x
|
ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Delaware
|
13-4064930
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
1345
Avenue of the Americas, New York, N.Y.
|
10105
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Title
of Class
|
Name
of each exchange on which registered
|
|
units
of limited partnership interest
|
None
|
ii
|
||
Part
I
|
||
Item
1.
|
1
|
|
1
|
||
2
|
||
5
|
||
5
|
||
6
|
||
6
|
||
7
|
||
15
|
||
15
|
||
15
|
||
16
|
||
17
|
||
17
|
||
19
|
||
19
|
||
Item
1A.
|
20
|
|
Item
1B.
|
26
|
|
Item
2.
|
27
|
|
Item
3.
|
28
|
|
Item
4.
|
29
|
|
Part
II
|
||
Item
5.
|
30
|
|
Item
6.
|
32
|
|
Item
7.
|
33
|
|
Item
7A.
|
48
|
|
Item
8.
|
50
|
|
Item
9.
|
83
|
|
Item
9A.
|
84
|
|
Item
9B.
|
85
|
|
Part
III
|
||
Item
10.
|
86
|
|
Item
11.
|
94
|
|
Item
12.
|
108
|
|
Item
13.
|
112
|
|
Item
14.
|
115
|
|
Part
IV
|
|
|
Item
15.
|
116
|
|
118
|
Item
1.
|
Business
|
|
•
|
institutional
clients, including unaffiliated corporate and public employee pension
funds, endowment funds, domestic and foreign institutions and governments,
and various affiliates;
|
|
•
|
retail
clients;
|
|
•
|
private
clients, including high-net-worth individuals, trusts and estates,
charitable foundations, partnerships, private and family corporations, and
other entities; and
|
|
•
|
institutional
investors seeking independent research and related
services.
|
|
•
|
To
our institutional clients, we offer separately managed accounts,
sub-advisory relationships, structured products, collective investment
trusts, mutual funds, hedge funds and other investment vehicles
(“Institutional Investment
Services”);
|
|
•
|
To
our retail clients, we offer retail mutual funds sponsored by
AllianceBernstein, our subsidiaries and our affiliated joint venture
companies, sub-advisory relationships with mutual funds sponsored by third
parties, separately managed account programs sponsored by various
financial intermediaries worldwide (“Separately Managed Account Programs”)
and other investment vehicles (collectively, “Retail
Services”);
|
|
•
|
To
our private clients, we offer diversified investment management services
through separately managed accounts, hedge funds, mutual funds and other
investment vehicles (“Private Client Services”);
and
|
|
•
|
To
institutional investors, we offer independent research, portfolio strategy
and brokerage-related services (“Institutional Research
Services”).
|
|
•
|
Value
equities, generally targeting stocks that are out of favor and that may
trade at bargain prices;
|
|
•
|
Growth
equities, generally targeting stocks with under-appreciated growth
potential;
|
|
•
|
Fixed
income securities, including both taxable and tax-exempt
securities;
|
|
•
|
Blend
strategies, combining style-pure investment components with systematic
rebalancing;
|
|
•
|
Passive
management, including both index and enhanced index
strategies;
|
|
•
|
Alternative
investments, such as hedge funds, currency management strategies and
venture capital; and
|
|
•
|
Asset
allocation services, by which we offer specifically-tailored investment
solutions for our clients (e.g., customized target-date fund retirement
services for institutional defined contribution plan
clients).
|
December
31,
|
%
Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07
|
2007-06
|
||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Institutional
Investment Services
|
$ | 291,361 | $ | 508,081 | $ | 455,095 | (42.7 | )% | 11.6 | % | ||||||||||
Retail
Services
|
101,643 | 183,165 | 166,928 | (44.5 | ) | 9.7 | ||||||||||||||
Private
Client Services
|
68,947
|
109,144
|
94,898
|
(36.8 | ) | 15.0 | ||||||||||||||
Total
|
$ | 461,951 | $ |
800,390
|
$ | 716,921 | (42.3 | ) | 11.6 |
(1)
|
Excludes
certain non-discretionary client
relationships.
