debt Securities purchased by an EQ Trust may be subsequently distributed pro
rata to holders of Preferred Securities and Common Securities in connection with
the dissolution of such EQ Trust, upon the occurrence of certain events as may
be described in an accompanying Prospectus Supplement.
Specific terms of the Junior Subordinated Debt Securities of any series
or the Preferred Securities of any EQ Trust in respect of which this Prospectus
is being delivered (the "Offered Securities") will be set forth in an
accompanying Prospectus Supplement (the "Prospectus Supplement") with respect to
such Offered Securities, which will describe, without limitation and where
applicable, the following: (i) in the case of Junior Subordinated Debt
Securities, the specific designation, aggregate principal amount, denominations,
maturity, premium, if any, interest rate (which may be fixed or variable), or
method of calculating interest, if any, place or places where principal,
premium, if any, and interest, if any, will be payable, any terms of redemption,
any sinking fund provisions, initial public offering or purchase price,
conversion rights, the right of the Company, if any, to defer payment of
interest on the Junior Subordinated Debt Securities and the maximum length of
such deferral period, and any listing on a securities exchange, methods of
distribution and other specific terms of the offering; and (ii) in the case of
Preferred Securities, the specific designation, number of securities,
liquidation amount per security, initial public offering price, and any listing
on a securities exchange, distribution rate (or method of calculation thereof),
dates on which distributions shall be payable and dates from which distributions
shall accrue, voting rights (if any), any redemption or sinking fund provisions,
any other rights, preferences, privileges, limitations or restrictions relating
to the Preferred
Alt-4
<PAGE>
Securities and the terms upon which the proceeds of the sale of the Preferred
Securities shall be used to purchase a specific series of Junior Subordinated
Debt Securities of the Company.
The Junior Subordinated Debt Securities will be unsecured and, because
the Company is a non-operating holding company, will be effectively subordinated
to all liabilities of the Company's subsidiaries, including liabilities under
contracts of insurance and annuities written by the Company's insurance
subsidiaries. Accordingly, holders of the Junior Subordinated Debt Securities
should look only to the assets of the Company for payments of interest and
principal. The Junior Subordinated Debt Securities will be subordinated in right
of payment to all Senior Debt (as defined herein) of the Company to the extent
described herein and in the Prospectus Supplement relating thereto.
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.
This Prospectus has been prepared for use by Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJSC") in connection with offers and sales of
the Offered Securities which may be made by it from time to time in
market-making transactions at negotiated prices relating to prevailing market
prices at the time of sale. The Company has been advised by DLJSC that it
currently intends to make a market in the Offered Securities; however, it is not
obligated to do so. Any such market making may be discontinued at any time, and
there is no assurance as to the liquidity of, or trading market for, the Offered
Securities. DLJSC may act as principal or agent in such transactions. See "Plan
of Distribution." This Prospectus may not be used to consummate sales of Offered
Securities unless accompanied by a Prospectus Supplement.
The date of this Prospectus is _________, 1998
Alt-5
<PAGE>
ALTERNATE TO JUNIOR SUBORDINATED DEBT SECURITIES, PREFERRED SECURITIES
AND RELATED GUARANTEES PROSPECTUS
USE OF PROCEEDS
Neither The Equitable Companies Incorporated nor the EQ Trusts will
receive any proceeds from the sale of the Offered Securities in any
market-making transaction with which this Prospectus may be delivered.
Alt-6
<PAGE>
ALTERNATE TO JUNIOR SUBORDINATED DEBT SECURITIES, PREFERRED SECURITIES
AND RELATED GUARANTEES PROSPECTUS
PLAN OF DISTRIBUTION
This Prospectus has been prepared for use by DLJSC in connection with
offers and sales of the Offered Securities in market-making transactions at
negotiated prices related to prevailing market prices at the time of the sale.
DLJSC may act as principal or agent in such transactions. DLJSC has advised the
Company that it currently intends to make a market in the Offered Securities,
but it is not obligated to do so and may discontinue any such market-making at
any time without notice. Accordingly, no assurance can be given as to the
liquidity of, or the trading market for, the Offered Securities.
Alt-7
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCES AND DISTRIBUTION
The following table sets forth the fees and expenses payable by the Company in
connection with the issuance and distribution of the securities other than
underwriting discounts and commissions. All of such expenses except the
Securities and Exchange Commission registration fee are estimated:
Securities and Exchange Commission registration fee............ $295,000
Blue Sky fees and expenses..................................... 30,000
Printing expense............................................... 55,000
Accounting fees and expenses................................... 45,000
Legal fees and expenses........................................ 100,000
Rating agency fees............................................. 350,000
Trustee's fees and expenses.................................... 31,000
Miscellaneous.................................................. 10,000
---------
Total $916,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to Section 102(b)(7) of the Delaware General Corporation Law
(the "DGCL"), which enables a corporation in its original certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for violations of the director's fiduciary duty, except
(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 law, (iii) pursuant to Section
174 of the DGCL (providing for liability of directors for the unlawful payment
of dividends or unlawful stock purchases or redemptions) or (iv) for any
transaction from which a director derived an improper personal benefit.
