<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration Nos. 333-45415;
333-42226
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--------------------------------------------------------------------------------
PROSPECTUS SUPPLEMENT
JULY 25, 2000
(TO PROSPECTUS DATED MARCH 27, 1998)
[AXA FINANCIAL, INC. LOGO]
$480,000,000
7.75% SENIOR NOTES DUE 2010
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
THE COMPANY: THE SENIOR NOTES AND THE OFFERING:
AXA Financial, Inc. - Maturity: August 1, 2010
1290 Avenue of the Americas - Interest Rate: 7.75%
New York, New York 10104 - Interest Payments: Semi-annually on February 1
(212) 554-1234 and August 1, commencing on February 1, 2001
- Closing: July 28, 2000
</TABLE>
SEE "RISK FACTORS" BEGINNING ON PAGE S-7 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SENIOR NOTES.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Per Senior Note Total
<S> <C> <C>
---------------------------------------------------------------------------------------------
Public offering price(1) 99.131% $475,828,800
Underwriting fees 0.650 3,120,000
Net proceeds to AXA Financial 98.481 472,708,800
---------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from July 28, 2000.
--------------------------------------------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED ANY OF THE SECURITIES OFFERED BY THIS
PROSPECTUS SUPPLEMENT OR THE ATTACHED PROSPECTUS OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE ATTACHED PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
We expect that the Senior Notes will be ready for delivery in book-entry form
through The Depository Trust Company, on or about July 28, 2000.
--------------------------------------------------------------------------------
DONALDSON, LUFKIN & JENRETTE
------------------
BANC OF AMERICA SECURITIES LLC
------------------
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
UBS WARBURG LLC
------------------
BANC ONE CAPITAL MARKETS, INC.
FLEETBOSTON ROBERTSON STEPHENS
SALOMON SMITH BARNEY
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
AXA Financial............................................... S-3
Recent Developments......................................... S-5
Risk Factors................................................ S-7
Use of Proceeds............................................. S-8
Capitalization.............................................. S-9
Ratio of Earnings to Fixed Charges.......................... S-10
Selected Consolidated Financial Data........................ S-11
Description of the Senior Notes............................. S-16
Underwriting................................................ S-19
Legal Opinions.............................................. S-20
ERISA Matters............................................... S-20
PROSPECTUS
Available Information....................................... 2
Incorporation of Certain Information by Reference........... 2
The Equitable............................................... 4
Use of Proceeds............................................. 4
Ratios of Earnings to Fixed Charges and Earnings to Combined
Fixed Charges and Preferred Stock Dividends............... 4
Description of Debt Securities.............................. 5
Plan of Distribution........................................ 14
Legal Matters............................................... 15
Experts..................................................... 16
</TABLE>
S-2
<PAGE> 3
AXA FINANCIAL
For the purposes of this prospectus supplement, the term "AXA Financial"
refers to AXA Financial, Inc. and its subsidiaries. Our name changed on
September 3, 1999 from "The Equitable Companies Incorporated" to AXA Financial,
Inc.
AXA Financial is a diversified financial services organization offering a
broad spectrum of insurance, investment banking and asset management services.
We are one of the world's largest asset managers, with total assets under
management of approximately $497.46 billion at March 31, 2000. Our financial
advisory and insurance business is conducted principally by our wholly-owned
subsidiaries, AXA Advisors, LLC, AXA Network, LLC, and The Equitable Life
Assurance Society of the United States ("Equitable Life") and its subsidiaries.
Our investment banking and brokerage business is conducted by Donaldson, Lufkin
& Jenrette, Inc. ("DLJ"), in which we owned on a consolidated basis at March 31,
2000 an approximate 69.5% interest. Our investment management business is
conducted by Alliance Capital Management L.P. ("Alliance"), in which we owned,
on a consolidated basis at March 31, 2000, an approximate 56.5% interest and, as
of that date, on a pro forma basis for the transactions discussed below under
"Recent Developments -- Alliance Agreement to Acquire Sanford C. Bernstein," an
approximate 52.9% interest.
Our unsecured long-term debt is rated A+ by Standard & Poor's Corporation
(5th highest rating of 22), A2 by Moody's Investors Service (6th highest rating
of 21) and A+ by Fitch Investors Services, Inc. (5th highest rating of 24).
AXA, a French holding company of an international group of insurance and
related financial service companies, is our largest shareholder, beneficially
owning (together with certain of its affiliates) at March 31, 2000 approximately
60.5% of the outstanding shares of our common stock.
FINANCIAL ADVISORY/INSURANCE
Our Financial Advisory/Insurance segment offers a variety of traditional,
variable and interest-sensitive life insurance products, variable and
fixed-interest annuity products, mutual fund and other investment products and
asset management services to individuals, small groups, small and medium-size
businesses, state and local governments and not-for-profit organizations, as
well as financial planning services to individuals. It also administers
traditional participating group annuity contracts with conversion features,
generally for corporate qualified pension plans, and association plans which
provide full service retirement programs for individuals affiliated with
professional and trade associations. This segment includes separate accounts for
individual and group insurance and annuity products. The Financial
Advisory/Insurance segment accounted for approximately $4.34 billion or 32.5% of
total segment revenues for the year ended December 31, 1999 and approximately
$1.19 billion or 28.3% of total segment revenues for the three months ended
March 31, 2000. Financial Advisory/Insurance segment products are marketed on a
retail basis in all 50 states, the District of Columbia, Puerto Rico and the
U.S. Virgin Islands by AXA Advisors, a broker-dealer, and AXA Network, an
insurance general agency through more than 7,500 financial professionals. In
addition, Equitable Distributors, Inc., a broker-dealer subsidiary of Equitable
Life, distributes Equitable Life products on a wholesale basis through major
securities firms, other broker-dealers and banks. Association plans are marketed
directly to clients by Equitable Life. As of December 31, 1999, the Financial
Advisory/Insurance segment had more than three million policy and contract
holders. Equitable Life, which was established in the State of New York in 1859,
is among the largest life insurance companies in the United States.
The claims-paying or financial strength rating of Equitable Life is AA from
Standard & Poor's Corporation (3rd highest rating of 18), Aa3 from Moody's
Investors Service, Inc. (4th highest rating of 19), AA from Fitch Investors
Service, Inc. (3rd highest rating of 26), and A+ from A.M. Best Company, Inc.
(2nd highest rating of 13).
S-3
<PAGE> 4
INVESTMENT BANKING AND BROKERAGE
The Investment Banking and Brokerage segment, which includes DLJ, a leading
integrated investment and merchant bank, serves institutional, corporate,
governmental and individual clients both domestically and internationally. DLJ's
businesses include securities underwriting, sales and trading; merchant banking;
financial advisory services; investment research; venture capital; correspondent
brokerage services; securities lending; online interactive brokerage services;
and asset management and other advisory services. Investment Banking and
Brokerage revenues, which amounted to approximately $7.15 billion for the year
ended December 31, 1999, or 53.7% of total segment revenues and approximately
$2.50 billion or 59.4% of total segment revenues for the three months ended
March 31, 2000, consist primarily of commissions, underwriting spreads, fees on
merger and acquisition, private placement, asset management and other advisory
services, principal transactions (both trading and investment revenues) and
other (primarily dividends and miscellaneous transaction revenues).
