Item 1. Business
General
Alliance
Holding was formed in 1987 to succeed to the business of ACMC which began
providing investment management services in 1971. On April 21, 1988 the business and substantially all of the
operating assets of ACMC were conveyed to Alliance Holding in exchange for a 1%
general partnership interest in Alliance Holding and approximately 55% of the
outstanding Alliance Holding Units. In
December 1991 ACMC transferred its 1% general partnership interest in Alliance
Holding to Alliance.
In October 1999 Alliance Holding reorganized
by transferring its business and assets to Alliance Capital, a newly formed
operating partnership, in exchange for all of the Alliance Capital Units
(“Reorganization”). Since the date of the Reorganization Alliance Capital has
conducted the diversified investment management services business formerly
conducted by Alliance Holding and Alliance Holding’s business has consisted of
holding Alliance Capital Units and engaging in related activities. As part of the Reorganization Alliance
Holding offered each Alliance Holding Unitholder the opportunity to exchange
Alliance Holding Units for Alliance Capital Units on a one-for-one basis. The Alliance Holding Units trade publicly on
the New York Stock Exchange, Inc. (“NYSE”) while the Alliance Capital Units do
not trade publicly and are subject to significant restrictions on
transfer. Alliance is the General
Partner of both Alliance Capital and Alliance Holding.
On October 2,
2000 Alliance Capital acquired the business and assets of SCB Inc., formerly
known as Sanford C. Bernstein Inc. (“Bernstein”), and assumed the liabilities
of the Bernstein business (“Bernstein Acquisition”). The purchase price
consisted of a cash payment of $1.4754 billion and 40.8 million newly issued
Alliance Capital Units. AXA Financial purchased approximately 32.6 million
newly issued Alliance Capital Units for $1.6 billion on June 21, 2000 to fund
the cash portion of the purchase price.
As
of March 1, 2002 AXA, AXA Financial, Equitable and certain subsidiaries of
Equitable were the beneficial owners of 128,477,020 Alliance Capital Units or
approximately 51.6% of the issued and outstanding Alliance Capital Units and
1,544,356 Alliance Holding Units or approximately 2.1% of the issued and
outstanding Alliance Holding Units. As of
March 1, 2002 Alliance Holding was the owner of 75,220,955 Alliance Capital
Units or approximately 30.2% of the issued and outstanding Alliance Capital
Units. As of March 1, 2002 SCB Partners
Inc., a wholly-owned subsidiary of SCB Inc., was the owner of 40.8 million
Alliance Capital Units or approximately 16.4% of the issued and outstanding
Alliance Capital Units.
As
of March 1, 2002 AXA and its subsidiaries owned all of the issued and
outstanding shares of the common stock of AXA Financial. AXA Financial owns all of the issued and
outstanding shares of Equitable. For
insurance regulatory purposes all shares of common stock of AXA Financial
beneficially owned by AXA and its affiliates have been deposited into a voting
trust. See “Item 12. Security Ownership of Certain Beneficial
Owners and Management.”
AXA, a French
company, is the holding company for an international group of companies and a
worldwide leader in financial protection and wealth management. AXA operates primarily in Western Europe,
North America and the Asia/Pacific region and, to a lesser extent, in other
regions including the Middle East, Africa and South America. AXA has five operating business
segments: life & savings, property
& casualty, international insurance (including reinsurance), asset
management and other financial services.
Alliance
Capital provides diversified investment management and related services
globally to a broad range of clients including (a) institutional investors,
consisting of unaffiliated entities such as corporate and public employee
pension funds, endowment funds, domestic and foreign institutions and
governments and affiliates such as AXA and its insurance company subsidiaries,
by means of separate accounts, sub-advisory relationships resulting from the
efforts of the institutional marketing department, structured products, group
trusts, and mutual funds sold exclusively to institutional investors and high
net worth individuals, (b) private clients, consisting of high net worth
individuals, trusts and estates, charitable foundations, partnerships, private
and family corporations and other entities, by means of separate accounts,
hedge funds, and certain other vehicles, (c) individual investors by means of
retail mutual funds sponsored by Alliance Capital, its subsidiaries and
affiliated joint venture companies including cash management products such as
money market funds and deposit accounts and sub-advisory relationships in
respect of mutual funds sponsored by third parties resulting from the efforts
of the mutual fund marketing department (“Alliance Mutual Funds”) and “managed
account” products, and (d) institutional investors by means of in-depth
research, portfolio strategy, trading and brokerage-related services. Alliance
Capital and its subsidiaries provide investment management, distribution and
shareholder and administrative services to the Alliance Mutual Funds.
Alliance
Capital provides a broad offering of investment products, global in scope, with
expertise in both growth and value oriented strategies, the two predominant
equity investment styles, coupled with a fixed income capability in both
taxable and tax exempt securities.
The following tables
provide a summary of assets under management and associated revenues of
Alliance Capital:
Assets Under Management (1)
(in millions)
Revenues
(2)
(in thousands)
(1) Includes
assets under management of the business acquired in the Bernstein Acquisition
at December 31, 2000 and December 31, 2001.
(2) Includes
revenues of the business acquired in the Bernstein Acquisition for the fourth
quarter of 2000 and all of
2001.
(3) Includes
the general and separate accounts of AXA and its insurance company
subsidiaries.
(4) Assets
under management exclude certain non-discretionary advisory relationships and
reflect 100% of the assets managed by unconsolidated joint
venture subsidiaries and affiliates.
(5) Includes
money market deposit accounts brokered by Alliance Capital for which no
investment management services are
performed.
(6) Set
of certain fees paid to Equitable for services rendered by Equitable in
marketing the variable annuity insurance
and variable life products
for which The Hudson River Trust (“HRT”) was the funding vehicle. All of the
portfolios
of HRT were transferred to
EQ Advisors Trust (“EQAT”) effective October 18, 1999 and such fees are no
longer
payable to Equitable.
(7) Includes
fees for the management of hedge funds which are higher than the fees charged
for Institutional Investment
Management and Retail and
also provide for the payment of performance fees, incentive allocations or
carried
interests.
INSTITUTIONAL
INVESTMENT MANAGEMENT SERVICES
Alliance
Capital’s Institutional Investment Management Services consist primarily of the
active management of equity accounts, balanced accounts (equity and fixed
income) and fixed income accounts for institutions such as corporate and public
employee pension funds, endowment funds, domestic and foreign institutions,
governments and affiliates (AXA and certain of its insurance company
subsidiaries, including Equitable) by means of separate accounts, sub-advisory
relationships resulting from the efforts of the institutional marketing group,
structured products, group trusts and mutual funds sold exclusively to institutional
investors and high net worth individuals.
As of December 31, 2001 the assets of institutional investors were
managed by 215 portfolio managers with an average of 15 years of experience in
the industry and 9 years of experience with Alliance Capital.
As of December 31, 1999,
2000 and 2001 institutional investment management services represented
approximately 56%, 56% and 57%, respectively, of total assets under management
by Alliance Capital. The fees earned from
these institutional investment management services represented approximately
22%, 21% and 24% of Alliance Capital’s revenues for 1999, 2000 and 2001,
respectively.
Institutional Investment Management Services
Assets Under Management (1) (2)
(in millions)
(1)
Includes 100% of the assets managed by
unconsolidated joint venture subsidiaries and affiliates of $621 million at
December 31, 1999, $1,126 million at December 31, 2000 and $870 million at
December 31, 2001.
(2)
Includes assets under management of the
business acquired in the Bernstein Acquisition at December 31, 2000 and
December 31, 2001.
Revenues From Institutional
Investment Management Services (1)
(in thousands)
(1)
Includes revenues of the business acquired
in the Bernstein Acquisition for the fourth quarter of 2000 and all of 2001.
Equity
and Balanced Accounts. Institutional
equity and balanced accounts contributed approximately 16%, 16% and 19% of
Alliance Capital’s total revenues for 1999, 2000 and 2001, respectively. Assets under management relating to active
equity and balanced accounts grew from approximately $60.8 billion as of
December 31, 1996 to approximately $155.0 billion as of December 31, 2001.
Fixed
Income Accounts. Institutional
fixed income accounts contributed approximately 6%, 5% and 4% of Alliance
Capital’s total revenues for 1999, 2000 and 2001, respectively. Assets under management relating to active
fixed income accounts increased from approximately $41.0 billion as of December
31, 1996 to approximately $75.4 billion as of December 31, 2001.
Institutional Clients
The
approximately 2,965 separately managed accounts for institutional investors for
which Alliance Capital acts as investment manager include corporate employee
benefit plans, public employee retirement systems, AXA and its insurance company
subsidiaries, endowments, foundations, foreign governments, multi-employer
pension plans and financial and other institutions.
AXA
and the general and separate accounts of Equitable and its insurance company
subsidiary, including investments made by these accounts in EQAT (See “Retail
Services - Variable Products”), represented approximately 20%, 15% and 14% of
total assets under management by Alliance Capital at December 31, 1999, 2000
and 2001, respectively, and approximately 8%, 6% and 5% of Alliance Capital’s
total revenues for 1999, 2000 and 2001, respectively. Taken as a whole they
comprise Alliance Capital’s largest institutional client.
As of
December 31, 2001 corporate employee benefit plan accounts represented
approximately 12% of total assets under management by Alliance Capital. Assets under management for other tax-exempt
accounts, including public employee benefit funds organized by government
agencies and municipalities, endowments, foundations and multi-employer
employee benefit plans, represented approximately 34% of total assets under
management as of December 31, 2001.
The
following table lists Alliance Capital’s ten largest institutional clients,
ranked in order of size of total assets under management as of December 31,
2001. Since Alliance Capital’s fee
schedules vary based on the type of account, the table does not reflect the ten
largest revenue generating clients.
These
institutional clients accounted for approximately 19% of Alliance Capital’s total
assets under management at December 31, 2001 and approximately 4% of Alliance
Capital’s total revenues for the year ended December 31, 2001 (25% and 7%,
respectively, if the investments by the separate accounts of Equitable in EQAT
were included). No single institutional
client other than Equitable and its insurance company subsidiary accounted for
more than approximately 1% of Alliance Capital’s total revenues for the year
ended December 31, 2001. AXA and the
general and separate accounts of Equitable and their subsidiaries accounted for
approximately 7% of Alliance Capital’s total assets under management at
December 31, 2001 and approximately 2% of Alliance Capital’s total revenues for
the year ended December 31, 2001 (14% and 5% respectively, if the investments
by the separate accounts of Equitable in EQAT were included).
Since its
inception, Alliance Capital has experienced periods when it gained significant
numbers of new accounts or amounts of assets under management and periods when
it lost significant accounts or assets under management. These fluctuations result from, among other
things, capital market conditions, Alliance Capital’s performance under
prevailing market conditions, changes in the investment preferences of clients
that result in a shift in assets under management and other circumstances such
as changes in the management or control of a client.
Institutional
Investment Management Agreements and Fees
Alliance
Capital’s accounts for institutional investors are managed pursuant to a
written investment management agreement between the client and Alliance
Capital, which usually is terminable at any time or upon relatively short
notice by either party. In general,
Alliance Capital’s contracts may not be assigned without the consent of the
client.
In providing
investment management services to institutional clients, Alliance Capital is
principally compensated on the basis of fees calculated as a percentage of
assets under management.
Management
fees are generally charged in accordance with a fee schedule based on the type
of portfolio, the size of the account and a percentage of assets under
management. With respect to approximately 5% of assets under management for
institutional investors, Alliance Capital charges performance-based fees,
which consist of a relatively low base fee plus an additional fee if investment
performance for the account exceeds certain benchmarks. No assurance can be given that such fee
arrangements will not become more common in the investment management
industry. Utilization of such fee
arrangements by Alliance Capital on a broader basis could create greater
fluctuations in Alliance Capital’s revenues.
In connection
with the investment advisory services provided to the general and separate
accounts of Equitable and its insurance company subsidiary Alliance Capital
provides ancillary accounting, valuation, reporting, treasury and other
services. Equitable and its insurance
company subsidiary compensate Alliance Capital for such services. See “Item 13. Certain Relationships and Related Transactions.”
Marketing
Alliance
Capital’s institutional products are marketed globally by AllianceBernstein
Institutional Investment Management, which has a sales force deployed across
all product lines including growth equities, value equities and fixed income.
PRIVATE
CLIENT SERVICES
Alliance
Capital provides investment management services to private clients consisting
of high net worth individuals, trusts and estates, charitable foundations,
partnerships, private and family corporations and other similar entities by
means of separate accounts, hedge funds and certain other vehicles. Fees for
the management of hedge funds are higher than the fees charged for other accounts
and also provide for the payment of performance fees, incentive allocations or
carried interests to Alliance Capital.
Alliance Capital provided investment management services to a group of
private clients prior to the Bernstein Acquisition. Private clients were a core client group of Bernstein for over 30
years prior to the Bernstein Acquisition on October 2, 2000. The former private
client services group of Bernstein is now known as the Bernstein Investment
Research and Management unit of Alliance Capital (“BIRM”). The private client services group consists
of BIRM and the historic Alliance Capital private client group. BIRM targets households with financial
assets of $1 million or more and has a minimum account size of $400,000. BIRM’s
services consist of customized, tax-sensitive investment planning across a
broad range of investment options.
BIRM’s private
client activities are built on a direct sales effort that involves over 175
advisors. These financial advisors work with private clients and their tax,
legal and other advisors to tailor long-range investment plans to meet each
client’s needs. The portfolio created for each private client is intended to
maximize after-tax investment returns given a client’s individual investment
goals, income requirements, risk tolerance, tax considerations and any other
consideration relevant for that client.
Revenues from
private clients, which represented 14% of Alliance Capital’s total revenues for
the year ended December 31, 2001, consist primarily of investment management
fees earned from managing assets and, in the case of clients of BIRM, also
include transaction charges earned by Sanford C. Bernstein & Co., LLC, a
wholly-owned subsidiary, from executing trading activities relating to equities
under management.
Private client
accounts are managed pursuant to a written investment advisory agreement, which
usually is terminable at any time or upon relatively short notice by any
party. In general, these contracts may
not be assigned without the consent of the client. In providing services to private clients Alliance Capital is
compensated on the basis of fees calculated based on the
type of portfolio, the size of the account and a percentage of assets
under management as well as transaction charges earned by Alliance
Capital’s wholly-owned subsidiary, Sanford C. Bernstein & Co., LLC, from
executing trading activities.
The tables
below set forth private client assets under management and revenues for the periods
presented:
Private Client Assets Under
Management (1)
(in millions)
(1)
Includes
private client assets under management of the business acquired in the Bernstein
Acquisition at December 31, 2000 and December 31, 2001.
Revenues From Private Client
Services (1)
(in thousands)
(1)
Includes
revenues of the business acquired in the Bernstein Acquisition for the fourth
quarter of 2000 and all of 2001.
Private Client Marketing
BIRM’s private
client financial advisors are dedicated to obtaining and maintaining client
relationships. They do not manage money and do not sell individual stocks or
external products. Their goal is to provide investment perspective for clients
in order to assist them in determining a suitable mix of U.S. and non-U.S.
equity securities and fixed income investments. The financial advisors are
based in New York City, Los Angeles,
West Palm Beach, Chicago, Dallas, San Francisco, Washington, D.C., White
Plains, Seattle, Miami, Minneapolis and Houston. These offices reach not only the targeted market within these
cities but also the surrounding areas.
BIRM’s private
client marketing group also has established an extensive nationwide
referral-source network, including accountants, attorneys and consultants.
These professionals serve many of the targeted clients. As part of this
strategy, meetings for professionals are organized in many cities and BIRM’s
private client marketing group regularly provides them with written materials
to inform them of investment insights and services.
RETAIL SERVICES
Alliance
Capital’s Retail Services consist of furnishing investment management and
related services to individual investors by means of retail mutual funds
sponsored by Alliance Capital, its subsidiaries and affiliated joint venture
companies including cash management products such as money market funds and
deposit accounts and sub-advisory relationships resulting from the efforts of
the mutual fund marketing department (“Alliance Mutual Funds”) and “managed
account” products. The net assets com­prising the Alliance Mutual Funds on
December 31, 2001 amounted to approximately $157 billion. The assets of the Alliance Mutual Funds are
managed by the same investment professionals who manage Alliance Capital’s
accounts of institutional investors and high net-worth individuals.
The
tables below set forth retail assets under management and revenues for the
periods presented:
Retail Services Assets Under
Management
(in millions)
Revenues From Retail Services (1)
(2) (3)
(in thousands)
(1)
Includes fees received
by Alliance Capital in connection with managed account product accounts.
(2)
Net of certain fees
paid to Equitable for services rendered by Equitable in marketing the
variable annuity insurance and variable life products for which HRT was the
funding vehicle. All of the
portfolios of HRT transferred to EQAT effective October 18, 1999 and such
fees are no longer payable to Equitable.
(3)
Includes fees received by Alliance Capital in connection
with its distribution of money market deposit accounts for which no
investment management services are provided.
Alliance Mutual Funds
and Managed Account Programs
Alliance Capital has
been managing mutual funds since 1971.
Since then, Alliance Capital has sponsored open-end load mutual funds
and closed-end mutual funds (i) registered as investment companies under the
Investment Company Act (“U.S. Funds”), and (ii) not registered under the
Investment Company Act and which are not publicly offered to United States persons
(“Offshore Funds”). Alliance Capital
also manages retail managed account product programs, which are sponsored by
various registered broker-dealers (“Managed Account Programs”). On December 31, 2001 net assets in the
Alliance Mutual Funds and Managed Account Programs totaled approximately $88
billion.
