SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant /x//X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x//X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
The Equitable Companies IncorporatedAXA FINANCIAL, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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/x//X/ No fee required
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
[LOGO OF THE EQUITABLE COMPANIES INCORPORATED]AXA FINANCIAL, INC.]
March 25, 199924, 2000
Dear Shareholders:
It is a pleasure to invite you to attend our 1999AXA Financial's 2000 Annual Meeting
of Shareholders. The meeting will be held in the Auditorium at The Equitable
Tower, 787 Seventh Avenue (between 51st and 52nd Streets), New York City, on
Wednesday, May 19, 1999,17, 2000, at 9:00 a.m., local time. The formal notice of the
meeting, the proxy statement, and your proxy card are enclosed in this mailing.
Whether or not you plan to attend the Annual Meeting in person, we ask that you
execute and return your proxy promptly, using the postage-paid envelope we have
provided for your convenience. You may submit your proxy by telephone or the
Internet if you wish.
Thank you for your continued support.
Sincerely,
/s/ Edward D. Miller /s/ Henri de Castries
Edward D. Miller Henri de Castries
President and Chairman of the Board
Chief Executive Officer
THE EQUITABLE COMPANIES INCORPORATEDAXA FINANCIAL, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
1290 Avenue of the Americas
New York, New York 10104
March 25, 199924, 2000
To The Shareholders:
The Annual Meeting of Shareholders of The Equitable Companies IncorporatedAXA Financial, Inc. will be held in
the Auditorium at The Equitable Tower, 787 Seventh Avenue (between 51st and 52nd
Streets), New York City, on Wednesday, May 19, 1999,17, 2000, at 9:00 a.m., local time,
to consider and act upon:
1. Election of 19 directors for a term of one year, or until their
successors are elected and qualified;
2. Ratification of the appointment of PricewaterhouseCoopers LLP as
independent accountants;
3. Approval of an amendment to the Company's Restated Certificate of
Incorporation to change the Company's name to "AXA Financial, Inc.";
4. Approval of an amendment to the Company's 1997 Stock Incentive Plan to
increase by 15,000,000 the number of authorized shares available for grant;of Common
Stock from 500,000,000 to 2,000,000,000; and
5.4. Such other business as may properly come before the meeting or any
adjournment thereof.
Shareholders of record as of the close of business on March 22, 199920, 2000 are
entitled to notice of, and to vote at, the Annual Meeting and any adjournment
thereof. SHAREHOLDERS ARE REMINDED THAT SHARES CANNOT BE VOTED UNLESS THE SIGNED
PROXY CARD IS RETURNED, THE PROXY IS SUBMITTED BY TELEPHONE OR THE INTERNET, THE
SHARES ARE VOTED IN PERSON, OR OTHER ARRANGEMENTS ARE MADE TO HAVE THE SHARES
REPRESENTED AT THE MEETING.
By Order of the Board of Directors
/s/ Pauline Sherman
Pauline Sherman
Senior Vice President and Secretary
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 19, 199917, 2000
------------------------
INTRODUCTION
SOLICITATION OF PROXIES
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of The Equitable Companies IncorporatedAXA Financial, Inc. (the "Company") of proxies to be
used at the Annual Meeting of Shareholders of the Company on Wednesday, May 19, 199917,
2000 at 9:00 a.m. in the Auditorium at The Equitable Tower, 787 Seventh Avenue,
New York City, and at any adjournment thereof. The Company's Annual Report for
19981999 and this proxy material are being sent to shareholders beginning on or
about April 1, 1999.2000.
Shares represented by valid proxies will be voted at the Annual Meeting or
any adjournment thereof in accordance with each shareholder's directions. Please
vote by marking the appropriate boxes, signing, dating and returning the
enclosed proxy card. If the card is signed and returned without direction, the
shares will be voted as recommended by the Board. Alternatively, a proxy may be
submitted by telephone or the Internet. Please follow the instructions on the
enclosed proxy card if you wish to submit your proxy in this manner. A proxy may
be revoked by a shareholder at any time before its use by giving written notice
of revocation to the Secretary of the Company, by submitting a subsequent proxy
or by voting in person at the meeting.
Any full shares held for you under the Company's Dividend Reinvestment and
Stock Purchase Plan, the EquitableAXA Financial Direct Purchase Plan, the EquitableAXA Financial
Stock Fund under the Equitable Investment Plan, or the Equitable Stock Purchase
Plan for Employees and Agents have been included in the shares shown on the
enclosed proxy card.
OUTSTANDING STOCK AND VOTING RIGHTS
The Company's Board of Directors has fixed the close of business on
March 22, 199920, 2000 as the record date for determining shareholders of record
entitled to notice of, and to vote at, the Annual Meeting. On the record date,
the Company had outstanding 223,795,672432,033,619 shares of Common Stock. Each shareholder
is entitled to one vote for each share of Common Stock registered in that
person's name on the books of the Company on the record date on all business to
come before the meeting. Participants in the Company's Dividend Reinvestment and
Stock Purchase Plan, in the EquitableAXA Financial Stock Fund under the Equitable Investment
Plan, in the EquitableAXA Financial Direct Purchase Plan, and in the Equitable Stock Purchase
Plan for Employees and Agents are entitled to vote shares held for their
accounts on such record date by the administrator or trustee of such Plans. The
presence of a majority of the Company's outstanding shares in person or by proxy
will constitute a quorum for the transaction of business at the Annual Meeting.
Provided a quorum is present, directors will be elected by a plurality of the
votes validly cast in the election and the vote of a majority of the shares of
Common Stock represented in person or by proxy will be sufficient for the
transaction of any other business properly brought before the Annual Meeting
other than the amendment of the Company's Restated Certificate of Incorporation,
which requires approval by the vote of a majority of the Company's outstanding
shares of
1
Common Stock. Abstentions from voting, including broker non-votes, with respect
to shares present at the Annual Meeting in person or by proxy will have no
effect in determining whether a quorum is present or on the election of
directors, but will have the effect of votes against any business other than the
election of directors.
VOTING BY THE COMPANY'S PRINCIPAL SHAREHOLDER
AXA is the largest shareholder of the Company, beneficially owning at
March 1, 19992000 approximately 58%60% of the outstanding shares of Common Stock, par
value $0.01 per share, of the Company (the "Common Stock"). For insurance
regulatory purposes, all shares of Common Stock beneficially owned by AXA have
been deposited into a voting trust (the "Voting Trust"). AXA remains the
beneficial owner of all capital stock deposited in the Voting Trust, but during
the term of the Voting Trust the trustees thereunder (the "Voting Trustees")
exercise all voting rights with respect to such capital stock. See "Security
Ownership of Certain Beneficial Owners and Management."
The Company understands that the Voting Trustees intend to vote all shares
of Common Stock beneficially owned by AXA at the Annual Meeting or any
adjournment thereof in favor of the proposals set forth in this Proxy Statement.
AXA beneficially owns, without acquiring any additional shares of Common Stock,
shares of Common Stock in an amount sufficient to permit the Voting Trustees to
control the outcome of the shareholder vote on the proposals set forth in this
Proxy Statement.
AXA, a French company, is the holding company for an international group of
insurance and related financial services companies. AXA's insurance operations
include activities in life insurance, property and casualty insurance and
reinsurance. The insurance operations are diverse geographically with activities
principally in Western Europe, North America, and the Asia/Pacific area and, to
a lesser extent, in Africa and South America. AXA is also engaged in asset
management, investment banking, securities trading, brokerage, real estate and
other financial services activities principally in the United States, as well as
in Western Europe and the Asia/Pacific area.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of March 1, 19992000 by (i) each person known to own
beneficially more than 5% of the outstanding shares of Common Stock, (ii) each
director, director nominee, and named executive officer of the Company and
(iii) all directors, director nominees, and executive officers of the Company,
as a group. This information reflects a two-for-one Common Stock split in the
form of a 100% stock dividend issued on October 1, 1999. Except as noted below,
each holder listed below has sole investment and voting power with respect to
the shares beneficially held by such holder.
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------------------ -------------------- ----------------
AXA (1)............................. 130,545,121 58.4%261,236,342 60.3%
Claude Bebear (2)(14)(16)............... 16,66793,332 *
John S. Chalsty (3)................. 116,000232,000 *
Francoise Colloc'h (2)(15)(17).......... 8,33349,998 *
Henri de Castries (2)(16)(18)........... 13,33386,665 *
Claus-Michael Dill (2).............. 0 *
Joseph L. Dionne (17)(19)............... 1,5894,125 *
Jean-Rene Fourtou (2)(4)(17)(19)........ 1,6954,329 *
Jacques Friedmann (2)............... 0 *
Robert E. Garber (5)................ 233,633 *
Jerome S. Golden (5)(6)................ 72,971147,068 *
Donald J. Greene (6)(17)(7)(19)............ 1,7834,510 *
Anthony J. Hamilton (2)(17)(19)......... 5,54512,029 *
John T. Hartley (7)(8)................. 1,5674,074 *
John H.F. Haskell, Jr. (17)(19)......... 1,5454,029 *
Michael Hegarty (8)................. 48,228(2)(9).............. 296,794 *
Nina Henderson (17)(19)................. 5452,029 *
W. Edwin Jarmain (9)(17)............ 10,545(10)(19)........... 22,029 *
Edward D. Miller (10)............... 142,745(2)(11)............ 732,711 *
Didier Pineau-Valencienne (2)(17)(19)... 5452,029 *
George J. Sella, Jr. (17)(19)........... 5452,029 *
Jose S. Suquet (11)(12)................. 144,200395,913 *
Peter J. Tobin...................... 0Tobin (13)................. 6,722 *
Stanley B. Tulin (12)(14)............... 87,437278,753 *
Dave H. Williams (13)(15)............... 100,000200,000 *
All directors, director nominees,
and executive officers
as a group (24(25 persons)........... 942,4683,031,434 *
- ------------------
* Number of shares listed represents less than one percent (1%) of the number
of shares of Common Stock outstanding.
(1) Includes 14,000,00028,000,000 shares of Common Stock beneficially owned by Lor
Finance, S.A. ("Lor Finance"), a subsidiary of AXA, in connection with a
stock compensation plan for key employees of AXA and its affiliates, and
23,297,39946,740,898 shares of Common Stock beneficially owned by various other
subsidiaries of AXA. For insurance regulatory purposes, the shares of
capital stock of the Company beneficially owned by AXA and its subsidiaries
have been deposited in the Voting Trust, which has an initial term of ten
years, commencing May 12, 1992. The Voting Trustees are Claude Bebear,
Patrice Garnier and Henri de Clermont-Tonnerre, each of whom serves either
on the ExecutiveManagement Board (in the case of Mr. Bebear) or Supervisory Board
(in the case of Messrs. Garnier and de Clermont-Tonnerre) of AXA. The
(Footnotes continued on next page)
3
(Footnotes continued from previous page)
Clermont-Tonnerre) 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 of its minority shareholders do not exercise control over the
Company or certain of its insurance subsidiaries. Exhibit A hereto contains
additional information, including addresses, as to AXA and certain direct
and indirect shareholders of AXA, who may be deemed to own beneficially all
shares of the Company's stock beneficially owned by AXA and to have shared
power to vote or to dispose of the shares beneficially owned by AXA.
(2) Excludes shares beneficially owned by AXA. Messrs. Bebear, de Castries, and
Miller and Ms. Colloc'h are members of AXA's Management Board. Messrs.
Fourtou, Friedmann, Hamilton, and Pineau-Valencienne are members of theAXA's
Supervisory Board. Messrs. Dill and Hegarty are members of AXA's Executive
Board (in the case of Mr. Bebear) or Supervisory Board (in the case of the
others) of AXA and, additionally, Messrs. Bebear and de Castries and Ms.
Colloc'h are executive officers of AXA. Also excludes certain options
exercisable presently or within 60 days for shares of Lor Finance held by
Messrs. Bebear and de Castries and Ms. Colloc'h (see Note (1)). The sole
assets of Lor Finance are voting trust certificates representing 14,000,000
shares of the Company's Common Stock. Each share of Lor Finance is intended
to be the economic equivalent of a share of the Company's Common Stock,
although holders of Lor Finance shares are not technically beneficial
owners of the Company's Common Stock.Board.
(3) Includes 100,000200,000 shares subject to options held by Mr. Chalsty, which
options Mr. Chalsty has the right to exercise presently or within 60 days.
(4) Mr. Fourtou owns 1,1502,300 of these shares jointly with his spouse, Janelly
Fourtou.
(5) Includes 52,914205,633 shares subject to options held by Mr. Garber, which
options Mr. Garber has the right to exercise presently or within 60 days.
(6) Includes 97,255 shares subject to options held by Mr. Golden, which options
Mr. Golden has the right to exercise presently or within 60 days, and
9,17027,750 shares owned by Linda Golden, Mr. Golden's spouse.
(6) Includes 103 shares owned by Mary Greene, Mr. Greene's spouse.(7) Mr. Greene disclaims beneficial ownershipowns 2,481 of thethese shares owned byjointly with his spouse.
(7) Includes 1,019spouse, Mary Greene.
(8) Represents 2,038 shares for which Mr. Hartley acts as Trustee for the John
T. Hartley Trust and 5482,036 shares (including reinvested dividends) received
as of March 1, 19992000 under the Company's Stock Plan for Directors (see
"Compensation of Directors").
(8)(9) Includes 48,039295,956 shares subject to options held by Mr. Hegarty, which
options Mr. Hegarty has the right to exercise presently or within 60 days.
(9)(10) Includes 10,00020,000 shares owned by Jarmain Group, Inc. Mr. Jarmain controls
Jarmain Group, Inc.
(10) Represents 142,745(11) Includes 732,511 shares subject to options held by Mr. Miller, which
options Mr. Miller has the right to exercise presently or within 60 days.
(11)(12) Includes 117,630336,300 shares subject to options held by Mr. Suquet, which
options Mr. Suquet has the right to exercise presently or within 60 days.
(12)(13) Mr. Tobin owns 6,000 of these shares jointly with his spouse, Mary Tobin.
Also includes 721 shares issuable on a deferred basis as of March 1, 2000
under the Company's Stock Plan for Directors and 1 additional deferred
share representing dividends attributable to such shares (see "Compensation
of Directors").
(14) Includes 82,819253,280 shares subject to options held by Mr. Tulin, which options
Mr. Tulin has the right to exercise presently or within 60 days, and 4,0008,000
shares owned jointly by Mr. Tulin and his spouse, Riki P. Tulin.
(13)(15) Represents 100,000200,000 shares subject to options held by Mr. Williams, which
options Mr. Williams has the right to exercise presently or within
60 days.