At March 31, 2000, AXA Financial owned approximately 69.5% of DLJ's common
stock. Assuming full vesting of restricted stock units and full exercise of all
outstanding options, AXA Financial would own approximately 55.0% of DLJ's common
stock. In 1999, DLJ issued a new class of DLJ common stock to track the
performance of DLJdirect, its online brokerage business, selling shares
representing an approximately 18% interest in DLJdirect's financial performance.
DLJ conducts its business through four principal operating groups: the
Banking Group, the Equities Group, the Fixed Income Group, and the Financial
Services Group. DLJ's Banking Group (which includes Investment Banking, Merchant
Banking and the Sprout Group) is a major participant in the raising of capital
for and the providing of financial advice to companies throughout the United
States and in Europe, Asia and Latin America. The Equities Group provides
domestic and foreign institutional clients with global research, trading and
sales services in United States listed and over-the-counter equities, and
foreign equities trading in the United States, Europe and Asia. The Fixed Income
Group provides institutional clients with research, trading and sales services
for a broad range of fixed-income products, and distributes fixed-income
securities in connection with offerings underwritten by DLJ. The Financial
Services Group provides a broad array of services to individual investors and
the financial intermediaries that represent them.
INVESTMENT MANAGEMENT
The Investment Management segment, which includes Alliance, one of the
nation's largest investment advisors, provides diversified investment management
services to Equitable Life and its insurance subsidiary and to a variety of
institutional clients, including corporate and public employee pension funds,
endowments, foundations and other domestic and foreign financial institutions as
well as to high net worth individuals and, through various investment vehicles,
to individual investors. This segment includes institutional separate accounts
of Equitable Life which provide various investment options for large group
pension clients, primarily defined benefit contribution plans, through pooled or
single group accounts. Through June 10, 1997, the segment also includes the
results of Equitable Real Estate Investment Management, Inc., which provided
real estate investment management services, property management services,
mortgage servicing and loan asset management as well as agricultural investment
management services. The Investment Management segment accounted for
approximately $1.87 billion or 14.0% of total segment revenues for the year
ended December 31, 1999, and approximately $549.5 million or 13.1% of total
segment revenues for the three months ended March 31, 2000. In recent years,
rapid growth in sales of mutual funds by Alliance to individuals and retail
clients has augmented the traditional focus on institutional markets.
At March 31, 2000, Alliance had assets under management of approximately
$394.25 billion (including $326.99 billion for third party clients), which
consisted of approximately $205.0 billion from separately managed accounts for
institutional investors and high net worth individuals and approximately $189.2
billion from mutual fund accounts. Alliance's greatest growth in recent years
has been in products
S-4
<PAGE> 5
for individual investors, primarily mutual funds, which generate relatively high
management and servicing fees as compared to fees charged to separately managed
accounts.
At a special meeting of the holders of units representing assignments of
beneficial ownership of limited partnership interests ("Alliance Holding Units")
in Alliance Capital Management Holding, L.P., formerly known as Alliance Capital
Management L.P. ("Alliance Holding") held in September 1999, the holders of
Alliance Holding Units approved both the transfer of Alliance Holding's business
to Alliance, a newly formed, private limited partnership, in exchange for all
units of Alliance (the "Reorganization") and the amendment and restatement of
Alliance Holding's partnership agreement. In connection with the Reorganization,
Alliance Holding offered to holders of Alliance Holding Units the opportunity to
exchange Alliance Holding Units for units of limited partnership interest of
Alliance ("Alliance Units") on a one-for-one basis. In October 1999, Alliance
Holding transferred its business, assets and liabilities to Alliance pursuant to
the Reorganization. At March 31, 2000, an Equitable Life subsidiary held 100,000
general partnership units of Alliance Holding and a 1% general partnership
interest in Alliance. Through its subsidiaries, Equitable Life also held
approximately 2% of the Alliance Holding Units. As of March 31, 2000, AXA
Financial, Inc. did not own any Alliance Units directly, and, as of that date,
Equitable Life and its subsidiaries held approximately 56.5% of the Alliance
Units. As of March 31, 2000, AXA Financial, Inc. held directly, on a pro forma
basis for the transactions discussed below under "Recent
Developments -- Alliance Agreement to Acquire Sanford C. Bernstein," 13.3% of
the Alliance Units. As of March 31, 2000, these combined holdings represented an
approximate 56.5% economic interest in Alliance's operations and, as of that
date, on a pro forma basis for the transactions discussed below under "Recent
Developments -- Alliance Agreement to Acquire Sanford C. Bernstein," represented
an approximate 52.9% economic interest in Alliance's operations.
RECENT DEVELOPMENTS
ALLIANCE AGREEMENT TO ACQUIRE SANFORD C. BERNSTEIN
On June 20, 2000, Alliance issued a press release announcing that it had
entered into a definitive agreement with Sanford C. Bernstein Inc. ("SCB"),
pursuant to which Alliance agreed, among other things, to acquire substantially
all of the assets and assume substantially all of the liabilities of SCB and its
subsidiaries for consideration of approximately $1.48 billion in cash and 40.8
million Alliance Units, subject to reduction if the client revenues of SCB fall
below certain levels (the "SCB Acquisition").
The closing of the SCB Acquisition is subject to the receipt of various
regulatory approvals, the maintenance of a minimum SCB client revenue base and
approval of the unit holders of Alliance Holding and other conditions. In
connection with the SCB Acquisition, AXA Financial entered into a financing
agreement, dated as of June 20, 2000, with Alliance (the "Financing Agreement"),
pursuant to which AXA Financial agreed to finance the cash portion of the SCB
Acquisition through the purchase of 32,619,775 Alliance Units for an aggregate
purchase price of $1.6 billion (the "June 2000 Purchase"), resulting in AXA
Financial, Inc. and its affiliates owning on a consolidated basis approximately
63.0% of the economic interest in Alliance's operations or approximately 52.9%
on a pro forma basis after giving effect to the issuance of 40.8 million
Alliance Units discussed above. AXA Financial completed the June 2000 Purchase
on June 21, 2000. AXA Financial funded $150 million of its obligation under the
Financing Agreement from internally generated funds and borrowed the remaining
$1.45 billion from Bank of America, N.A., pursuant to a promissory note, dated
as of June 21, 2000, due on September 22, 2000 (the "Promissory Note"). The
interest rate of the Promissory Note is 7.06%. AXA Financial intends to
refinance the balance outstanding on the Promissory Note prior to its maturity.