(1)
Assets under management exclude certain
non-discretionary advisory relationships and reflect 100% of the assets
managed by unconsolidated affiliates totaling approximately $2.6 billion.
Variable Products
Alliance Capital is a
sub-adviser to EQAT, which is the funding vehicle for the variable annuity and
variable life insurance products offered by Equitable and its insurance company
subsidiary. The Alliance Variable
Products Series Fund is a funding vehicle for variable annuity and variable
life insurance products offered by other unaffiliated insurance companies. On December 31, 2001 the net assets of the
portfolios of the Variable Products totaled approximately $37 billion:
Distribution.
The Alliance Mutual Funds are distributed to individual investors
through broker-dealers, insurance sales representatives, banks,
registered investment advisers, financial planners and other financial
intermedi­aries. Alliance Fund
Distributors, Inc. (“AFD”), a registered broker-dealer and a wholly-owned
subsidiary of Alliance Capital, serves as the principal underwriter and
distributor of the U.S. Funds and serves as a placing or distribution agent for
most of the Offshore Funds. There are
approximately 300 sales representatives who devote their time exclusively to
promoting the sale of shares of Alliance Mutual Funds by financial inter­mediaries.
Alliance
Capital maintains a mutual fund distribution system (the “System”) which
permits open-end Alliance Mutual Funds to offer investors various options for
the purchase of mutual fund shares, including the purchase of Front-End Load
Shares and Back-End Load Shares. The
Front-End Load Shares are subject to a conventional front-end sales charge paid
by investors to AFD at the time of sale.
AFD in turn compensates the financial intermediaries distributing the
funds from the front-end sales charge paid by investors. For Back-End Load Shares, investors do not
pay a front-end sales charge although, if there are redemptions before the
expiration of the minimum holding period (which ranges from one year to four
years), investors pay a contingent deferred sales charge (“CDSC”) to AFD. While AFD is obligated to compensate the financial
intermediaries at the time of the purchase of Back-End Load Shares, it receives
higher ongoing distribution fees from the funds. Payments made to financial intermediaries in connection with the
sale of Back-End Load Shares under the System, net of CDSC received, reduced
cash flow from operations by approximately $163.3 million and $330.6 million
during 2001 and 2000, respectively.
Management of Alliance Capital believes AFD will recover the payments
made to financial intermediaries for the sale of Back-End Load Shares from the
higher distribution fees and CDSC it receives over periods not exceeding 5 ½
years.
The rules of
the National Association of Securities Dealers, Inc. effectively limit the
aggregate of all front-end, deferred and asset-based sales charges paid to AFD
with respect to any class of its shares by each open-end U.S. Fund to 6.25% of
cumulative gross sales of shares of that class, plus interest at the prime rate
plus 1% per annum.
The open-end
U.S. Funds and Offshore Funds have entered into agreements with AFD under which
AFD is paid a distribution services fee.
Alliance Capital uses borrowings and its own resources to finance
distribution of open-end Alliance Mutual Fund shares.
The selling
and distribution agreements between AFD and the financial intermediaries that
distribute Alliance Mutual Funds are termi­nable by either party upon notice
(generally not more than sixty days) and do not obligate the financial
intermediary to sell any specific amount of fund shares. A small amount of mutual fund sales is made
directly by AFD, in which case AFD retains the entire sales charge.
During 2001
the ten financial intermediaries responsible for the largest volume of sales of
open-end U.S. Funds were responsible for 52% of such sales. AXA Advisors, LLC (“AXA Advisors”), a
wholly-owned subsidiary of AXA Financial that utilizes members of Equitable’s
insurance agency sales force as its registered representatives, has entered
into a selected dealer agreement with AFD and, together with its predecessor,
since 1986 has been responsible for a significant portion of total sales of
shares of open-end U.S. Funds and Offshore Funds (4%, 4% and 3% in 1999, 2000
and 2001, respectively). AXA Advisors
is under no obligation to sell a specific amount of fund shares and also sells
shares of mutual funds sponsored by organizations unaffiliated with Equitable.
Subsidiaries
of Merrill Lynch & Co., Inc. (collectively “Merrill Lynch”) were
responsible for approximately 26%, 18%
and 13% of open-end Alliance Mutual Fund sales in 1999, 2000 and 2001,
respectively. Citigroup Inc. and its
subsidiaries (“Citigroup”), parent company of Salomon Smith Barney & Co.,
Inc., was responsible for approximately 6% of open-end Alliance Mutual Fund
sales in 1999, 5% in 2000 and 5% in
2001. Neither Merrill Lynch nor
Citigroup is under any obligation to sell a specific amount of Alliance Mutual
Fund shares and each also sells shares of mutual funds that it sponsors and
which are sponsored by unaffiliated organizations.
No dealer or
agent other than AXA Advisors, Merrill Lynch and Citigroup has in any year
since 1995 accounted for more than 10% of the sales of open-end Alliance Mutual
Funds.
Many of the
financial intermediaries that sell shares of Alliance Mutual Funds also offer
shares of funds not managed by Alliance Capital and frequently offer shares of
funds managed by their own affiliates.
Based
on industry sales data reported by the Investment Company Institute (January
2002), Alliance Capital’s market share in the U.S. mutual fund industry is
1.40% of total industry assets and Alliance Capital accounted for 1.41% of
total open-end industry sales in the U.S. during 2001. While the performance of the Alliance Mutual
Funds is a factor in the sale of their shares, there are other factors
contributing to success in sales of mutual fund shares that are not as
important in institutional investment management services. These factors include the level and quality
of shareholder services (see “Shareholder and Administration Services” below)
and the amounts and types of distribution assis­tance and administrative
services payments. Alliance Capital
believes that its compensation programs with financial intermediaries are
competitive with others in the industry.
Under current
interpretations of laws and regulations governing depository institutions,
banks and certain of their affiliates generally are permitted to act as agent
for their customers in connection with the purchase of mutual fund shares and
to receive as compensation a portion of the sales charges paid with respect to
such purchases. During 2001 banks and
their affiliates accounted for approximately 13% of the sales of shares of
open-end U.S. Funds and Variable Products.
Investment Management Agreements and Fees. Investment management fees from the Alliance
Mutual Funds, EQAT and the Variable Products are based upon a percentage of
average net assets. As certain of the
U.S. Funds have grown, fee schedules have been revised to provide lower
incremental fees above certain asset levels.
Fees paid by the U.S. Funds and EQAT are fixed annually by negotiation
between Alliance Capital and the board of directors or trustees of each U.S.
Fund and EQAT, including a majority of the disinterested directors or trustees. Changes in fees must be approved by the
shareholders of each U.S. Fund and EQAT.
In general, the investment management agreements with the U.S. Funds and
EQAT provide for termination at any time upon 60 days’ notice.
Under each
investment management agreement with a U.S. Fund, Alliance Capital provides the
U.S. Fund with investment management services, office space and order placement
facilities and pays all compensation of directors or trustees and officers of
the U.S. Fund who are affiliated persons of Alliance Capital. Each U.S. Fund pays all of its other
expenses. If the expenses of a U.S.
Fund exceed an expense limit established under the securities laws of any state
in which shares of that U.S. Fund are qualified for sale or as prescribed in
the U.S. Fund’s investment management agreement, Alliance Capital absorbs such
excess through a reduction in the investment management fee. The expense ratios
for the U.S. Funds during their most recent fiscal year ranged from 0.59% to
3.70%. In connection with newly
organized U.S. Funds, Alliance Capital may also agree to reduce its fee or bear
certain expenses to limit expenses during an initial period of operations.
Cash Management Services
Alliance
Capital provides cash management services to individual investors through a
product line comprising 20 money market fund portfolios, including two offshore
money market funds, domiciled in the Cayman Islands and in Dublin, Ireland and
3 types of brokered money market deposit accounts. Net assets in these products as of December 31, 2001 totaled
approximately $31 billion.
Under its
investment management agreement with each money market fund, Alliance Capital
is paid an investment management fee based on a percentage of the fund’s
average net assets. In the case of
certain money market funds, the fee is payable at lesser rates with respect to
average net assets in excess of $1.25 billion.
For distribution and account mainte­nance services rendered in
connection with the sale of money market deposit accounts, Alliance Capital receives
fees from the participating banks that are based on outstanding account
balances. Because the money market
deposit account programs involve no investment management functions to be
performed by Alliance Capital, Alliance Capital’s costs of maintaining the
account programs are less, on a relative basis, than its costs of managing the
money market funds.
On December
31, 2001 more than 98% of the assets invested in Alliance Capital’s cash
management programs were attributable to regional broker-dealers and other
financial intermediaries, with the remainder coming directly from the
public. On December 31, 2001 more than
500 financial intermediaries offered Alliance Capital’s cash management
services. Alliance Capital’s money
market fund market share (not including deposit products), as computed based on
market data reported by the Investment Company Institute (December 2001), has
decreased from 1.99% of total money market fund industry assets at the end of
1996 to 1.89% at December 31, 2001.
Alliance Capital
makes payments to financial intermediaries for distribution assistance and
shareholder servicing and administration.
Alliance Capital’s money market funds pay fees to Alliance Capital at
annual rates of up to 0.25% of average daily net assets pursuant to “Rule
12b-1” distribution plans except for Alliance Money Market Fund which pays a
fee of up to 0.45% of its average daily net assets. Such payments are supplemented by Alliance Capital in making
payments to financial intermediaries under the distribution assistance and
shareholder servicing and administration program. During 2001 such
supplemental payments totaled
approximately $108.0 million ($77.4 million in 2000). There are 7 employees of Alliance Capital who devote their time
exclusively to marketing Alliance Capital’s cash management services.
A principal risk to Alliance Capital’s cash management services
business is the acquisition of its participating financial intermediaries by
companies that are competitors or that plan to enter the cash manage­ment
services business. As of December 31,
2001 the five largest participating financial intermediaries were responsible
for assets aggregating approximately $25 billion, or 81% of the cash management
services total.
Many of the
financial intermediaries whose customers utilize Alliance Capital’s cash
management services are broker-dealers whose customer accounts are carried, and
whose securities transactions are cleared and settled, by the Pershing Division
(“Pershing”) of Donaldson, Lufkin & Jenrette Securities Corporation (“DLJ
Securities Corporation”), a wholly-owned subsidiary of Credit Suisse First
Boston Corporation. DLJ Securities
Corporation was a wholly-owned subsidiary of AXA Financial until November 3,
2000. Pursuant to an agreement between Pershing and Alliance Capital, Pershing
recommends that certain of its correspondent firms use Alliance Capital’s money
market funds and other cash management products. As of December 31, 2001 DLJ Securities Corporation and these
Pershing correspondents were responsible for approximately $19 billion or 62%
of Alliance Capital’s total cash management assets. Pershing may terminate its agreement with Alliance Capital on 180
days’ notice. If the agreement were
terminated, Pershing would be under no obligation to recommend or in any way
assist in the sale of Alliance Capital’s cash management products and would be
free to recommend or assist in the sale of competitive products.
Alliance
Capital’s money market funds distributed publicly in the United States are
investment companies registered under the Investment Company Act and are
managed under the supervision of boards of directors or trust­ees, which
include disinterested directors or trustees who must approve investment
management agreements and certain other matters. The investment management agreements between the money market
funds and Alliance Capital provide for an expense limitation of 1% per annum or
less of average daily net assets. See “Mutual
Funds Management - Investment Management Agreements and Fees.”
Shareholder
and Administration Services
Alliance
Global Investor Services, Inc. (“AGIS”), a wholly-owned subsidiary of Alliance
Capital, provides registrar, dividend disbursing and transfer agency related
services for each U.S. Fund and provides servicing for each U.S. Fund’s
shareholder accounts. As of December
31, 2001 AGIS employed 588 people. AGIS
operates out of offices in Secaucus, New Jersey, San Antonio, Texas, and
Scranton, Pennsylvania. Under each
servicing agreement AGIS receives a monthly fee. Each servicing agreement must be approved annually by the
relevant U.S. Fund’s board of directors or trustees, including a majority of
the disinterested directors or trustees, and may be terminated by either party
without penalty upon 60 days’ notice.
Most U.S.
Funds utilize Alliance Capital and AGIS personnel to perform legal, clerical
and accounting services not required to be provided by Alliance Capital. Payments by a U.S. Fund for these services
must be specifically approved in advance by the U.S. Fund’s board of directors
or trustees. Currently, Alliance
Capital and AGIS are accruing revenues for providing clerical and accounting
services to the U.S. Funds and these closed-end funds at the rate of
approximately $11.0 million per year.
ACM Global
Investor Services S.A. (“ACMGIS”) a wholly-owned subsidiary of Alliance
Capital, is the registrar and transfer agent of substantially all of the
Offshore Funds. As of December 31, 2001
ACMGIS employed 73 people. ACMGIS
operates out of offices in Luxembourg and Singapore and receives a monthly fee
for its registrar and transfer agency services. Each agreement between ACMGIS and an Offshore Fund may be
terminated by either party upon 60 days’ notice.
Alliance
Capital expects to continue to devote substantial resources to shareholder
servicing because of its importance in competing for assets invested in mutual
funds and cash management services.
INSTITUTIONAL RESEARCH SERVICES
Institutional
Research Services consist of in-depth research, portfolio strategy, trading and
brokerage related services provided to institutional investors such as pension
managers, mutual fund managers and other institutional investors who manage
assets and look to Sanford C. Bernstein & Co., LLC (“SCB LLC”) in the
United States and Sanford C. Bernstein Limited (“SCBL”) in Europe, wholly-owned
subsidiaries of Alliance Capital, to provide services to support their asset
management activities. As of December 31, 2001 SCB LLC served approximately 810
clients in the U.S. and approximately 236 in Europe, Australia and the Far
East.
SCB LLC and
SCBL earn revenues from institutional services by providing investment research
and by executing brokerage transactions for research clients on an agency
basis. In the case of research, research clients provide compensation
principally by directing brokerage transactions to SCB LLC and SCBL in return
for SCB LLC and SCBL research products. These services accounted for 2.2% and
8.9% of Alliance Capital’s revenues in 2000 and 2001, respectively. SCB LLC is
occasionally invited to and chooses to participate in underwriting syndicates
for equity issuances.
The following
table sets forth institutional services revenues for each of the periods
presented:
Revenues From Institutional Research Services
(1)
(in thousands)
(1)
Includes
revenues of the business acquired in the Bernstein Acquisition for the fourth
quarter of 2000 and all of 2001.
COMPETITION
The financial
services industry is highly competitive and new entrants are continually
attracted to it. No one or small number
of competitors is dominant in the industry.
Alliance Capital is subject to substantial competition in all aspects of
its business. Pension fund,
institutional and corporate assets are managed by investment management firms,
broker-dealers, banks and insurance companies.
Many of these financial institutions have substantially greater
resources than Alliance Capital. Alliance Capital competes with other providers
of institutional investment products and services primarily on the basis of the
range of investment products offered, the investment performance of such
products and the services provided to clients.
Based on an annual survey conducted by Pensions & Investments,
as of December 31, 2000 Alliance Capital was ranked 9th out of 251 managers based on U.S.
institutional, tax-exempt assets under management. Additionally, Alliance Capital was ranked 6th out of
the 21 largest managers of international index assets, 8th out of
the 25 largest managers of domestic equity index funds and 15th out
of the 25 largest domestic bond index managers.
Many of the
firms competing with Alliance Capital for institutional clients also offer
mutual fund shares and cash management services to individual investors. Competitiveness in this area is chiefly a
function of the range of mutual funds and
cash management services
offered, investment performance, quality in servicing customer accounts and the
capacity to provide financial incentives to financial intermediaries through
distribution assistance and administrative services payments funded by “Rule
12b-1” distribution plans and the investment adviser’s own resources.
CUSTODY
AND BROKERAGE
Neither
Alliance Capital nor its subsidiaries, other than SCB LLC, maintain custody of
client funds or securities, which is maintained by client-designated banks,
trust companies, brokerage firms or other custodians. SCB LLC maintains custody of private client assets and
securities.
Alliance
Capital generally has the discretion to select the brokers or dealers to be
utilized to execute transactions for client accounts. SCB LLC and SCBL effect trans­actions for client accounts only if
specifically authorized or directed by the client.
REGULATION
Alliance
Capital, Alliance Holding, and Alliance are investment advisers regis­tered
under the Investment Advisers Act. Each
U.S. Fund is registered with the Securities and Exchange Commission (“SEC”)
under the Investment Company Act and the shares of most U.S. Funds are
qualified for sale in all states in the United States and the District of
Columbia, except for U.S. Funds offered only to residents of a particular
state. AGIS is registered with the SEC
as a transfer agent. SCB LLC and AFD are registered with the SEC as broker-dealers.
SCB LLC is a member of the NYSE and SCBL is a member of the London Stock
Exchange. SCB LLC, SCBL and AFD are
subject to minimum net capital requirements ($9.7 million, $5.5 million and
$9.3 million, respectively, at December 31, 2001) imposed by the SEC and
Financial Services Authority on registered broker-dealers and had
aggregate regulatory net capital of $173.8 million, $37.7 million and $43.6
million, respectively, at December 31, 2001.
The
relationships of AXA and its subsidiaries, including Equitable and its
insurance company subsidiary, with Alliance Capital are subject to applicable
provisions of the New York Insurance Law and regulations. Certain of the investment advisory
agreements and ancillary administrative service agreements are subject to
either approval or disapproval by the New York Superintendent of Insurance
within a prescribed notice period.