(14)(16) Represents 16,66793,332 shares subject to options held by Mr. Bebear, which
options Mr. Bebear has the right to exercise presently or within 60 days.
(15)(17) Represents 8,33349,998 shares subject to options held by Ms. Colloc'h, which
options Ms. Colloc'h has the right to exercise presently or within 60 days.
(16)(18) Represents 13,33386,665 shares subject to options held by Mr. de Castries, which
options Mr. de Castries has the right to exercise presently or within 60
days.
(17)(19) Includes 5452,023 shares issuable on a deferred basis as of March 1, 19992000
under the Company's Stock Plan for Directors and 6 additional deferred
shares representing dividends attributable to such shares (see
"Compensation of Directors").
4
The following tables set forth certain information regarding the beneficial
ownership of common stock of AXA, Finaxa, a shareholder of AXA described in
Exhibit A, and Donaldson, Lufkin & Jenrette, Inc. ("DLJ") and DLJdirect, and of
limited partnership interests (the "Alliance ("Units") in Alliance Capital Management Holding
L.P. ("Alliance Holding") and Alliance Capital Management L.P. ("Alliance") as
of March 1, 19992000 by (i) each director, director nominee, and named executive
officer of the Company who beneficially owns any shares of AXA's, Finaxa's,
DLJ's, or DLJ'sDLJdirect's common stock or Alliance Holding or Alliance Units and
(ii) all directors, director nominees, and executive officers as a group. Except
as otherwise listed below, no director, director nominee, or executive officer
of the Company beneficially owns any shares of common stock of AXA or Finaxa or
any equity interest in any subsidiary of the Company or The Equitable
Life Assurance Society of the United States ("Equitable Life") other than directors'
qualifying shares.
AXA COMMON STOCK
NUMBER PERCENT
NAME OF SHARES OF CLASS
- --------------------------------------------- ------------------- --------
Claude Bebear (1)............................ 592,234288,046 *
John S. Chalsty (2).......................... 6,25011,250 *
Francoise Colloc'h (3)....................... 84,645104,220 *
Henri de Castries (4)........................ 70,188122,750 *
Jean-Rene Fourtou............................ 1,623 *
Jacques Friedmann (5)........................ 75,12525,154 *
Robert E. Garber (6)......................... 3,500 *
Jerome S. Golden (6)(7)......................... 1,2503,000 *
Anthony J. Hamilton.......................... 1,000 *
John H.F. Haskell, Jr........................ 500 *
Michael Hegarty (8).......................... 3,750 *
Edward D. Miller (9)......................... 12,500 *
Didier Pineau-Valencienne.................... 664 *
Jose S. Suquet (7)........................... 1,750(10).......................... 5,000 *
Stanley B. Tulin (8)......................... 3,500(11)........................ 8,500 *
Dave H. Williams (9)......................... 5,000(12)........................ 10,000 *
All directors, director nominees, and
executive officers as a group
(24(25 persons)......................... 846,479............................... 605,707 *
- ------------
* Represents less than one percent (1%) of the outstanding common stock of
AXA. Holdings of AXA American Depositary Shares are expressed as their
equivalent in AXA common stock.
(1) Includes 23 shares owned by Mr. Bebear's spouse, Catherine Bebear, and
272,59993,250 shares subject to options held by Mr. Bebear, which options
Mr. Bebear has the right to exercise presently or within 60 days.
(2) Includes 5,00010,000 shares subject to options held by Mr. Chalsty, which options
Mr. Chalsty has the right to exercise presently or within 60 days.
(3) Includes 84,5255,150 shares owned by Ms. Colloch's minor child, and 89,950 shares
subject to options held by Ms. Colloc'h, which options Ms. Colloc'h has the
right to exercise presently or within 60 days.
(4) Includes 69,1887,500 shares owned by Mr. de Castries' three minor children, and
59,125 shares subject to options held by Mr. de Castries, which options
Mr. de Castries has the right to exercise presently or within 60 days.
(5) Includes 1,399 shares owned jointly by Mr. Friedmann and his spouse, 554
shares owned solely by Mr. Friedmann's spouse, and 72,00024,000 shares subject to options held by Mr. Friedmann, which
options Mr. Friedmann has the right to exercise presently or within 60 days.
(6) Includes 3,250 shares subject to options held by Mr. Garber, which options
Mr. Garber has the right to exercise presently or within 60 days.
(7) Represents 1,2503,000 shares subject to options held by Mr. Golden, which options
Mr. Golden has the right to exercise presently or within 60 days.
(7) Includes 1,250(8) Represents 3,750 shares subject to options held by Mr. Hegarty, which
options Mr. Hegarty has the right to exercise presently or within 60 days.
(Footnotes continued on next page)
5
(Footnotes continued from previous page)
(9) Represents 12,500 shares subject to options held by Mr. Miller, which
options Mr. Miller has the right to exercise presently or within 60 days.
(10) Represents 5,000 shares subject to options held by Mr. Suquet, which
options Mr. Suquet has the right to exercise presently or within 60 days.
(8)(11) Includes 2,5007,500 shares subject to options held by Mr. Tulin, which options
Mr. Tulin has the right to exercise presently or within 60 days.
(9)(12) Represents 5,00010,000 shares subject to options held by Mr. Williams, which
options Mr. Williams has the right to exercise presently or within 60 days.
5
FINAXA COMMON STOCK
NUMBER PERCENT
NAME OF SHARES OF CLASS
- -------------------------------------------------- ------------ --------
Claude Bebear (1)................................. 595,241 *
Francoise Colloc'h (2)............................ 97,824 *
Henri de Castries (3)............................. 115,000 *
All directors and executive officers as a group
(24 persons).................................... 808,065 1.3%
FINAXA COMMON STOCK
NUMBER PERCENT
NAME OF SHARES OF CLASS
- -------------------------------------------------- ------------ -----------
Claude Bebear (1)................................. 593,297 *
Francoise Colloc'h (2)............................ 47,655 *
Henri de Castries................................. 71,001 *
All directors, director nominees, and executive
officers as a group (25 persons)................ 711,953 1.1%
- ------------
* Represents less than one percent (1%) of the outstanding common stock of
Finaxa.
(1) Includes 434,445443,274 shares owned by Clauvalor, a French company controlled by
Mr. Bebear, and 75,000Bebear.
(2) Includes 1,661 shares subject to options held by Mr. Bebear, which
options Mr. Bebear has the right to exercise presently or within 60 days.
(2) Includes 77,249Ms. Colloc'h's minor child, and 25,000 shares
subject to options held by Ms. Colloc'h, which options Ms. Colloc'h has the
right to exercise presently or within 60 days.
(3) Represents 115,000 shares subject to options held by Mr. de Castries, which
options Mr. de Castries has the right to exercise presently or within 60
days.ALLIANCE HOLDING AND ALLIANCE UNITS
NUMBER PERCENT
NAME OF UNITS OF CLASS
- -------------------------------------------------- --------- --------
John S. Chalsty................................... 18,000 *
John T. Hartley (1)............................... 1,460 *
George J. Sella, Jr............................... 10,000 *
Dave H. Williams (2).............................. 1,868,912 1.1%
All directors and executive officers as a group
(24 persons).................................... 1,900,372 1.1%
ALLIANCE HOLDING ALLIANCE
----------------------- -----------
NUMBER PERCENT NUMBER
NAME OF UNITS OF CLASS OF UNITS
- -------------------------------------------------- ---------- -------- -----------
John S. Chalsty................................... 18,000 * 0
Henri de Castries................................. 2,000 * 0
John T. Hartley (1)............................... 1,460 * 0
Michael Hegarty................................... 0 * 18,000
George J. Sella, Jr............................... 10,000 * 0
Stanley B. Tulin.................................. 4,000 * 0
Dave H. Williams (2).............................. 1,009,876 1.4% 759,036
All directors, director nominees, and executive
officers as a group (25 persons)................ 1,047,336 1.5% 777,036
- ------------
* Represents less than one percent (1%) of the outstanding Alliance Holding
Units. No director, director nominee, or executive officer owns more than 1%
of the outstanding Alliance Units.
(1) Represents 1,460 Alliance Holding Units owned by Martha Hartley,
Mr. Hartley's spouse. Mr. Hartley disclaims beneficial ownership of the
Alliance Holding Units owned by his spouse.
(2) Includes 160,000 Alliance Holding Units owned by Reba W. Williams,
Mr. Williams' spouse.
6
DLJ AND DLJDIRECT COMMON STOCK
NUMBER PERCENT
NAME OF SHARES OF CLASS
- -------------------------------------------------- --------- --------
Claude Bebear..................................... 2,000 *
John S. Chalsty (1)............................... 1,931,263 1.5%
Francoise Colloc'h................................ 2,000 *
Henri de Castries................................. 2,000 *
John T. Hartley (2)............................... 2,048 *
W. Edwin Jarmain (3).............................. 20,048 *
George J. Sella, Jr............................... 1,046 *
Jose S. Suquet.................................... 400 *
Stanley B. Tulin (4).............................. 1,000 *
All directors and executive officers as a group
(24 persons).................................... 1,962,805 1.6%
DLJ DLJDIRECT
------------------------ ----------
NUMBER PERCENT NUMBER
NAME OF SHARES OF CLASS OF SHARES
- -------------------------------------------------- ----------- -------- ----------
Claude Bebear..................................... 2,000 * 0
John S. Chalsty (1)............................... 1,998,532 1.5% 20,250
Francoise Colloc'h................................ 2,000 * 0
Henri de Castries................................. 2,000 * 2,500
Robert E. Garber.................................. 1,000 * 0
John T. Hartley (2)............................... 2,048 * 0
Michael Hegarty................................... 0 * 2,500
W. Edwin Jarmain (3).............................. 27,248 * 2,500
Edward D. Miller.................................. 0 * 2,500
George J. Sella, Jr............................... 1,046 * 2,000
Jose S. Suquet.................................... 0 * 2,000
Stanley B. Tulin (4).............................. 1,000 * 2,500
All directors, director nominees, and executive
officers as a group (25 persons)................ 2,036,874 1.5% 36,750
- ------------
* Represents less than one percent (1%) of the outstanding shares of DLJ
common stock. No director, director nominee, or executive officer owns more
than 1% of the outstanding shares of DLJdirect common stock.
(1) Includes 2,5001,500 shares of DLJ common stock owned by Jennifer Chalsty,
Mr. Chalsty's spouse; 650,649712,552 DLJ vested restricted stock units; and
1,272,714 DLJ shares subject to options held by Mr. Chalsty, which options
Mr. Chalsty has the right to exercise presently or within 60 days.
(2) Represents 2,048 DLJ shares for which Mr. Hartley acts as Trustee for the
John T. Hartley Trust.
(3) Includes 8,000 DLJ shares and 2,500 DLJdirect shares owned by Jarmain Group,
Inc. (which is controlled by Mr. Jarmain), and 10,00017,000 DLJ shares subject to
options held by Mr. Jarmain, which options Mr. Jarmain has the right to
exercise presently or within 60 days.
(4) Represents 1,000 DLJ shares owned jointly by Mr. Tulin and his spouse, Riki
P. Tulin.
67
PROPOSAL 1. ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
The Board of Directors consists of one class of directors who hold office
until the Annual Meeting of Shareholders next following their election and until
their successors shall have been elected and qualified.
Pursuant to the By-Laws of the Company, the Board has set 19 as the number
of directors to be elected at the Annual Meeting for terms ending in May 20002001 or
until their respective successors shall have been elected and qualified. All of
the nominees except Mr. Dill are at the present time directors of the Company
whose current terms will expire at the 19992000 Annual Meeting. Jacques Friedmann,
currently a director of the Company, is retiring from the Board of Directors as
of the 2000 Annual Meeting and is therefore not a nominee. If any nominee should
become unable to serve, the persons named as proxies on the proxy card will vote
for the person or persons the Board recommends, if any. The Board knows of no
reason why any nominee will be unavailable or unable to serve.
Set forth below is information about each nominee, including business
positions held during at least the past five years, age, other directorships
held and periods of service as a director of the Company and The Equitable Life.Life
Assurance Society of the United States ("Equitable Life").
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE NOMINEES
NAMED BELOW.
CLAUDE BEBEAR, 6364 Director since May 1992
Formerly Chairman of the Board of the Company (until April 1998), Mr.
Bebear has been Chairman of the ExecutiveManagement (formerly Executive) Board (chief
executive officer) of AXA since January 1997. Prior thereto, he was Chairman and
Chief Executive Officer of AXA from 1989 to January 1997 and Chief Executive
Officer of the AXA Group from 1974 to 1989. Mr. Bebear serves as Chairman or
Director of numerous subsidiaries and affiliated companies of the AXA Group. He
is also a Director of Schneider Electric (formerly Schneider S.A.) and serves as
a Member of the Supervisory BoardsBoard of Paribas and
Societe Generale.Paribas. Mr. Bebear was a Director of
Equitable Life from July 1991 to April 1998.
JOHN S. CHALSTY, 6566 Director since February 1996
Chairman of DLJ (since February 1996) and a. He was Senior Executive Vice
President of AXA (sincefrom January 1997). He was1997 to January 2000, Chief Executive Officer of
DLJ from 1986 to February 1998, and President of DLJ from 1986 to February 1996.
Director of DLJ since 1971 and Director of IBP, Inc., Sappi Limited (South
African-based pulp, paper, and timber mills), and Occidental Petroleum
Corporation. From 1990 to 1994 Mr. Chalsty served as Vice Chairman of the New
York Stock Exchange, Inc.
FRANCOISE COLLOC'H, 5556 Director since December 1996
Member of the AXA Management Board and Group Executive President, Human
Resources, Communication and Synergies of AXA (since January 2000). Prior
thereto, she was Senior Executive Vice President in charge of Group Human Resources and
Communications of AXA. Prior thereto, she was(1993-2000), Executive Vice
President (1993), Senior Vice President-Management and Communication (1992), and
Vice President (1984-1992) of AXA. She is also a Director or officer of various
subsidiaries and affiliates of the AXA Group. Director of Equitable Life since
July 1992.
78
HENRI DE CASTRIES, 4445 Director since May 1994
Chairman of the Board of the Company since April 1998; Vice Chairman from
February 1996 to April 1998. Vice Chairman of AXA's Management Board (since
January 2000). Prior thereto, he was Senior Executive Vice President Financial
Services and Life Insurance Activities of AXA in the United States, Germany, the United
Kingdom and Benelux since 1996. Prior thereto, he wasfrom 1996 to 2000; Executive Vice President Financial
Services and Life Insurance Activities of AXA from 1993 to 1996,1996; General Secretary of AXA from
1991 to 19931993; and Central Director of Finances of
AXA from 1989 to 1991.1991 of AXA. He is
also a Director or officer of various subsidiaries and affiliates of the AXA
Group. He is also a Director of DLJ and Alliance Capital Management Corporation,
the general partner of Alliance Holding and Alliance. Director of Equitable Life
since September 1993.