In addition, AXA Financial entered into a purchase agreement with SCB and
Alliance, dated as of June 20, 2000 (the "Purchase Agreement"), pursuant to
which it granted SCB the right, beginning on the second anniversary of the
closing of the SCB Acquisition, to cause AXA Financial to purchase, at a price
equal to the average of the closing prices of the Alliance Holding Units for the
ten trading days ending on the fifth trading day following the date of exercise
of the right, the Alliance Units received by SCB as part of the consideration
for the SCB Acquisition (in the aggregate, such Alliance Units are referred to
herein as the
S-5
<PAGE> 6
"Equity Consideration"). This right is exercisable no more than once annually
during each of the eight annual periods following the second anniversary of the
closing of the SCB Acquisition, in an amount not to exceed 20% of the Equity
Consideration per each annual period less any Restricted Units (defined below)
that SCB otherwise transferred since the beginning of that annual period and
subject to deferral under certain circumstances. Under the Purchase Agreement,
SCB agreed not to transfer 38 million of the Alliance Units received by it as
part of the Equity Consideration (the "Restricted Units") until after the second
anniversary of the closing of the SCB Acquisition. SCB also agreed that the
aggregate transfers of the Restricted Units will not exceed 20%, 40%, 60% and
80% of the Equity Consideration at any time prior to and on the third, fourth,
fifth and sixth anniversaries of the closing, respectively. AXA Financial has a
right of first refusal on transfers of Restricted Units to third parties (but
not on exchanges of Restricted Units for Alliance Holding Units or subsequent
transfers of those Units).
DISABILITY INCOME REINSURANCE TRANSACTION
During July 2000, Equitable Life transferred, at no gain or loss, all the
risk of its directly written Disability Income business for years 1993 and
prior, to Centre Life Insurance Company, a subsidiary of Zurich Financial
Services. The transfer of the risk to Centre Life Insurance was accomplished
through an indemnity reinsurance contract. The cost of the arrangement will be
amortized over the expected lives of the contracts reinsured and will not have a
significant impact on the results of operations in any specific period.
Equitable Life discontinued writing Disability Income business in 1997.
S-6
<PAGE> 7
RISK FACTORS
In addition to the other information contained or incorporated by reference
in this prospectus supplement and the accompanying prospectus, the following
factors should be carefully considered prior to deciding whether or not to
purchase the Senior Notes. This prospectus supplement, the accompanying
prospectus and the information incorporated herein and therein by reference
include forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. These forward-looking statements are subject to certain
risks and uncertainties, including those identified in "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Forward-Looking
Statements" in our Quarterly Report on Form 10-Q for the three months ended
March 31, 2000 and "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Forward-Looking Statements" in our Annual Report on
Form 10-K for the year ended December 31, 1999 which could cause actual results
to differ materially from historical results or those anticipated.
Forward-looking statements include, among other things, discussions concerning
AXA Financial's potential exposure to market risks, as well as statements
expressing management's expectations, beliefs, estimates, forecasts, projections
and assumptions, as indicated by words such as "believes," "estimates,"
"intends," "anticipates," "expects," "projects," "should," "probably," "risk,"
"target," "goals," "objectives," or similar expressions.
HOLDING COMPANY STRUCTURE
The Senior Notes are obligations exclusively of AXA Financial, Inc., a
non-operating holding company which conducts business through subsidiaries and
the Senior Notes therefore are effectively subordinated to liabilities of our
subsidiaries, including liabilities under contracts of insurance and annuities
written by our insurance subsidiaries. Accordingly, holders of Senior Notes
should look only to our assets for payments of interest and principal. At March
31, 2000, as adjusted for the short-term debt incurred under the Promissory Note
in connection with the SCB acquisition, we (excluding the debt of our
subsidiaries) had $2.56 billion of senior debt outstanding. Our wholly owned
operating subsidiaries include Equitable Life, AXA Advisors and AXA Network. At
March 31, 2000, we also owned directly approximately 38.2% of the outstanding
common stock of DLJ, and, on a pro forma basis for the transaction discussed
above under "Recent Developments -- Alliance to Acquire Sanford C. Bernstein,"
13.3% of the outstanding Alliance Units. As of March 31, 2000, all of our other
subsidiaries, including an approximate 39.6% interest in Alliance on a pro forma
basis for the transactions discussed above under "Recent
Developments -- Alliance Agreement to Acquire Sanford C. Bernstein," and an
additional interest in 31.3% of DLJ's outstanding common stock, were held
indirectly through our subsidiaries.
PAYMENTS ON SENIOR NOTES AND LIQUIDITY
Our ability to make cash payments with respect to our securities, including
the payment of principal and interest on the Senior Notes, depends on the
availability of adequate sources of funds. Under the New York Insurance Law,
Equitable Life is permitted to pay shareholder dividends to us only if it files
notice of its intention to declare such a dividend and the amount thereof with
the Superintendent of Insurance of the State of New York and the Superintendent,
who by statute has broad discretion in such matters, does not disapprove the
distribution. From our 1992 demutualization until 1999, we received no dividends
from Equitable Life. During 1999, we received $150.0 million in dividends from
Equitable Life and, in May 2000, we received additional dividends from Equitable
Life of $150.0 million. We believe that our sources of liquidity will be
sufficient to meet our cash requirements for several years. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources -- Liquidity Requirements" and
"-- Liquidity Sources" in our annual report on Form 10-K for the year ended
December 31, 1999.
After this offering we expect to refinance the debt we incurred in
connection with the SCB Acquisition, which is due on September 22, 2000, prior
to its maturity. We can provide no assurance that we will be able to do so.
S-7
<PAGE> 8
ABSENCE OF PUBLIC MARKET FOR SENIOR NOTES
The Senior Notes are a new issue of securities for which no market
currently exists. If the Senior Notes are traded after their initial issuance,
they may trade at a discount from the initial public offering price, depending
upon prevailing interest rates, the market for similar securities and other
factors. No assurance can be given that a holder of Senior Notes will be able to
sell them in the future or that any sale of Senior Notes will be at a price
equal to or higher than the initial offering price of the Senior Notes. No
assurance can be given that an active market will develop or be maintained for
the Senior Notes. We do not intend to apply for listing of the Senior Notes on
any securities exchange or to seek their admission to trading on any
inter-dealer quotation system. The underwriters currently intend to make a
market in the Senior Notes, subject to applicable law and regulations. However,
the underwriters are not obligated to do so and may discontinue such market
making at any time without notice.
USE OF PROCEEDS
The net proceeds to AXA Financial from the sale of the Senior Notes are
estimated to be approximately $472.1 million after deducting underwriting
discounts and commissions and estimated expenses. Substantially all of these net
proceeds are expected to be used to repay a portion of the $1.45 billion of debt
we incurred in connection with the SCB Acquisition. We incurred this debt
pursuant to a Promissory Note with Bank of America, N.A., which matures on
September 22, 2000. The interest rate of the Promissory Note is 7.06%.
S-8
<PAGE> 9
CAPITALIZATION
The following table sets forth our consolidated short-term debt and
capitalization at March 31, 2000 and as adjusted to give effect to the sale of
the Senior Notes and application of the net proceeds therefrom to repay
short-term debt. The financial data at March 31, 2000 in the following table are
derived from our unaudited financial statements at and for the quarter ended
March 31, 2000.