Section 145 of the DGCL empowers the Company to indemnify, subject to the
standards set forth therein, any person in connection with any action, suit or
proceeding brought before or threatened by reason of the fact that the person
was a director, officer, employee or agent of such company, or is or was serving
as such with respect to another entity at the request of such company. The DGCL
also provides that the Company may purchase insurance on behalf of any such
director, officer, employee or agent.
The Company's Certificate of Incorporation and By-laws limit the personal
liability of directors to the fullest extent permitted by Section 102(b)(7) of
the DGCL and provide in effect for the indemnification by the Company of each
director and officer of the Company to the fullest extent permitted by
applicable law.
Each Declaration will provide for the Company to indemnify the Trustees of the
relevant Trust, to the fullest extent permitted by applicable law.
ITEM 16. EXHIBITS
See index to exhibits at E-1.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective 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;
provided, however, that the undertakings set forth in paragraph (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission
II-1
<PAGE>
by the registrants pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
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 the registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 above or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-2
<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 25th day of
March, 1998.
THE EQUITABLE COMPANIES INCORPORATED
By: /s/ Alvin H. Fenichel
-------------------------------
Name: Alvin H. Fenichel
Title: Senior Vice President
and Controller
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 OFFICER:
* President, Chief Executive Officer and Director March 25, 1998
- ---------------------------------------------
Edward D. Miller
PRINCIPAL FINANCIAL OFFICER:
* Executive Vice President and Chief Financial March 25, 1998
- --------------------------------------------- Officer
Stanley B. Tulin
PRINCIPAL ACCOUNTING OFFICER:
* Senior Vice President and Controller March 25, 1998
- ---------------------------------------------
Alvin H. Fenichel
* Chairman of the Board and Director March 25, 1998
- ---------------------------------------------
Claude Bebear
* Vice-Chairman of the Board and Director March 25, 1998
- ---------------------------------------------
Henri de Castries
* Director March 25, 1998
- ---------------------------------------------
John S. Chalsty
* Director March 25, 1998
- ---------------------------------------------
Francoise Colloc'h
* Director March 25, 1998
- ---------------------------------------------
Joseph L. Dionne
* Director March 25, 1998
- ---------------------------------------------
William T. Esrey
* Director March 25, 1998
- ---------------------------------------------
Jean-Rene Fourtou
* Director March 25, 1998
- ---------------------------------------------
Jacques Friedmann
* Director March 25, 1998
- ---------------------------------------------
Donald J. Greene
Director
- ---------------------------------------------
Anthony J. Hamilton
* Director March 25, 1998
- ---------------------------------------------
John T. Hartley
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SIGNATURE TITLE DATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
* Director March 25, 1998
- ---------------------------------------------
John H. F. Haskell, Jr.
* Director March 25, 1998
- ---------------------------------------------
Mary R. (Nina) Henderson
* Director March 25, 1998
- ---------------------------------------------
W. Edwin Jarmain
* Director March 25, 1998
- ---------------------------------------------
Joseph J. Melone
* Director March 25, 1998
- ---------------------------------------------
Didier Pineau-Valencienne
* Director March 25, 1998
- ---------------------------------------------
George J. Sella, Jr.
* Director March 25, 1998
- ---------------------------------------------
Dave H. Williams
*By /s/ Adam R. Spilka
Name: Adam R. Spilka March 25, 1998
Title: Attorney-in-Fact
</TABLE>
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, EQ Capital Trust I,
EQ Capital Trust II, EQ Capital Trust III and EQ Capital Trust IV each 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, New York, on the 25th day of March, 1998.
EQ CAPITAL TRUST I
By: The Equitable Companies Incorporated,
as Sponsor
By: /s/ Adam R. Spilka
-----------------------
Name: Adam R. Spilka
Title: Attorney-in-Fact
EQ CAPITAL TRUST II
By: The Equitable Companies Incorporated,
as Sponsor
By: /s/ Adam R. Spilka
-----------------------
Name: Adam R. Spilka
Title: Attorney-in-Fact
EQ CAPITAL TRUST III
By: The Equitable Companies Incorporated,
as Sponsor
By: /s/ Adam R. Spilka
-----------------------
Name: Adam R. Spilka
Title: Attorney-in-Fact
EQ CAPITAL TRUST IV
By: The Equitable Companies Incorporated,
as Sponsor
By: /s/ Adam R. Spilka
-----------------------
Name: Adam R. Spilka
Title: Attorney-in-Fact
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT NO. DESCRIPTION TAG VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1.1 Form of Underwriting Agreement relating to the Debt Securities*............................