CLAUS-MICHAEL DILL, 46
Chairman of the Management Board of AXA Colonia Konzern AG (insurance) and
affiliated companies since June 1999. Prior thereto, was a member of the
Management Board of the same companies (from April 1999 to June 1999), and a
member of the Holding Management Board of Gerling-Konzern (insurance) (from 1995
to April 1999). From 1988 to 1995, he was a member of the management boards of a
number of Swiss Reinsurance subsidiaries. He is also a member of the Executive
Board of AXA, and serves as Director or officer of various subsidiaries and
affiliates of the AXA Group. He is also a Member of the Supervisory Board of
Deutsche Arzteversicherung AG, Kolnische Ruckversicherung-Gesellschaft AG and
Rheinboden Hypothekenbank AG.
JOSEPH L. DIONNE, 6566 Director since May 1992
Retired as Chairman (since April 1988)of The McGraw-Hill Companies (multimedia publishing and
formerinformational services) in January 2000; prior thereto, held the positions of
Chairman (April 1988 to December 1999) and Chief Executive Officer (April 1983
to April 1998) of The McGraw-Hill Companies (multimedia publishing and
informational services).Companies. Director of The McGraw-Hill
Companies, Harris Corporation and Ryder System, Inc. Director of Equitable Life
since May 1982.
JEAN-RENE FOURTOU, 5960 Director since July 1992
Vice Chairman of the Management Board of Aventis (formerly
Rhone-Poulenc, S.A.) since December 1999. Prior thereto, was Chairman and Chief
Executive Officer of Rhone-Poulenc, S.A. (industrial conglomerate principally
engaged in the manufacture of pharmaceuticals and specialty chemicals) since 1986.from 1986
to December 1999. Member of the Supervisory Board of AXA. Director of Schneider
Electric (formerly Schneider S.A.), Societe Generale,Paribas, and Groupe Pernod-Ricard. Member of
the European Advisory Board of Bankers Trust Company and Consulting Council of Banque de France. Director of Equitable Life since
July 1992.
JACQUES FRIEDMANN, 66 Director since July 1997
Chairman of the Supervisory Board of AXA since January 1997. Vice Chairman
of the Board of Directors of Royale Belge (insurance), and Director of AXA
Colonia Konzern, Banque Nationale de Paris, Elf Aquitaine, Vivendi and Alcatel.
DONALD J. GREENE, 6566 Director since May 1992
Partner,Of Counsel, LeBoeuf, Lamb, Greene & MacRae, L.L.P. (law firm) since 1965.1999;
prior thereto, he was a partner of the firm from 1965 to 1999. Director of
Equitable Life since July 1991.
ANTHONY J. HAMILTON, 5758 Director since December 1995
Group Chairman and Chief Executive (since February 1994) of Fox-Pitt,
Kelton Group Ltd., the London and New York based investment banking firm, which
Mr. Hamilton joined in 1978. Non-executive Chairman, Byas, Mosley Group Ltd.
Director of various Fox-Pitt, Kelton and Byas, Mosley Group companies. Member of
the Supervisory Board of AXA and Director of Sun Life & Provincial Holdings plc.
Director of Equitable Life from December 1995 to June 1996.
89
JOHN T. HARTLEY, 6970 Director since May 1992
Retired as Chairman and Chief Executive Officer of Harris Corporation
(industrial conglomerate principally engaged in the manufacture of electronic,
telephone and copying systems and related equipment) in July 1995; prior
thereto, he held the positions of Chairman of Harris Corporation from 1987,
Chief Executive Officer from 1986 and President from October 1987 to April 1993.
Director of Harris Corporation and The McGraw-Hill Companies. Director of
Equitable Life since August 1987.
JOHN H.F. HASKELL, JR., 6768 Director since July 1992
Managing DirectorSenior Advisor of Warburg Dillon Read LLC (formerly SBC Warburg Dillon
Read, Inc.) (investment banking firm) since 1999; prior thereto, Managing
Director (from 1975 to 1999) and a member of its Board of Directors. Director of Dillon, Read Limited and
Pall Corporation, and Chairman of the Supervisory Board of Dillon Read (France)
Gestion (until 1998). Director of Equitable Life since July 1992.
MICHAEL HEGARTY, 5455 Director since February 1998
Senior Vice Chairman of the Company since April 1998November 1999 and Chief Operating
Officer since February 1998; Vice Chairman of the Company from April 1998 to
November 1999; Senior Executive Vice President of the Company from January 1998
to April 1998. He has also been a Director and President of Equitable Life since
January 1998 and Chief Operating Officer since February 1998. From 1996 to 1997
he was Vice Chairman of Chase Manhattan Corporation. Prior thereto, he was Vice
Chairman (1995-1996) and Senior Executive Vice President (1991-1995) of Chemical
Bank, which merged with Chase in 1996. He is alsoa member of the Executive Board of
AXA and a director of various AXA Financial subsidiaries, including DLJ and
Alliance Capital Management Corporation, the general partner of Alliance Holding
and Alliance.
NINA HENDERSON, 4849 Director since December 1996
Corporate Vice President of Core Business Development of Bestfoods (food
manufacturing company) since June 1999. Prior thereto, she was President of
Bestfoods Grocery and Vice President of Bestfoods (formerly CPC International,
Inc.), both food manufacturing companies, since 1993. Prior
thereto, she was from 1997 to 1999, and President of CPCBestfoods Specialty Markets Group.Group from
1993 to 1997. Director of Hunt Corporation (formerly Hunt Manufacturing Company), a manufacturer of office
products.
and PACTIV Corporation (formerly known as Tenneco Packaging). Director of
Equitable Life since December 1996.
W. EDWIN JARMAIN, 6061 Director since July 1992
President of Jarmain Group Inc. (private investment holding company) since
1979; also an officer or director of several affiliated companies. Director of
Equitable Life (since July 1992), DLJ (since October 1992), AXA Insurance
(Canada), Anglo Canada General Insurance Company, and AXA Pacific Insurance
Company, and National Mutualan Alternate Director of AXA Asia Pacific Holdings Limited. He
served as non-executive Chairman and Director of FCA International Ltd.
(financial collection services) from January 1994 until May 1998. Director of
Equitable Life since July 1992.
EDWARD D. MILLER, 5859 Director since August 1997
President and Chief Executive Officer of the Company since August 1997. He
was President of Equitable Life from August 1997 to January 1998 and has been
Chairman of Equitable Life since January 1998 and Chief Executive Officer and a
Director of Equitable Life since August 1997. He is also a Member of AXA's
Management Board (since January 2000); prior thereto, he was a Senior Executive
Vice President of AXA. From 1996 to 1997, he was Senior Vice Chairman of Chase
Manhattan Corporation. Prior thereto, he was President of Chemical Bank (which
merged
10
with Chase in 1996) from 1994 to 1996 and Vice Chairman from 1991 to 1994. He is
also a Director of DLJ;various AXA Financial subsidiaries, including DLJ and
Alliance Capital Management Corporation, the general partner of Alliance Holding
and Alliance; AXA Canada; and KeySpan Energy Corporation, formed as a result of
the merger of Long Island Lighting Company and Brooklyn Union Gas Co.
9
DIDIER PINEAU-VALENCIENNE, 6869 Director since February 1996
Vice Chairman (since March 1999) of Credit Suisse First Boston (investment
banking firm). From 1981 to February 1999, he was Chairman and Chief Executive
Officer of Schneider Electric (formerly Schneider S.A.) (industrial conglomerate
principally engaged in the electrical equipment business), of which he became
Honorary Chairman in February 1999, and of Square D and Chairman or a Director of numerous subsidiaries and
affiliated companies of Schneider.1999. Director of the Company and Equitable Life
from July 1992 to February 1995. Member of the Supervisory Board of AXA and
Lagardere (French publishing company).AXA.
Director of CGIP, Aventis (formerly Rhone-Poulenc, S.A.),
and Sema Group PLC;PLC (UK),
Soft Computing and Swiss Helvetic Fund; member of the European Advisory Board of Bankers Trust
Company and of the Advisory Boards of Banque de France and
Booz-Allen & Hamilton. Director of Equitable Life since February 1996.
GEORGE J. SELLA, JR., 7071 Director since May 1992
Retired as Chairman and Chief Executive Officer of American Cyanamid
Company (industrial conglomerate principally engaged in the manufacture of
pharmaceutical products and agricultural herbicides and pesticides) in April
1993; prior thereto, he held the positions of Chairman from 1984, Chief
Executive Officer from 1983 and President from 1979 to 1991. Director of Union
Camp Corporation, Coulter
Pharmaceutical, and Bush, Boake, Allen Inc.Pharmaceutical. Director of Equitable Life since May 1987.
PETER J. TOBIN, 5556 Director since March 1999
Dean of the Peter J. Tobin College of Business Administration of St. John's
University since August 1998. He was Chief Financial Officer at 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. Director of
The CIT Group, Inc. and, H.W. Wilson Company.Company and P.A. Consulting. Director of
Equitable Life since March 1999.
DAVE H. WILLIAMS, 6667 Director since May 1992
Chairman (since 1977) and former Chief Executive Officer (1977 to January
1999) of Alliance Capital Management Corporation, the general partner of
Alliance Holding and Alliance; Chairman or Director of numerous subsidiaries and
affiliated companies of Alliance Capital Management Corporation and of mutual
funds managed by Alliance. He was Senior Executive Vice President of AXA (sincefrom
January 1997).1997 to January 2000. Director of Equitable Life since March 1991.
BOARD MEETINGS AND COMMITTEES
The Company's Board of Directors held sevensix meetings during 1998.1999. Each
Director attended at least 75% of the aggregate meetings of the Board of
Directors and committees to which he or she was assigned during the year except
for Mr. Friedmann, who missed 2 of the 7 meetings that he was eligible to
attend.year.
The Board of Directors has the following four standing committees.
Executive Committee. The function of the Executive Committee is to
exercise the authority of the Board of Directors in the management of the
Company between meetings of the Board with certain exceptions as set forth in
the Company's By-Laws. The members of the Committee are: Henri de Castries
(Chairman), Claude Bebear, Joseph L. Dionne, Donald J. Greene, Michael Hegarty, and Edward D.
Miller. The Committee met oncetwice in 1998.
101999.
11
Audit Committee. The Audit Committee is authorized to review and approve
the scope and results of the Company's outside audit, and the fees therefor, and
to make recommendations to the Board of Directors and management of the Company
concerning auditing and accounting matters and the selection of independent
accountants. Its membership is restricted to Directors who are not employees of
the Company or its affiliates. The members of the Committee are: George J.
Sella, Jr. (Chairman), Donald J. Greene, John T. Hartley, Nina Henderson, and W.
Edwin Jarmain. William T. Esrey was a member of the Committee through February
1999.Jarmain, and Peter J. Tobin. The Committee met threefive times in 1998.1999.
Organization and Compensation Committee. The function of the Organization
and Compensation Committee is to make recommendations to the Board with respect
to nominations of Directors and to review, report and make recommendations to
the Board with respect to officer compensation. The members of the Committee
are: Joseph L. Dionne (Chairman), Jean-Rene Fourtou, John T. Hartley, W. Edwin
Jarmain, and Peter J. Tobin. William T. Esrey was a member of the Committee
through February 1999. The Committee met eightseven times in 1998.1999.
Stock Option Committee. The function of the Stock Option Committee is to
administer the Company's 1997 Stock Incentive Plan. The members of the Committee
are: Joseph L. Dionne (Chairman), Jean-Rene Fourtou, John T. Hartley, and
Peter J. Tobin. William T. Esrey was a member of the Committee through February
1999. The Committee met sevensix times in 1998.1999.
COMPENSATION OF DIRECTORS
All directors of the Company are also directors of Equitable Life with the
exception of Messrs. Bebear, Chalsty, Friedmann, and Hamilton. In consideration
for serving on the Board of Directors of Equitable Life or the Board of
Directors of the Company, each director who is not an employee of the Company or
any affiliate of the Company (including AXA) ("non-employee director") receives
an annual cash retainer fee of $30,000, payable quarterly. Non-employee
directors who receive a cash retainer for service on the Board of Directors of
Equitable Life do not receive an additional cash retainer for service on the
Board of Directors of the Company. Mr. Hamilton receives his cash retainer (and
meeting fees) for his service as a director of the Company from the Company.
In addition, each non-employee director receives a meeting fee of $1,200
from the Company and Equitable Life, as appropriate, for each meeting of the
Company's Board or Equitable Life's Board (and any committee of such boards)
attended. Each such director who serves as chairperson of a standing committee
of the Company's Board or Equitable Life's Board also receives an annual chair
retainer fee of $5,000. For each joint meeting of the Company's and Equitable
Life's Boards (or committees), non-employee directors receive only one meeting
fee and one annual chair retainer. The non-employee directors may defer all or
part of their cash compensation as directors until retirement from the Board or,
at the election of each director, age 72.
Under the Stock Plan for Directors, effective January 1, 1998, each
non-employee director of Equitable Life or of the Company also receives a
quarterly award of $7,500 payable in common stock of the Company in addition to
the cash retainer and per meeting fees described above. Only one quarterly award
is payable to any such director who serves on both the Company's and Equitable
Life's Boards. The non-employee directors may defer all or part of their awards
under the Stock Plan for Directors until retirement from the Board or, at the
election of each director, age 72.
Effective December 31, 1997, Equitable Life terminated the Retired
Directors Consulting Program (the "Program"). This Program, as in effect on
December 31, 1997, allowed for the provision of advisory and consulting services
to Equitable Life by directors who retired at age 72 after at least 10 years of
Equitable Life Board service and who had not been employees of Equitable Life or
any affiliate of Equitable Life (including AXA). Under the Program, 11
each
eligible director who offered such advisory and consulting services was
compensated annually in an amount equal to the annual cash retainer payable to
directors of Equitable Life at the time that director retired from the Equitable
Life
12
Board. In connection with the termination of the Program, a transition rule was
adopted pursuant to which directors serving on Equitable Life's Board as of
December 31, 1997, who otherwise would have been eligible for the Program, but
for its termination, will remain eligible to participate in the Program at a
reduced rate of compensation, the formula for which takes into account an
eligible director's years of Equitable Life Board service as of December 31,
1997 and that director's total years of Equitable Life Board service upon
retirement from the Board.