|
Years Ended December
31,
|
% Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07
|
2007-06
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Institutional
Investment Services
|
$ | 1,240,636 | $ | 1,481,885 | $ | 1,221,780 | (16.3 | )% | 21.3 | % | ||||||||||
Retail
Services
|
1,227,538 | 1,521,201 | 1,303,849 | (19.3 | ) | 16.7 | ||||||||||||||
Private
Client Services
|
849,830 | 960,669 | 882,881 | (11.5 | ) | 8.8 | ||||||||||||||
Institutional
Research Services
|
471,716 | 423,553 | 375,075 | 11.4 | 12.9 | |||||||||||||||
Other(1)
|
(239,037 | ) |
332,441
|
354,655 | n/m | (6.3 | ) | |||||||||||||
Total
Revenues
|
3,550,683 | 4,719,749 | 4,138,240 | (24.8 | ) | 14.1 | ||||||||||||||
Less:
Interest Expense
|
36,524 |
194,432
|
187,833 | (81.2 | ) | 3.5 | ||||||||||||||
Net
Revenues
|
$ | 3,514,159 | $ | 4,525,317 | $ | 3,950,407 | (22.3 | ) | 14.6 |
(1)
|
Other
revenues primarily consist of dividend and interest income, investment
gains (losses) and shareholder servicing fees. For additional information,
see “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
in Item 7.
|
December
31,
|
% Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07
|
2007-06
|
||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Value
Equity:
|
||||||||||||||||||||
U.S.
|
$ | 22,598 | $ | 49,235 | $ | 55,562 | (54.1 | )% | (11.4 | )% | ||||||||||
Global
and International
|
84,787
|
192,472
|
158,572
|
(55.9 | ) | 21.4 | ||||||||||||||
107,385
|
241,707
|
214,134
|
(55.6 | ) | 12.9 | |||||||||||||||
Growth
Equity:
|
||||||||||||||||||||
U.S.
|
16,075 | 31,908 | 36,668 | (49.6 | ) | (13.0 | ) | |||||||||||||
Global
and International
|
38,034
|
88,691
|
66,242
|
(57.1 | ) | 33.9 | ||||||||||||||
54,109
|
120,599
|
102,910
|
(55.1 | ) | 17.2 | |||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
66,151 | 73,240 | 73,414 | (9.7 | ) | (0.2 | ) | |||||||||||||
Global
and International
|
51,043
|
53,978
|
39,166
|
(5.4 | ) | 37.8 | ||||||||||||||
117,194
|
127,218
|
112,580
|
(7.9 | ) | 13.0 | |||||||||||||||
Other
(2):
|
||||||||||||||||||||
U.S.
|
6,617 | 12,426 | 19,942 | (46.7 | ) | (37.7 | ) | |||||||||||||
Global
and International
|
6,056 | 6,131 | 5,529 | (1.2 | ) | 10.9 | ||||||||||||||
12,673
|
18,557
|
25,471
|
(31.7 | ) | (27.1 | ) | ||||||||||||||
Total:
|
||||||||||||||||||||
U.S.
|
111,441 | 166,809 | 185,586 | (33.2 | ) | (10.1 | ) | |||||||||||||
Global
and International
|
179,920
|
341,272
|
269,509
|
(47.3 | ) | 26.6 | ||||||||||||||
Total
|
$ | 291,361 | $ | 508,081 | $ | 455,095 | (42.7 | ) | 11.6 |
(1)
|
Excludes
certain non-discretionary client
relationships.
|
(2)
|
Includes
index, structured and asset allocation
services.
|
Years Ended
December 31,
|
%
Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07
|
2007-06
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Investment
Advisory and Services Fees:
|
||||||||||||||||||||
Value
Equity:
|
||||||||||||||||||||
U.S.
|
$ |
108,921
|
$ | 153,747 | $ | 154,163 | (29.2 | )% | (0.3 | )% | ||||||||||
Global
and International
|
607,431
|
747,957
|
570,185
|
(18.8 | ) | 31.2 | ||||||||||||||
716,352
|
901,704
|
724,348
|
(20.6 | ) | 24.5 | |||||||||||||||
Growth
Equity:
|
||||||||||||||||||||
U.S.
|
70,119
|
108,691 | 122,132 | (35.5 | ) | (11.0 | ) | |||||||||||||
Global
and International
|
276,676
|
311,727
|
226,293
|
(11.2 | ) | 37.8 | ||||||||||||||
346,795
|
420,418
|
348,425
|
(17.5 | ) | 20.7 | |||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
85,333 | 91,144 | 97,452 | (6.4 | ) | (6.5 | ) | |||||||||||||
Global
and International
|
78,197
|
54,021
|
38,825
|
44.8 | 39.1 | |||||||||||||||
163,530
|
145,165
|
136,277
|
12.7 | 6.5 | ||||||||||||||||
Other
(1):
|
||||||||||||||||||||
U.S.
|
2,883 | 4,441 | 4,993 | (35.1 | ) | (11.1 | ) | |||||||||||||
Global
and International
|
11,076 |
9,865
|
7,177 | 12.3 | 37.5 | |||||||||||||||
13,959
|
14,306
|
12,170 | (2.4 | ) | 17.6 | |||||||||||||||
Total
Investment Advisory and Services Fees:
|
||||||||||||||||||||
U.S.