Under the New York Insurance Law and regulations, the terms of these
agreements are to be fair and equitable, charges or fees for services performed
are to be reasonable, and certain other standards must be met. Fees must be determined either with
reference to fees charged to other clients for similar services or, in certain
cases, which include the ancillary service agreements, based on cost
reimbursement.
Alliance Capital’s
assets under management and revenues derived from the general accounts of
Equitable and its insurance company subsidiary are directly affected by the
investment policies for the general accounts.
Among the numerous factors influencing general account investment
policies are regulatory factors, such as (i) laws and regulations that require
diversification of the investment portfolios and limit the amount of
investments in certain investment categories such as below investment grade
fixed maturities, equity real estate and equity interests, (ii) statutory
investment valuation reserves, and (iii) risk-based capital guidelines for life
insurance companies approved by the National Association of Insurance
Commissioners. These policies have
resulted in the shifting of general account assets managed by Alliance Capital
into categories with lower management fees.
All aspects of
Alliance Capital’s business are subject to various federal and state laws and
regulations and to the laws in the foreign countries in which Alliance
Capital’s subsidiaries conduct business.
These laws and regulations are primarily intended to benefit clients and
Alliance Mutual Fund shareholders and generally grant super­visory agencies
broad administrative powers, including the power to limit or restrict the
carrying on of business for failure to comply with such laws and
regulations. In such event, the
possible sanctions which may be imposed include the suspension of individual
employees, limitations on engaging in business for specific periods, the
revocation of the registration as an investment adviser, censures and fines.
EMPLOYEES
As of December
31, 2001 Alliance Capital and its subsidiaries employed 4,542 employees,
including 642 investment professionals, of whom 215 are portfolio managers, 322
are research analysts and 94 are order placement specialists. The average period of employ­ment of these
professionals with Alliance Capital is approximately 7 years and their average
investment experience is approximately 13 years. Alliance Capital considers its employee relations to be good.
SERVICE
MARKS
Alliance
Capital has registered a number of service marks with the U.S. Patent and
Trademark Office, including an “A” design logo and the combination of such logo
and the words “Alliance” and “Alliance Capital”. Each of these service marks was registered in 1986. As a result of the Bernstein Acquisition,
Alliance Capital acquired all of the rights and title in and to the Bernstein
service marks, including a “Bee” design logo, the name Bernstein and a
combination of such logo and the word Bernstein. These marks were registered in 1982, 1981 and 1981, respectively.
Item 2.
Item 2. Properties
Alliance
Capital’s and Alliance Holding’s principal executive offices at 1345 Avenue of
the Americas, New York, New York are occupied pursuant to a lease which extends
until 2019. Alliance Capital currently
occupies approximately 566,011 square feet of space at this location. Alliance Capital also occupies approximately
114,097 square feet of space at 135 West 50th Street, New York, New
York, and approximately 187,203 square feet of space at 767 Fifth Avenue, New
York, New York, under leases expiring in 2016, and 2002 and 2005,
respectively. Alliance Capital also
occupies approximately 4,594 square feet of space at 709 Westchester Avenue,
White Plains, New York, 45,242 square feet of space at 925 Westchester Avenue,
White Plains, New York, 4,341 square feet of space at One North Broadway, White
Plains, New York, and 127,136 square feet of space at One North Lexington,
White Plains, New York under leases expiring in 2004, 2008, 2008 and 2008,
respectively. Alliance Capital and its subsidiaries,
AFD and AGIS, occupy approximately 134,261 square feet of space in Secaucus,
New Jersey, approximately 92,067 square feet of space in San Antonio, Texas,
and approximately 60,653 square feet of space in Scranton, Pennsylvania, under
leases expiring in 2016, 2009, and 2005, respectively.
Alliance
Capital also leases space in 11 cities in the United States and its
subsidiaries and affiliates lease space in London, England, Tokyo, Japan, and
25 other cities outside the United States.
Item
3.
Item
3. Legal
Proceedings
On April 25,
2001, an amended class action complaint (“amended Miller Complaint”) entitled Miller, et
al. v. Mitchell Hutchins Asset Management, Inc., et al. was filed in
federal district court in the Southern District of Illinois against Alliance
Capital, AFD, and other defendants alleging violations of the Investment
Company Act and breaches of common law fiduciary duty. The allegations in the amended Miller
Complaint concern six mutual funds with which Alliance Capital has investment advisory
agreements, including Alliance Premier Growth Fund (“Premier Growth Fund”),
Alliance Health Care Fund, Alliance Growth Fund, Alliance Quasar Fund, Alliance
Fund, and Alliance Disciplined Value Fund.
The principal allegations of the amended Miller Complaint are that (i)
certain advisory agreements concerning these funds were negotiated, approved,
and executed in violation of the Investment Company Act, in particular because
certain directors of these funds should be deemed interested under the Investment
Company Act; (ii) the distribution plans for these funds were negotiated,
approved, and executed in violation of the Investment Company Act; and (iii)
the advisory fees and distribution fees paid to Alliance Capital and AFD,
respectively, are excessive and, therefore, constitute a breach of fiduciary
duty. Plaintiff seeks a recovery of
certain fees paid by these Funds to Alliance Capital. On March 12, 2002 the court issued an order granting defendants’
joint motion to dismiss the amended Miller Complaint. The court allowed plaintiffs up to and including April 1, 2002 to
file an amended complaint comporting with its order.
Alliance
Capital and AFD believe that plaintiffs’ allegations in the amended Miller
Complaint are without merit and intend to vigorously defend against these
allegations.
On December 7,
2001 a complaint entitled Benak v. Alliance Capital Management L.P. and
Alliance Premier Growth Fund (“Benak Complaint”) was filed in
federal district court in the District of New Jersey against Alliance Capital
and Premier
Growth Fund alleging violation
of the Investment Company Act. The
principal allegations of the Benak Complaint are that Alliance Capital breached
its duty of loyalty to Premier Growth Fund because one of the directors of the
General Partner of Alliance Capital
served as a director of Enron Corp. (“Enron”) when Premier Growth Fund
purchased shares of Enron and as a consequence thereof the investment advisory
fees paid to Alliance Capital by Premier Growth Fund should be returned as a
means of recovering for Premier Growth Fund the losses plaintiff allege were
caused by the alleged breach of the duty of loyalty. Plaintiff seeks recovery of certain fees paid by Premier Growth Fund
to Alliance Capital. On December 21, 2001 a complaint entitled Roy v.
Alliance Capital Management L.P. and Alliance Premier Growth Fund (“Roy
Complaint”) was filed in federal district court in the Middle District of
Florida, Tampa Division, against Alliance Capital and Premier Growth Fund. The allegations and relief sought in the Roy
Complaint are virtually identical to the Benak Complaint. On March 13, 2002 the court granted the
defendants’ motion to transfer the Roy Complaint to federal district court in
the District of New Jersey. On December
26, 2001 a complaint entitled Roffe v. Alliance Capital Management L.P. and
Alliance Premier Growth Fund (“Roffe Complaint”) was filed in
federal district court in the District of New Jersey against Alliance Capital
and Premier Growth Fund. The
allegations and relief sought in the Roffe Complaint are virtually identical to
the Benak Complaint. On February 14,
2002 a complaint entitled Tatem v. Alliance Capital Management L.P. and
Alliance Premier Growth Fund (“Tatem Complaint”) was filed in
federal district court in the District of New Jersey against Alliance Capital
and Premier Growth Fund. The
allegations and relief sought in the Tatem Complaint are virtually identical to
the Benak Complaint. On March 6, 2002 a
complaint entitled Gissen v. Alliance Capital Management L.P. and
Alliance Premier Growth Fund (“Gissen Complaint”) was filed in
federal district court in the District of New Jersey against Alliance Capital
and Premier Growth Fund. The
allegations and relief sought in the Gissen Complaint are virtually identical
to the Benak Complaint.
Alliance
Capital believes the plaintiffs’ allegations in the Benak Complaint, Roy
Complaint, Roffe Complaint, Tatem Complaint and Gissen Complaint are without
merit and intends to vigorously defend against these allegations.
Alliance Capital and Alliance Holding are
involved in various other inquiries, administrative proceedings and litigation,
some of which allege substantial damages.
While any proceeding or litigation has the element of uncertainty,
Alliance Capital and Alliance Holding believe that the outcome of any one of
the other lawsuits or claims that is pending or threatened, or all of them
combined, will not have a material adverse effect on Alliance Capital’s or
Alliance Holding’s results of operations or financial condition.
Item
4.
Item
4. Submission
of Matters to a Vote of Security Holders
Neither
Alliance Capital nor Alliance Holding submitted a matter to a vote of security
holders during the fourth quarter of 2001.
PART II
Item 5.
Item 5. Market
for Registrant’s Common Equity and Related Stockholder Matters
Market for the Alliance Capital Units and the Alliance
Holding Units
There
is no established public trading market for the Alliance Capital Units. The Alliance Capital Units are subject to
significant restrictions on transfer.
In general, transfers of Alliance Capital Units will be allowed only
with the written consent of both Equitable and the General Partner. Either
Equitable or, where applicable, the General Partner may withhold its consent to
a transfer in its sole discretion, for any reason. Generally, neither Equitable nor the General Partner will permit
any transfer that it believes would create a risk that Alliance Capital would
be treated as a corporation for tax purposes.
On
March 1, 2002 there were approximately 673 Alliance Capital Unitholders of
record.
The
Alliance Holding Units are traded on the NYSE.
The high and low sale prices on the NYSE during each quarter of Alliance
Holding’s two most recent fiscal years were as follows:
On March 1, 2002 the
closing price of the Alliance Holding Units on the NYSE was $45.90 per Unit. On March 1, 2002 there were approximately
1,714 Alliance Holding Unitholders of record.
Cash Distributions
Each of
Alliance Capital and Alliance Holding distributes on a quarterly basis all of
its Available Cash Flow (as defined in each Partnership Agreement). Prior to the Reorganization, Alliance
Holding’s Available Cash Flow was derived from the operations now conducted by
Alliance Capital. Subsequent to the
completion of the Reorganization in the fourth quarter of 1999, when Alliance
Capital commenced operations, Alliance Holding’s principal sources of income
and cash flow have been attributable to its ownership of Alliance Capital
Units.
Alliance
Capital made the following distributions of Available Cash Flow in respect of
2001 and 2000:
Alliance Holding made the following distributions of Available Cash
Flow in respect of 2001 and 2000:
Item 6.
Item 6. Selected Financial Data
The Selected
Consolidated Financial Data that appears on page 21 of the Alliance Capital
2001 Annual Report to Unitholders is incorporated by reference in this Annual
Report on Form 10-K.
Item 7.
Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations
Management’s
Discussion and Analysis of Financial Condition and Results of Operations that
appears on pages 22 through 33 of the Alliance Capital 2001 Annual Report to
Unitholders is incorporated by reference in this Annual Report on Form 10-K.
Item 7A.
Item 7A. Quantitative and Qualitative
Disclosures about Market Risk
The
quantitative and qualitative disclosures about market risk contained in
Management’s Discussion and Analysis of Financial Condition and Results of
Operations on pages 32 through 33 of the Alliance Capital 2001 Annual Report to
Unitholders are incorporated by reference in this Annual Report on Form 10-K.
Item 8.
Item 8. Financial Statements and
Supplementary Data
The
Consolidated Financial Statements of Alliance Capital and its subsidiaries and
the report thereon by KPMG LLP that appear on pages 34 through 54 of the
Alliance Capital 2001 Annual Report to Unitholders are incorporated by
reference in this Annual Report on Form 10-K.
Item 9.
Item 9. Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure
Neither
Alliance Capital nor Alliance Holding had any changes in or disagreements with
accountants in respect of accounting or
financial disclosure.
PART III
Item 10.
Item 10. Directors and Executive
Officers of the Registrant
General Partner
Alliance
Capital’s and Alliance Holding’s activities are managed and controlled by
Alliance as General Partner and Alliance Capital and Alliance Holding
Unitholders do not have any rights to manage or control Alliance Capital or
Alliance Holding. The General Partner
has agreed that it will conduct no active business other than managing Alliance
Capital and Alliance Holding, although it may make certain investments for its
own account.
The
General Partner does not receive any compensation from Alliance Capital or
Alliance Holding for services rendered to Alliance Capital or Alliance Holding
as General Partner. The General Partner
holds a 1% general partnership interest in Alliance Capital and 100,000 units
of general partnership interest in Alliance Holding. As of March 1, 2002 Equitable, ACMC and ECMC, affiliates of the
General Partner, held 128,477,020 Alliance Capital Units and 1,544,356 Alliance
Holding Units.
The
General Partner is reimbursed by Alliance Capital for all expenses incurred by
it in carrying out its activities as General Partner of Alliance Capital and
Alliance Holding, including compensation paid by the General Partner to its
directors and officers (to the extent such persons are not compensated directly
as employees of Alliance Capital) and the cost of directors and officers
liability insurance obtained by the General Partner. The General Partner was not reimbursed for any such expenses in
2001 except for directors’ fees and directors and officers liability insurance.
Directors and Executive Officers of the General Partner
The
directors and executive officers of the General Partner are as follows:
Mr. Calvert
joined Alliance in 1973 as an equity portfolio manager and was elected Chief
Executive Officer on January 6, 1999 and Chairman of the Board on May 1,
2001. He served as Chief Investment
Officer from May 3, 1993 until January 6, 1999. He served as Vice Chairman from May 3, 1993 until April 30,
2001. From 1986 to 1993 he was an
Executive Vice President and from 1981 to 1986 he was a Senior Vice
President. He was elected a Director of
Alliance in 1992.
Mr. Brydon was
elected a Director of Alliance in May 1997.
He is Chairman and Chief Executive Officer of AXA Investment Managers
S.A. Mr. Brydon was formerly Barclays
Group’s Deputy Chief Executive of BZW, the investment banking division of
Barclays Plc., and was a member of the Executive Committee of Barclays. Before joining BZW, Mr. Brydon was the Chief
Executive and Chairman of Barclays de Zoete Wedd Investment Management Ltd.
(BZWIM) and had served in various executive capacities within the Barclays
organization including Barclays Investment Management Ltd. and Barclays
Bank. Mr. Brydon serves as director of
Allied Domecq Plc., Amersham Plc., and Edinburgh UK Tracker Trust Plc. He also
serves as Vice President of the European Asset Management Association. AXA Investment Managers S.A. is a subsidiary
of AXA, a parent of Alliance Capital and Alliance Holding.
Mr. Carifa
joined Alliance in 1971 and was elected President and Chief Operating Officer
on May 3, 1993. He is Chief Executive
Officer of Alliance Capital’s Mutual Funds Division and is Chairman and
Director of the majority of Alliance Capital’s Mutual Fund Boards. He was the Chief Financial Officer from 1973
until 1994. He was an Executive Vice
President from 1986 to 1993 and he was a Senior Vice President from 1980 to
1986. He was elected a Director of
Alliance in 1992. Mr. Carifa serves on the Board and the Executive Committee of
The American Composers Orchestra. He
also serves on the Board of Trustees of the Valley Hospital in Ridgewood, New
Jersey and is a member of the Board of Governors and Executive Committee of the
Investment Company Institute.
Mr. de
Castries was elected a Director of Alliance in October 1993. Since January 19,
2000, he has been Chairman of the Management Board of AXA. Prior thereto, he
was Vice Chairman of the Management Board of AXA, Senior Executive Vice
President Financial Services and Life Insurance Activities of AXA in the United
States, Germany, the United Kingdom and Benelux from 1996 to 2000; Executive
Vice President Financial Services and Life Insurance Activities of AXA from
1993 to 1996; General Secretary of AXA from 1991 to 1993; and Central Director
of Finances of AXA from 1989 to 1991.
Mr. de Castries is also a Director or Officer of various subsidiaries
and affiliates of the AXA Group and a Director of AXA Financial, and
Equitable. Mr. de Castries was elected
Vice Chairman of AXA Financial on February 14, 1996 and was elected Chairman of
AXA Financial, effective April 1, 1998.
AXA, AXA Financial and Equitable are parents of Alliance Capital and
Alliance Holding. Equitable is a subsidiary of AXA Financial.
Mr. Condron
was elected a Director of Alliance in May 2001. He is Director, President and Chief Executive Officer of AXA
Financial, which he joined in May 2001.
He is Chairman of the Board and Chief Executive Officer of AXA Client
Solutions and Equitable. Mr. Condron is
also a member of the Management Board of AXA.
Prior to being named to head AXA Financial, Mr. Condron served both as
President and Chief Operating Officer of Mellon Financial Corporation
(“Mellon”) since 1999 and President and Chief Financial Officer of The Dreyfus
Corporation since 1995. He was Vice
Chairman of The Boston Company from 1989 to 1993 and was then named Executive
Vice President of Mellon in 1993, when Mellon acquired The Boston Company. Mr. Condron was named Vice Chairman of
Mellon in 1994. In 1990, Mr. Condron
was appointed a Director and Treasurer of Central Supply Corp. He served on the Board of Governors of the
Investment Company Institute from October 1997 through October 2000 and served
on its Executive Committee from November 1998 through October 2000. He was re-appointed to the ICI’s Board of
Governors in October 2001. In 1999, Mr.
Condron was appointed a Director of The American Ireland Fund, which he also
serves as Treasurer. AXA, AXA Financial, AXA Client Solutions and Equitable are
parents of Alliance Capital and Alliance Holding. AXA Client Solutions and Equitable are subsidiaries of AXA
Financial. Equitable is a subsidiary of
AXA Client Solutions.