Mr. Bebear, former Chairman of the Company's Board of Directors, and
Mr. de Castries, Chairman of the Company's Board of Directors, received $150,000
and $125,000, respectively, from the Company for services provided in addition
to their services as directors of the Company during 1998,1999, and are expected to
receive the same amounts during 1999.2000. During 1998,1999, Messrs. Bebear and de
Castries were eligible to participate in both the Company's Short-Term and
Long-Term Incentive Compensation Plans, but did not receive any compensation
under these plans for 1998.1999. Mr. de Castries is eligible to participate in the
Company's Short-Term Incentive Compensation Plan for 1999.2000. Ms. Colloc'h received
$50,000 from the Company in 19981999 for services provided in addition to her
services as a director of the Company and is expected to receive the same amount
during 1999. Messrs. Bebear and de Castries and Ms. Colloc'h received grants of
40,000, 50,000, and 25,000 options, respectively, in February 1999 pursuant to
the Company's 1997 Stock Incentive Plan.2000.
SECTION 16(a)16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. Directors, executive officers and greater than
10% shareholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file. Based on a review of such forms and
written representations as to the need to file Form 5, the Company believes that
all Section 16(a) filing requirements applicable to its directors, executive
officers and greater than 10% beneficial owners were complied with for the year
ended December 31, 1998.1999.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEES
Policies governing compensation of the Company's executive officers are
administered by the Organization and Compensation Committees (collectively, the
"Committees") of the Company and of Equitable Life. The Committees' major
responsibilities are to ensure that compensation programs for the Company's
executive officers are effective in attracting, retaining and motivating key
officers, are consistent with the Company's business objectives, relate pay to
performance, and are administered in a fair and equitable fashion. All members
of the Company's Organization and Compensation Committee are also members of
Equitable Life's Organization and Compensation Committee, and no member of the
Committees is a current or former officer or employee of the Company, Equitable
Life or their affiliates.
Compensation Philosophy and Strategy. The Company and its subsidiaries
constitute a diversified financial services organization which provides a broad
spectrum of financial advisory/insurance, assetinvestment management, and investment
banking and brokerage services. The total compensation program for the Company's
executive officers is designed to attract, retain and motivate key individuals
by providing compensation based on the Company's profitability and total returns
to shareholders and on an
12
assessment of each executive officer's contribution to
the success of the Company. The Committees believe that the Company competes
most directly for executive talent with other large diversified financial
services organizations and, accordingly, in determining total compensation for
executive officers, seek to provide compensation opportunities competitive with
levels of total compensation paid by
13
selected large diversified financial services companies. However, the total
compensation program for executive officers contains substantial incentive
components which afford executive officers opportunities to earn compensation
which may exceed levels at comparison companies if warranted by corporate
performance. The Committees review and approve the selection of companies used
for compensation comparison purposes and obtain compensation data from surveys
conducted by outside consulting firms. Because of the broad spectrum of
companies with which the Company competes for executive talent, the companies
selected for compensation comparison purposes are not generally the same
companies which comprise either the New York Stock Exchange Financials Index or
the Standard & Poor's Life & Health Insurance Index selected for company
shareholder return comparisons. In 1998,1999, the companies selected for comparison
purposes included large U.S. insurance companies and large diversified financial services institutions, includingU.S.
insurance companies, commercial banking corporations and nonbank financial
services institutions located in major U.S. metropolitan areas.
The Committees believe that the total compensation arrangementsarrangement for
executive officers should be aligned with the short- and long-term interests of
shareholders. Accordingly, a high proportion of the total compensation of
executive officers is based on at riskat-risk and variable incentive programs,
including stock incentives, which emphasize Company performance and growth in
earnings and return on shareholders' equity. In addition, in 1997, the Committees approvedCompany
implemented minimum stock ownership guidelines for the Company's executive and
senior officers.
TotalWhile total direct compensation includes base salaries and annual and
long-term incentive compensation, including stock incentives. Theincentives, the Committees
also consider other elements of an executive's total compensation package,
including retirement and savings plans, insurance and other benefits. The
Organization and Compensation Committee of Equitable Life approves the
compensation of all executive officers of the Company who are designated for
purposes of the New York Insurance Law as principal officers of Equitable Life.
For 19981999 such principal officers included all the named executive officers.
o Base Salaries. Base salaries of executive officers are compared against
the median of comparison companies, except where exceptional conditions
require otherwise. The Company's policy is generally not to increase base
salaries for executive officers annually, except to reflect promotions,competitive
market pay levels and increased levels of responsibility and competitive pay levels.responsibility.
o Annual Incentive Compensation. Annual incentive bonusesincentives allow the Company to
communicate specific Company goals for the year and motivate executive
officers to achieve these goals. For 19981999 the Company's goals were to
increase profitability, sales and return on equity. Annual incentive
bonusespayments for 19981999 were paid in February 19992000 in accordance with the
Company's amended and restated Short-Term Incentive Compensation Plan For
Senior Officers (the "Short-Term Plan") which was approved by the
Company's shareholders at the Annual Meeting of Shareholders held in May
1997. The Committees determined that the levels of earnings established
by the Committees under the Short-Term Plan for 19981999 had been met and
determined the aggregate amount of incentive compensation paid for 19981999
pursuant to the Short-Term Plan and the amount paid to each participant
under the Short-Term Plan. In general, such amounts reflect the
assessment by the Committees of each executive officer's contribution to
achieving the Company's annual objectives with respect to pre-tax
insurance adjusted earnings, return on equity and total insurance
premiums and deposits.
o Long-Term Incentives.Incentive Compensation. Long-term incentives for the Company's
executive officers were provided pursuant to the Company's amended and
restated Long-Term Incentive Compensation Plan for Senior Officers (the
"Long-
Term"Long-Term Plan") and the Company's 1997 Stock Incentive Plan (the "Stock
Option Plan"), both of which were
13
approved by the Company's shareholders
at the Annual Meeting of Shareholders held in May 1997. Long-term
incentives were also provided by grants of AXA stock options under AXA's
stock option plan. With respect to Performance Periodsperformance periods beginning after
1996,1997, the Company intends to use primarily equity-
14
based vehicles, including stock and stock option grants, to provide
long-term incentives to the Company's executive officers.
Long-Term Incentive Compensation Plan. In March 1996, the
Committees established earnings goals and Company performance criteria
relating to pre-tax insurance adjusted earnings and return on equity for
the Initial Performance Period under the1997-1999 Long-Term Plan. The Initial
Performance Period under the Long-Term Plan commenced January 1, 1996 and
ended on December 31, 1998. Payments with respect to the Initial
Performance Period were made in February 1999. The Committees determined
that the applicable earnings goals and performance criteria for the
Initial Performance Period were satisfied and determined the aggregate
amount of compensation paid for the Initial Performance Period and the
amount paid to each participant. In March 1997, the Committees established
earnings goals and Company performance criteria under the Long-Term Plan
for the three year
Performance Period from January 1, 1997 to December 31, 1999. Pursuant to
the terms of the Long-Term Plan, payments for this Performance Period may
not be made until early 2000 and then only in the event certain goals
with respectrelating to pre-tax insurance adjusted earnings and return on equity are satisfied. Paymentsfor
the three year performance period from January 1, 1997 to December 31,
1999. In February 2000, the Committees determined that the applicable
earnings goals and performance criteria for this Performance Period are expectedperformance period were
satisfied and determined the aggregate amount of compensation paid for
this performance period and the amount paid to beeach participant. Payments
with respect to this performance period were made in common stock of the Company.cash in February
2000.
Stock Option Plan. Options granted pursuant to the Company's Stock
Option Plan provide officersare intended to align the long-term interests of executives
with those of the Company's shareholders by providing executives of the
Company and certain of its subsidiaries with the opportunity to buy an
equity interest in the Company and to share in the appreciation of its
common stock. The Company's Stock Option Committee (which consists of all
the members of the Committees except Mr. Jarmain) administers the Stock
Option Plan and as part of such administration determines the number and
type of options to be granted to the Company's executive officers.
Options are granted with an exercise price equal to the market price on
the date of grant. Determination of the number of stock options to be
granted to each executive officer takes into account annualized present
value comparisons to long-term compensation awards, including stock
incentives, made by large diversified financial services companies
included in the group of comparison companies described above under
"Compensation Philosophy and Strategy" and an assessment of each
executive officer's potential contribution to the success of the Company.
See "Options" for information on options granted in 19981999 to the Company's
named executive officers.
AXA Stock Options. In order to assist the Company and its
subsidiaries in attracting, retaining and motivating key officers,executives, AXA
has made available to certain officersexecutives of the Company and its
subsidiaries options to purchase AXA ordinary shares. The Committees
reviewed and approved the receipt of the grants of AXA stock options to
the Company's executive
officers.senior executives. Under the AXA stock option plan, options
are granted within 1999 have an exercise price equal to 95% of the average market price
on the Paris Stock Exchange for the 20 trading days prior to the date of
grant. The number and terms of the AXA stock options granted to
officersexecutives of the Company and its subsidiaries take into account the
importance of the officer'sexecutive's work to the performance of the Company and
its subsidiaries as well as contributions to the synergies that are
available to the Company from AXA's world-wide operations, of which the
Company is both a contributor and a beneficiary. See "Options" for
information on options granted in 19981999 to the Company's named executive
officers.
CEO Compensation. Pursuant to the terms of his employment agreement which
was approved by the Committees, Mr. Miller, for his services in 19981999 as
President and CEO of the Company and Chairman and CEO of Equitable Life,
received a base salary of $800,000 and a bonus payment$800,000. In addition, in February 1999 of
$2,700,000. In addition,2000, the
Committees unanimously determined that for his
services in 1998, Mr. Miller should receive short-term
(annual) incentive
14
compensation of $2,218,480 million$6,381,950 pursuant to the Short-Term Plan
and long-term incentive compensation of $1,500,000 pursuant to the 1997-1999
Long-Term Plan. The Committees believe that Mr. Miller's leadership and personal
efforts have been critical to accomplishing the Company's strong performance in
19981999 and to positioning the Company for future growth. For the year ended
December 31, 1998,1999, the Company's after-tax operating earnings from continuing
operations rose 14.3%43.2% to a record $755.0$1,080.8 million, excluding non-DLJ after-tax
investment gains and non-recurring charges, as compared to $660.6$755.0 million in
1997.1998. Total premiums, deposits and deposits received by Equitable Life's Insurancemutual fund sales for the Company's financial
15
advisory/insurance segment for the year ended December 31, 19981999 rose 20.4%12.8% to a
record $9.278$13,297.8 billion, as compared to $7.703$11,788.2 billion in 1997,1998, and mutual
fund sales and first year individual premiums and deposits for the Company's financial
advisory/insurance and annuity premiumssegment for the year ended December 31, 19981999 increased 38.0%17.8%
to $5.126$8,849.5 billion, as compared to $3.714$7,511.8 billion in 1997.1998. Among the specific
achievements considered in determining the amount of Mr. Miller's annual bonus
were the restructuringcompletion of
Equitable Life's field force to enhance the Company's distribution capabilities,name change to AXA Financial, Inc.; the
expansionlaunching of Equitable Life's wholesale distribution operations, the consolidationnew branding structure, including the introduction of Equitable Life's service delivery operationsthe AXA
Advisors brand into athe marketplace; the positioning of AXA Advisors for the
year 2000 nationwide rollout of fee-based financial planning through the
financial planning pilot program in Texas and the establishment of the new
National Operations Center,financial training center; the launchlaunching of EQ Access, an on-line consolidated
statementthe AXA Asset Account; the
successful completion of systems readiness testing for Year 2000; the receipt of
rating increases for Equitable Life policyholders, the strengthening of the Company's
human resource operations, the implementation of the real estate sales program,from A.M. Best and S&P; the completion of
the architectural blueprint forcombination of the Hudson River Trust with the EQ Advisors Trust; the
execution of the Company's capital management program, including approximately
$700 million in real estate sales and the payment of Equitable Life's first
dividend to the Company; the restructuring of Alliance into a two-tier
partnership; the leveraging of technology resourcesand other synergies among DLJ,
Alliance and Equitable Life; and the development of meaningful business metrics to better
understandproject
management capabilities for prioritizing and monitoring the progress of the
Company's profitability.strategic initiatives.
Deductibility of Certain Executive Compensation. Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code") denies publicly held
corporations a deduction for compensation in excess of $1 million per year paid
or accrued with respect to certain executives, in taxable years beginning on or
after January 1, 1994, except to the extent that such
compensation qualifies for an exemption from that limitation. Exempt
compensation includes only the following: (a) performance-based compensation
(provided that certain outside director, shareholder approval, and certification
requirements are met); (b) commissions; (c) payments from certain tax-qualified
retirement plans; (d) health and other fringe benefits that are reasonably
believed to be excludable from gross income; and (e) compensation payable under
a binding written contract in effect on February 17, 1993. The Committees have
determined that the Company's policy is to design its short-term and long-term
compensation plansprograms to qualify for the exemption from the deduction
limitations of Section 162(m) of the Code consistent with designing plans
providing appropriate compensation to executives. InThe Short-Term and Long-Term
Plans, which were approved by the caseCompany's shareholders in 1997, are designed
to qualify for the exemption from the Section 162(m) deduction limitations.
Portions of Mr. MillerMiller's and Mr. Hegarty, a portion
of theirHegarty's sign on and other bonuses guaranteed
under their employment contracts willare not be tax deductible by virtue of the
limitations of Section 162(m). The Committees and the Company's Stock Option
Committee consist solely of directors who are "outside directors" for purposes
of Section 162(m).