|
267,256 |
358,023
|
378,740 | (25.4 | ) | (5.5 | ) | |||||||||||||
Global
and International
|
973,380
|
1,123,570
|
842,480
|
(13.4 | ) | 33.4 | ||||||||||||||
1,240,636 | 1,481,593 | 1,221,220 | (16.3 | ) | 21.3 | |||||||||||||||
Distribution
Revenues
|
— | 292 | 560 | (100.0 | ) | (47.9 | ) | |||||||||||||
Total
|
$ |
1,240,636
|
$ |
1,481,885
|
$ | 1,221,780 | (16.3 | ) | 21.3 |
(1)
|
Includes
index, structured and asset allocation
services.
|
December
31,
|
%
Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07
|
2007-06
|
||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Value
Equity:
|
||||||||||||||||||||
U.S.
|
$ |
12,086
|
$ |
33,488
|
$ |
35,749
|
(63.9 | )% | (6.3 | )% | ||||||||||
Global
and International
|
28,053
|
56,560
|
38,797
|
(50.4 | ) | 45.8 | ||||||||||||||
40,139
|
90,048
|
74,546
|
(55.4 | ) | 20.8 | |||||||||||||||
Growth
Equity:
|
||||||||||||||||||||
U.S.
|
8,494 | 24,637 | 28,587 | (65.5 | ) | (13.8 | ) | |||||||||||||
Global
and International
|
11,544
|
23,530
|
19,937
|
(50.9 | ) | 18.0 | ||||||||||||||
20,038
|
48,167
|
48,524
|
(58.4 | ) | (0.7 | ) | ||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
9,857 | 10,627 | 11,420 | (7.2 | ) | (6.9 | ) | |||||||||||||
Global
and International
|
20,178
|
29,855
|
27,614
|
(32.4 | ) | 8.1 | ||||||||||||||
30,035
|
40,482
|
39,034
|
(25.8 | ) | 3.7 | |||||||||||||||
Other
(1):
|
||||||||||||||||||||
U.S.
|
9,851 | 4,468 | 4,824 | 120.5 | (7.4 | ) | ||||||||||||||
Global
and International
|
1,580
|
—
|
— | n/m | — | |||||||||||||||
11,431
|
4,468 | 4,824 | 155.8 | (7.4 | ) | |||||||||||||||
Total:
|
||||||||||||||||||||
U.S.
|
40,288 | 73,220 | 80,580 | (45.0 | ) | (9.1 | ) | |||||||||||||
Global
and International
|
61,355
|
109,945
|
86,348
|
(44.2 | ) | 27.3 | ||||||||||||||
Total
|
$ |
101,643
|
$ |
183,165
|
$ |
166,928
|
(44.5 | ) | 9.7 |
(1)
|
Includes
index, structured and asset allocation
services.
|
Years Ended
December 31,
|
%
Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07
|
2007-06
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Investment
Advisory and Services Fees:
|
||||||||||||||||||||
Value
Equity:
|
||||||||||||||||||||
U.S.
|
$ | 88,394 | $ |
129,125
|
$ |
123,355
|
(31.5 | )% | 4.7 | % | ||||||||||
Global
and International
|
216,561
|
262,369
|
133,314
|
(17.5 | ) | 96.8 | ||||||||||||||
304,955
|
391,494
|
256,669
|
(22.1 | ) | 52.5 | |||||||||||||||
Growth
Equity:
|
||||||||||||||||||||
U.S.
|
84,651 | 119,880 | 143,344 | (29.4 | ) | (16.4 | ) | |||||||||||||
Global
and International
|
130,247
|
168,817
|
152,883
|
(22.8 | ) | 10.4 | ||||||||||||||
214,898
|
288,697
|
296,227
|
(25.6 | ) | (2.5 | ) | ||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
30,888 | 39,644 | 43,705 | (22.1 | ) | (9.3 | ) | |||||||||||||
Global
and International
|
195,373
|
224,335
|
186,196
|
(12.9 | ) | 20.5 | ||||||||||||||
226,261
|
263,979
|
229,901
|
(14.3 | ) | 14.8 | |||||||||||||||
Other
(1):
|
||||||||||||||||||||
U.S.
|
3,702 | 1,868 | 1,673 | 98.2 | 11.7 | |||||||||||||||
Global
and International
|
1,297
|
— | 3,363 | n/m | (100.0 | ) | ||||||||||||||
4,999 | 1,868 | 5,036 | 167.6 | (62.9 | ) | |||||||||||||||
Total
Investment Advisory and Services Fees:
|
||||||||||||||||||||
U.S.