<TABLE>
<CAPTION>
AT MARCH 31, 2000
-------------------------
HISTORICAL AS ADJUSTED
(IN MILLIONS)
<S> <C> <C>
DEBT:
Short-term debt
AXA Financial, Inc. ................................... $ 35.0 $ 1,012.9(1)
Subsidiaries of AXA Financial, Inc. ................... 3,636.6 3,636.6
--------- ---------
Total Short-Term Debt............................. $ 3,671.6 $ 4,649.5
========= =========
Long-term debt
AXA Financial, Inc. ................................... $ 1,075.8 $ 1,551.6
Subsidiaries of AXA Financial, Inc. ................... 6,268.9 6,268.9
--------- ---------
Total long-term debt.............................. 7,344.7 7,820.5
--------- ---------
SHAREHOLDERS' EQUITY:
Series D Convertible Preferred Stock; $1.00 par value;
$500.00 stated value; 60,000 shares authorized and issued,
47,940 outstanding (liquidation value $24.0 million)...... 684.5 684.5
Stock Employee Compensation Trust (Series D Convertible
Preferred Stock held in trust)............................ (684.5) (684.5)
Common Stock; $0.01 par value; 500 million shares
authorized; 451.2 million shares issued and outstanding... 4.5 4.5
Capital in excess of par value.............................. 3,745.9 3,745.9
Treasury stock.............................................. (548.3) (548.3)
Retained earnings........................................... 3,296.2 3,296.2
Accumulated other comprehensive loss........................ (418.1) (418.1)
--------- ---------
Total shareholders' equity........................ 6,080.2 6,080.2
--------- ---------
Total Long-Term Debt and Capitalization..................... $13,424.9 $13,900.7
========= =========
</TABLE>
------------------------------
(1) Includes $1.45 billion of short-term debt incurred by AXA Financial, Inc. on
June 21, 2000 in connection with the SCB Acquisition, partially offset by
the application of the estimated net proceeds of this offering. See "Recent
Developments -- Alliance Agreement to Acquire Sanford C. Bernstein." We
intend to refinance the remaining outstanding balance under the Promissory
Note prior to its maturity.
S-9
<PAGE> 10
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges for
AXA Financial for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEARS ENDED DECEMBER 31,
--------------- -------------------------------------
2000 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(1)........ 1.357 1.417 1.346 1.262 1.173 1.237
</TABLE>
------------------------------
(1) For purposes of determining the historical ratios of earnings to fixed
charges, 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, and preferred stock
dividend payments by consolidated subsidiaries. The inclusion of Interest
Credited to Policyholders' Account Balances in the ratios presented above
would not have a material effect on such ratios.
S-10
<PAGE> 11
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected historical consolidated financial
information for AXA Financial. The selected historical consolidated financial
information (other than General Account Investment Assets and assets under
management) at and for each of the years ended December 31, 1999, 1998 and 1997
has been derived from consolidated financial statements audited by
PricewaterhouseCoopers LLP, independent accountants, included in AXA Financial's
Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated
by reference herein and should be read in conjunction with and is qualified by
reference to such statements and the related notes. The selected historical
consolidated financial information (other than General Account Investment Assets
and assets under management) at and for the years ended December 31, 1996 and
1995 have been derived from consolidated financial statements not included or
incorporated by reference herein. The selected historical consolidated financial
information (other than General Account Investment Assets and assets under
management) at and for the three months ended March 31, 2000 and 1999 have been
derived from consolidated financial statements included in AXA Financial's
Quarterly Report on Form 10-Q for the three months ended March 31, 2000 and
incorporated by reference herein.
S-11
<PAGE> 12
SELECTED CONSOLIDATED FINANCIAL DATA -- (CONTINUED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF
EARNINGS DATA:
REVENUES
Universal life and
investment-type product
policy fee income........... $ 340.4 $ 296.7 $ 1,257.5 $ 1,056.2 $ 950.6 $ 874.0 $ 788.2
Premiums...................... 133.0 134.9 558.2 588.1 601.5 597.6 606.8
Net investment income(1)...... 1,437.6 1,053.4 4,500.0 4,498.7 3,991.3 3,336.3 3,047.4
Investment banking principal
transactions, net(2)........ 514.7 177.1 826.0 67.4 552.0 557.0 496.8
Investment gains (losses),
net(3)(4)................... (120.0) (4.3) 32.6 122.6 (39.2) .8 55.5
Commissions, fees and other
income...................... 1,761.6 1,280.7 6,109.9 4,498.4 3,507.4 2,841.9 2,142.4
Contribution from the Closed
Block(2)(5)................. 16.7 18.9 86.4 87.1 102.5 125.0 143.2
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total revenues............ 4,084.0 2,957.4 13,370.6 10,918.5 9,666.1 8,332.6 7,280.3
---------- ---------- ---------- ---------- ---------- ---------- ----------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to
policyholders' account
balances.................... 262.1 270.2 1,078.2 1,153.9 1,267.0 1,271.1 1,249.2
Policyholders' benefits(6).... 282.0 240.8 1,038.6 1,024.7 978.6 1,317.7 1,008.6
Other operating costs and
expenses(7)(8)(9)........... 2,883.3 1,982.1 9,177.9 7,135.9 6,317.5 5,228.0 4,377.3
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total benefits and other
deductions.............. 3,427.4 2,493.1 11,294.7 9,314.5 8,563.1 7,816.8 6,635.1
---------- ---------- ---------- ---------- ---------- ---------- ----------
EARNINGS FROM CONTINUING
OPERATIONS BEFORE FEDERAL
INCOME TAXES, MINORITY
INTEREST AND CUMULATIVE
EFFECT OF ACCOUNTING
CHANGE...................... 656.6 464.3 2,075.9 1,604.0 1,103.0 515.8 645.2
Federal income taxes(10)...... 200.9 156.7 584.5 527.8 280.5 137.4 192.3
Minority interest in net
income of consolidated
subsidiaries................ 152.2 81.2 393.4 245.8 174.3 172.4 87.5
---------- ---------- ---------- ---------- ---------- ---------- ----------
EARNINGS FROM CONTINUING
OPERATIONS BEFORE CUMULATIVE
EFFECT OF ACCOUNTING
CHANGE...................... 303.5 226.4 1,098.0 830.4 648.2 206.0 365.4
Discontinued operations, net
of Federal income
taxes(1)(11)(12)............ (4.9) (5.3) 28.1 2.7 (87.2) (83.8) --
Cumulative effect of
accounting change, net of
Federal income taxes(13).... -- -- -- -- -- (23.1) --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net earnings.................. 298.6 221.1 1,126.1 833.1 561.0 99.1 365.4