1.2 Form of Underwriting Agreement relating to the Preferred Securities*.......................
3.1 Restated Certificate of Incorporation of Company, filed as Exhibit 4.01(a) to
the Company's Form S-3 Registration Statement (No. 333-03224), and
incorporated herein by reference........................................................
3.2 Certificate of Designation of Cumulative Convertible Preferred Stock, Series D,
filed as Exhibit 4.01(e) to the Company's Form S-3 Registration Statement
(No. 333-03224), and incorporated herein by reference...................................
3.3 Amendment to Restated Certificate of Incorporation of the Company, dated as of
May 15, 1997, filed as Exhibit 4.01(g) to the Company's Form S-3
Registration Statement (No. 333-03224), and incorporated herein by reference............
3.4 By-Laws of the Company, filed as Exhibit 4.02 to the Company's Form S-3
Registration Statement (No. 333-03224), and incorporated herein by reference............
4.1 Indenture, dated as of December 1, 1993, from the Company to Chemical Bank, as
Trustee, filed as Exhibit 4.02 to the Company's Form S-4 Registration
Statement (No. 33-73102) dated December 17, 1993 and incorporated herein
by reference............................................................................
4.2 First Supplemental Indenture, dated December 1, 1993, from the Company to
Chemical Bank, as Trustee, filed as Exhibit 4.03 to the Company's Form S-4
Registration Statement (No. 33-73102) dated December 17, 1993 and
incorporated herein by reference........................................................
4.3 Form of Second Supplemental Indenture, filed as Exhibit 4.04 to the Company's
Form S-4 Registration Statement (No. 33-73102) dated December 17, 1993 and
incorporated herein by reference........................................................
4.4 Form of Third Supplemental Indenture, dated as of December 8, 1994, from the
Company to Chemical Bank, as Trustee, filed as Exhibit 4.05 to the Company's
Current Report on Form 8-K dated December 1, 1994.......................................
4.5 Subordinated Indenture, dated as of October 22, 1994, between the Company and
Shawmut Bank Connecticut, National Association, as Trustee filed as Exhibit
4.10 to the Company's Current Report on Form 8-K dated December 19, 1994................
4.6 First Supplemental Indenture, dated as of October 22, 1994, between the Company
and Shawmut Bank Connecticut, National Association, as Trustee filed as
Exhibit 4.11 to the Company's Current Report on Form 8-K dated December 19,
1994....................................................................................
4.7 Form of Junior Subordinated Indenture between the Company and the Bank of
New York+...............................................................................
4.8 Declaration of Trust of EQ Capital Trust I+................................................
4.9 Certificate of Trust of EQ Capital Trust I+................................................
4.10 Declaration of Trust of EQ Capital Trust II+...............................................
4.11 Certificate of Trust of EQ Capital Trust II+...............................................
4.12 Declaration of Trust of EQ Capital Trust III+..............................................
4.13 Certificate of Trust of EQ Capital Trust III+..............................................
4.14 Declaration of Trust of EQ Capital Trust IV+...............................................
4.15 Certificate of Trust of EQ Capital Trust IV+...............................................
4.16 Form of Amended and Restated Declaration of Trust for each of EQ Capital Trust
I, II, III, and IV+.....................................................................
4.17 Form of Preferred Security (included in Exhibit 4.16)......................................
4.18 Form of Supplemental Indenture to be used in connection with issuance of Debt
Securities*.............................................................................
4.19 Form of Supplemental Indenture to be used in connection with issuance of Junior
Subordinated Debt Securities+...........................................................
4.20 Form of Junior Subordinated Debt Security (included in Exhibit 4.19).......................
4.21 Form of Guarantee with respect to Preferred Securities+....................................
5.1 Opinion of Debevoise & Plimpton+...........................................................
5.2 Opinion of Richards, Layton & Finger, P.A.+................................................
</TABLE>
E-1
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT NO. DESCRIPTION TAG VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
12.1 Computation of ratio of earnings to fixed charges and ratio of earnings to
combined fixed charges and preferred stock dividends.................................... EX-12.1
23.1 Consent of Debevoise & Plimpton (included in Exhibit 5.1)..................................
23.2 Consent of Richards, Layton & Finger (included in Exhibit 5.2).............................
23.3 Consent of Price Waterhouse LLP............................................................ EX-23.3
24.1 Powers of Attorney for the Company (previously filed on the signature pages hereto)........
24.2 Powers of Attorneys for The Equitable Companies Incorporated, as sponsor, to
sign the Registration Statement on behalf of EQ Capital Trust I, II, III and
IV (included in Exhibits 4.8, 4.10, 4.12 and 4.14, respectively)........................