Respectfully submitted,
J.L. Dionne,
Chairman
W.T. Esrey J.T. Hartley
J-R. Fourtou W.E. Jarmain
15J.T. Hartley P.J. Tobin
16
SUMMARY COMPENSATION TABLE
The table below summarizes for Mr. Miller, who served as the Company's
Chief Executive Officer during 1998, and1999, the other four individuals serving as
executive officers of the Company on December 31, 19981999 who had the highest
aggregate annual compensation for 19981999, and Mr. Golden (who served as an
Executive Vice President of the Company through June 30, 1999) (the "named
executive officers") all compensation required to be reported for the years
1996, 1997, 1998 and 1998.1999.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
---------------------------
AWARDS
ANNUAL COMPENSATION ---------- PAYOUTS
---------------------------------------- SECURITIES -------------
NAME AND OTHER ANNUAL UNDERLYING LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS(1) COMPENSATION(2) OPTIONS(3) PAYOUTS(4) COMPENSATION(5)
- ------------------------------- ---- --------- ---------- --------------- ---------- ------------- ---------------
Edward D. Miller (6) 1999 $ 797,852 $6,381,950 -- 484,600 $ 1,500,000 $ 7,200
President and 1998 $ 828,539 $4,918,480 -- 238,235476,470 -- $ 6,049
President andChief Executive Officer 1997 $ 306,866 $1,250,000 -- 340,000680,000 -- $ 1,500,000(7)
Chief Executive Officer
Michael Hegarty (8) 1999 $ 573,456 $3,000,000 -- 311,400 -- $ 7,200
Senior Vice Chairman and 1998 $ 562,428 $2,676,800 -- 144,118288,236 -- $ 250,000(9)
Vice Chairman and
Chief Operating Officer
Stanley B. Tulin (10)1999 $ 548,522 $2,600,000 -- 76,154 $ 882,202 $ 257,200(10)
Vice Chairman and 1998 $ 536,632 $1,801,600 -- 109,706219,412 $ 401,500 $ 7,200
Executive Vice PresidentChief Financial Officer 1997 $ 349,060 $1,620,000 -- 18,75037,500 $ 483,000 $ 12,150
and Chief Financial Officer 1996 $ 225,547 $ 850,000 -- 100,000 -- $ 250,000(11)
Jose S. Suquet 1999 $ 398,925 $1,400,000 -- 50,000 $ 571,814 $ 7,200
Senior Executive 1998 $ 406,022 $1,154,150 -- 69,412138,824 $ 221,000 $ 26,505(12)
Executive26,505(11)
Vice President 1997 $ 349,060 $1,026,000 -- 12,15024,300 $ 267,000 $ 13,521
1996Robert E. Garber 1999 $ 349,060299,194 $1,155,000 -- 40,000 $ 725,000490,112 $ 7,200
Executive Vice President 1998 $ 310,701 $ 900,800 -- 44,118 $ 166,000 $ 4,069
and General Counsel 1997 $ 299,194 $ 810,000 -- --20,832 $ 8,604200,000 $ 9,354
Jerome S. Golden (12) 1999 $ 844,200 $ 928,950 -- 40,000 $ 326,842 $ 7,200
Retired Executive 1998 $ 362,500 $ 928,950 -- 22,05944,118 -- $ 7,200
Executive
Vice President 1997 $ 303,427 $ 648,000 -- 7,14314,286 -- $ 13,521
- ------------
(1) Includes all amounts deferred under qualified and non-qualified deferred
compensation plans.
(2) The amounts in thisThis column dodoes not include certain incidental non-cash compensation
provided to theeach named executive officersofficer which does not exceed $50,000.
(3) Awards in this column consist of options exercisable into the Company's
Common Stock.Stock, and reflect the October 1, 1999 two-for-one Common Stock
split. See "Option Grants in Last Fiscal Year--AXA Options" for AXA option
awards to the named executive officers.
(4) Represents Long-Term Plan (i) payouts in 2000 for the three-year
performance period ended December 31, 1999, (ii) payouts in 1999 for the
three-year performance period ended December 31, 1998, and (ii)(iii) interim
payouts in 1998 for the first two years, ended December 31, 1997, of that samethe
three-year performance period.period ended December 31, 1998.
(5) Amounts in this column consist solely of employer contributions to defined
contribution plans unless otherwise indicated.
(6) Mr. Miller joined the Company on August 4, 1997.
(7) Represents a one-time non-recurring payment made to Mr. Miller in
connection with the commencement of his employment.
(8) Mr. Hegarty joined the Company on January 12, 1998.
(9) Represents a one-time non-recurring payment made to Mr. Hegarty in
connection with the commencement of his employment.
(10) Mr. Tulin joined the Company on May 1, 1996.
(11) RepresentsIncludes a one-time non-recurring payment maderelocation expense allowance of $250,000 paid to Mr. Tulin upon the
commencement of his employment.
(12)Tulin.
(11) Includes a taxable moving expense allowance of $19,305 paid to Mr. Suquet.
16(12) Mr. Golden retired as an Executive Vice President of the Company effective
July 1, 1999. See "Employment Contracts and Termination of Employment
Arrangements."
17
OPTIONS
The following tables set forth information concerning the grant of options
to each of the named executive officers during 19981999 and the value of options
held by the named executive officers on December 31, 1998.1999.
OPTION GRANTS IN LAST FISCAL YEAR
EQUITABLEAXA FINANCIAL OPTIONS
The options listed in the following table will be exercisable into the
Company's Common Stock. All share amounts reflect the October 1, 1999
two-for-one Common Stock split.
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
------------------------------------------------------------------------------------------------------------------ AT
NUMBER OF % OF ASSUMED ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------------
NAME GRANTED(1) FISCAL YEAR ($/SH) EXPIRATION DATE 5% 10%
- ------------------- ---------- ------------- -------- ---------------------------- ---------- -----------
Edward D. Miller... 88,235 2.1%184,600 4.28% $32.00 2/17/2009 $3,715,006 $ 52.000 February 18, 2008 $2,885,507 $ 7,312,441
150,000 3.5% $ 50.625 September 16, 2008 $4,775,669 $12,102,4829,414,555
300,000 6.96% $28.50 9/15/2009 $5,377,049 $13,626,498
Michael Hegarty.... 100,000 2.3% $ 44.500 January 19, 2008 $2,798,581 $ 7,092,154
44,118 1.0% $ 52.000 February 18, 2008 $1,442,770 $ 3,656,262311,400 7.22% $32.00 2/17/2009 $6,266,809 $15,881,325
Stanley B. Tulin... 109,706 2.6%76,154 1.77% $32.00 2/17/2009 $1,532,571 $ 52.000 February 18, 2008 $3,587,663 $ 9,091,8423,883,836
Jose S. Suquet..... 69,412 1.6%50,000 1.16% $32.00 2/17/2009 $1,006,231 $ 52.000 February 18, 2008 $2,269,9472,549,988
Robert E. Garber... 40,000 0.93% $32.00 2/17/2009 $ 5,752,492804,985 $ 2,039,990
Jerome S. Golden... 22,059 0.5%40,000 0.93% $32.00 2/17/2009 $ 52.000 February 18, 2008804,985 $ 721,385 $ 1,828,1312,039,990
- ------------
(1) Options under the 1997 Stock Incentive Plan vest (become exercisable) at the
rate of 33 1/3% per year subject to acceleration in the event of death.
AXA OPTIONS
The options listed in the following table will be exercisable into ordinary
shares of AXA, which are traded on the Paris Stock Exchange.
INDIVIDUAL GRANTS
------------------------------------------------------------------------------------------------------------------ POTENTIAL REALIZABLE VALUE
NUMBER OF % OF AT ASSUMED ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN PRICE EXPIRATION --------------------------
NAME GRANTED(1) FISCAL YEAR (FF/SH)(2) DATE 5% 10%
- ------------------- ---------- ------------- ---------- ------------------------ ---------- ----------
Edward D. Miller... 30,000 1.56% 751.92FF 6/8/2009 $2,181,408 $5,528,117
25,000 1.06% 629.40FF April 19, 2008 $1,757,666 $4,454,2701.30% 810.43FF 11/17/2009 $1,959,294 $4,965,236
Michael Hegarty.... 15,000 0.64% 629.40FF April 19, 2008 $1,054,599 $2,672,5620.78% 751.92FF 6/8/2009 $1,090,704 $2,764,059
Stanley B. Tulin... 10,000 0.42% 629.40FF April 19, 20087,500 0.39% 751.92FF 6/8/2009 $ 703,066 $1,781,708545,352 $1,382,029
Jose S. Suquet..... 10,000 0.42% 629.40FF April 19, 20087,500 0.39% 751.92FF 6/8/2009 $ 703,066 $1,781,708545,352 $1,382,029
Robert E. Garber... 4,400 0.23% 751.92FF 6/8/2009 $ 319,940 $ 810,791
Jerome S. Golden... 7,000 0.30% 629.40FF April 19, 2008 $ 492,146 $1,247,1960 0 -- -- -- --
- ------------
(1) Options under the April 20, 1998June 9, 1999 and November 18, 1999 AXA Stock Option PlanPlans
vest (become exercisable) at the rate of 25% per year beginning on the
second anniversary of their grant.
(2) Exercise price for AXA options is in French francs ("FF") per share.
(3) Value is expressed in U.S. dollars at the prevailing exchange rate of
5.63FF/6.5033FF/$1.00 effective on December 30, 1998,1999, the last trading day of 19981999
on the Paris Stock Exchange.
1718
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
EQUITABLEAXA FINANCIAL OPTIONS
The options listed in the following table are, or will be, exercisable into
the Company's Common Stock. All share amounts reflect the October 1, 1999
two-for-one Common Stock split.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END OPTIONS AT FY-END(1)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED(2) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------- ----------- ----------- ------------------------- -------------------------
Edward D. Miller... 0 $ 0 113,333/ 464,902 $2,129,162/ $5,864,219612,156/1,028,914 $7,892,645/$7,974,545
Michael Hegarty.... 0 $ 0 0/ 144,118 96,078/ 503,558 $1,018,622/$ 0/ $1,596,6932,660,067
Stanley B. Tulin... 0 0 46,250/ 182,206 $1,445,703/ $2,860,92963,378 $ 1,465,829 154,758/ 314,930 $2,145,196/$3,236,497
Jose S. Suquet..... 15,00010,000 $ 523,007 94,493/ 97,512 $3,419,538/ $1,271,827212,500 273,360/ 150,650 $5,556,364/$ 943,420
Robert E. Garber... 10,000 $ 236,250 178,594/ 76,356 $3,868,033/$ 403,613
Jerome S. Golden... 22,82056,374 $ 842,457 45,561/ 46,821 $1,611,528/ 1,169,912 69,216/ 74,174 $1,277,531/$ 922,217369,464
- ------------
(1) Based on $57.875$34.00 per share, the closing price of the Common Stock on the New
York Stock Exchange on December 31, 1998.1999.
(2) Includes any unrealized gains upon exercise of incentive stock options.
AXA OPTIONS
The options listed in the following table are, or will be, exercisable into
ordinary shares of AXA.
None of the named executive officers exercised AXA
options during 1998.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END OPTIONS AT FY-END(1)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------- ------------------------- -------------------------
Edward D. Miller... 0/ 50,000 $0/ $2,648,712
Michael Hegarty.... 0/ 15,000 $0/ $ 481,172
Stanley B. Tulin... 2,500/ 17,500 $240,675/ $1,042,806
Jose S. Suquet..... 1,250/ 13,750 $120,337/ $ 681,794
Jerome S. Golden... 1,250/ 10,750 $120,337/ $ 585,560
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END OPTIONS AT FY-END(1)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED(2) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------- ----------- ----------- ------------------------- -------------------------
Edward D. Miller... 0 $ 0 6,250/ 98,750 $493,769/$3,646,030
Michael Hegarty.... 0 $ 0 0/ 30,000 $ 0/$1,002,091
Stanley B. Tulin... 0 $ 0 5,000/ 22,500 $491,973/$1,100,076
Jose S. Suquet..... 0 $ 0 2,500/ 20,000 $245,987/$ 854,089
Robert E. Garber... 1,000 $ 94,105 1,500/ 13,900 $147,592/$ 651,273
Jerome S. Golden... 1,250 $ 104,362 1,250/ 9,500 $122,993/$ 545,747
- ------------
(1) Based on 810.00FF907.89FF per share, the closing price of AXA's ordinary shares on
December 30, 1998,1999, the last trading day of 19981999 on the Paris Stock Exchange,
and on the prevailing exchange rate of 5.63FF/6.5033FF/$1.00 in effect on that
date.
18(2) Includes any unrealized gains upon exercise of stock options. U.S. dollar
value realized is based on the prevailing exchange rate on the date of
exercise.
19
PERFORMANCE GRAPH
The graph set forth below shows the cumulative total return to holders of
the Company's Common Stock from December 31, 19931994 to December 31, 1998,1999, computed
by dividing (X) the sum of (a) dividends for such period assuming reinvestment
of dividends and (b) the difference between the price per share at the beginning
and end of such period by (Y) the share price at the beginning of such period,
and compares such return to the performance at the beginning and end of such
period of the Standard & Poor's 500 Index, the New York Stock Exchange
Financials Index, and the Standard & Poor's Life & Health Insurance Index.Index, which
was the industry index used for comparison in the Company's 1999 proxy
statement. This year, the New York Stock Exchange Financials Index has been
chosen as the comparative industry index because the Company is recognized as a
diversified financial services institution. The graph assumes $100 invested on
December 31, 19931994 in the Company's Common Stock (at $27.00$9.06 per share)share, adjusted
for stock splits since that date), the Standard & Poor's 500 Index, the New York
Stock Exchange Financials Index, and the Standard & Poor's Life & Health
Insurance Index.
CUMULATIVE TOTAL RETURN
Based on reinvestment ofBASED ON REINVESTMENT OF $100 beginning DecemberBEGINNING DECEMBER 31, 19931994
[LINE GRAPH]
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
Equitable 100.00 67.77 90.51 93.62 190.14 221.93
S&P 500 100.00 101.36 139.31 171.28 228.49 293.77
S&P Life Ins. 100.00 83.01 118.23 144.42 183.06 190.39
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- --------------------------------------------------------------------------------------------------------
AXA Financial (AXF) 100 132 136 274 319 375
S&P 500 (SPX) 100 134 161 211 268 320
NYSE Financials (NF) 100 140 179 253 266 264
S&P Life & Health Ins.(SINLH) 100 140 166 205 213 180
---
TOTAL RETURN DATA PROVIDED BY S&P'S COMPUSTAT SERVICES INC. Source: The Carson Group
19
20
RETIREMENT PLANS
Equitable Life maintains a qualified defined benefit retirement plan (the
"Retirement Plan") and an unfunded, nonqualified excess benefit plan (the
"Excess Plan") which pays benefits in excess of the benefit limits provided by
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
the Code, as well as benefits in excess of the compensation limits under the
Code, and a supplemental benefit plan pursuant to which the chief executive
officer of Equitable Life may authorize that an officer receive a supplemental
executive retirement benefit based on additional years of service in excess of
actual years of service (the "Supplemental Executive Retirement Plan""SERP").