Dividends on preferred
stocks...................... -- -- -- -- 15.6 26.7 26.7
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET EARNINGS APPLICABLE TO
COMMON SHARES............... $ 298.6 $ 221.1 $ 1,126.1 $ 833.1 $ 545.4 $ 72.4 $ 338.7
========== ========== ========== ========== ========== ========== ==========
NET EARNINGS PER COMMON SHARE:
Basic..................... $ .69 $ .50 $ 2.58 $ 1.88 $ 1.35 $ .20 $ .92
========== ========== ========== ========== ========== ========== ==========
Diluted................... $ .64 $ .48 $ 2.45 $ 1.81 $ 1.24 $ .18 $ .87
========== ========== ========== ========== ========== ========== ==========
CASH DIVIDEND PER COMMON
SHARE....................... $ .025 $ .025 $ .10 $ .10 $ .10 $ .10 $ .10
========== ========== ========== ========== ========== ========== ==========
</TABLE>
S-12
<PAGE> 13
SELECTED CONSOLIDATED FINANCIAL DATA -- (CONTINUED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES BY SEGMENT:
Segment revenues:
Financial Advisory/
Insurance(1)(3)(4).......... $ 1,190.7 $ 1,047.5 $ 4,337.5 $ 4,063.6 $ 4,020.9 $ 3,825.1 $ 3,649.1
Investment Banking and
Brokerage(2)................ 2,495.2 1,492.7 7,153.7 5,418.7 4,649.5 3,518.1 2,781.9
Investment Management......... 549.5 419.1 1,870.2 1,328.7 1,073.5 1,017.8 866.6
Eliminations.................. (31.4) (3.6) (32.4) (15.2) (20.0) (29.3) (35.4)
---------- ---------- ---------- ---------- ---------- ---------- ----------
4,204.0 2,955.7 13,329.0 10,795.8 9,723.9 8,331.7 7,262.2
Non-DLJ investment
gains/losses and
other(1)(3)(4).............. (120.0) 1.7 41.6 122.7 (57.8) .9 18.1
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Revenues............ $ 4,084.0 $ 2,957.4 $ 13,370.6 $ 10,918.5 $ 9,666.1 $ 8,332.6 $ 7,280.3
========== ========== ========== ========== ========== ========== ==========
PRE-TAX OPERATING EARNINGS
FROM CONTINUING OPERATIONS
BEFORE FEDERAL INCOME TAXES,
MINORITY INTEREST AND
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE, BY
SEGMENT:
Segment pre-tax operating
earnings from continuing
operations:
Financial Advisory/
Insurance(1)(3)(4)(9)....... $ 250.7 $ 202.7 $ 852.9 $ 654.0 $ 469.6 $ 300.7 $ 239.4
Investment Banking and
Brokerage(2)................ 242.1 118.5 583.5 372.9 421.1 300.1 236.4
Investment Management(9)...... 87.1 48.2 241.3 169.1 126.3 127.9 98.3
---------- ---------- ---------- ---------- ---------- ---------- ----------
579.9 369.4 1,677.7 1,196.0 1,017.0 728.7 574.1
Investment gains/losses, net
of related DAC, other
adjustments and minority
interest(1)(3)(4)(9)........ 76.7 94.9 398.2 408.0 86.0 (212.9) 71.1
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL EARNINGS FROM CONTINUING
OPERATIONS BEFORE FEDERAL
INCOME TAXES, MINORITY
INTEREST AND CUMULATIVE
EFFECT OF ACCOUNTING
CHANGE...................... $ 656.6 $ 464.3 $ 2,075.9 $ 1,604.0 $ 1,103.0 $ 515.8 $ 645.2
========== ========== ========== ========== ========== ========== ==========
GENERAL ACCOUNT INVESTMENT
ASSETS (AT PERIOD
END)(14).................... $ 33,488.3 $ 35,686.8 $ 34,060.3 $ 35,356.6 $ 35,711.5 $ 34,512.2 $ 34,660.0
ASSETS UNDER MANAGEMENT (AT
PERIOD END):
Third party................... $ 368,504 $ 265,775 $ 340,555 $ 252,707 $ 182,345 $ 154,914 $ 120,984
General Account & other....... 71,510 55,357 67,664 52,923 56,262 54,990 50,900
Separate Accounts............. 57,447 45,093 54,454 43,302 36,539 29,870 24,720
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total..................... $ 497,461 $ 366,225 $ 462,673 $ 348,932 $ 275,146 $ 239,774 $ 196,604
========== ========== ========== ========== ========== ========== ==========
CONSOLIDATED BALANCE SHEETS
DATA (AT PERIOD END):
Total assets(5)(15)........... $224,267.5 $180,458.6 $208,082.9 $159,501.1 $151,173.2 $128,811.2 $113,716.2
Long-term debt................ 7,344.7 6,222.0 6,606.5 5,474.0 3,946.0 3,920.7 3,852.0
Total liabilities(5)(15)...... 218,187.3 174,789.3 202,244.0 153,808.0 145,899.7 124,823.2 109,607.5
Shareholders' equity.......... 6,080.2 5,669.3 5,838.9 5,693.1 5,273.5 3,988.0 4,108.7
Book value per common share... 14.07 12.93 13.47 13.01 11.79 9.56 9.94
</TABLE>
S-13
<PAGE> 14
------------------------------
(1) Net investment income and discontinued operations included $26.6 million,
$53.3 million, $114.3 million and $154.6 million for 1998, 1997, 1996 and
1995, respectively, recognized as investment income by continuing
operations and as interest expense by discontinued operations relating to
intersegment loans.
(2) Investment gains (losses), net for 1996 included a $79.4 million gain
(before variable compensation and related expenses) related to the sale of
shares of one investment in the DLJ long-term corporate development
portfolio.
(3) Investment gains (losses), net included additions to asset valuation
allowances and writedowns of publicly traded securities and equity real
estate, for continuing operations aggregating $67.4 million ($69.6 million
including amounts related to the Closed Block), $91.5 million ($94.5
million including amounts related to the Closed Block), $291.4 million
($309.6 million including amounts related to the Closed Block), $187.8
million ($201.4 million including amounts related to the Closed Block),
$483.8 million ($544.7 million including amounts related to the Closed
Block), $178.6 million ($205.8 million including amounts related to the
Closed Block), and $197.6 million ($224.9 million including amounts related
to the Closed Block) for the three months ended March 31, 2000 and 1999 and
for 1998, 1997, 1996 and 1995, respectively. In 1997, additions to
valuation allowances of $227.6 million ($243.0 million including amounts
related to the Closed Block) were recorded related to management's
announced intention to accelerate sales of equity real estate.
Additionally, in 1997, $132.3 million ($161.1 million including amounts
related to the Closed Block) of writedowns on real estate held for
production of income were recorded. Additionally, as of January 1, 1996, as
a result of the adoption of SFAS No. 121, $152.4 million of allowances on
assets held for investment were released and impairment losses of $144.0
million ($149.6 million including amounts related to the Closed Block) were
recognized on real estate held and used.
(4) Investment gains (losses), net for 1999 included a pre-tax gain of $212.3
million from DLJ's offering of a new class of its common stock to track the
financial performance of DLJdirect. Investment gains (losses), net for 1997
included a pre-tax gain of $252.1 million resulting from the sale of ERE.
Investment gains, net for 1995 included a $34.7 million gain resulting from
the sale of a minority interest in DLJ.