Mr. Duverne
was elected a Director of Alliance in February 1996. Mr. Duverne is Group Executive Vice President-Finance, Control
and Strategy of AXA which he joined as Senior Vice President in 1995. Prior to that Mr. Duverne was a member of
the Executive Committee, Operations of Banque Colbert from 1992 to 1995. Mr. Duverne was Secretary General of
Compagnie Financière IBI from 1991 to 1992.
Mr. Duverne worked for the French Ministry of Finance serving as Deputy
Assistant Secretary for Tax Policy from 1988 to 1991 and director of the
Corporate Taxes Department from 1986 to 1988.
He is also a Director of various subsidiaries and affiliates of the AXA
Group. Mr. Duverne is also a Director
of Equitable. AXA and Equitable are
parents of Alliance Capital and Alliance Holding. Equitable is a subsidiary of AXA Financial.
Mr. Dziadzio
was elected a Director of Alliance in February 2001. Mr. Dziadzio is Senior
Vice President - Asset Management Activities of AXA, which he joined in 1994 as
a member of the corporate finance department with responsibilities in the realm
of asset management and insurance businesses, as well as other areas of
activities in the United States and United Kingdom. From 1998 through December
31, 2000, Mr. Dziadzio was Chief of Finance and Administration of AXA Real
Estate Investment Managers, a wholly-owned subsidiary of AXA. Prior to joining
AXA, he was with Yarmouth Group, a real estate investment advisory company,
holding positions in New York and London. AXA is a parent of Alliance Capital
and Alliance Holding.
Mr. Harrison
joined Alliance in 1978 and was elected Vice Chairman on May 3, 1993. Mr. Harrison is in charge of Alliance
Capital’s Minneapolis office and is a senior portfolio manager. He was an Executive Vice President from 1986
to 1993 and a Senior Vice President from 1978 to 1986. He was elected a Director of Alliance in
1992.
Mr. Hertog was
elected Director and Vice Chairman of Alliance on October 2, 2000. Prior
thereto, he was President and Chief Operating Officer of Sanford C. Bernstein
& Co., Inc., which he joined as a research analyst in 1968. Mr. Hertog is
currently Chairman of the Manhattan Institute, a leading policy institute
specializing in urban issues. He is also a Trustee of the American Enterprise
Institute for Public Policy Research in Washington, D.C. and a Trustee of the
New York Public Library. Mr. Hertog is
a Director and President of SCB Inc.
Mr. Holloway
was elected a Director of Alliance in November 1987. He is a consultant to The Continental Real Estate Companies. From September 1988 until his retirement in
March 1990, Mr. Holloway was a Vice Chairman of Equitable. He served as an Executive Vice President of
Equitable from 1979 until 1988. Prior
to his retirement he served as a Director and Officer of various Equitable
subsidiaries. Mr. Holloway is a
Director of Interstate Hotels Corporation and the Museum of Contemporary Art in
Miami. Mr. Holloway was a Director of Rockefeller Center Properties, Inc. and
is a Director Emeritus of The Duke University Manage­ment Corporation, former
Chairman of The Touro National Heritage Trust, a Regent of the Cathedral of St.
John the Divine and a Trustee of Duke University (Emeritus) and the American
Academy in Rome (Emeritus).
Mr.
Jarmain was elected a Director of Alliance in May 2000. He has been President
of Jarmain Group Inc. (a private investment holding company) since 1979. Mr.
Jarmain has been a Director of AXA Financial and Equitable since July 1992 and
a Director of several other companies affiliated with Equitable. He served as
non-executive Chairman and Director of FCA International Ltd. from January 1994
through May 1998. AXA Financial and Equitable are parents of Alliance Capital
and Alliance Holding. Equitable is a subsidiary of AXA Financial.
Mr. Noris was
elected a Director of Alliance in July 1995.
Since 1995 Mr. Noris has been Executive Vice President and Chief
Investment Officer of AXA Financial and Equitable. Prior thereto, he was Vice
President for Salomon Brothers from 1992 to 1995. From 1984 to 1992 Mr. Noris was a Principal in the Fixed Income
and Equity Divisions of Morgan Stanley Group Inc. AXA Financial and Equitable
are parents of Alliance Capital and Alliance Holding. Equitable is a subsidiary of AXA Financial.
Mr. Sanders
was elected Director, Vice Chairman and Chief Investment Officer of Alliance on
October 2, 2000. Prior thereto, he served as Chairman and Chief Executive
officer of Sanford C. Bernstein & Co., Inc., which he joined in 1968 as a
research analyst. Mr. Sanders is a Chartered Financial Analyst, a New York
Stock Exchange supervisory analyst and was a member of the Institutional Investor
All-America Research Team for four years.
Mr. Sanders is a Director, Chairman and the Chief Executive Officer of
SCB Inc.
Mr. Savage was
elected a Director of Alliance in May 1993. He served as Chairman of Alliance
Capital Management International, a division of Alliance Capital, from May 1994
until July 31, 2001. Mr. Savage is
Chief Executive Officer of Savage Holdings LLC, a private equity investing
firm. In addition, Mr. Savage is a
Director of Lockheed Martin Corporation, Qualcomm Inc., and Enron Corp.
Mr. Tobin was
elected a Director of Alliance in May 2000. He has been Dean of the Tobin
College of Business since August 1998. As Dean, Mr. Tobin is the chief
executive and academic leader of the College of Business. Mr. Tobin was Chief
Financial Officer at The Chase Manhattan Corporation from 1996 to 1997. Prior
thereto, he was Chief Financial Officer of Chemical Bank (which merged with
chase in 1996) from 1991 to 1996 and Chief Financial Officer of Manufacturers
Hanover Trust (which merged with Chemical in 1991) from 1985 to 1991. Mr. Tobin is a member of the American
Institute of Certified Public Accountants, the New York State Society of CPA’s
and the Financial Executives Institute. He is also a member of the Independent
Budget Office of New York City Advisory Board and the Boards of Directors of
The H.W. Wilson Co. and P.A. Consulting Group. He has been a Director of AXA
Financial since March 1999. AXA
Financial is a parent of Alliance Capital and Alliance Holding.
Mr. Tulin was
elected a Director of Alliance in July 1997.
He is Vice Chairman and Chief Financial Officer of AXA Financial and
Director, Vice Chairman and Chief Financial Officer of Equitable. In addition
to his current responsibilities at AXA Financial, Mr. Tulin has responsibility
for Group financial communication, relations with rating agencies and
consolidated risk assessment. Since December 2000, he has also been Executive
Vice President of AXA and a member of its Executive Committee. Mr. Tulin was
formerly Coopers & Lybrand’s Co-Chairman of the Insurance Industry
Practice. Before joining Coopers &
Lybrand, Mr. Tulin was with Milliman and Robertson for 17 years. Mr. Tulin is a Fellow of the Society of
Actuaries, a Board member of the American Academy of Actuaries and a frequent
speaker at actuarial and insurance industry conferences. He is a member of the Board of Directors and
Treasurer of the Jewish Theological Seminary; Brandeis University Graduate
School of International Economics and Finance; Board Member of the American
Council of Life Insurers; and a Board Member of the Life Insurance Council of
New York, Inc. AXA, AXA Financial and
Equitable are parents of Alliance Capital and Alliance Holding. Equitable is a
subsidiary of AXA Financial.
Mr. Williams joined
Alliance in 1977 and was the Chairman of the Board until May 1, 2001 when he
became Chairman Emeritus. He served as
a Director of Equitable from March 1991 until April 2001 and served as a
Director of AXA Financial from May 1992 until April 2001. He served as a Senior Executive Vice
President of AXA from January 1997 through January 2000. Mr. Williams is a Director of Groupo
Elektra. AXA, AXA Financial and
Equitable are parents of Alliance Capital and Alliance Holding. Mr. Williams is the husband of Mrs. Reba W.
Williams, a Director of Alliance until May 1, 2001.
Ms. Corbet
joined Alliance in 1993 and has been an Executive Vice President since February
1997. Ms. Corbet has been the Chief
Executive Officer of Alliance Fixed Income Investors, a division of Alliance
Capital, since 2000 and Chairman of Alliance Capital Management Australia
Limited and Alliance Capital Management New Zealand Limited, each a subsidiary
of Alliance Capital, since February 2001.
She served as Chief Executive Officer of Alliance Capital Limited, a
wholly-owned subsidiary of Alliance Capital, from 1998 until 2000. She was Chief of Investment Operations of
Alliance from 1997 to 1999. She served
as President and Chief Administrative Officer of Alliance Fixed Income
Investors from 1995 to 1999. She was
Senior Vice President and Head of Insurance Asset Management, Money Markets and
Quantitative Fixed Income Research from 1993 through 1994. Prior to joining Alliance, Ms. Corbet was
Executive Vice President and Head of Fixed Income Management Division of
Equitable Capital Management Corporation, which was acquired by Alliance in
1993. Ms. Corbet is a member of the
Board of Trustees of Boston College and a member of the New York University
Stern Business School Advisory Committee.
Mr. Lieberman
joined Alliance in October 2000 as a member of the senior officer team from the
Sanford C. Bernstein & Co., acquisition.
He was named Executive Vice President, Finance and Operations in
November 2000. Prior to the Bernstein
Acquisition, Mr. Lieberman was a member of Bernstein’s Board of Directors with
senior responsibility for Finance and Administration. Prior to joining Bernstein in 1998, he was Chief Financial
Officer and chief of administration at Fidelity Investments. He is a member of the Board of Overseers for
the University of Connecticut School of Business Administration, a Trustee of
the University of Connecticut Foundation, and a member of the Board of
Directors of American Friends of Beth Issie Shapiro.
Mr. Brewer
joined Alliance in 1987 and has been Senior Vice President and General Counsel
since 1991. From 1987 until 1990 Mr.
Brewer was Vice President and Assistant General Counsel of Alliance. Mr. Brewer
is a member of the Board of Directors of ICI Mutual Insurance Company.
Mr. Joseph
joined Alliance in 1984 and has been Senior Vice President and Chief Financial
Officer since December 1994. He was
Senior Vice President and Controller from 1989 until January 1994 and Senior
Vice President-Finance from January 1994 until December 1994. From 1986 until 1989 Mr. Joseph was Vice
President and Controller of Alliance and from 1984 to 1986 Mr. Joseph was a
Vice President and the Controller of AGIS, a subsidiary of Alliance Capital.
AXA Financial
and SCB Inc. entered into an agreement in connection with the Bernstein
Acquisition pursuant to which AXA Financial agreed to elect or cause the
election of Messrs. Lewis A. Sanders and Roger Hertog to the Board of Directors
until at least October 2, 2003.
Certain
executive officers of Alliance are also directors or trustees and officers of
various Alliance Mutual Funds and are directors and officers of certain of
Alliance Capital’s subsidiaries and affiliates.
All directors
of the General Partner hold office until the next annual meeting of the
stockholder of the General Partner and until their successors are elected and
qualified. All officers of the General
Partner serve at the discretion of the General Partner’s Board of Directors.
The General
Partner has an Audit Committee composed of its independent directors Messrs.
Holloway, Jarmain, and Tobin. The Audit
Committee reports to the Board of Directors with respect to the selection and
terms of engagement of the independent auditors of Alliance Capital and
Alliance Holding and with respect to certain other matters. The Audit Committee also reviews various
matters relating to the accounting and auditing policies and procedures of
Alliance Capital and Alliance Holding.
The Audit Committee held 4 meetings in 2001.
The
General Partner has a Board Compensation Committee composed of Messrs. Calvert,
Condron and Holloway. The Board Compensation
Committee is responsible for compensation and compensation related matters,
including, but not limited to, responsibility and authority for determining
bonuses, contributions and awards under most employee incentive plans or
arrangements, amending or terminating such plans or arrangements or any welfare
benefit plan or arrangement or adopting any new incentive, fringe benefit or
welfare benefit plan or arrangement.
The Option Committee, consisting of Mr. Holloway, is responsible for
granting options under Alliance Capital’s 1993 Unit Option Plan. The 1997 Option Committee, consisting of
Messrs. Calvert, Condron and Holloway, is responsible for granting options
under Alliance Capital’s 1997 Long Term Incentive Plan. The Unit Option and Unit Bonus Committee,
consisting of Messrs. Holloway and Condron, is responsible for granting awards
under Alliance Capital’s Unit Bonus Plan.
The Board Compensation Committee, Option Committee, Unit Option and Unit
Bonus Committee and 1997 Option Committee consult with an Executive Committee
consisting of Messrs. Calvert, Carifa, Harrison, Sanders, Hertog, Lieberman and
Ms. Corbet with respect to matters within their authority. The Committee under the SCB Deferred
Compensation Award Plan consisting of Messrs. Sanders and Hertog is responsible
for granting awards under the SCB Deferred Compensation Award Plan. The Century
Club Plan Committee, consisting of Messrs. Carifa and Michael J. Laughlin,
Executive Vice President of the General Partner and Chairman of the Board of
AFD, is responsible for granting awards under Alliance Capital’s Century Club
Plan.
The General
Partner pays directors who are not employees of Alliance Capital, Alliance
Holding, AXA Financial or any affiliate of AXA Financial (i) an annual retainer
of $20,000, (ii) a fee of $2,500 per meeting attended in person of the Board of
Directors, (iii) a fee of $1,250 per meeting attended by telephone of the Board
of Directors, (iv) a fee of $1,000 per meeting attended in person of a
committee of the Board of Directors not held in conjunction with a Board of
Directors meeting, and (v) a fee of $500 per meeting attended by telephone of a
committee of the Board of Directors not held in conjunction with a Board of
Directors meeting. The General Partner
also grants annually to such directors an option to purchase 10,000 Alliance
Holding Units pursuant to Alliance Capital’s Unit Option Plans, the date of
grant to be determined by the Board of Directors each year. During 2001, options were granted on May 17
to Messrs. Holloway, Jarmain and Tobin.
Alliance Capital reimburses Messrs. Brydon, de Castries, Duverne,
Dziadzio, Holloway, Jarmain, and Tobin for certain expenses incurred in
attending Board of Directors’ meetings.
Other directors are not entitled to any additional compensation from the
General Partner for their services as directors. The Board of Directors meets quarterly.
Section 16 (a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Securities
Exchange Act of 1934 requires the General Partner’s directors and executive
officers, and persons who own more than 10% of the Alliance Holding Units or
Alliance Capital Units to file with the SEC initial reports of ownership and
reports of changes in ownership of Alliance Holding Units or Alliance Capital
Units. To the best of Alliance
Holding’s knowledge, during the year ended December 31, 2001 all Section 16(a)
filing requirements applicable to its executive officers, directors and 10%
beneficial owners were complied with.
To the best of Alliance Capital’s knowledge, during the year ended
December 31, 2001 all Section 16(a) filing requirements applicable to its
executive officers, directors and 10% beneficial owners were complied with.
Item 11.
Item 11. Executive Compensation
The following Summary
Compensation Table sets forth all plan and non-plan compensation awarded to,
earned by or paid to the Chief Executive Officer and each of the four most
highly compensated executive officers of the General Partner at the end of 2001
(“Named Executive Officers”):
(1)
Mr.
Sanders and Mr. Hertog became employees of Alliance Capital on October 2,
2000, the date of the Bernstein Acquisition.
Accordingly, no amounts are included for periods prior to October 2,
2000.
(2)
Perquisites
and personal benefits are not included in column (e) if the aggregate amount
did not exceed the lesser of either $50,000 or 10% of the total annual salary
and bonus reported in columns (c) and (d).
Column (e) for 2001 includes for Mr. Calvert, among other perquisites
and personal benefits, $4,305,970 representing the dollar value of the
difference between the exercise price and fair market value of Alliance
Holding Units acquired as a result of the exercise of options, distributions
of $223,031 in respect of unvested Alliance Holding Units awarded under the
Partners Compensation Plan and $25,987 of car allowance.
Column (e) for 2001 includes for Mr. Carifa, among other perquisites
and personal benefits, distributions of $223,031 in respect of unvested
Alliance Holding Units awarded under the Partners Compensation Plan, $29,800
for personal tax services and $20,279 of car allowance.
Column (e) for 2001 includes for Ms. Corbet, among other perquisites
and personal benefits, $90,000 representing the dollar value of the
difference between the exercise price and fair market value of Alliance
Holding Units acquired as a result of the exercise of options and
distributions of $208,805 in respect of unvested Alliance Holding Units
awarded under the Partners Compensation Plan.
Column (e) for 2000 includes for Mr. Calvert, among other perquisites
and personal benefits, $8,687,906 representing the dollar value of the
difference between the exercise price and fair market value of Alliance
Holding Units and AXA Financial common stock acquired as a result of the
exercise of options, distributions of $128,152 in respect of unvested
Alliance Holding units awarded under the Partners Compensation Plan and
$19,617 of car allowance.
Column (e) for 2000 includes for Mr. Carifa, among other perquisites
and personal benefits, $2,264,060 representing the dollar value of the
difference between the exercise price and fair market value of AXA Financial
common stock acquired as a result of the exercise of options, distributions
of $128,152 in respect of unvested Alliance Holding Units awarded under the
Partners Compensation Plan and $16,821 of air travel.
Column (e) for 2000 includes for Ms. Corbet, among other perquisites
and personal benefits, $417,656 representing the dollar value of the
difference between the exercise price and fair market value of Alliance
Holding Units acquired as a result of the exercise of options, $322,315
relating to tax equalization and housing, for a temporary assignment in
London, and distributions of $93,384 in respect of unvested Alliance Holding
Units awarded under the Partners Compensation Plan.