The Retirement Plan will provide pension benefits for Messrs. Miller,
Hegarty, Tulin, Suquet and Golden.Garber. For purposes of the Retirement Plan, covered
compensation for pension benefit calculation purposes is salary and short-term
incentive compensation allocated tofrom Equitable Life and those of its affiliates who are
co-sponsors of the Retirement Plan. Mr. Suquet and Mr. Golden will have theirhis benefits determined
on the basis of the sum of theirhis frozen accrued benefit, based on actual and deemed service if any,
prior to January 1, 1989 under the final average pay formula (the "Pre-89
Formula") and theirhis accrued account balance, under the Cash Balance Formula,
accrued subsequent to December 31, 1988. As of December 31, 1998, the number of1999, Mr. Suquet had
18.58 credited years of service for purposes of calculating his Pre-89 Formula
benefits under the Retirement Plan (including any service supplement authorized
pursuant to the Supplemental Executive Retirement Plan) for Messrs. Suquet and
Golden was 17.58 and 18.67, respectively.Plan. Mr. Miller's, Mr. Hegarty's, Mr. Tulin's and
Mr. Tulin'sGarber's benefits will be computed solely according to the Cash Balance
Formula. The Cash Balance Formula credits each named executive's account during
each year of such executive's participation in the Retirement Plan, subsequent
to December 31, 1988, with an amount equal to the sum of 5% of such individual's
annual covered compensation not in excess of the social security wage base and
10% in excess of such wage base. These accounts are credited monthly with
interest based on the average yield of one-year U.S. Treasury bills for the
twelve month period ending on the last business day of November in the preceding
calendar year. Under the Cash Balance Formula, Messrs. Miller, Hegarty, Tulin,
Suquet and GoldenGarber will receive estimated annual retirement benefits at age 65 of
$221,019, $444,589, $556,269, $873,869$452,256, $444,276, $599,676, $923,052 and $181,970,$363,444 respectively. The Pre-89
Formula recognizes that participants in the Retirement Plan will receive social
security benefits and reduces the benefit by a portion of the social security
benefits. The benefits to the executives generally will be paid as a life
annuity or a joint and survivor annuity depending on the executive's marital
status and distribution election at the time of retirement. The executive also
has the opportunity to receive the cash balance account portion of the benefit
in a lump sum.
The following table indicates the estimated maximum annual retirement
benefits that a hypothetical participant would be entitled to receive under the
Retirement Plan's Pre-89 Formula (without regard to the maximum benefit
limitations imposed by ERISA and the Code and including payments, if any, under
the Supplemental Executive Retirement Plan) computed on a straight-life annuity
basis, before any deduction for social security benefits, if retirement occurred
at age 65 and the number of credited years of service and average annual
recognized earnings equaled the amounts indicated.
2021
PENSION PLAN TABLE -- PRE-89 FORMULA
CREDITED YEARS OF SERVICE
----------------------------------------------------------------
RECOGNIZED EARNINGS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS
- ------------------- -------- ---------- ---------- ---------- ----------
$ 100,000....... $ 100,000.......20,000 $ 20,00030,000 $ 30,00040,000 $ 50,000 $ 60,000
200,000....... 40,000 $ 50,000 $ 60,000 200,000....... 40,000 60,00080,000 100,000 120,000
400,000....... 80,000 100,000 120,000 400,000....... 80,000160,000 200,000 240,000
600,000....... 120,000 180,000 240,000 300,000 360,000
800,000....... 160,000 240,000 320,000 400,000 480,000
1,000,000....... 200,000 240,000
600,000....... 120,000 180,000 240,000 300,000 360,000
800,000....... 160,000 240,000 320,000 400,000 480,000
1,000,000....... 200,000500,000 600,000
1,500,000....... 300,000 450,000 600,000 750,000 900,000
2,000,000....... 400,000 600,000 800,000 1,000,000 1,200,000
2,500,000....... 500,000 600,000
1,500,000....... 300,000 450,000 600,000 750,000 900,000
2,000,000....... 400,000 600,000 800,000 1,000,000 1,200,0001,250,000 1,500,000
Pursuant to an arrangement approved by the Board of Directors of Equitable
Life on May 18, 1994,In connection with his retirement effective July 1, 1999, Mr. Golden
willelected to receive an additional retirementhis pension benefit under the Supplemental Executive Retirement Plan ("SERP"). UnderCash Balance Formula in a
single lump-sum payment of $472,152.04. At that time, Mr. Golden also began
receiving a total monthly pension benefit of $19,601.60 under the Pre-89
Formula, which includes an additional benefit under the SERP Mr.
Golden was granted 3.42 additional yearspayable in the form
of credited service for purposes of
calculating his supplemental retirement benefit. Thea fifteen-year-certain annuity in the amount of the supplemental$19,020.67 monthly. This
additional benefit, payable at age 65 will beas modified in connection with his retirement, is the
benefit that would be payable under the
Pre-89 Formula based on Mr. Golden's total years of credited service (as
adjusted pursuant to the SERP) and his final pay (defined for purposes of the
SERP as the sum of (1) his 1994 base pay of $300,000, increased by three percent
annually, and (2) a fixed short-term incentive compensation component of
$300,000), reduced by any benefit actually payable to Mr. Golden under the Pre-89 Formula (but not by any benefit payablebased on
19.17 total years of credited service (including 3.42 additional years credited
under the Cash Balance Formula).
TheSERP) and his final pay (defined as the sum of (1) a modified base pay
component of $450,000, and (2) an incentive compensation component of $300,000),
reduced by Mr. Golden's actual benefit under the Pre-89 Formula. Mr. Golden's
SERP benefit, is payable in the formas modified, was calculated using early retirement reduction
factors based on retirement at age 60 rather than his actual age of a fifteen year certain payout.55.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
In connection with joining the Company in 1997, Mr. Miller entered into an
employment agreement providing generally for a sign on bonus of $1,500,000, of
which $500,000 was paid upon his joining the Company and the balance of
$1,000,000 was paid in early 1998; a payment of $250,000 in early 1998 in lieu
of his participation in the Company's Long-Term Plan prior to 1998; a base
salary of $800,000 per annum for 1997, 1998 and 1999; the payment of a
$2,700,000 bonus in February 1999; and grants, pursuant to the Company's 1997
Stock Incentive Plan, of 300,000 options upon Mr. Miller's joining the Company,
and of an additional 100,000 options in both September 1998 and 1999. The
agreement also provides that Mr. Miller will participate in the Company's
Short-Term Plan, with the amount of bonuses referred to above to be taken into
account in determining amounts to be paid under such plan for 1997 and 1998.
Mr. Hegarty, in connection with joining the Company in 1998, entered into
an employment agreement providing generally for a sign on bonus of $250,000
payable upon his joining the Company; an annual base salary of $575,000 for
1998; the payment of a $1,750,000 bonus in February 1999; and grants, pursuant
to the Company's 1997 Stock Incentive Plan, of 100,000 options upon
Mr. Hegarty's joining the Company, and of an additional 75,000 options in both
February 1999 and February 2000. The agreement provides that Mr. Hegarty will
participate in the Company's Short-Term Plan with the amount of bonuses referred
to above to be taken into account in determining amounts to be
22
paid under such plan for 1998. The agreement also provides that Mr. Hegarty will
participate in the Company's long-
21
termlong-term incentive program and that his 1998
target long-term award, under such program for the
three year period commencing January 1, 1998which may be payable in stock options, is $750,000.
In connection with his retirement from service effective July 1, 1999,
Mr. Golden entered into a separation agreement pursuant to which he received
payments in respect of base salary and short-term incentive compensation of
$350,000 and $928,950, respectively. These amounts were paid to Mr. Golden in a
single lump sum on July 14, 1999. In addition, Mr. Golden's pension benefit
attributable to the SERP was modified (see "Retirement Plans"). Mr. Golden also
entered into a consulting agreement with Equitable Life pursuant to which he
agreed to provide consulting services to Equitable Life from July 1, 1999
through June 30, 2000. Mr. Golden receives compensation in the amount of $53,700
per month for his services under the consulting agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Organization and Compensation Committee of the Company's
Board of Directors are Joseph L. Dionne (Chairman), Jean-Rene Fourtou, John T.
Hartley, W. Edwin Jarmain, and Peter J. Tobin. William T. Esrey was a member of
the Committee through February 1999. No member of the Committee was an
officer or employee of the Company or any of its subsidiaries. See "Compensation
of Directors."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Equitable Life has agreements with GIE AXA Universite and GIE Informatique
AXA, affiliates of AXA, relating to services provided by AXA and its affiliates
to Equitable Life and its subsidiaries for management training seminars and for
ongoing maintenance and technical support for computer software and technology
licensed by AXA for use by the Company and its subsidiaries. Equitable Life
incurred approximately $2,839,507$1,323,000 in fees for services provided by AXA's
affiliates pursuant to these agreements during 19981999 and anticipates that it will
continue to incur fees in 19992000 under these agreements.
Equitable Life has entered into an agreement with AXA (the "AXA Services
Agreement") covering management, communications, advertising, rating agency and
various other services to be provided to and by AXA and its affiliates. To the extent
that Equitable Life provides similar services to AXA and its affiliates, amounts
payable under this agreement will be offset by the amounts attributable to such
services.
Equitable Life incurred approximately $6,500,000 in fees for services provided
by AXA and its affiliates pursuant to the AXA Services Agreement during 1998,1999,
and received approximately $1,241,787$7,973,000 for its services to AXA under the
offset described above.AXA. Equitable Life
anticipates that itservices will continue to incur feesbe provided in 19992000 under the AXA
Services Agreement.
Equitable Life has entered into an agreement with AXA Canada Tech Inc.
("AXA Canada Tech"), a Canadian subsidiary of AXA which provides data processing
services to certain of its affiliated Canadian companies (the "AXA Canada
Companies"). Under the terms of the agreement, Equitable Life provides data
processing resources and services to AXA Canada Tech to process data of the AXA
Canada Companies. The agreement will continue in effect until December 31, 2000
and provides for reimbursement of Equitable Life's start-up costs (approximately
U.S. $1.14 million, all of which has been paid) and an annual fee of $2,700,000
(Canadian) (but not less than approximately U.S. $2,050,000) to be paid by AXA
Canada Tech for a defined level of services with usage above such level to be
paid for based on Equitable Life's cost of providing the incremental usage.
Equitable Life received payments of U.S. $2,688,353$2,900,000 from AXA Canada Tech
pursuant to this agreement during 19981999 and anticipates that services will
continue to be provided under this agreement through December 31, 2000.
23
In 1999, GIE Informatique AXA, an affiliate of AXA, entered into a
technology cost contribution agreement with various AXA subsidiaries, including
the Company and Alliance, to enable those participating companies to share the
costs and benefits of cooperative technology development through GIE
Informatique AXA. All participating companies are joint owners of the technology
and processes developed under this agreement. In 1999, the Company's and
Alliance's respective shares of such costs were approximately $2,891,000 and
$1,142,000. The Company and Alliance anticipate continuing to pay their
respective shares of such costs under this agreement in 1999.2000.
Equitable Life has entered into a reinsurance agreement with AXA Space, an
underwriting manager for space insurance which is 80% owned by AXA America, an
affiliate of AXA. In 1998,1999, Equitable Life earned $2,825,710$1,211,210 in premiums from AXA
Space and paid claims and commissions of $2,678,755$2,013,139 to AXA Space under this
agreement.
22
Equitable Life has entered into a reinsurance agreement (aviation risks)
with AXA Global Risks, a subsidiary of AXA. In 1998,1999, Equitable Life earned
$377,210$791,011 in premiums and paid claims and commissions of $1,210,297$279,465 under this
agreement.
In 1999, Equitable Life committed to invest (euro)14,000,000 (approximately
U.S. $13.9 million, based on the exchange rate on December 31, 1999) in the
aggregate in Europe Select Private Equity Partners LP, a private equity "fund of
funds" co-sponsored by AXA Investment Managers, S.A. ("AXA-IM"), an affiliate of
AXA, and AIG Capital Partners, Inc. ("AIGCP"), a subsidiary of American
International Group, Inc. AXA-AIG Asset Management L.P. is the fund's general
partner; AXA-IM PEP Advisor, LLC, an indirect wholly owned subsidiary of AXA-IM,
serves as the fund's investment advisor; and WSW Capital, Inc., an indirect
wholly-owned subsidiary of DLJ, provides certain administrative and reporting
services for the fund.
In September 1999, The Equitable Companies Incorporated Stock Trust
("SECT") converted 4,020 shares of the Company's Series D Convertible Preferred
Stock into 1.6 million shares of the Company's Common Stock and sold them. The
Company purchased 1,356,500 shares under its stock repurchase program, AXA
purchased 146,100 shares, and the public purchased the remaining shares. The
Company and AXA made their purchases on the same terms as purchases by the
public.
An affiliate of AXA, AXA Asset Management PartenairesInvestment Managers GS Ltd. ("AXA Asset
Management"Investment
Managers"), provides investment management services to the DLJ Winthrop
International Equity Fund and DLJ Winthrop Developing Markets Fund (the
"Funds"), a set of mutual funds sponsored by Wood, Struthers & WinthropDLJ Asset Management Group, Inc.
("WSW"DLJAM"), a subsidiary of DLJ, pursuant to a sub-advisory agreement between
WSWDLJAM and AXA Asset Management.Investment Managers. Advisory fees of $503,155$428,168 were paid by WSWDLJAM
to AXA Asset
ManagementInvestment Managers relating to the Funds' fiscal year ended October 31,
1998.1999. In addition, WSWDLJAM pays for various direct fund expenses on behalf of the
Funds and AXA Asset ManagementInvestment Managers reimburses WSWDLJAM for 50% of such expenses. The
total amount of expenses reimbursed by AXA Investment Managers relating to the
Funds' fiscal year ended October 31, 19981999 was approximately $106,000.$61,000.
Alliance and its subsidiaries provide investment management services to AXA
Reinsurance Company, a subsidiary of AXA, and its affiliates, pursuant to
discretionary investment advisory agreements. AXA Reinsurance Company and its
affiliates paid Alliance approximately $829,000$1.1 million during 19981999 for such
services. Alliance earned an additional $99,000 in management fees from AXA
Reinsurance Company and its affiliates during 1999, which fees were paid in full
in 2000.
24
Alliance and its subsidiaries also provide investment management services
to AXA World Funds, a Luxembourg fund, pursuant to a sub-advisory agreement
between Alliance and AXA Funds Management S.A., a subsidiary of AXA. Alliance
earned $102,000approximately $189,000 in management fees during 1998,1999, which fees were
paid in full in 1999.2000.