(5) The results of the Closed Block are reported on one line in the
consolidated statements of earnings. Total assets, total liabilities and
General Account Investment Assets, respectively, include the assets and
liabilities of the Closed Block and, therefore, are comparable for all
periods presented. See Note 7 of Notes to Consolidated Financial Statements
in the 1999 10-K.
(6) In 1996, AXA Financial wrote off $145.0 million of unamortized DAC on
disability income ("DI") products and strengthened reserves by $248.0
million for DI and Pension Par lines of business. As a result, earnings
from continuing operations decreased by $255.5 million ($393.0 million
pre-tax).
(7) In 1999, other operating costs and expenses included a writedown of DAC of
$131.7 million resulting from revisions to estimated future gross profits
used to determine the amortization of DAC for universal life and investment
type-products.
(8) Other operating costs and expenses included corporate interest expenses of
$36.3 million, $32.8 million, $131.2 million, $126.1 million, $127.2
million, $139.6 million and $100.5 million for the three months ended March
31, 2000 and 1999 and for 1998, 1997, 1996 and 1995, respectively.
(9) Other operating costs and expenses included provisions associated with
employee termination and exit costs of $42.4 million, $24.4 million and
$39.2 million for 1997, 1996 and 1995, respectively (including $41.7
million, $22.3 million and $28.1 million attributable to the Financial
Advisory/Insurance segment for 1997, 1996 and 1995, respectively; and $0.7
million, $2.1 million, and $11.1 million attributable to the Investment
Management segment for 1997, 1996 and 1995, respectively).
(10) During 1997, AXA Financial released $97.5 million of tax reserves related
to years prior to 1989.
(11) Discontinued operations, net of Federal income taxes, included additions to
asset valuation allowances and writedowns of publicly traded securities
and, equity real estate aggregating $0.6 million, $11.8 million, $50.5
million, $33.2 million, $212.5 million, $36.0 million and $38.2 million for
the three months ended March 31, 2000 and 1999 and for 1999, 1998, 1997,
1996 and 1995, respectively. Additionally, the
S-14
<PAGE> 15
implementation of SFAS No. 121 as of January 1, 1996 resulted in the
release of existing valuation allowances of $71.9 million on equity real
estate and recognition of impairment losses of $69.8 million.
(12) During the three months ended March 31, 2000 and 1999 and 1999, 1998, 1997
and 1996 reviews of the allowance for future losses for discontinued
operations, management increased the allowance for the three months ended
March 31, 2000 and 1999 and for 1997 and 1996 and released the allowance
for 1999 and 1998. As a result, net earnings (decreased) increased by
$(4.9) million, $(5.3) million, $28.1 million, $2.7 million, $(87.2)
million and $(83.8) million for the three months ended March 31, 2000 and
1999 and for 1999, 1998, 1997 and 1996, respectively. Incurred losses of
$12.8 million, $19.3 million and $154.4 million, respectively, were charged
to discontinued operations' allowance for future losses for the three
months ended March 31, 1999 and for 1999 and 1997 and earnings credited to
the allowance for future losses of $50.3 million in 1998. See Note 8 of
Notes to Consolidated Financial Statements in the 1999 10-K.
(13) Cumulative effect of accounting change, net of Federal income taxes,
included a charge of $23.1 million, net of a Federal income tax benefit of
$12.4 million, related to the implementation of SFAS No. 121 for the year
ended December 31, 1996.
(14) General Account Investment Assets does not include the Discontinued
Operations Investment Assets, which had an aggregate carrying value of
$1.17 billion, $1.25 billion, $1.19 billion, $1.30 billion, $1.77 billion,
$2.49 billion and $3.26 billion at March 31, 2000 and 1999 and at December
31, 1999, 1998, 1997, 1996 and 1995, respectively.
(15) Assets and liabilities relating to discontinued operations are not
reflected on the consolidated balance sheets of AXA Financial, except that
the net amount due to continuing operations for intersegment loans made to
discontinued operations in excess of continuing operations obligations to
fund discontinued operations accumulated deficit (the amount required to
make assets equal to liabilities) is reflected as "Amounts due from
discontinued operations" at March 31, 2000 and 1999 and at December 31,
1999, 1998, 1997, 1996 and 1995. In 1995, continuing operations transferred
$1,215.4 million in cash to discontinued operations in settlement of its
obligation. Subsequently, discontinued operations remitted $1,155.4 million
in cash to continuing operations in partial repayment of borrowings by
discontinued operations. See Note 8 of Notes to Consolidated Financial
Statements in the 1999 10-K.
S-15
<PAGE> 16
DESCRIPTION OF THE SENIOR NOTES
The following description of the particular terms of the Senior Notes
offered by this prospectus supplement supplements the description of the general
terms and provisions of the Senior Notes set forth in the accompanying
prospectus (the Senior Notes are referred to in that prospectus as the "Debt
Securities"). You should carefully read the entire prospectus and prospectus
supplement to understand fully the terms of the Senior Notes. All of the
information set forth below is qualified in its entirety by the more detailed
explanation set forth in the accompanying prospectus.
GENERAL
The Senior Notes are issued by us under a Senior Indenture, dated as of
December 1, 1993 (the "Senior Indenture"), between AXA Financial, Inc. and The
Chase Manhattan Bank, as Trustee (the "Trustee"), as supplemented from time to
time, including by a certain Supplemental Indenture, to be dated as of July 28,
2000 to be entered into by AXA Financial and the Trustee in respect of the
Senior Notes (the Senior Indenture as amended and supplemented, is referred to
herein as the "Indenture"). The Indenture is more fully described in the
accompanying prospectus. The Senior Notes are unsecured and will rank equally
with all of our other senior and unsubordinated debt. As of March 31, 2000, as
adjusted for short-term debt of $1.45 billion incurred under the Promissory Note
in connection with the SCB Acquisition, we had $2.56 billion of senior and
unsubordinated debt outstanding.
The Senior Notes will initially be limited to a total principal amount of
$480,000,000. We may, without the consent of the holders of the Senior Notes,
issue additional Senior Notes having the same interest rate, maturity date and
other terms as described in this prospectus supplement and in the accompanying
prospectus. Any additional Senior Notes, together with the Senior Notes offered
by this prospectus supplement, will constitute a single series of Senior Notes
under the Indenture. No additional Senior Notes may be issued if an event of
default under the Indenture has occurred and is continuing with respect to the
Senior Notes. The Senior Notes will mature on August 1, 2010. The provisions of
Article 4 of the Indenture relating to defeasance, which are described in the
accompanying prospectus, will apply to the Senior Notes. The Senior Notes will
not be entitled to the benefit of any sinking fund.
We will periodically pay interest on the Senior Notes at an annual rate of
7.75% from the date of issuance, or from the most recent interest payment date
to which interest has been paid or duly provided for, payable semi-annually on
February 1 and August 1, commencing February 1, 2001. Interest will be paid to
the persons in whose names the Senior Notes are registered at the close of
business on the regular record date relating thereto, which will be January 15
and July 15, as the case may be, next preceding such Interest Payment Date,
except that any interest payable upon maturity or earlier redemption of the
Senior Notes will be payable to the person to whom the principal of the Senior
Notes is payable.