Column (e) for 1999 includes for Mr. Carifa, among other perquisites
and personal benefits, $6,525,000 representing the dollar value of the
difference between the exercise price and fair market value of Alliance
Holding Units acquired as a result of the exercise of options and $42,000 for
personal tax services.
Column (e) for 1999 includes for Ms. Corbet $113,508 relating to a
temporary assignment in London, including cost-of-living adjustment, tax
equalization and car allowance.
(3)
Column (i)
includes award amounts vested and earnings credited in 1999, 2000 and 2001 in
respect of the Alliance Partners Compensation Plan, SCB Deferred Compensation
Plan and the Alliance Capital Management L.P. Annual Elective Deferral Plan
(“Alliance Deferral Plan”). The table does not include any amounts in respect
of 2001 awards under the Alliance Partners Compensation Plan, the SCB
Deferred Compensation Plan or in respect of association with the hedge funds
since none of these awards or contributions have vested and no earnings have
been credited in respect thereof.
Alliance Capital adopted the SCB Deferred Compensation Plan in
connection with the Bernstein Acquisition.
Under the SCB Deferred Compensation Plan Alliance Capital agreed to
make awards of $96 million per year for three years after the closing for the
benefit of certain individuals who were stockholders or principals of SCB
Inc. on the closing date and their replacements.
Column (i) includes the following amounts for 2001:
Option
Grants in 2001
The table below shows information regarding grants of
options made to the Named Executive Officers under the 1993 Unit Option Plan
and the 1997 Long Term Incentive Plan (“Alliance Capital Option Plans”) during
2001. The amounts shown for each of the
Named Executive Officers as potential realizable values are based on assumed
annualized rates of appreciation of five percent and ten percent over the full
ten-year term of the options, which would result in Alliance Holding Unit
prices of approximately $81.85 and $130.34, respectively. The amounts shown as potential realizable
values for all Alliance Holding Unitholders represent the corresponding
increases in the market value of 74,880,255 outstanding Alliance Holding Units
held by all Alliance Holding Unitholders as of December 31, 2001, which would
total approximately $2.4 billion and $6.0 billion, respectively. No gain to the optionees is possible without
an increase in Alliance Holding Unit price which will benefit all Alliance
Holding Unitholders proportionately.
These potential realizable values are based solely on assumed rates of
appreciation required by applicable SEC regulations. Actual gains, if any, on option exercises and Alliance Holding
Unitholdings are dependent on the future performance of the Alliance Holding
Units. There can be no assurance that
the potential realizable values shown in this table will be achieved.
Option Grants In 2001
(1)
Options on Alliance
Holding Units are awarded at the fair market value of Alliance Holding Units
at the date of award and become exercisable in 20% increments commencing one
year from such date if the optionee has not died or terminated
employment. Such options lapse at the
earliest of ten years after award, three months after the optionee’s normal
termination of employment or disability, six months after the optionee’s
death, or at the time of the optionee’s termination of employment otherwise
than normally.
(2)
Options in respect of
2,468,500 Alliance Holding Units were granted in 2001.
Aggregated Option Exercises in 2001
and 2001 Year-End Option Values
The
following table summarizes for each of the Named Executive Officers the number
of options exercised during 2001, the aggregate dollar value realized upon
exercise, the total number of Alliance Holding Units subject to unexercised
options held at December 31, 2001, and the aggregate dollar value of
in-the-money, unexercised options held at December 31, 2001. Value realized upon exercise is the
difference between the fair market value of the underlying Alliance Holding
Units on the exercise date and the exercise price of the option. Value of unexercised, in-the-money options
at fiscal year-end is the difference between its exercise price and the fair
market value of the underlying Alliance Holding Units on December 31, 2001,
which was $48.32 per Alliance Holding Unit.
These values have not been, and may never be, realized. The underlying options have not been, and
may never be, exercised, and actual gains, if any, on exercise will depend on
the value of Alliance Holding Units on the date of exercise. There can be no assurance that these values
will be realized.
Aggregated Option Exercises In 2001 And December 31, 2001 Option Values
(1)
In-the-Money Options
are those where the fair market value of the underlying Alliance Holding
Units exceeds the exercise price of the option. The Named Executive Officers hold no other options in respect
of the Alliance Holding Units or the Alliance Capital Units.
Options to
acquire Alliance Holding Units are granted by Alliance Capital to its
employees. Upon exercise of options,
Alliance Holding exchanges the proceeds from exercise for a number of Alliance
Capital Units equal to the number of Alliance Holding Units acquired pursuant
to the option exercises, thus increasing Alliance Holding’s investment in
Alliance Capital.
Compensation
Agreements with Certain Executive Officers
In
connection with Equitable’s 1985 acquisition of Donaldson, Lufkin &
Jenrette, Inc. (“DLJ”), the former parent of ACMC, ACMC entered into employment
agreements with Messrs. Calvert and Carifa.
Each agreement provided for deferred compensation payable in stated
monthly amounts for ten years commencing at age 65, or earlier in a reduced
amount in the event of disability or death, if the individual involved so
elects. The right to receive such
deferred compensation is vested.
Assuming pay­ments commence at age 65, the annual amount of deferred
compensation payable for ten years to Messrs. Calvert and Carifa is $434,612
and $522,036, respectively. While
Alliance Capital assumed responsibility for payment of these deferred
compensation obligations, ACMC and Alliance are required, subject to certain
limitations, to make capital contri­butions to Alliance Capital in an amount
equal to the payments, and ACMC is also obligated to the employees for the
payments. ACMC’s obligations to make
capital contributions to Alliance Capital are guaranteed, subject to certain
limitations, by Equitable Investment Corporation (“EIC”), a wholly-owned
subsidiary of Equitable, the parent of Alliance.
In
connection with the Bernstein Acquisition Mr. Sanders and Mr. Hertog entered
into employment agreements with Alliance Capital that expire on October 2,
2003. Under the terms of their respective
employment agreements Messrs. Sanders and Hertog have each agreed (i) not to
engage, directly or indirectly, in any business that is competitive with
Alliance Capital for a period through October 2, 2003 or, in the event of a
termination by Alliance Capital without cause (as defined in their respective
employment agreement) or by Messrs. Sanders or Hertog as the case may be, for
good reason (as defined in their respective employment agreement), through the
date of such termination; (ii) not to solicit or entice away any employee of
Alliance Capital for a period through October 2, 2003
or, in the event of a termination by Alliance Capital without cause or by
Messrs. Sanders or Hertog, as the case may be, for good reason, through the
date of such termination, and (iii) not to solicit or entice away any clients
or accounts of Alliance Capital through the earlier of October 2, 2003 and the
end of the one year period beginning on the date as of which employment is
terminated. “Good reason” under the
employment agreements of Messrs. Sanders and Hertog include any failure of Mr.
Sanders or Mr. Hertog, respectively, to be elected to the Board of Directors of
Alliance or the removal of Mr. Sanders or Mr. Hertog, respectively, from the
Board without cause. The employment
agreements provide for an annual minimum base salary of $1,000,000 per year and
provide that Mr. Sanders and Mr. Hertog shall receive minimum annual awards
under the SCB Deferred Compensation Plan of $5,333,000 and $4,000,000,
respectively.
Certain Employee Benefit Plans
Retirement
Plan. Alliance Capital maintains a qualified,
non-contributory, defined benefit retirement plan covering most employees of
Alliance Capital who have completed one year of service and attained age
21. Employer contributions are
determined by application of actuarial methods and assumptions to reflect the
cost of benefits under the plan. Each
participant’s benefits are determined under a formula which takes into account
years of credited service, the participant’s average compensation over
prescribed periods and Social Security covered compensation. The maximum annual benefit payable under the
plan may not exceed the lesser of $100,000 or 100% of a participant’s average
aggregate compensation for the three consecutive years in which he received the
highest aggregate compensation from Alliance Capital or such lower limit as may
be imposed by the Internal Revenue Code on certain participants by reason of
their coverage under another qualified plan maintained by Alliance Capital. A
participant is fully vested after the completion of five years of service. The plan generally provides for payments to
or on behalf of each vested employee upon such employee’s retirement at the
normal retirement age provided under the plan or later, although provision is
made for payment of early retirement benefits on an actuarially reduced
basis. Normal retirement age under the
plan is 65. Death benefits are payable
to the surviving spouse of an employee who dies with a vested benefit under the
plan.
The
table below sets forth with respect to the retirement plan the estimated annual
straight life annuity benefits payable upon retirement at normal retirement age
for employees with the remuneration and years of service indicated.
Assuming
they are employed by Alliance Capital until age 65, the credited years of
service under the plan for Messrs. Calvert and Carifa and Ms. Corbet would be
38, 40, and 41, respectively.
Compensation on which plan benefits are based includes only base
compensation and not bonuses, incentive compensation, profit-sharing plan
contributions or deferred compensation.
The compensation for calculation of plan benefits for each of these
three individuals for 2001 is $170,000, $170,000 and $170,000,
respectively. Messrs. Sanders and
Hertog are not eligible to participate in the retirement plan.
DLJ
Executive Supplemental Retirement Program. In 1983, DLJ
adopted an Executive Supplemental Retirement Program under which certain
employees of Alliance Capital deferred a portion of their 1983 compensation in
return for which DLJ agreed to pay each of them a specified annual retirement
benefit for 15 years beginning at age 65.
Benefits are based upon the participant’s age and the amount deferred
and are calculated to yield an approximate 12.5% annual compound return. In the event of the participant’s disability
or death, an equal or lesser amount is to be paid to the participant or his
beneficiary. After age 55, participants
the sum of whose age and years of service equals 80 may elect to have their
benefits begin in an actuarially reduced amount before age 65. DLJ has funded its obliga­tion under the
Program through the purchase of life insurance policies.
The
following table shows as to the Named Executive Officers who are participants
in the Plan the estimated annual retirement benefit payable at age 65. Each of these individuals is fully vested in
the applicable benefit.
Item
12.
Item
12. Security
Ownership of Certain Beneficial Owners and Management
Principal Security Holders
Alliance
Capital has no information that any person beneficially owns more than 5% of
the outstanding Alliance Capital Units except
(i) AXA Financial, Equitable, ACMC and ECMC (Equitable, ACMC and ECMC
are wholly-owned subsidiaries of AXA Financial) as reported on Schedule 13D
dated June 30, 2000 and subsequent Forms 4 dated July 10, 2001 and September
10, 2001, respectively, filed with the SEC by AXA Financial and certain of its
affiliates pursuant to the Securities Exchange Act of 1934, and (ii) SCB Inc.
as reported on Schedule 13D dated October 12, 2000, filed with the SEC by SCB
Inc. pursuant to the Securities Exchange Act of 1934. The following table and notes have been prepared in reliance upon
such filings for the nature of ownership and an explanation of overlapping
ownership.
(1) Based on information provided by AXA Financial, at
March 1, 2002, AXA and certain of its subsidiaries beneficially owned all of
AXA Financial’s outstanding common stock.
For insurance regulatory purposes the shares of capital stock of AXA
Financial beneficially owned by AXA and its subsidiaries have been deposited
into a voting trust (“Voting Trust”) which has an initial term of 10 years commencing May 12, 1992. The trustees of the Voting Trust (the
“Voting Trustees”) are Claude Bébéar, Patrice Garnier and Henri de
Clermont-Tonnerre, each of whom serves on the Supervisory Board of AXA. The Voting Trustees have agreed to exercise
their voting rights to protect the legitimate economic interests of AXA, but
with a view to ensuring that certain minority shareholders of AXA do not
exercise control over AXA Financial or certain of its insurance subsidiaries.
(2) Based
on information provided by AXA, on March 1, 2002, approximately 17.8% of the
issued ordinary shares (representing 28.8% of the voting power) of AXA were
owned directly and indirectly by Finaxa, a French holding company. As of March 1, 2002, 69.5% of the shares
(representing 79.5% of the voting power) of Finaxa were owned by four French
mutual insurance companies (the “Mutuelles AXA”) and 22.2% of the shares of
Finaxa (representing 13.7% of the voting power) were owned by Paribas, a French
bank. On March 1, 2002, the Mutuelles
AXA owned directly or indirectly through intermediate holding companies (including
Finaxa) approximately 20.6% of the issued ordinary shares (representing 33.2%
of the voting power) of AXA.
(3) The Voting Trustees may be deemed to be beneficial
owners of all Alliance Capital Units beneficially owned by AXA and its
subsidiaries. In addition, the
Mutuelles AXA, as a group, and Finaxa may be deemed to be beneficial owners of
all Alliance Capital Units beneficially owned by AXA and its subsidiaries. By virtue of the provisions of the Voting
Trust Agreement, AXA may be deemed to have shared voting power with respect to
the Alliance Capital Units. AXA and its
subsidiaries have the power to dispose or direct the disposition of all shares
of the capital stock of AXA Financial deposited in the Voting Trust. The Mutuelles AXA, as a group, and Finaxa
may be deemed to share the power to vote or to direct the vote and to dispose
or to direct the disposition of all the Alliance Capital Units beneficially
owned by AXA and its subsidiaries. The
address of each of AXA and the Voting Trustees is 25, avenue Matignon, 75008
Paris, France. The address of Finaxa is
23 avenue Matignon, 75008 Paris, France.
The addresses of the Mutuelles AXA are as follows: The address of each of AXA Conseil Vie
Assurance Mutuelle, AXA Assurances Vie Mutuelle and AXA Assurances I.A.R.D.
Mutuelle is 370, rue Saint Honoré, 75001 Paris, France; and the address of AXA
Courtage Assurance Mutuelle is 26, rue Louis le Grand, 75002 Paris,
France. The address of Paribas is 3,
rue d’Antin, Paris, France.
(4) By reason of their relationship, AXA, the Voting
Trustees, the Mutuelles AXA, Finaxa, AXA Financial, AXA Client Solutions,
Equitable, Equitable Holdings, LLC, ACMC and ECMC may be deemed to share the
power to vote or to direct the vote and to dispose or direct the disposition of
all or a portion of the 128,477,020 Alliance Capital Units.
(5) SCB Partners Inc. is a wholly-owned
subsidiary of SCB Inc. Mr. Sanders is a
Director, the Chairman and the Chief Executive Officer of SCB Inc. and is the
owner of an approximate 22.2% equity interest in SCB Inc. Mr. Hertog is a Director, President and
Chief Operating Officer of SCB Inc. and is the owner of an approximate 10%
equity interest in SCB Inc. Mr.
Lieberman is a Director and the Chief Financial Officer of SCB Inc. and is the
owner of a less than 1% equity interest in SCB Inc. Mr. Sanders, Mr. Hertog and Mr. Lieberman disclaim beneficial
ownership of the 40.8 million Alliance Capital Units owned by SCB Partners Inc.
(6) In connection with the Bernstein Acquisition SCB Inc.,
Alliance Capital and AXA Financial entered into a purchase agreement under
which SCB Inc. has the right to sell or assign up to 2.8 million Alliance
Capital Units issued in connection with the Bernstein Acquisition at any time. Beginning on October 2, 2002, SCB Inc. has
the right (“Put”) to sell to AXA Financial or an entity designated by AXA
Financial up to 8.16 million Alliance Capital Units issued in connection with
the Bernstein Acquisition each year less any Alliance Capital Units SCB Inc.
may have otherwise transferred that year.
The Put rights expire on October 2, 2010. Generally, SCB Inc. may exercise its Put rights only once per
year and SCB Inc. may not deliver an exercise notice regarding its Put rights
until at least nine months after it delivered its immediately preceding
exercise notice.
Alliance Holding, 1345
Avenue of the Americas, New York, NY 10105, owns 75,220,955 or 30.2% of the
outstanding Alliance Capital Units.
Alliance Holding has no information that
any person beneficially owns more than 5% of the outstanding Alliance Holding
Units.
Management
The
following table sets forth, as of March 1, 2002, the beneficial ownership of
Alliance Capital Units by each director and each Named Executive Officer of the
General Partner and by all directors and executive officers of the General
Partner as a group:
*
Number of Alliance
Capital Units listed represents less than 1% of the Units outstanding.
(1)
Excludes Alliance Capital Units
beneficially owned by AXA, AXA Financial and/or Equitable. Messrs. Calvert, Brydon, de Castries, Condron,
Duverne, Dziadzio, Jarmain, Noris, Tobin
and Tulin are directors and/or officers of AXA, AXA Financial and/or
Equitable. Messrs. Calvert, Carifa,
Harrison, Hertog, Sanders, Savage, Williams, Lieberman, Brewer, Joseph and
Ms. Corbet are directors and/or officers of Alliance.
(2)
Excludes 40.8 million Alliance Capital
Units beneficially owned by SCB Inc. and SCB Partners Inc., a wholly-owned
subsidiary of SCB Inc. Mr. Sanders is
a Director, the Chairman and the Chief Executive Officer of SCB Inc. and is
the owner of an approximate 22.2% equity interest in SCB Inc. Mr. Hertog is a Director, President and
Chief Operating Officer of SCB Inc. and is the owner of an approximate 10%
equity interest in SCB Inc. Mr.
Lieberman is a Director and the Chief Financial Officer of SCB Inc. and is
the owner of a less than 1% equity interest in SCB Inc. Mr. Sanders, Mr. Hertog and Mr. Lieberman
disclaim beneficial interest in the 40.8 million Alliance Capital Units owned
by SCB Partners Inc.
The
following table sets forth, as of March 1, 2002, the beneficial ownership of
Alliance Holding Units by each director and each Named Executive Officer of the
General Partner and by all directors and executive officers of the General
Partner as a group:
*
Number of Alliance
Holding Units listed represents less than 1% of the Units outstanding.