25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Chase Manhattan Bank, as Trustee, under the Senior Indenture+.......................
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
State Street Bank and Trust Company, as Trustee, under the Subordinated
Indenture+..............................................................................
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Trustee, under the Junior Subordinated Indenture+..............
25.4 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Trustee, with respect to the Amended and Restated
Declaration of Trust of EQ Capital Trust I+.............................................
25.5 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Trustee, with respect to the Amended and Restated
Declaration of Trust of EQ Capital Trust II+............................................
25.6 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Trustee, with respect to the Amended and Restated
Declaration of Trust of EQ Capital Trust III+...........................................
25.7 Statement of Eligibility under the Trust Indenture Act of 1939, as amended of
The Bank of New York, as Trustee, with respect to the Amended and Restated
Declaration of Trust of EQ Capital Trust IV+............................................
25.8 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Trustee, under the Preferred Securities Guarantee
of the Company with respect to the Preferred Securities of EQ Capital Trust I+..........
25.9 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Trustee, under the Preferred Securities Guarantee
of the Company with respect to the Preferred Securities of EQ Capital Trust II+.........
25.10 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Bank of New York, as Trustee, under the Preferred Securities Guarantee
of the Company with respect to the Preferred Securities of EQ Capital Trust III+........
25.11 Statement of Eligibility under the Trust Indenture Act of 1939, as amended of
The Bank of New York, as Trustee under the Preferred Securities Guarantee
of the Company with respect to the Preferred Securities of EQ Capital Trust IV+.........
</TABLE>
- -------------------
* Indicates document to be filed as an exhibit to a subsequent Current Report on
Form 8-K and incorporated herein by reference.
+ Indicates document previously filed as an exhibit.
E-2
THE EQUITABLE COMPANIES INCORPORATED EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EARNINGS FROM CONTINUING OPERATIONS BEFORE FEDERAL
INCOME TAXES, MINORITY INTEREST AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 376.3 546.6 645.2 515.8 1,103.0
EXCESS OF EQUITY IN INCOME OF UNCONSOLIDATED
INVESTEES OVER DISTRIBUTED INCOME 57.4 92.4 44.4 15.7 2.0
EQUITY IN LOSSES OF UNCONSOLIDATED INVESTEES 29.8 45.7 16.7 16.6 24.8
--------------------------------------------------------------
EARNINGS BEFORE FIXED CHARGES 463.5 684.7 706.3 548.1 1,129.8
--------------------------------------------------------------
FIXED CHARGES:
INTEREST EXPENSE ON LONG AND SHORT-TERM DEBT 1,558.4 2,275.9 2,905.7 3,092.0 4,235.4
INTEREST FACTOR IN RENTAL EXPENSE 54.9 52.8 55.7 61.8 63.3
--------------------------------------------------------------
TOTAL FIXED CHARGES 1,613.3 2,328.7 2,961.4 3,153.8 4,298.7
--------------------------------------------------------------
TOTAL EARNINGS AND FIXED CHARGES 2,076.8 3,013.4 3,667.7 3,701.9 5,428.5
==============================================================
RATIO OF EARNINGS TO FIXED CHARGES 1.287 1.294 1.239 1.174 1.263
==============================================================
TOTAL OF FIXED CHARGES 1,613.3 2,328.7 2,961.4 3,153.8 4,298.7
PREFERRED DIVIDEND REQUIREMENTS 100.6 123.2 41.1 41.1 24.0
--------------------------------------------------------------
TOTAL COMBINED FIXED CHARGES AND PREFERRED
DIVIDENDS 1,713.9 2,451.9 3,002.5 3,194.9 4,322.7
--------------------------------------------------------------
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED DIVIDENDS 1.212 1.229 1.222 1.159 1.256
==============================================================
</TABLE>
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in each Prospectus
constituting part of this Amendment No. 1 to Registration Statement on Form S-3
of our report dated February 10, 1998 which appears on page F-1 of The Equitable
Companies Incorporated's Annual Report on Form 10-K for the year ended December
31, 1997. We also consent to the incorporation by reference of our report on the
Consolidated Financial Statement Schedules dated February 10, 1998 which appears
on page F-54 of such Annual Report on Form 10-K. We also consent to the
reference to us under the heading "Experts" in each such Prospectus.
Price Waterhouse LLP
New York, New York
March 25, 1998