OPTIONAL REDEMPTION
At our option, we may redeem all or part of the Senior Notes at any time.
The redemption price will be equal to the greater of (i) 100% of the principal
amount of the Senior Notes to be redeemed, or (ii) a "make-whole" amount, which
will be calculated as described below. At the time of redemption, we will also
pay all interest that has accrued to the redemption date on the redeemed Senior
Notes.
CALCULATION OF MAKE WHOLE AMOUNT
The "make whole" amount will equal the sum of the present values of the
Remaining Scheduled Payments (as defined below) discounted to the redemption
date, on a semiannual basis, at a rate equal to the Treasury Rate (as defined
below) plus 25 basis points.
"REMAINING SCHEDULED PAYMENTS" means the remaining scheduled payments of
the principal and interest that would be due after the redemption date of a
Senior Note if such Senior Note were not redeemed. However, if the redemption
date is not a scheduled interest payment date, the amount of the
S-16
<PAGE> 17
next succeeding scheduled interest payment on such Senior Note will be reduced
by the amount of interest accrued on such Senior Note to such redemption date.
"TREASURY RATE" means an annual rate equal to the semiannual equivalent
yield to maturity of the Comparable Treasury Issue (as defined below), assuming
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for the redemption
date. The semiannual equivalent yield to maturity will be computed as of the
third business day immediately preceding the redemption date.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by Donaldson, Lufkin & Jenrette Securities Corporation or an affiliate
as having a maturity comparable to the remaining term of the Senior Notes that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Senior Notes.
"COMPARABLE TREASURY PRICE" means the average of three Reference Treasury
Dealer Quotations (as defined below) obtained by the Trustee for the redemption
date.
"REFERENCE TREASURY DEALERS" means Donaldson, Lufkin & Jenrette Securities
Corporation (so long as it continues to be a primary U.S. Government securities
dealer) and any two other primary U.S. Government securities dealers. If
Donaldson, Lufkin & Jenrette Securities Corporation ceases to be a primary U.S.
Government securities dealer, we will appoint in its place another nationally
recognized investment banking firm that is a primary U.S. Government securities
dealer.
"REFERENCE TREASURY DEALER QUOTATION" means the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by a Reference Treasury Dealer at 3:30 p.m., New York
City time on the third business day preceding the redemption date.
REDEMPTION PROCEDURES
We will give you at least 30 days (but not more than 60 days) prior notice
of any redemption. If less than all of the Senior Notes are redeemed, the
Trustee will select the Senior Notes to be redeemed by a method determined by
the Trustee to be fair and appropriate.
On or before the redemption date, we will deposit with a paying agent (or
the Trustee) money sufficient to pay the redemption price and accrued interest
on the Senior Notes to be redeemed on such date. On and after the redemption
date, interest will cease to accrue on any Senior Notes that have been called
for redemption (unless we default in the payment of the redemption price and
accrued interest).
If any redemption date is not a business day, then the redemption price and
all accrued and unpaid interest to the date of redemption will be payable on the
next business day (and without any interest or other payment in respect of any
such delay). However, if the business day is in the next calendar year, the
redemption amount will be payable on the preceding business day.
BOOK ENTRY DELIVERY AND FORM
The Senior Notes will be issued as global debt securities in "book-entry"
form in multiples of $1,000. See "Description of Debt Securities -- Book-Entry
System" in the accompanying prospectus. The Depository Trust Company ("DTC")
will be the depository with respect to the Senior Notes. The Senior Notes will
be issued as fully-registered securities in the name of Cede & Co., DTC's
nominee, and will be deposited with DTC.
DTC has advised us as follows: DTC is a limited-purpose trust company
organized under the New York Banking Law, 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 Securities Exchange Act of 1934, as amended. DTC holds securities
that its participants deposit with
S-17
<PAGE> 18
it. DTC also facilitates the settlement among participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in participants' accounts, thereby
eliminating the need for physical movement of securities certificates.
Participants in DTC include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. DTC is owned
by a number of its participants and by the New York Stock Exchange, the American
Stock Exchange, Inc., and the National Association of Securities Dealers, Inc.
Access to DTC's system is also available to others, such as securities brokers
and dealers, banks and trust companies that clear transactions through or
maintain a direct or indirect custodial relationship with a participant either
directly or indirectly. The rules applicable to DTC and its participants are on
file with the Securities and Exchange Commission.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Senior Notes will be made by the underwriters in
immediately available funds. All payments of principal and interest on the
Senior Notes will be made by us in immediately available funds. The Senior Notes
will trade in DTC's settlement system until maturity.
Investors may elect to hold interests in the Senior Notes through either
DTC or Clearstream Banking SA ("Clearstream", formerly Cedelbank) or Morgan
Guaranty Trust Company of New York, Brussels Office, or its successor, as
operator of the Euroclear System ("Euroclear") if they are participants of such
systems, or indirectly through organizations which are participants in such
systems. Clearstream and Euroclear will hold interests on behalf of their
participants through customers' securities accounts in Clearstream's and
Euroclear's names on the books of their respective depositaries, which in turn
may hold such interests in customers' securities accounts in the names of their
respective depositaries on the books of DTC.
CONCERNING THE TRUSTEE
Except during the continuance of an Event of Default, the Trustee shall
perform only such duties as are specifically set forth in the Indenture. During
the continuance of any Event of Default, the Trustee shall exercise such of the
rights and powers vested in it under the Indenture and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
The Trustee may acquire and hold Senior Notes and, subject to certain
conditions, otherwise deal with AXA Financial as if it were not Trustee under
the Indenture.
AXA Financial, Inc. and its subsidiaries currently conduct banking
transactions with the Trustee in the ordinary course of business.
S-18
<PAGE> 19
UNDERWRITING
The underwriters named below have severally agreed, subject to the terms
and conditions of the pricing agreement with us, to purchase the principal
amount of Senior Notes set forth below opposite their respective names. The
underwriters are committed to purchase all of such Senior Notes if any are
purchased. Under certain circumstances, the commitments of non-defaulting
underwriters may be increased.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITERS: OF SENIOR NOTES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation......... $240,000,000
Banc of America Securities LLC.............................. 81,600,000
Chase Securities Inc........................................ 38,400,000
Credit Suisse First Boston Corporation...................... 38,400,000
UBS Warburg LLC............................................. 38,400,000
Banc One Capital Markets, Inc............................... 14,400,000
FleetBoston Robertson Stephens Inc. ........................ 14,400,000
Salomon Smith Barney Inc.................................... 14,400,000
------------
Total..................................................... $480,000,000
============
</TABLE>
The underwriters propose to offer the Senior Notes in part directly to the
public at the initial public offering price set forth on the cover page of this
prospectus supplement and in part to certain securities dealers at such price
less a concession of 0.40% of the principal amount of the Senior Notes. The
underwriters may allow, and such dealers may reallow, a concession not to exceed
0.25% of the principal amount of the Senior Notes to certain brokers and
dealers. After the Senior Notes are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
underwriters.