(1)
Excludes
Alliance Holding Units beneficially owned by AXA, AXA Financial and/or
Equitable. Messrs. Calvert, Brydon,
de Castries, Condron, Duverne,
Dziadzio, Jarmain, Noris, Tobin and Tulin are directors and/or
officers of AXA, AXA Financial and/or Equitable. Messrs. Calvert, Carifa, Harrison, Hertog, Sanders, Savage,
Lieberman, Brewer and Joseph and Ms. Corbet are directors and/or officers of
Alliance.
(2)
Includes 860,000 Alliance Holding Units
which may be acquired within 60 days under Alliance Capital Option Plans.
(3)
Includes 710,000 Alliance Holding Units
which may be acquired within 60 days under Alliance Capital Option Plans and
1,200 Alliance Holding Units owned by Mr. Carifa’s children.
(4)
Includes 60,000 Alliance Holding Units
which may be acquired within 60 days under Alliance Capital Option Plans.
(5)
Includes 223,000 Alliance Holding Units
which may be acquired within 60 days under Alliance Capital Option Plans.
(6)
Includes 137,000 Alliance Holding Units
which may be acquired within 60 days under Alliance Capital Option Plans and
4,000 Alliance Holding Units owned by Mr. Brewer’s wife.
(7)
Includes 132,120 Alliance Holding Units
which may be acquired within 60 days under Alliance Capital Option Plans.
(8)
Includes 2,122,120 Alliance Holding Units
which may be acquired within 60 days under Alliance Capital Option Plans.
The
following tables set forth, as of March 1, 2002, the beneficial ownership of
the common stock of AXA and Finaxa by each director and each Named Executive
Officer of the General Partner and by all directors and executive officers of
the General Partner as a group:
AXA Common Stock (1)
*
Number of shares listed
represents less than one percent (1%) of the outstanding AXA common stock.
(1)
Holdings of AXA American
Depositary Shares are expressed as their equivalent in AXA common stock. Each AXA American Depositary Share is
equivalent to one-half of a share of AXA common stock.
(2)
Represents 20,288
shares subject to options held by Mr. Calvert, which options Mr. Calvert has
the right to exercise within 60 days.
(3)
Includes 88,260 shares
subject to options held by Mr. Brydon, which options Mr. Brydon has the right
to exercise within 60 days.
(4)
Includes 20,288 shares subject to options
and 79,108 AXA American Depository Shares subject to options held by Mr.
Carifa, which options Mr. Carifa has the right to exercise within 60 days.
(5)
Includes 664,486 shares subject to options
and 284,796 AXA American Depository Shares subject to options held by Mr. de
Castries, which options Mr. de Castries has the right to exercise within 60
days and 30,000 shares owned by Mr. de Castries’ minor children.
(6)
Includes 307,609 shares subject to options
and 158,220 AXA American Depository Shares subject to options, which options
Mr. Duverne has the right to exercise within 60 days.
(7)
Represents 9,129 shares subject to options
held by Mr. Dziadzio, which options Mr. Dziadzio has the right to exercise
within 60 days.
(8)
Includes 11,800 AXA American Depository
Shares owned by Jarmain Group Inc.
Mr. Jarmain controls Jarmain Group Inc. Also includes 3,063 AXA American Depository Shares issuable on
a deferred basis as of March 1, 2002 under AXA Financial's Stock Plan for
Directors.
(9)
Includes 46,055 shares subject to options
and 287,556 AXA American Depository Shares subject to options held by Mr.
Noris, which options Mr. Noris has the right to exercise within 60 days. Also includes 74,442 AXA American
Depository Shares held by Mr. Noris.
(10)
Includes 3,540 AXA American Depository
Shares Mr. Tobin owns jointly with his spouse and 2,279 AXA American
Depository Shares issuable on a deferred basis as of March 1, 2002 under AXA
Financial's Stock Plan for Directors.
(11)
Includes 58,332 shares subject to options
and 975,011 AXA American Depository Shares subject to options held by Mr.
Tulin, which options Mr. Tulin has the right to exercise within 60 days. Also includes 19,742 AXA American
Depository Shares held by Mr. Tulin.
(12)
Represents 400 AXA American Depository
Shares held by Ms. Corbet.
(13)
Includes 1,214,447 shares and 1,784,691 AXA
American Depository Shares subject to options, which options may be exercised
within 60 days.
Finaxa Common Stock
*
Number of shares listed represents less than one percent (1%) of the
outstanding Finaxa common stock.
(1)
Includes 35,000 shares subject to options held by Mr. de Castries,
which options Mr. de Castries has the right to exercise within 60 days.
The General Partner makes all decisions relating to the management of
Alliance Capital and Alliance Holding.
The General Partner has agreed that it will conduct no business other
than managing Alliance Capital and Alliance Holding, although it may make
certain investments for its own account.
Conflicts of interest, however, could arise between Alliance Capital and
Alliance Holding, the General Partner and the Unit­holders of both Alliance
Capital and Alliance Holding.
Section
17-403(b) of the Delaware Revised Uniform Limited Part­nership Act (the
“Delaware Act”) states that, except as provided in the Delaware Act or the
partnership agreement, a general partner of a limited partnership has the same
liabilities to the partnership and to the limited partners as a general partner
in a partnership without limited partners.
While, under Delaware law, a general partner of a limited partnership is
liable as a fiduciary to the other partners, the Amended and Restated Agreement
of Limited Partnership of Alliance Capital Management L.P. (“Alliance Capital
Partnership Agreement”) and the Amended and Restated Agreement of Limited
Partnership of Alliance Capital Management Holding L.P. (“Alliance Holding
Partnership Agreement”) set forth a more limited standard of liability for the
General Partner. The Alliance Capital
Partnership Agreement and the Alliance Holding Partnership Agreement provide
that the General Partner is not liable for monetary damages for errors in
judgment or for breach of fiduciary duty (including breach of any duty of care
or loyalty), unless it is established that the General Partner’s action or
failure to act involved an act or omission undertaken with deliberate intent to
cause injury, with reckless disregard for the best interests of Alliance
Capital or Alliance Holding or with actual bad faith on the part of the General
Part­ner, or constituted actual fraud.
Whenever the Alliance Capital Partnership Agreement and the Alliance
Holding Partnership Agreement provide that the General Partner is permitted or
required to make a decision (i) in its “discretion,” the General Partner is
entitled to consider only such interests and factors as it desires and has no
duty or obligation to consider any interest of or other factors affecting
Alliance Capital or Alliance Holding or any Unitholder of Alliance Capital or
Alliance Holding or (ii) in its “good faith” or under another express
standard, the General Partner will act under that express
standard and will not be subject to any other or different standard imposed by
the Alliance Capital Partnership Agreement and the Alliance Holding Partnership
Agreement or applicable law.
In
addition, the Alliance Capital Partnership Agreement and the Alliance Holding
Partnership Agreement grant broad rights of indemnification to the General
Partner and its directors and affiliates and authorizes Alliance Capital and
Alliance Holding to enter into indemnification agreements with the directors,
officers, partners, employees and agents of Alliance Capital and its affiliates
and Alliance Holding and its affiliates.
Alliance Capital and Alliance Holding have granted broad rights of
indemnification to officers of the General Partner and employees of Alliance
Capital and Alliance Holding. The foregoing indemnification provisions are not
exclusive, and Alliance Capital and Alliance Holding are authorized to enter
into additional indemnification arrangements.
Alliance Capital and Alliance Holding have obtained directors and
officers liability insurance.
The
Alliance Capital Partnership Agreement and the Alliance Holding Partnership
Agreement also allow transactions between Alliance Capital and Alliance Holding
and the General Partner or its affiliates if the transactions are on terms
determined by the General Partner to be comparable to (or more favorable to
Alliance Capital or Alliance Holding than) those that would prevail with any
unaffiliated party. The Alliance Capital
Partnership Agreement and the Alliance Holding Partnership Agreement provide
that those transactions are deemed to meet that standard if such transactions
are approved by a majority of those directors of the General Partner who are
not directors, officers or employees of any affiliate of the General Partner
(other than Alliance Capital, and its subsidiaries or Alliance Holding) or, if
in the reasonable and good faith judgment of the General Partner, the
transactions are on terms substantially comparable to (or more favorable to
Alliance Capital or Alliance Holding than) those that would prevail in a
transaction with an unaffiliated party.
The
Alliance Capital Partnership Agreement and the Alliance Holding Partnership
Agreement expressly permit all affiliates of the General Partner (including
Equitable and its other subsidiaries) to compete, directly or indirectly, with
Alliance Capital and Alliance Holding, to engage in any business or other
activity and to exploit any opportunity, including those that may be available
to Alliance Capital and Alliance Holding.
AXA, AXA Financial, Equitable and certain of their subsidiaries
currently compete with Alliance Capital.
See “Item 13.
Item 13. Certain Relationships and
Related Transactions
Competition
AXA, AXA
Financial, Equitable and certain of their direct and indirect subsidiaries
provide financial services, some of which are competitive with those offered by
Alliance Capital. The Alliance Capital
Partnership Agreement specifically allows Equitable and its subsidiaries (other
than the General Partner) to compete with Alliance Capital and to exploit
opportunities that may be available to Alliance Capital. AXA, AXA Financial, Equitable and certain of
their subsidiaries have substantially greater financial resources than Alliance
Capital or the General Partner.
Financial Services
The
Alliance Capital Partnership Agreement and the Alliance Holding Partnership
Agreement permit Equitable and its affiliates to provide services to Alliance
Capital and Alliance Holding on terms comparable to (or more favorable to
Alliance Capital than) those that would prevail in a transaction with an
unaffiliated third party. The General
Partner believes that its arrangements with Equitable and its affiliates are at
least as favorable to Alliance Capital and Alliance Holding as could be
obtained from an unaffiliated third party, based on its knowledge of and
inquiry with respect to comparable arrangements with or between unaffiliated
third parties.
Alliance
Capital acts as the investment manager for the general and separate accounts of
Equitable and its insurance company subsidiary pursuant to investment advisory
agreements. During 2001 Alliance Capital
received approximately $43.6 million in fees pursuant to these agreements. In connection with the services provided
under these agreements Alliance Capital provides ancillary accounting,
valuation, reporting, treasury and other services under service agreements. During 2001 Alliance Capital received
approximately $3.0 million in fees pursuant to these agreements. Equitable provides certain legal and other
services to Alliance Capital relating to certain insurance and other regulatory
aspects of the general and separate accounts of Equitable and its insurance
company subsidiary. During 2001
Alliance Capital paid approximately $0.7 million to Equitable for these
services.
Equitable
has issued life insurance policies to ACMC on certain employees of Alliance
Capital, the costs of which are borne by ACMC without reimbursement by Alliance
Capital. During 2001 ACMC paid
approximately $2.7 million in insurance premiums on these policies.
Alliance
Capital and its employees are covered under various insurance policies
maintained by Equitable and its subsidiaries.
The amount of premiums for these group policies paid by Alliance Capital
to Equitable was approximately $1.3 million for 2001.
Alliance
Capital provides investment management services to certain separate accounts of
Equitable. Advisory fees from these
accounts totaled approximately $2.2 million for 2001.
In
April 1996 Alliance Capital acquired the United States investing activities and
business of National Mutual Funds Management (“NMFM”), a subsidiary of
AXA. In connection therewith, Alliance
Capital entered into investment management agreements with AXA Asia Pacific and
various of its subsidiaries (collectively, the “AXA Asia Pacific Group”). In
2001, the management fees related to services provided by Alliance Capital and
its subsidiaries under these agreements amounted to approximately $2.7 million.
AXA
Advisors was Alliance Capital’s fifth largest distributor of U.S. Funds in 2001
for which AXA Advisors received sales concessions from Alliance Capital on
sales of $683 million. In 2001, AXA
Advisors also distributed certain of Alliance Capital’s cash management
products. AXA Advisors received
distribution payments totaling $7.9 million in 2001 for these services.
Alliance
Capital and its subsidiaries provide investment management services to AXA
Reinsurance Company, a subsidiary of AXA, and its affiliates, pursuant to
discretionary investment advisory agreements.
In 2001, the management fees
related to services provided by Alliance Capital and its subsidiaries under
such agreements amounted to approximately $3.1 million.
Alliance
Capital and its subsidiaries provide investment management services to AXA
World Funds, a Luxembourg fund, pursuant to a sub-advisory agreement between
Alliance Capital and AXA Funds Management SA, a subsidiary of AXA. In 2001, the sub-advisory fees related to
services provided by Alliance Capital ad its subsidiaries under the
sub-advisory agreement amounted to approximately $275,000.
Alliance
Capital and its subsidiaries provide investment management services to Nichidan
Life Insurance Co., Ltd., a subsidiary of AXA, pursuant to various advisory
agreements. In 2001, the advisory fees related to services provided by Alliance
Capital and its subsidiaries under the advisory agreements amounted to
approximately $1.0 million.
Alliance
Capital and its subsidiaries provide investment management services to AXA
Global Risks U.S. Insurance Company, a subsidiary of AXA, and its affiliates,
pursuant to discretionary investment advisory agreements. In 2001, the advisory
fees related to services provided by Alliance Capital under the agreements
amounted to approximately $337,000.
Other
Transactions
On February 1, 2001 Alliance Capital and AXA
Asia Pacific Holdings Limited (“AXA Asia Pacific”), a subsidiary of AXA,
entered into a Subscription and Shareholders Agreement under which they
established two new investment management companies in Australia and New
Zealand named Alliance Capital Management Australia Limited and Alliance
Capital Management New Zealand Limited, respectively. AXA Asia Pacific and Alliance Capital each own fifty percent
(50%) of the equity of each new company and have equal representation on the
Boards. The new companies currently manage approximately $7.5 billion in
assets, and recognized $12.3 million in management fees in 2001. In addition, Alliance Capital Management
Australia Limited, a wholly-owned subsidiary of Alliance Capital, is required
to pay a fee for office and related expenses to AXA Asia Pacific and such
amount totaled approximately $1.9 million in 2001.
During
2001 Alliance Capital paid certain legal and other expenses incurred by
Equitable and its insurance company subsidiary relating to the general and
separate accounts of Equitable and such subsidiary for which it has been or
will be fully reimbursed by Equitable.
The largest amount of such indebtedness outstanding during 2001 was
approximately $150,000 which represents the amount outstanding on June, 2001.
In
connection with the Reorganization, Alliance Capital agreed to reimburse
Alliance Holding for all costs and expenses incurred by Alliance Holding other
than the payment of taxes.
Equitable
and its affiliates are not obligated to provide funds to Alliance Capital,
except for ACMC’s and the General Partner’s obligation to fund certain of
Alliance Capital’s deferred compensation and employee benefit plan obligations
referred to under “Item 11. Executive
Compensation - Compensation Agreements with Named Executive Officers.”
In
1999 GIE Informatique AXA, an affiliate of AXA, entered into a technology cost
contribution agreement with various AXA subsidiaries, including Alliance
Capital, to enable the participants to share the costs and benefits of
cooperative technology development through GIE Informatique AXA. All participants are joint owners of the
technology and processes developed under this agreement. In 2001 Alliance Capital’s share of such
costs was approximately $907,000. Alliance
Capital anticipates to pay its share of such costs under this agreement in
2002.
In
2001 Alliance Capital entered into a Services Agreement with Equitable pursuant
to which Equitable agreed to provide certain data processing services and
functions for a service fee not to exceed Equitable’s direct and indirect costs
and expenses as determined in accordance with the New York Insurance Law and
regulations thereunder. Alliance
Capital paid Equitable a service fee of approximately $2.2 million in 2001.
Mr.
Dave H. Williams resigned as Chairman of the Board of Alliance on May 1, 2001
and became Chairman Emeritus of the Board of Alliance. Mr. Williams and Alliance entered into an
agreement under which Mr. Williams has agreed to be employed by Alliance
Capital from May 1, 2001 until December 31, 2003 (“Employment Period”) and be
paid an annual salary of $275,000. Mr.
Williams has agreed to be a consultant to Alliance Capital for the period
January 1, 2004 until December 31, 2006 (“Consulting Period”) for a fee of
$275,000 per year. During the
Employment Period Alliance Capital will compensate Mr. Williams for serving as
a Director of three Alliance Mutual Funds at one-half the fee paid to a
non-affiliated director of those Funds and has agreed to pay Mr. Williams $200
per hour for all time spent meeting with clients at Alliance Capital’s
request. During the Employment Period
Mr. Williams is entitled to office space, an administrative staff and certain
standard executive officer perquisites including, but not limited to,
reimbursement of income tax preparation costs, a gym membership and the use of
a leased automobile and a chauffeur.
During the Consulting Period he is entitled to be reimbursed, subject to
an annual limitation, to cover any costs incurred in leasing another automobile
and hiring his own chauffeur. Alliance
Capital has agreed to provide Mr. Williams with a monthly allowance during the
Consulting Period to cover Mr. Williams’ costs in obtaining, furnishing and
equipping an office at a separate location and maintaining an administrative
staff. Alliance Capital purchased
certain of Mr. Williams’ prints for $13,288 under the agreement and agreed to
return Mr. Williams’ prints hanging in the headquarters office to a location in
the New York City metropolitan area at Alliance Capital’s expense. In addition, Alliance Capital agreed that
during the Employment Period Mr. Williams and his wife, Ms. Reba W. Williams, a
former Director of Alliance, are entitled to sponsor events for non-profit activities
at Alliance Capital’s facilities at Alliance Capital’s
expense subject to a $100,000 annual limitation. Following the Employment Period Alliance
Capital has agreed to provide Mr. Williams and his wife with comparable dental
and medical benefits for their respective lives.