In April 1996, Alliance acquired the United States investing activities and
business of National Mutual Funds Management ("NMFM"), a subsidiary of AXA. In
connection therewith, Alliance entered into investment management agreements
with AXA Asia Pacific Holdings Limited (formerly National Mutual Holdings
Limited,Limited), the parent of NMFM and a subsidiary of AXA, and various of its
subsidiaries (collectively, the "NMH"AXA Asia Pacific Group"). The NMHAXA Asia Pacific
Group paid approximately $3.2 million in advisory fees to Alliance in 1998.1999.
Alliance earned an additional $32,500 in advisory fees from the AXA Asia Pacific
Group in 1999, which fees were paid in full in 2000.
Equitable Life, either directly or indirectly through its subsidiary The
Equitable of Colorado, Inc., has entered into sixseven life reinsurance agreements
with AXA Re Life Insurance Company ("AXA Re Life"), an indirect subsidiary of
AXA. In 1998,1999, Equitable incurred premium expenses of $705,227$1,085,722 and accrued $3,600,000 inno
claims due from AXA Re Life in the aggregate under these sixseven agreements.
In July 1998, AXA Holdings (Belgium), a subsidiary of AXA, purchased from
DLJ $100,000,020 of newly issued common stock of DLJ for $60.00 per share, the
average closing price of DLJ common stock on the New York Stock Exchange for the
three-day period beginning Friday, July 17, 1998 and ending Tuesday, July 21,
1998.
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC"), a subsidiary
of DLJ, from time to time provides investment banking and other services to AXA. The fees
related to such services were $810,655$16,492,000 in 1998.1999. DLJSC from time to time also
provides administrative, brokerage and research services to AXA. Such services were
provided on an arm's-length basis in the ordinary course of business at rates
comparable to those paid at the time by unaffiliated third parties.
Selected employees of DLJ are offered the opportunity to become members of
the DLJ First ESC L.P. and DLJ ESC II L.P. (the "ESCs"), investment vehicles
which qualify as "employees' securities companies" for purposes of the
Investment Company Act of 1940, as amended. The ESCs invest in DLJ's merchant
banking portfolio companies, typically acquiring between 30% and 40% of DLJ's
investment in such companies. The amounts invested by members 23
are augmented in
the ratio of 4:1 by a combination of recourse loans from DLJ and preferred
contributions to the ESCs by DLJ which have a capped return equal to the prime
rate plus 1 3/4%, each of which is repaid to DLJ upon realization of the
applicable portfolio investment. The amount invested in the ESCs by Mr. Chalsty
in 19981999 was $275,000.$240,000. The loans made to Mr. Chalsty and preferred contributions
made to the ESCs by DLJ on behalf of Mr. Chalsty in 19981999 were $1,122,264.$1,156,000. As of
December 31, 19981999 the outstanding loans and preferred contributions with respect
to Mr. Chalsty amounted to $1,977,986.$2,473,000.
Selected employees of DLJ are limited partners of DLJ Fund Investment
Partners, L.P. ("FIP"), an investment vehicle organized to allow these employees
to invest on a leveraged basis in funds and other investment vehicles sponsored
by certain of DLJ's clients and potential clients and on a co-investment basis
in transactions in which DLJ's clients also invest. Amounts invested by the
limited partners are augmented in the ratio of 2:1 by preferred contributions to
FIP by DLJ which have a capped return equal to the prime rate plus 1 3/4%. The
amount committed to FIP by Mr. Chalsty as of December 31, 19981999 was $2,000,000
and the outstanding preferred contributions made to FIP by DLJ on behalf of
Mr. Chalsty at December 31, 19981999 were $1,548,269.$1,449,000.
DLJ has purchased split-dollar life insurance policies on the lives of
certain of its officers, including Mr. Chalsty, from Equitable Life at rates
comparable to those paid at the time by unaffiliated third parties. The
aggregate amount of premiums borne by DLJ in 19981999 for the policy on
Mr. Chalsty's life was approximately $172,000.$170,000. In addition, DLJ from time to
time purchases life insurance policies from Equitable Life on the lives of
several hundred employees,
25
including Mr. Chalsty, who participate in deferred compensation plans maintained
by DLJ. Such purchases are believed by DLJ to be
at rates comparable to those that could be obtained from unaffiliated third
parties. During 1998,1999, the aggregate premiums paid under such policies for all
participants were approximately $31.1$28.1 million.
Certain directors and executive officers of the Company have made
commitments to invest in various funds sponsored by subsidiaries of DLJ. Such
commitments were made on the same basis as those made by investors not
affiliated with DLJ or the Company. Since January 1, 1998, the following
commitment was made:1999, Mr. Miller committed
to invest $1,000,000 in GreenDLJ European Private Equity Partners, Fund, L.P., a limited
partnership whose general partner is WSW Capital, Inc., a wholly-owned
subsidiary of Wood, Struthers & WinthropDLJ Asset Management Corp.Group, Inc., a wholly-owned subsidiary of
DLJ. The commitment referred to above does not exceed 2.0%1.0% of the total
commitments to that fund.
Certain directors, officers and employees of the Company, AXA and certain
of their subsidiaries maintain margin accounts with DLJSC. Margin account
transactions for such directors, officers and employees are conducted by DLJSC
in the ordinary course of business and are substantially on the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with unaffiliated persons and do not involve more than
the normal risk of collectibility or present other unfavorable features. DLJSC
also, from time to time and in the ordinary course of business, enters into
transactions involving the purchase or sale of securities from or to such
directors, officers and employees and members of their immediate families, as
principal. Such transactions on a principal basis are effected on substantially
the same terms as similar transactions with unaffiliated third parties except
that in some instances directors, officers and employees are not charged
placement fees. DLJSC offers its employees reduced commission rates.
LeBoeuf, Lamb, Greene & MacRae, L.L.P. (of which Mr. Greene is a partner)of counsel)
has rendered legal services to the Company or its subsidiaries during 19981999 and
is expected to continue rendering such services to the Company or its
subsidiaries in 1999.
24
2000.
PROPOSAL 2. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
On November 19, 1998,18, 1999, the Board of Directors, on the recommendation of its
Audit Committee, appointed PricewaterhouseCoopers LLP ("PricewaterhouseCoopers")
independent accountants to audit and report on the consolidated financial
statements of the Company for 1999.2000. PricewaterhouseCoopers has audited and
reported on the consolidated financial statements of the Company for 1996, 1997, 1998
and 1998.1999.
Although ratification of the appointment of PricewaterhouseCoopers by the
shareholders is not required, the Board of Directors has determined that it is
desirable to request ratification of such appointment. If ratification is not
obtained, the Board of Directors will reconsider the appointment.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THIS PROPOSAL.
The Company understands that the Voting Trustees intend to vote all shares
of Common Stock held in the Voting Trust in favor of this proposal. Therefore,
it is expected that this proposal will be approved.
The Company has been advised that representatives of PricewaterhouseCoopers
will be present at the Annual Meeting. They will be afforded the opportunity to
make a statement, should they desire to do so, and to respond to appropriate
questions.
26
PROPOSAL 3. APPROVAL OF AN AMENDMENT TO THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION TO CHANGEINCREASE THE COMPANY'S NAMENUMBER OF AUTHORIZED SHARES OF
COMMON STOCK FROM 500,000,000 TO 2,000,000,000
The Board of Directors has approved and recommends that at the annual
meeting shareholders approve an amendment (the "Amendment") to the Company's
Restated Certificate of Incorporation, as heretofore amended, to changeincrease the
namenumber of authorized shares of Common Stock of the Company from 500,000,000 to
"AXA Financial, Inc."2,000,000,000 shares. The Amendment, if approved, would amend and restate
Article Iparagraph 1 of ARTICLE FOURTH of the Company's Restated Certificate of Incorporation to read in its entirety as follows:
"The name"1. The amount of total authorized capital stock of the
Corporation is AXA Financial, Inc.2,010,000,000 shares, of which 2,000,000,000 shares
shall be Common Stock, having a par value of $.01 per share, and
10,000,000 shares shall be Preferred Stock, having a par value of
$1.00 per share."
The Company was incorporated in 1991 in connection withCurrently, the demutualizationRestated Certificate authorizes the issuance of The Equitable Life Assurance Society500,000,000
shares of Common Stock, par value $.01 per share, and 10,000,000 shares of
Preferred Stock, par value $1.00 per share. As of March 16, 2000,
(a) 432,859,978 shares of Common Stock were issued and outstanding,
(b) 27,743,579 shares of Common Stock were reserved for issuance pursuant to
outstanding stock options, and (c) 19,080,599 shares of Common Stock were
reserved for issuance upon conversion of the United States ("Equitable Life"),
which later becameSeries D Preferred Stock. In
addition, the Company's wholly-owned subsidiary. The Company's original
name emphasized its connection with Equitable Life, its oldest and best-known
subsidiary.
The name Equitable has long been associated with insurance products.
Management is pursuing a strategic initiative to create an overall brand1997 Stock Incentive Plan provides for the Company intended to reflectissuance of
an additional 26,709,570 shares of Common Stock, and 20,315,844 of the broad arraypresently
authorized shares of products and services thatCommon Stock have been reserved for this purpose.
The Board of Directors of the Company offers and to embody the positive attributes of a global company with
significant resources. The Board believes that the proposed namenumber of
authorized shares of Common Stock should be increased to provide sufficient
shares for such corporate purposes as may be determined from time to time by the
Board of Directors, including without limitation capital raising transactions,
additional employee stock options or awards, acquisitions of other businesses in
exchange for stock, and stock dividends. Proposal 3 would accomplish such
increase. The Board of Directors believes that having additional shares
authorized and available for issuance or reservation will complementgive the Company
greater flexibility in considering potential future actions involving the
issuance of stock without the delay and expense of obtaining further stockholder
approval for each issuance except as may be required in a particular case by
law, the rules of any stock exchange upon which the Common Stock may be listed,
or any other rules which may be applicable to the Company. The Company has no
current agreements, plans or arrangements to effect any such potential actions
and no pending arrangements to issue any of the additional shares of Common
Stock that would be authorized as a result of the Amendment (other than
issuances permitted or required under the Company's new strategic emphasis.
If approved,stock-based employee benefit
plans).
The shares of Common Stock to be authorized by adoption of the change inAmendment
would have rights identical to the currently outstanding Common Stock of the
Company. Adoption of the Amendment would not affect the rights of the holders of
currently outstanding Common Stock, except for effects incidental to future
issuances of additional shares of the Common Stock, such as dilution of earnings
per share and voting rights of current holders of Common Stock. The Amendment
does not alter the Company's name10,000,000 authorized shares of Preferred Stock,
nor the terms of the outstanding Series D Preferred Stock. If the Amendment is
expected toadopted, it will become effective later in 1999 concurrent withupon filing of a Certificate of Amendment of
the introduction of new products and
services currently being developed. The Company may not file the AmendmentRestated Certificate with the Secretary of State of the State of Delaware no later than
May 14,December 31, 2000. Pursuant to the Delaware General Corporation Law, the Board
of Directors may abandon the Amendment prior to the effectiveness of its filing,
either before or after a majority of the shareholdersshares have been voted in favor of the
Amendment.
2527
The name "AXA" and theUnder a Standstill Agreement entered into by AXA, trademark are owned by Finaxa, which has granted
to AXA a non-exclusive license to use the AXA trademark. The license may be
terminated upon three months prior written notice by either party; however,
Finaxa may not exercise its termination right for so long as it is AXA's largest
shareholder. AXA will sublicense to the Company and Equitable
Life dated as of July 18, 1991 (as amended, the "Standstill Agreement"), AXA (or
any other AXA affiliate designated by it) has the right, unless waived, to
acquire a percentage of each new issuance by the Company of voting securities or
convertible securities equal to the percentage of the total voting power held by
AXA and its affiliates (the "AXA Parties") immediately prior to the issuance of
such voting securities or convertible securities (assuming, in the case of
convertible securities, the conversion, exchange or exercise at such time of all
convertible securities to be issued in such issuance), except that AXA's
preemptive rights do not apply to issuances pursuant to certain employee benefit
plans. AXA's preemptive rights will be in effect until the AXA Parties own less
than 10% of the total voting power (determined as though all convertible
securities owned by any AXA Party had been converted into voting securities
immediately prior to the time of determination).
Under Article XI of the Company's subsidiariesBy-Laws ("Article XI"), the rightAXA Parties
are prohibited from acquiring any voting securities of the Company (including
Common Stock) if, immediately after such acquisition, the percentage of the
total voting power represented by all such voting securities then owned by the
AXA Parties would exceed 90% (the "Threshold Percentage") unless the relevant
AXA Party offers to usepurchase all shares of Common Stock then outstanding (other
than shares owned by the nameother AXA Parties) and trademark. No fee is contemplated to
be paid in respecta special committee of any such sublicense. For additional information about AXA,
see page 2.
If approved, the change in the
Company's name willBoard (consisting of directors of the Company other than nominees of
AXA or officers of the Company or any of its subsidiaries) is appointed to
evaluate such offer. Article XI does not affectrequire that an offer be made to all
shareholders or that a special committee be appointed if the validityAXA Parties acquire
or transferability of stock certificates presently outstanding. Shareholders
will not be requiredpropose to surrender or exchange any stock certificates they
currently hold.acquire less than the Threshold Percentage.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the outstanding shares of Common
Stock is required to approve the Amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT.
The Company understands that the Voting Trustees intend to vote all shares
of Common Stock held in the Voting Trust in favor of this proposal. Therefore,
it is expected that this proposal will be approved.
PROPOSAL 4. APPROVAL OF AN AMENDMENT
TO THE EQUITABLE COMPANIES INCORPORATED 1997 STOCK INCENTIVE PLAN
INTRODUCTION
At the Annual Meeting, shareholders will be asked to approve an amendment
(the "Amendment") to The Equitable Companies Incorporated 1997 Stock Incentive
Plan (the "Plan") which would increase by 15,000,000 the number of shares
available for grant to employees of the Company or its affiliates, as defined in
the Plan ("Employees").
The Plan, which was adopted by the Board in February 1997 and approved by
the Company's shareholders in May 1997, provides that shares of Common Stock of
the Company may be granted to Employees. In February 1999, the Board approved
the Amendment, subject to the approval of shareholders, which would increase by
15,000,000 the number of shares of the Company's Common Stock available for
issuance under the Plan. The Board adopted the Amendment to ensure that the
Company can continue to make grants under the Plan to Employees at levels
determined appropriate by the Stock Option Committee (the "Committee") of the
Board.
The Plan enhances the Company's ability to attract, retain and motivate
highly qualified Employees, thereby promoting the long-term financial success of
the Company and materially increasing shareholder value.