In connection with the offering of the Senior Notes, the underwriters may
engage in overallotment, stabilizing transactions and short covering
transactions in accordance with Regulation M under the Securities Exchange Act
of 1934. Overallotment involves sales in excess of the offering size, which
creates a short position for the underwriters. Stabilizing transactions involve
bids to purchase the Senior Notes in the open market for the purpose of pegging,
fixing or maintaining the price of the Senior Notes. Short covering transactions
involve purchases of the Senior Notes in the open market after the distribution
has been completed in order to cover short positions. These stabilizing
transactions and short covering transactions may cause the price of the Senior
Notes to be higher than it would otherwise be in the absence of such
transactions. Such activities, if commenced, may be discontinued at any time.
All secondary trading in the Senior Notes will settle in immediately
available funds. See "Description of Senior Notes -- Same-Day Settlement and
Payment."
We do not intend to apply for listing of the Senior Notes on a national
securities exchange, but have been advised by the underwriters that the
underwriters intend to make a market in the Senior Notes. The underwriters are
not obligated, however, to make a market in the Senior Notes and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Senior Notes.
AXA Financial, Inc. has agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.
In the ordinary course of their respective businesses, the underwriters and
certain of their affiliates have engaged and may in the future engage in
investment banking and commercial banking transactions with us and our
subsidiaries. In particular, an affiliate of Banc of America Securities LLC
loaned us $1.45 billion in June 2000 to fund our obligations in connection with
the SCB Acquisition. We intend to use the proceeds of this offering to repay a
portion of that loan.
S-19
<PAGE> 20
We estimate that we will spend approximately $600,000 for printing, rating
agency, trustee, accounting and legal fees and other expenses relating to the
offering.
Donaldson, Lufkin & Jenrette Securities Corporation is a wholly owned
subsidiary of DLJ, approximately 69.5% of the outstanding common stock of which
was owned by AXA Financial at March 31, 2000. Donaldson, Lufkin & Jenrette
Securities Corporation has committed to purchase from us 50.0% of the Senior
Notes to be purchased in the offering on the same basis as the other
underwriters. Although the amount of proceeds derived from the offering by us
will not be affected by Donaldson, Lufkin & Jenrette Securities Corporation's
participation as an underwriter, to the extent that part or all of the Senior
Notes owned by Donaldson, Lufkin & Jenrette Securities Corporation are not
resold, the Senior Notes will be eliminated in consolidation and will not be
shown as outstanding debt in our consolidated financial statements. Donaldson,
Lufkin & Jenrette Securities Corporation intends to resell any Senior Notes
which it is unable to resell in the offering from time to time, at prevailing
market prices.
Since Donaldson, Lufkin & Jenrette Securities Corporation, one of the
underwriters, is our affiliate, and since all of the net proceeds of the
offering will be paid to an affiliate of one of the underwriters, the offering
of the Senior Notes is being made pursuant to and in compliance with the
provisions of Rules 2710(c)(8) and 2720 of the Conduct Rules of the National
Association of Securities Dealers, Inc. (the "NASD"). In accordance with Rule
2720, no NASD member participating in the distribution is permitted to confirm
sales to accounts over which it exercises discretionary authority without the
prior specific written approval of the customer.
This prospectus supplement may also be used by Donaldson, Lufkin & Jenrette
Securities Corporation in connection with offers and sales of the Senior Notes
in market-making transactions at negotiated prices related to prevailing market
prices at the time of the sale. Donaldson, Lufkin & Jenrette Securities
Corporation may act as principal or agent in such transactions. Donaldson,
Lufkin & Jenrette Securities Corporation has advised us that it currently
intends to make a market in the Senior Notes, 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 Senior Notes. We will not receive any proceeds from the sale of
the Senior Notes in any such market-making transactions.
LEGAL OPINIONS
The validity of the Senior Notes will be passed upon for AXA Financial by
Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022, and for the
underwriters by Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York
10017.
ERISA MATTERS
AXA Financial, Inc. and certain of its affiliates, including Equitable
Life, Alliance and DLJ, may each be considered a "party in interest" within the
meaning of ERISA or a "disqualified person" within the meaning of the Internal
Revenue Code of 1986, as amended (the "Code"), with respect to many employee
benefit plans. Prohibited transactions within the meaning of ERISA or the Code
may arise, for example, if the Senior Notes are acquired by or on behalf of a
pension or other employee benefit plan with respect to which AXA Financial or
any of its affiliates is a service provider, unless such Senior Notes are
acquired pursuant to an exemption for transactions effected on behalf of such
plan by a "qualified professional asset manager" or pursuant to any other
available exemption. Any such pension or employee benefit plan or other person
proposing to invest in the Senior Notes should consult with its legal counsel.
S-20
<PAGE> 21
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.
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 MARCH 27, 1998
<PAGE> 22
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
2
<PAGE> 23
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.
3
<PAGE> 24
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.
4
<PAGE> 25
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
5
<PAGE> 26
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 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
6
<PAGE> 27
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.
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.
7
<PAGE> 28
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.
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
8
<PAGE> 29
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
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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 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.)
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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 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
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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
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<PAGE> 34
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.)
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
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<PAGE> 35
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.
Since the Company is affiliated with one or more NASD members intending to
participate in the distribution of the Debt Securities, any offering of Debt
Securities will be made pursuant to and in compliance with the provisions of
Rule 2720 of the Conduct Rules of the National Association of Securities
Dealers, Inc. (the "NASD"). In accordance with Rule 2720, no NASD member
participating in a distribution of Debt Securities will be permitted to confirm
sales to accounts over which it exercises discretionary authority without the
prior specific written approval of the customer.
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.
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.
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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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JULY 25, 2000
[AXA FINANCIAL, INC. LOGO]
$480,000,000
7.75% SENIOR NOTES DUE 2010
------------------------------------------
PROSPECTUS SUPPLEMENT
------------------------------------------
DONALDSON, LUFKIN & JENRETTE
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
UBS WARBURG LLC
BANC ONE CAPITAL MARKETS, INC.
FLEETBOSTON ROBERTSON STEPHENS
SALOMON SMITH BARNEY
--------------------------------------------------------------------------------
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE YOU
WRITTEN INFORMATION OTHER THAN THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED
PROSPECTUS OR TO MAKE REPRESENTATIONS AS TO MATTERS NOT STATED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. YOU MUST NOT RELY ON UNAUTHORIZED
INFORMATION. THIS PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL THE SECURITIES
OR OUR SOLICITATION OF YOUR OFFER TO BUY THE SECURITIES IN ANY JURISDICTION
WHERE THAT WOULD NOT BE PERMITTED OR LEGAL. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS NOR ANY SALES MADE HEREUNDER
AFTER THE DATE OF THIS PROSPECTUS SUPPLEMENT SHALL CREATE AN IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN OR THE AFFAIRS OF THE COMPANY HAVE NOT CHANGED
SINCE THE DATE HEREOF.
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