Ms. Reba W. Williams resigned as a Director of Alliance and as an
employee of Alliance Capital on May 1, 2001.
Ms. Williams and Alliance entered into an agreement under which Ms.
Williams has agreed to be a consultant to Alliance Capital from May 1, 2001
until December 31, 2003 (“Consulting Term”).
Under the agreement Alliance Capital has agreed to pay Ms. Williams a
guaranteed supplemental retirement benefit of $180,000 per year for life. During the Consulting Term Alliance Capital
will compensate Ms. Williams for serving as a Director of three Alliance Mutual
Funds at one-half the fee paid to a non-affiliated director of those Funds and
has agreed to pay Ms. Williams $100 per hour for all time spent meeting with
clients at Alliance Capital’s request. During the Consulting Term Ms. Williams
is entitled, at Alliance Capital’s expense, to the continued use of her office
and the use of an administrative staff.
On May 2, 2001 EFM
Holdings GmbH, an Austrian company controlled by Mr. and Ms. Williams,
purchased Alliance Capital’s 51% interest in East Fund Managementberatung GmbH,
an Austrian investment manager, for $2.5 million in cash.
Mr. Frank Savage, a
Director of Alliance, retired as an employee of Alliance Capital on July 31,
2001. Mr. Savage and Alliance entered
into an agreement pursuant to which Mr. Savage was paid a bonus of $300,000 in
respect of services performed in 2001.
The agreement provides that while Mr. Savage is a Director of Alliance
he will be paid an annual retainer equal to that paid to independent directors
of Alliance for attending meetings of the Alliance Board of Directors and
committees thereof. Mr. Savage will continue
to serve as a Director of two Alliance Mutual Funds and shall be reimbursed for
expenses incurred in attending Board meetings of those Funds by Alliance
Capital or those Funds. The agreement
provided that from August 1, 2001 until December 31, 2001 Mr. Savage was
entitled to use office space at Alliance Capital’s headquarters and the
services of a secretary at Alliance Capital’s expense.
Certain
of the hedge funds managed by Alliance Capital pay a portion of the carried
interests or performance fees to certain portfolio managers, research analysts
and other investment professionals who are associated with the management of
the hedge funds. Alliance Capital
provides investment management services to the hedge funds and is entitled to
receive between 75% and 100% of the aggregate carried interests or performance
fees paid by such funds. Alliance
Capital received approximately $1 million from the hedge funds in 2001. Mr. Alfred Harrison, a Director and Vice
Chairman of the General Partner, received no amounts in 2001 in respect of his
association with the hedge funds.
ACMC
and the General Partner are obligated, subject to certain limitations, to make
capital contributions to Alliance Capital in an amount equal to the payments
Alliance Capital is required to make as deferred compensation under the
employment agreements entered into in connection with Equitable’s 1985
acquisition of DLJ, as well as obligations of Alliance Capital to various
employees and their beneficiaries under Alliance Capital’s Capital Accumulation
Plan. In 2001, ACMC made capital
contributions to Alliance Capital in the amount of $745,000 in respect of these
obligations. ACMC’s obligations to make
these contributions are guaranteed by EIC subject to certain limitations. All tax deductions with respect to these
obligations, to the extent funded by ACMC, Alliance or EIC, will be allocated
to ACMC or Alliance.
Item
14.
Item
14. Exhibits, Financial
Statement Schedules and Reports on Form 8-K
The following
is a list of the documents filed as a part of this Annual Report on Form 10-K:
(b) Reports on Form 8-K.
On March 15,
2002 Alliance Capital and Alliance Holding each filed a Current Report on Form
8-K with respect to a press release issued March 14, 2002.
On February
15, 2002 Alliance Capital and Alliance Holding each filed a Current Report on
Form 8-K with respect to a press issued February 14, 2002.
On February 1,
2002 Alliance Capital and Alliance Holding each filed a Current Report on Form
8-K with respect to their Fourth Quarter 2001 Review dated January 31, 2002.
On January 16,
2002 Alliance Capital and Alliance Holding each filed a Current Report on Form
8-K with respect to a press release issued January 15, 2002.
On January 10,
2002 Alliance Capital and Alliance Holding each filed a Current Report on Form
8-K with respect to a complaint entitled Roy v. Alliance Capital Management
L.P. and Alliance Premier Growth Fund.
On December
18, 2001 Alliance Capital and Alliance Holding each filed a Current Report on
Form 8-K with respect to a press release issued December 14, 2001.
On December
13, 2001 Alliance Capital and Alliance Holding each filed a Current Report on
Form 8-K with respect to a complaint entitled Benak v. Alliance Capital
Management L.P. and Alliance Premier Growth Fund.
(c) Exhibits.
The
following exhibits required to be filed by Item 601 of Regulation S-K are filed
herewith or, in the case of Exhibit 13.1, incorporated by reference herein:
3.1
Certificate of Amendment to Certificate of Limited Partnership dated
October 29, 1999 of Alliance Capital Management L.P. (formerly Alliance
Capital Management L.P. II) (incorporated by reference to Exhibit 2.1 to the
Registration Statement of Form 8-A of Alliance Capital Management L.P.
(formerly Alliance Capital Management L.P. II) filed on March 15, 2000).
3.2
Amended and Restated
Agreement of Limited Partnership dated October 29, 1999 of Alliance
Capital Management Holding L.P. (formerly Alliance Capital Management L.P.)
(incorporated by reference to Exhibit (a)(2) to the Form 10-Q for the
quarterly period ended September 30, 1999 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed on November
15, 1999).
3.3
Amended and Restated Agreement of Limited Partnership dated October
29, 1999 of Alliance Capital Management L.P. (formerly Alliance Capital
Management L.P. II) (incorporated by reference to Exhibit (a)(3) to the Form
10-Q for the quarterly period ended September 30, 1999 of Alliance Capital
Management Holding L.P. (formerly Alliance Capital Management L.P.) filed on
November 15, 1999).
4.1
Senior
Indenture dated as of August 10, 2001, between Alliance Capital Management
L.P. and The Bank of New York (incorporated by reference to Exhibit 4 to the
Form 10-Q for the quarterly period ended September 30, 2001 of Alliance
Capital Management L.P. filed November 14, 2001).
10.1
Award
Agreement dated as of December 31, 2001 under the Amended and Restated
Alliance Partners Compensation Plan with Bruce W. Calvert.
10.2
Award
Agreement dated as of December 31, 2001 under the Amended and Restated
Alliance Partners Compensation Plan with John D. Carifa.
10.3
Award
Agreement dated as of December 31, 2001 under the Amended and Restated
Alliance Partners Compensation Plan with Alfred Harrison.
10.4
Award
Agreement dated as of December 31, 2001 under the Amended and Restated
Alliance Partners Compensation Plan with Kathleen A. Corbet.
10.5
Award
Agreement dated as of December 31, 2001 under the Amended and Restated
Alliance Partners Compensation Plan with Gerald M. Lieberman.
10.6
Award
Agreement dated as of December 31, 2001 under the Amended and Restated
Alliance Partners Compensation Plan with David R. Brewer, Jr.
10.7
Award
Agreement dated as of December 31, 2001 under the Amended and Restated
Alliance Partners Compensation Plan with Robert H. Joseph, Jr.
10.8
Unit Option
Agreement dated as of December 7, 2001 with Kathleen A. Corbet.
10.9
Unit Option
Agreement dated as of December 7, 2001 with Gerald M. Lieberman.
10.10
Unit Option
Agreement dated as of December 7, 2001 with David R. Brewer, Jr.
10.11
Unit Option
Agreement dated as of December 7, 2001 with Robert H. Joseph, Jr.
10.12
Deferral
Agreement dated as of November 14, 2001 under the Alliance Capital Management
L.P. Annual Elective Deferral Plan with David R. Brewer, Jr.
10.13
Deferral
Agreement dated as of October 29, 2001 under the Alliance Capital Management
L.P. Annual Elective Deferral Plan with Alfred Harrison.
10.14
Award
Agreement dated October 2, 2001 for the Year 2001 Offering under the SCB
Deferred Compensation Award Plan with Roger Hertog.
10.15
Award
Agreement dated October 2, 2001 for the Year 2001 Offering under the SCB
Deferred Compensation Award Plan with Gerald M. Lieberman.
10.16
Letter
Agreement dated as of July 31, 2001 between Frank Savage, Alliance Capital
Management Corporation and Alliance Capital Management L.P.
10.17
Letter
Agreement dated as of April 30, 2001 between Dave H. Williams, Alliance
Capital Management Corporation and Alliance Capital Management L.P.
10.18
Letter Agreement
dated as of April 30, 2001 between Reba W. Williams, Alliance Capital
Management Corporation and Alliance Capital Management L.P.
10.19
Services
Agreement dated as of April 22, 2001 between Alliance Capital Management L.P.
and The Equitable Life Assurance Society of the United States.
10.20
Subscription
and Shareholders Agreement dated as of January 18, 2001, between Alliance
Capital Management Corporation of Delaware, Alliance Capital Management
Australia Limited, AXA Asia Pacific Holdings Limited, National Mutual Funds
Management Limited, ACN 095 022 718 Limited (to be renamed Alliance Capital
Management Australia Limited), and Cidwell Developments Limited (to be
renamed Alliance Capital Management New Zealand Limited).
10.21
Restricted Unit Award Agreement dated as of December 31, 2000 under
the Amended and Restated Alliance Partners Compensation Plan with Bruce W.
Calvert (incorporated by reference to Exhibit 10.1 to the Form 10-K for the
fiscal year ended December 31, 2000 of Alliance Capital Management L.P., as
filed April 2, 2001).
10.22
Restricted Unit Award Agreement dated as of December 31, 2000 under
the Amended and Restated Alliance Partners Compensation Plan with John D.
Carifa (incorporated by reference to Exhibit 10.2 to the Form 10-K for the
fiscal year ended December 31, 2000 of Alliance Capital Management L.P., as
filed April 2, 2001).
10.23
Restricted Unit Award Agreement dated as of December 31, 2000 under
the Amended and Restated Alliance Partners Compensation Plan with Alfred
Harrison (incorporated by reference to Exhibit 10.3 to the Form 10-K for the
fiscal year ended December 31, 2000 of Alliance Capital Management L.P., as
filed April 2, 2001).
10.24
Restricted Unit Award Agreement dated as of December 31, 2000 under
the Amended and Restated Alliance Partners Compensation Plan with David R.
Brewer, Jr. (incorporated by reference to Exhibit 10.4 to the Form 10-K for
the fiscal year ended December 31, 2000 of Alliance Capital Management L.P.,
as filed April 2, 2001).
10.25
Restricted Unit Award Agreement dated as of December 31, 2000 under
the Amended and Restated Alliance Partners Compensation Plan with Robert H.
Joseph, Jr. (incorporated by reference to Exhibit 10.5 to the Form 10-K for
the fiscal year ended December 31, 2000 of Alliance Capital Management L.P.,
as filed April 2, 2001).
10.26
Unit Option Agreement dated as of December 11, 2000 with David R.
Brewer, Jr. (incorporated by reference to Exhibit 10.6 to the Form 10-K for
the fiscal year ended December 31, 2000 of Alliance Capital Management L.P.,
as filed April 2, 2001).
10.27
Unit Option Agreement dated as of December 11, 2000 with Robert H.
Joseph, Jr. (incorporated by reference to Exhibit 10.7 to the Form 10-K for
the fiscal year ended December 31, 2000 of Alliance Capital Management L.P.,
as filed April 2, 2001).
10.28
Deferral Agreement dated as of November 13, 2000 under the Alliance
Capital Management L.P. Annual Elective Deferral Plan with John D. Carifa
(incorporated by reference to Exhibit 10.8 to the Form 10-K for the fiscal
year ended December 31, 2000 of Alliance Capital Management L.P., as filed
April 2, 2001).
10.29
Deferral Agreement dated as of November 14, 2000 under the Alliance Capital
Management L.P. Annual Elective Deferral Plan with Alfred Harrison
(incorporated by reference to Exhibit 10.9 to the Form 10-K for the fiscal
year ended December 31, 2000 of Alliance Capital Management L.P., as filed
April 2, 2001).
10.30
Deferral Agreement dated as of November 15, 2000 under the Alliance
Capital Management L.P. Annual Elective Deferral Plan with David R. Brewer,
Jr. (incorporated by reference to Exhibit 10.10 to the Form 10-K for the
fiscal year ended December 31, 2000 of Alliance Capital Management L.P., as
filed April 2, 2001).
10.31
Deferral Agreement dated as of November 16, 2000 under the Alliance
Capital Management L.P. Annual Elective Deferral Plan with Robert H. Joseph,
Jr. (incorporated by reference to Exhibit 10.11 to the Form 10-K for the
fiscal year ended December 31, 2000 of Alliance Capital Management L.P., as
filed April 2, 2001).
10.32
Unit Option Agreement dated as of June 20, 2000 with Bruce W. Calvert
(incorporated by reference to Exhibit 10.12 to the Form 10-K for the fiscal
year ended December 31, 2000 of Alliance Capital Management L.P., as filed
April 2, 2001).
10.33
Unit Option Agreement dated as of June 20, 2000 with John D. Carifa
(incorporated by reference to Exhibit 10.13 to the Form 10-K for the fiscal
year ended December 31, 2000 of Alliance Capital Management L.P., as filed
April 2, 2001).
10.34
Unit Option Agreement dated as of June 20, 2000 with Alfred Harrison
(incorporated by reference to Exhibit 10.14 to the Form 10-K for the fiscal
year ended December 31, 2000 of
Alliance Capital Management L.P., as filed April 2, 2001).
10.35
Unit Option Agreement dated as of June 20, 2000 with David R. Brewer,
Jr. (incorporated by reference to Exhibit 10.15 to the Form 10-K for the
fiscal year ended December 31, 2000 of Alliance Capital Management L.P., as
filed April 2, 2001).
10.36
Unit Option Agreement dated as of June 20, 2000 with Robert H.
Joseph, Jr. (incorporated by reference to Exhibit 10.16 to the Form 10-K for
the fiscal year ended December 31, 2000 of Alliance Capital Management L.P.,
as filed April 2, 2001).
10.37
Registration Rights Agreement dated as of October 2, 2000 by and
among Alliance Capital Management L.P., Sanford C. Bernstein Inc. and SCB
Partners Inc. (incorporated by reference to Exhibit 10.17 to the Form 10-K
for the fiscal year ended December 31, 2000 of Alliance Capital Management
L.P., as filed April 2, 2001).
10.38
Purchase Agreement dated as of June 20, 2000 by and among Alliance
Capital Management L.P., AXA Financial, Inc. and Sanford C. Bernstein Inc.
(incorporated by reference to Exhibit 10.18 to the Form 10-K for the fiscal
year ended December 31, 2000 of Alliance Capital Management L.P., as filed
April 2, 2001).
10.39
Financing Agreement dated as June 20, 2000 by and between AXA
Financial, Inc. and Alliance Capital Management L.P. (incorporated by
reference to Exhibit 10.19 to the Form 10-K for the fiscal year ended
December 31, 2000 of Alliance Capital Management L.P., as filed April 2,
2001).
10.40
Letter Agreement dated as of June 20, 2000 by and between AXA
Financial, Inc. and Sanford C. Bernstein Inc. (incorporated by reference to
Exhibit 10.20 to the Form 10-K for the fiscal year ended December 31, 2000 of
Alliance Capital Management L.P., as filed April 2, 2001).
10.41
Employment Agreement dated as of June 20, 2000 with Lewis A. Sanders
(incorporated by reference to Exhibit 10.21 to the Form 10-K for the fiscal
year ended December 31, 2000 of Alliance Capital Management L.P., as filed
April 2, 2001).
10.42
Employment Agreement dated as of June 20, 2000 with Roger Hertog
(incorporated by reference to Exhibit 10.22 to the Form 10-K for the fiscal
year ended December 31, 2000 of Alliance Capital Management L.P., as filed
April 2, 2001).
10.43
Employment Agreement dated as of June 20, 2000 with Michael L.
Goldstein (incorporated by reference to Exhibit 10.23 to the Form 10-K for
the fiscal year ended December 31, 2000 of Alliance Capital Management L.P.,
as filed April 2, 2001).
10.44
Employment Agreement dated as of June 20, 2000 with Andrew S. Adelson
(incorporated by reference to Exhibit 10.24 to the Form 10-K for the fiscal
year ended December 31, 2000 of Alliance Capital Management L.P., as filed
April 2, 2001).
10.45
Employment Agreement dated as of June 20, 2000 with Marilyn G. Fedak
(incorporated by reference to Exhibit 10.25 to the Form 10-K for the fiscal
year ended December 31, 2000 of Alliance Capital Management L.P., as filed
April 2, 2001).
10.46
Revolving Credit Agreement dated as of October 30, 2000 by and among
Alliance Capital Management L.P., Bank of America, N.A., Banc of America
Securities LLC, The Chase Manhattan Bank, and Deutsche Bank AG, New York
and/or Cayman Islands Branches (incorporated by reference to Exhibit 10.26 to
the Form 10-K for the fiscal year ended December 31, 2000 of Alliance Capital
Management L.P., as filed April 2, 2001).
10.47
SCB Deferred Compensation Award Plan (incorporated by reference to
Exhibit 99 to the Form S-8 of Alliance Capital Management Holding L.P., as
filed October 3, 2000).