26
MATERIAL FEATURES OF THE PLAN
The Committee administers the Plan and determines which Employees will
receive awards and, consistent with the provisions of the Plan, the terms and
conditions of any such awards.
Prior to the Amendment, the maximum number of shares of the Company's
Common Stock that may be issued under the Plan is 9,316,265 plus any shares
which remained or may become available for grant under the Company's 1991 Stock
Incentive Plan (the "Predecessor Plan"). If shares subject to any award made
under the Plan or under the Predecessor Plan are cancelled, terminated or
otherwise settled without issuance of stock, those shares will be available for
future grants. The shares issued under the Plan may be previously unissued
shares or treasury shares.
The Committee has the authority to grant the following types of awards
under the Plan: (1) nonstatutory and incentive stock options; (2) restricted
stock; and (3) stock in lieu of other cash compensation. Each type of award may
be granted alone, in conjunction with or in tandem with other types of awards
under the Plan or cash awards outside the Plan.
STOCK OPTION GRANTS UNDER THE PLAN
The Committee may grant Employees nonstatutory stock options ("NSOs") and
incentive stock options ("ISOs"). The exercise price of any option cannot be
less than the Fair Market Value (as defined in the Plan) of the Company's Common
Stock on the date of grant. The term and exercise schedule of each option
generally is fixed by the Committee at the time of grant, but no option is
exercisable for more than 10 years from the date of grant. The maximum number of
shares an Employee can receive in any calendar year attributable to grants of
options cannot exceed 500,000 shares (unless adjusted by the Committee in the
event of a merger, consolidation, recapitalization or similar corporate event).
Since the Committee administering the Plan has discretion regarding option
grants, it is not possible to determine at this time the number of options that
may be granted in the future to Employees, including the Company's named
executive officers. See "Executive Compensation--Options" for information on
outstanding options held by the Company's named executive officers.
Under currently applicable federal tax law, when an NSO or an ISO is
granted to an Employee under the Plan, the Employee recognizes no taxable income
at the time of grant, and his or her employer will not be allowed a federal
income tax deduction at that time. When an Employee exercises an NSO, the excess
of the fair market value as of the exercise date of the shares acquired over the
exercise price paid will be ordinary compensation income to the Employee, and
his or her employer will be allowed a federal income tax deduction in the same
amount. When the Employee sells the shares so acquired, he or she will recognize
capital gain (or loss) based on the difference between the price at which the
shares are ultimately sold and the Employee's basis in the shares. The
Employee's basis, for tax purposes, is generally the sum of the exercise price
and the amount of income recognized by the Employee at the time of exercise. An
Employee who exercises an ISO while employed or within three months after
termination of employment (one year for disability) recognizes no income upon
exercise of the ISO. If the Employee holds shares acquired upon exercise of an
ISO for at least two years after the date of grant and more than one year after
exercise of the ISO, the excess of the amount realized upon disposition of the
shares over the exercise price paid is treated as long-term capital gain to the
Employee, and his or her employer is not allowed a federal income tax deduction.
A sale or other exchange of the underlying stock before the end of either of the
required holding periods will be a "disqualifying disposition," which generally
results in the Employee being taxed on the gain derived from the ISO as
27
though it were an NSO, and his or her employer will be allowed a federal income
tax deduction in the amount of the compensation income includible by the
Employee. Special tax rules apply if an Employee, as permitted by the Plan, pays
the exercise price by delivering shares of Common Stock he or she already owns
rather than in cash.
THE AMENDMENT
The Board believes that it is in the best long-term interest of the Company
to have available for issuance under the Plan a sufficient number of shares of
Common Stock to attract, retain and motivate its highly qualified Employees by
tying their interest to that of shareholders. Accordingly, subject to the
approval of the shareholders of the Company, the Board has approved the
Amendment, under which the number of shares of Common Stock authorized for
issuance under the Plan would be increased by 15,000,000 shares.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the shares represented in person or
by proxy at the meeting is required to approve the Amendment to the Plan. In the
absence of such approval, the Plan will not be amended.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT TO
THE PLAN.
The Company understands that the Voting Trustees intend to vote all shares
of Common Stock held in the Voting Trust in favor of this proposal. Therefore,
it is expected that this proposal will be approved.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
Annual Meeting. If any other matters are presented for action and come before
the meeting, it is intended that the persons named as proxies on the proxy card
will vote on such matters in accordance with their best judgment.
EXPENSES OF SOLICITATION
The Company will bear the cost of soliciting proxies from its shareholders
and will enlist the help of banks and brokerage houses in soliciting proxies
from their customers. The Company will reimburse these institutions for out-of-
pocket expenses. In addition to being solicited through the mails, proxies may
also be solicited personally or by telephone by the directors, officers and
employees of the Company or its subsidiaries. The Company has engaged Georgeson
& Company, Inc. to assist in soliciting proxies for a fee of approximately
$8,500 plus reasonable out-of-pocket expenses.
28
20002001 ANNUAL MEETING OF SHAREHOLDERS
The 20002001 Annual Meeting of Shareholders is scheduled to be held on
Wednesday, May 17, 2000.16, 2001. The Board is empowered by the By-Laws of the Company to
change the time of the meeting.
Proposals of shareholders must be received by the Company no later than
December 4, 19992000 to be eligible for inclusion under the rules of the SEC in the
Company's proxy materials for the 20002001 Annual Meeting of Shareholders and must
comply with such rules.
Under the Company's By-Laws, proposals of shareholders not included in the
proxy materials may be presented at the 20002001 Annual Meeting of Shareholders only
if the Company's Secretary has been notified of the nature of the proposal and
is provided certain additional information at least sixty days but not more than
ninety days prior to May 19, 2000,17, 2001, the first anniversary of the 19992000 Annual
Meeting of Shareholders (subject to exceptions if the 20002001 Annual Meeting is
advanced by more than 30 days or delayed by more than 60 days from such
anniversary date), and the proposal is a proper one for shareholder action.
These provisions do not affect the right of shareholders to make shareholder
proposals for inclusion in proxy statements for the Company's Annual Meetings
pursuant to the rules of the SEC.
Shareholders wishing to suggest candidates to the Company's Organization
and Compensation Committee for consideration as possible nominees as directors
may submit names and biographical data to the Secretary of the Company.
The Company's By-Laws also require that notice of nominations of persons
for election to the Board of Directors, other than those made by or at the
direction of the Board of Directors, must be received by the Secretary at least
sixty days but not more than ninety days prior to May 19, 2000,17, 2001, the first
anniversary of the 19992000 Annual Meeting of Shareholders (subject to exceptions if
the 2000 Annual Meeting of Shareholders is advanced by more than 30 days or
delayed by more than 60 days from such anniversary date). The notice must
present certain information concerning the nominees and the shareholders making
the nominations. The Secretary must receive a statement of any nominee's consent
to serve as a Director if elected.
The provisions of the By-Laws described in the preceding paragraphs do not
apply to any shareholder that beneficially owns shares representing at least 25%
of the voting power of the Company's outstanding voting shares. Accordingly, AXA
is not subject to such provisions.
By Order of the Board of Directors
/s/ Pauline Sherman
Pauline Sherman, Senior Vice President
and Secretary
March 25, 199924, 2000
29
EXHIBIT A
BENEFICIAL OWNERSHIP OF COMMON STOCK BY THE AXA GROUP
AXA, a French company, is the holding company for an international group of
insurance and related financial services companies. AXA's insurance operations
include activities in life insurance, property and casualty insurance and
reinsurance. The insurance operations are diverse geographically with activities
principally in Western Europe, North America, and the Asia/Pacific area and, to
a lesser extent, in Africa and South America. AXA is also engaged in asset
management, investment banking, securities trading, brokerage, real estate and
other financial services activities principally in the United States, as well as
in Western Europe and the Asia/Pacific area.
Based on information provided by AXA, on March 1, 1999,2000, approximately 20.7%20.3%
of the issued ordinary shares (representing 32.7%31.9% of the voting power) of AXA
were owned directly and indirectly by Finaxa, a French holding company. As of
March 1, 1999, 61.7%2000, 60.7% of the shares (representing 72.3%70.7% of the voting power) of
Finaxa were owned by four French mutual insurance companies (the "Mutuelles
AXA") (one of which, AXA Assurances I.A.R.D. Mutuelle, owned 35.4%34.8% of the
shares, representing 41.5%40.4% of the voting power), and 22.7%22.3% of the shares of
Finaxa (representing 13.7%13.3% of the voting power) were owned by Paribas, a French
bank. Including the ordinary shares owned by Finaxa, on March 1, 1999,2000, the
Mutuelles AXA directly or indirectly owned approximately 23.9%23.3% of the issued
ordinary shares (representing 37.6%36.7% of the voting power) of AXA.
The Voting Trustees may be deemed to be beneficial owners of all shares of
Common Stock 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 shares of Common Stock 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 shares of Common Stock in the
Voting Trust and have the power to dispose or direct the disposition of all the
shares of Common Stock 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 shares of Common Stock
beneficially owned by AXA and its subsidiaries.
The address of each of AXA and the Voting Trustees is 9 Place Vendome,
7500125, 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 Assurances I.A.R.D. Mutuelle, and AXA Assurances Vie Mutuelle is 21 rue de
Chateaudun, 75009 Paris, France; the address ofand AXA Conseil
Vie Assurance Mutuelle is Tour Franklin, 100/101 Terrasse Boieldieu, Cedex 11, 92042370, rue Saint Honore, 75001 Paris, La
Defense, 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.
A-1
THE EQUITABLE'SAXA FINANCIAL'S SHAREHOLDER INFORMATION CENTER IS AVAILABLE
TO SERVE YOU 24 HOURS A DAY, 7 DAYS A WEEK.
CALL (TOLL FREE) 1-800-437-8736.
[LOGO OF THE EQUITABLE COMPANIES INCORPORATED]AXA FINANCIAL, INC.]
c/o First Chicago Trust Company
PO Box 8636
Edison, NJ 08818-9051
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Proxy Solicited by the Board of Directors for the Annual Meeting of Shareholders
May 19, 199917, 2000
Pauline Sherman, Linda Galasso and Janet Hannon,Francesca Divone, or any of them individually
and each of them with the power of substitution, are hereby appointed Proxies of
the undersigned to vote all stock of The Equitable Companies IncorporatedAXA Financial, Inc. owned on the record
date by the undersigned at the Annual Meeting of Shareholders to be held in the
Auditorium at The Equitable Tower, 787 Seventh Avenue, New York City, at 9:00
a.m., local time, on Wednesday, May 19, 1999,17, 2000, or any adjournment thereof, upon
such business as may properly come before the meeting, including the items on
the reverse side of this form as set forth in the Notice of Annual Meeting of
Shareholders and Proxy Statement.
ELECTION OF DIRECTORS: NOMINEES:
1.01. Claude Bebear 2.02. John S. Chalsty 3.03. Francoise Colloc'h 4.04. Henri de Castries
5.05. Joseph L. Dionne 6.06. Jean-Rene Fourtou 7. Jacques Friedmann 8.07. Claus-Michael Dill 08. Donald J. Greene
9.09. Anthony J. Hamilton 10. John T. Hartley 11. John H.F. Haskell, Jr. 12. Michael Hegarty
13. Nina Henderson 14. W. Edwin Jarmain 15. Edward D. Miller 16. Didier Pineau-Valencienne
17. George J. Sella, Jr. 18. Peter J. Tobin 19. Dave H. Williams
(Shares cannot be voted unless this proxy form is signed and returned, the proxy
is submitted by telephone or the Internet, the shares are voted in person, or
other arrangements are made to have the shares represented at the meeting.)
COMMENTS/CHANGE OF ADDRESS (Please mark the box on the reverse side.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
The Equitable Companies IncorporatedAXA Financial, Inc.
Annual Meeting of Shareholders
Wednesday, May 19, 199917, 2000
9:00 a.m.
787 Seventh Ave.
New York, NY 10019
/X/ Please mark your
| 7210
votes as in this -------
example.
The Board of Directors recommends a vote FOR proposals 1, 2, 3 and 4.3.
SHARES WILL BE SO VOTED UNLESS OTHERWISE INDICATED.
FOR WITHHELD
1. Election of / / / /
Directors
(see reverse)
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the appointment
of PricewaterhouseCoopers LLP as
independent accountants. / / / / / /
3. Approval of an amendment to the
Company's Restated Certificate of
Incorporation to changeincrease the
Company's namenumber of authorized shares of
Common Stock from 500,000,000
to "AXA Financial,
Inc."2,000,000,000. / / / / / /
4. Approval of an amendmentI consent to future access to the Company's 1997 Stock Incentive
PlanAnnual Reports and Proxy
Statements in electronic form via the Internet. I understand that the
Company may no longer distribute printed materials to increaseme for any future
shareholder meeting until and unless my consent is revoked. I understand
that I may revoke my consent at any time by 15,000,000giving written notice to the
number of shares available
for grant.Company. / /
/ /PLEASE CALL 1-800-437-8736 IF YOU HAVE
ANY QUESTIONS.
Please use the reverse side for change
of address or comments. Put an X in this
box if you have written on the reverse
side. / /
- ------------------------------------- ----------------
SIGNATURE: Please sign exactly as DATE
your name or names appear above. If
more than one owner, all shareholders
must sign. When signing as an
attorney, executor, trustee, or
guardian, please give your full title
as such.
PLEASE CALL 1-800-437-8736 IF YOU HAVE
ANY QUESTIONS.
Please use the reverse side for change
of address or comments. Put an X in this
box if you have written on the reverse
side. / /
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FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
Dear Shareholder:
The Equitable Companies IncorporatedAXA Financial, Inc. encourages you to take advantage of new and convenient ways
by which you can submit your proxy. You can submit your proxy electronically
over the Internet or by telephone. This eliminates the need to return the proxy
card.
To submit your proxy electronically, you must use the control number (printed in
the box above, just below the perforation) as well as your social security
number for this account.
To submit your proxy over the Internet:
o Log on to the Internet and go to the web site
http://www.vote-by-net.comwww.eproxyvote.com/axf
To submit your proxy by telephone:
o Using a touch-tone telephone, U.S. and Canadian shareholders may dial
1-800-OK2-VOTE (1-800-652-8683)1-877-779-8683 24 hours a day, 7 days a week. From outside the U.S.
orand Canada, shareholders may call 1-201-324-0377.1-201-536-8073.
If you choose to submit your proxy electronically, there is no need for you to
mail back your proxy card.
If you would like to access future Annual Reports and Proxy Statements in
electronic form via the Internet rather than as printed materials sent to you by
mail, please so indicate when you submit your proxy.
Your vote is important. Thank you for voting.