10.48
Alliance Capital Management L.P. Annual Elective Deferral Plan
(incorporated by reference to Exhibit 99 to the Form S-8 of Alliance Capital
Management Holding L.P., as filed November 6, 2000).
10.49
Unit Option Plan Agreement dated December 6, 1999 with Robert H.
Joseph, Jr. (incorporated by reference to Exhibit 10.1 to the Form 10-K for
the fiscal year ended December 31, 1999 of Alliance Capital Management L.P.,
as filed March 28, 2000).
10.50
Unit Option Plan Agreement dated December 6, 1999 with David R.
Brewer, Jr. (incorporated by reference to Exhibit 10.2 to the Form 10-K for
the fiscal year ended December 31, 1999 of Alliance Capital Management L.P.,
as filed March 28, 2000).
10.51
Amended and Restated Alliance Partners Compensation Plan dated
December 6, 1999 (incorporated by reference to Exhibit 10.3 to the Form 10-K
for the fiscal year ended December 31, 1999 of Alliance Capital Management
L.P., as filed March 28, 2000).
10.52
Restricted Unit Award Agreement dated December 31, 1999 with Bruce W.
Calvert (incorporated by reference to Exhibit 10.4 to the Form 10-K for the
fiscal year ended December 31, 1999 of Alliance Capital Management L.P., as
filed March 28, 2000).
10.53
Restricted Unit Award Agreement dated December 31, 1999 with John D.
Carifa (incorporated by reference to Exhibit 10.5 to the Form 10-K for the
fiscal year ended December 31, 1999 of Alliance Capital Management L.P., as
filed March 28, 2000).
10.54
Restricted Unit Award Agreement dated December 31, 1999 with Alfred
Harrison (incorporated by reference to Exhibit 10.6 to the Form 10-K for the
fiscal year ended December 31, 1999 of Alliance Capital Management L.P., as
filed March 28, 2000).
10.55
Restricted Unit Award Agreement dated December 31, 1999 with Robert
H. Joseph, Jr. (incorporated by reference to Exhibit 10.7 to the Form 10-K
for the fiscal year ended December 31, 1999 of Alliance Capital Management
L.P., as filed March 28, 2000).
10.56
Restricted Unit Award Agreement dated December 31, 1999 with David R.
Brewer, Jr. (incorporated by reference to Exhibit 10.8 to the Form 10-K for
the fiscal year ended December 31, 1999 of Alliance Capital Management L.P.,
as filed March 28, 2000).
10.57
Commercial Paper Dealer Agreement, dated as of December 14, 1999
(incorporated by reference to Exhibit 10.9 to the Form 10-K for the fiscal
year ended December 31, 1999 of Alliance Capital Management L.P., as filed
March 28, 2000).
10.58
Extendible Commercial Notes Dealer Agreement, dated as of December
14, 1999 (incorporated by reference to Exhibit 10.10 to the Form 10-K for the
fiscal year ended December 31, 1999 of Alliance Capital Management L.P., as
filed March 28, 2000).
10.59
Amended and Restated Investment Advisory and Management Agreement
dated October 29, 1999 among Alliance Capital Management Holding L.P.
(formerly Alliance Capital Management L.P.), Alliance Corporate Finance Group
Incorporated and The Equitable Life Assurance Society of the United States
(incorporated by reference to Exhibit (a)(6) to the Form 10-Q for the
quarterly period ended September 30, 1999 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed on November
15, 1999).
10.60
Amended and Restated Accounting, Valuation, Reporting and Treasury
Services Agreement dated October 29, 1999 between Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.), Alliance Corporate
Finance Group Incorporated and The Equitable Life Assurance Society of the
United States (incorporated by reference to Exhibit (a)(7) to the Form 10-Q
for the quarterly period ended September 30, 1999 of Alliance Capital
Management Holding L.P. (formerly Alliance Capital Management L.P.) filed on
November 15, 1999).
10.61
Global Assignment and Assumption Agreement dated October 29, 1999
between Alliance Capital Management Holding L.P. (formerly Alliance Capital
Management L.P.) and Alliance Capital Management L.P. (formerly Alliance
Capital Management L.P. II) (incorporated by reference to Exhibit (a)(8) to
the Form 10-Q for the quarterly period ended September 30, 1999 of Alliance
Capital Management Holding L.P. (formerly Alliance Capital Management L.P.)
filed on November 15, 1999).
10.62
Pass-Through Agreement dated October 29, 1999 between Alliance
Capital Management Holding L.P. (formerly Alliance Capital Management L.P.)
and Alliance Capital Management L.P. (formerly Alliance Capital Management
L.P. II) (incorporated by reference to Exhibit (a)(9) to the Form 10-Q for
the quarterly period ended September 30, 1999 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed on November
15, 1999).
10.63
Reimbursement Agreement dated August 16, 1999 between Alliance
Capital Management Holding L.P. (formerly Alliance Capital Management L.P.)
and The Equitable Life Assurance Society of the United States (incorporated
by reference to Exhibit (a)(1) to the Form 10-Q for the quarterly period
ended June 30, 1999 of Alliance Capital Management Holding L.P. (formerly
Alliance Capital Management L.P.) filed on August 16, 1999).
10.64
Revolving Credit Agreement dated as of July 21, 1999 among Alliance
Capital Management L.P. (formerly Alliance Capital Management L.P. II), as
Borrower, and the lending institutions listed on Schedule 1 thereto,
collectively as Banks, and Fleet National Bank, as Administrative Agent, The
First National Bank of Chicago, as Syndication Agent, and Banque Nationale de
Paris, as Documentation Agent (incorporated by reference to Exhibit (a)(2) to
the Form 10-Q for the quarterly period ended June 30, 1999 of Alliance
Capital Management Holding L.P. (formerly Alliance Capital Management L.P.)
filed on August 16, 1999).
10.65
Exchange Agreement dated April 8, 1999 among Alliance Capital
Management Holding L.P. (formerly Alliance Capital Management L.P.), Alliance
Capital Management L.P. (formerly Alliance Capital Management L.P. II) and
The Equitable Life Assurance Society of the United States (incorporated by
reference to Exhibit 10.2 to the Registration Statement on Form S-4 of
Alliance Capital Management L.P. (formerly Alliance Capital Management L.P.
II)).
10.66
Indemnification and Reimbursement Agreement dated April 8, 1999 among
Alliance Capital Management Holding L.P. (formerly Alliance Capital
Management L.P.), Alliance Capital Management L.P. (formerly Alliance Capital
Management L.P. II) and The Equitable Life Assurance Society of the United
States (incorporated by reference to Exhibit 10.2 to the Registration
Statement on Form S-4 of Alliance Capital Management L.P. (formerly Alliance
Capital Management L.P. II)).
10.67
Unit Option Plan Agreement dated December 10, 1998 with Bruce W.
Calvert (incorporated by reference to Exhibit 10.102 to the Form 10-K for the
fiscal year ended December 31, 1998 of Alliance Capital Management Holding
L.P. (formerly Alliance Capital Management L.P.) filed March 30, 1999).
10.68
Unit Option Plan Agreement dated December 10, 1998 with John D.
Carifa (incorporated by reference to Exhibit 10.103 to the Form 10-K for the
fiscal year ended December 31, 1998 of Alliance Capital Management Holding
L.P. (formerly Alliance Capital Management L.P.) filed March 30, 1999).
10.69
Unit Option Plan Agreement dated December 10, 1998 with David R.
Brewer, Jr. (incorporated by reference to Exhibit 10.105 to the Form 10-K for
the fiscal year ended December 31, 1998 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed March 30,
1999).
10.70
Unit Option Plan Agreement dated December 10, 1998 with Robert H.
Joseph, Jr. (incorporated by reference to Exhibit 10.107 to the Form 10-K for
the fiscal year ended December 31, 1998 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed March 30,
1999).
10.71
Revolving Credit Agreement dated as of July 20, 1998 among Alliance
Capital Management L.P., as Borrower, and the lending institutions listed on
Schedule 1 thereto, collectively as Banks, and Nations Bank, N.A., The Chase
Manhattan Bank and the Bank of New York, individually as Co-Agents, Nations
Bank N.A., as Administrative Agent, The Chase Manhattan Bank, as Syndication
Agent, and the Bank of New York, as Documentation Agent (incorporated by
reference to Exhibit 10.106 to the Form 10-K for the fiscal year ended
December 31, 1998).
10.72
Unit Option Plan Agreement dated December 16, 1997 with David R.
Brewer, Jr. (incorporated by reference to Exhibit 10.98 to the Form 10-K for
the fiscal year ended December 31, 1997 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed March 30, 1998).
10.73
Unit Option Plan Agreement dated December 16, 1997 with Robert H.
Joseph, Jr. (incorporated by reference to Exhibit 10.97 to the Form 10-K for
the fiscal year ended December 31, 1997 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed March 30,
1998).
10.74
1997 Long Term Incentive Plan (incorporated by reference to Annex I
to the Proxy Statement on Schedule 14A of Alliance Capital Management Holding
L.P. (formerly Alliance Capital Management L.P.) filed December 4, 1997).
10.75
Unit Option Plan Agreement dated December 16, 1996 with David R.
Brewer, Jr. (incorporated by reference to Exhibit 10.93 to the Form 10-K for
the fiscal year ended December 31, 1996 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed March 27,
1997).
10.76
Unit Option Plan Agreement dated December 16, 1996 with Robert H.
Joseph, Jr. (incorporated by reference to Exhibit 10.92 to the Form 10-K for
the fiscal year ended December 31, 1996 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed March 27,
1997).
10.77
Unit Option Plan Agreement dated December 5, 1995 with David R.
Brewer, Jr. (incorporated by reference to Exhibit 10.82 to the Form 10-K for
the fiscal year ended December 31, 1995 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed April 1,
1996).
10.78
Unit Option Plan Agreement dated July 24, 1995 with Bruce W. Calvert
(incorporated by reference to Exhibit 10.78 to the Form 10-K for the fiscal
year ended December 31, 1995 of Alliance Capital Management Holding L.P.
(formerly Alliance Capital Management L.P.) filed April 1, 1996).
10.79
Unit Option Plan Agreement dated July 24, 1995 with John D. Carifa
(incorporated by reference to Exhibit 10.80 to the Form 10-K for the fiscal
year ended December 31, 1995 of Alliance Capital Management Holding L.P.
(formerly Alliance Capital Management L.P.) filed April 1, 1996).
10.80
Unit Option Plan Agreement dated April 25, 1995 with Bruce W. Calvert
(incorporated by reference to Exhibit 10.77 to the Form 10-K for the fiscal
year ended December 31, 1995 of Alliance Capital Management Holding L.P. (formerly
Alliance Capital Management L.P.) filed April 1, 1996).
10.81
Unit Option Plan Agreement dated April 25, 1995 with John D. Carifa
(incorporated by reference to Exhibit 10.79 to the Form 10-K for the fiscal
year ended December 31, 1995 of Alliance Capital Management Holding L.P.
(formerly Alliance Capital Management L.P.) filed April 1, 1996).
10.82
Unit Option Plan Agreement dated April 25, 1995 with David R. Brewer,
Jr. (incorporated by reference to Exhibit 10.81 to the Form 10-K for the
fiscal year ended December 31, 1995 of Alliance Capital Management Holding
L.P. (formerly Alliance Capital Management L.P.) filed April 1, 1996).
10.83
Unit Option Plan Agreement dated April 25, 1995 with Robert H.
Joseph, Jr. (incorporated by reference to Exhibit 10.83 to the Form 10-K for
the fiscal year ended December 31, 1995 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed April 1,
1997).
10.84
Unit Option Plan Agreement dated December 5, 1995 with Robert H. Joseph,
Jr. (incorporated by reference to Exhibit 10.84 to the Form 10-K for the
fiscal year ended December 31, 1995 of Alliance Capital Management Holding
L.P. (formerly Alliance Capital Management L.P.) filed April 1, 1997).
10.85
Unit Option Plan Agreement dated May 10, 1994 with Bruce W. Calvert
(incorporated by reference to Exhibit 10.59 to the Form 10-K for the fiscal
year ended December 31, 1994 of Alliance Capital Management Holding L.P.
(formerly Alliance Capital Management L.P.) filed March 30, 1995).
10.86
Unit Option Plan Agreement dated May 10, 1994 with John D. Carifa
(incorporated by reference to Exhibit 10.60 to the Form 10-K for the fiscal
year ended December 31, 1994 of Alliance Capital Management Holding L.P.
(formerly Alliance Capital Management L.P.) filed March 30, 1995).
10.87
Unit Option Plan Agreement dated May 10, 1994 with David R. Brewer,
Jr. (incorporated by reference to Exhibit 10.61 to the Form 10-K for the
fiscal year ended December 31, 1994 of Alliance Capital Management Holding
L.P. (formerly Alliance Capital Management L.P.) filed March 30, 1995).
10.88
Unit Option Plan Agreement dated May 10, 1994 with Robert H. Joseph,
Jr. (incorporated by reference to Exhibit 10.62 to the Form 10-K for the
fiscal year ended December 31, 1994 of Alliance Capital Management Holding
L.P. (formerly Alliance Capital Management L.P.) filed March 30, 1995).
10.89
Convertible Note Purchase Agreement dated as of August 11, 1994
between Alliance Capital Management L.P. (formerly Alliance Capital
Management L.P. II) and Banco Bilbao Vizcaya, S.A. (incorporated by reference
to Exhibit 10.67 to the Form 8-K to Alliance Capital Management L.P.
(formerly Alliance Capital Management L.P.) filed on August 12, 1994).
10.90
Alliance Capital Management Holding L.P. (formerly Alliance Capital
Management L.P.) 1993 Unit Option Plan (incorporated by reference to Exhibit
4.1 to the Form S-8 of Alliance Capital Management Holding L.P. (formerly
Alliance Capital Management L.P.) filed July 12, 1993).
10.91
Alliance Capital Management L.P. Unit Bonus Plan (incorporated by
reference to Exhibit 4.2 to the Form S-8 of Alliance Capital Management L.P.
(formerly Alliance Capital Management L.P.) filed July 12, 1993).
10.92
Alliance Capital Management L.P. Century Club Plan (incorporated by
reference to Exhibit 4.3 to the Form S-8 of Alliance Capital Management L.P.
(formerly Alliance Capital Management L.P.) filed July 12, 1993).
10.93
Unit Option Plan Agreement dated October 10, 1992 with David R.
Brewer, Jr. (incorporated by reference to Exhibit 10.49 to the Form 10-K for
the fiscal year ended December 31, 1992 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed March 25,
1993).
10.94
Unit Option Plan Agreement dated October 10, 1992 with Robert H.
Joseph, Jr. (incorporated by reference to Exhibit 10.48 to the Form 10-K for
the fiscal year ended December 31, 1992 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed March 25,
1993).
10.95
Alliance Capital Accumulation Plan (incorporated by reference to
Exhibit 10.51 to the Form 10-K for the fiscal year ended December 31, 1992 of
Alliance Capital Management Holding L.P. (formerly Alliance Capital
Management L.P.) filed March 25, 1993).
10.96
Transfer Agreement dated December 12, 1991 between Alliance Capital
Management Corporation and Alliance GP Incorporated (incorporated by
reference to Exhibit 10.46 to the Form 10-K of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed March 27,
1992).
10.97
Unit Option Plan Agreement dated August 8, 1991 with David R. Brewer,
Jr. (incorporated by reference to Exhibit 10.42 to the Form 10-K for the
fiscal year ended December 31, 1991 of Alliance Capital Management Holding
L.P. (formerly Alliance Capital Management L.P.) filed March 27, 1992).
10.98
Unit Option Plan Agreement dated August 8, 1991 with Robert H.
Joseph, Jr. (incorporated by reference to Exhibit 10.41 to the Form 10-K for
the fiscal year ended December 31, 1991 of Alliance Capital Management
Holding L.P. (formerly Alliance Capital Management L.P.) filed March 27,
1992).
10.99
Alliance Capital Accumulation Plan (incorporated by reference to
Exhibit 10.11 to the Form 10-K for the fiscal year ended December 31, 1988 of
Alliance Capital Management Holding L.P. (formerly Alliance Capital
Management L.P.) filed March 31, 1989).
10.100
Alliance Partners Plan (incorporated by reference to Exhibit 10.12 to
the Form 10-K for the fiscal year ended December 31, 1988 of Alliance Capital
Management Holding L.P. (formerly Alliance Capital Management L.P.) filed
March 31, 1989).
12.1
Alliance Capital Consolidated Ratio of Earnings to Fixed Charges in
respect of the years ended December 31, 2001, 2000 and 1999.
13.1
Pages 21 through 54 of the 2001 Alliance Capital Annual Report to
Unitholders.
21.1
Subsidiaries of the Registrant.
23.1
Consent of KPMG LLP.
24.1
Power of Attorney by Donald H. Brydon.
24.2
Power of Attorney by Henri de Castries.
24.3
Power of Attorney by Christopher M. Condron.
24.4
Power of Attorney by Denis Duverne.
24.5
Power of Attorney by Richard S. Dziadzio.
24.6
Power of Attorney by Benjamin D. Holloway.
24.7
Power of Attorney by W. Edwin Jarmain.
24.8
Power of Attorney by Peter D. Noris.
24.9
Power of Attorney by Frank Savage.
24.10
Power of Attorney by Peter J. Tobin.
24.11
Power of Attorney by Stanley B. Tulin.
24.12
Power of Attorney by Dave H. Williams.
Signatures
Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has
been signed by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.
Directors