|
207,635 | 290,517 | 312,077 | (28.5 | ) | (6.9 | ) | |||||||||||||
Global
and International
|
543,478
|
655,521
|
475,756
|
(17.1 | ) | 37.8 | ||||||||||||||
751,113 | 946,038 | 787,833 | (20.6 | ) | 20.1 | |||||||||||||||
Distribution
Revenues(2)
|
376,372 | 471,031 | 418,780 | (20.1 | ) | 12.5 | ||||||||||||||
Shareholder
Servicing Fees(2)
|
100,053
|
104,132
|
97,236
|
(3.9 | ) | 7.1 | ||||||||||||||
Total
|
$ |
1,227,538
|
$ |
1,521,201
|
$ |
1,303,849
|
(19.3 | ) | 16.7 |
(1)
|
Includes
index, structured and asset allocation
services.
|
(2)
|
For
a description of distribution revenues and shareholder servicing fees,
see
below.
|
December
31,
|
%
Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07
|
2007-06
|
||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Value
Equity:
|
||||||||||||||||||||
U.S.
|
$ | 13,254 | $ | 25,259 | $ | 27,703 | (47.5 | )% | (8.8 | )% | ||||||||||
Global
and International
|
11,627 | 25,497 | 19,091 | (54.4 | ) | 33.6 | ||||||||||||||
24,881 | 50,756 | 46,794 | (51.0 | ) | 8.5 | |||||||||||||||
Growth
Equity:
|
||||||||||||||||||||
U.S.
|
8,425 | 16,004 | 13,237 | (47.4 | ) | 20.9 | ||||||||||||||
Global
and International
|
5,709 | 12,175 | 9,418 | (53.1 | ) | 29.3 | ||||||||||||||
14,134 | 28,179 | 22,655 | (49.8 | ) | 24.4 | |||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
29,287 | 29,498 | 25,032 | (0.7 | ) | 17.8 | ||||||||||||||
Global
and International
|
606 | 676 | 328 | (10.4 | ) | 106.1 | ||||||||||||||
29,893 | 30,174 | 25,360 | (0.9 | ) | 19.0 | |||||||||||||||
Other
(1):
|
||||||||||||||||||||
U.S.
|
21 | 25 | 80 | (16.0 | ) | (68.8 | ) | |||||||||||||
Global
and International
|
18 | 10 | 9 | 80.0 | 11.1 | |||||||||||||||
39 | 35 | 89 | 11.4 | (60.7 | ) | |||||||||||||||
Total:
|
||||||||||||||||||||
U.S.
|
50,987 | 70,786 | 66,052 | (28.0 | ) | 7.2 | ||||||||||||||
Global
and International
|
17,960 | 38,358 | 28,846 | (53.2 | ) | 33.0 | ||||||||||||||
Total
|
$ | 68,947 | $ | 109,144 | $ | 94,898 | (36.8 | ) | 15.0 |
(1)
|
Includes
index, structured and asset allocation
services.
|
Years Ended
December 31,
|
%
Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07
|
2007-06 | ||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Investment
Advisory and Services Fees:
|
||||||||||||||||||||
Value
Equity:
|
||||||||||||||||||||
U.S.
|
$ | 270,346 | $ | 322,366 | $ | 293,281 | (16.1 | )% | 9.9 | % | ||||||||||
Global
and International
|
181,665 | 233,964 | 260,529 | (22.4 | ) | (10.2 | ) | |||||||||||||
452,011 | 556,330 | 553,810 | (18.8 | ) | 0.5 | |||||||||||||||
Growth
Equity:
|
||||||||||||||||||||
U.S.
|
162,770 | 164,547 | 134,070 | (1.1 | ) | 22.7 | ||||||||||||||
Global
and International
|
98,409 | 113,379 | 83,615 | (13.2 | ) | 35.6 | ||||||||||||||
261,179 | 277,926 | 217,685 | (6.0 | ) | 27.7 | |||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
132,195 | 121,872 | 108,418 | 8.5 | 12.4 | |||||||||||||||
Global
and International
|
2,334 | 2,315 | 1,188 | 0.8 | 94.9 | |||||||||||||||
134,529 | 124,187 | 109,606 | 8.3 | 13.3 | ||||||||||||||||
Other
(1):
|
||||||||||||||||||||
U.S.
|
15 | 23 | 75 | (34.8 | ) | (69.3 | ) | |||||||||||||
Global
and International
|
43 | 91 | — | (52.7 | ) | — | ||||||||||||||
58 | 114 | 75 | (49.1 | ) | 52.0 | |||||||||||||||
Total
Investment Advisory and Services Fees:
|
||||||||||||||||||||
U.S.
|
565,326 | 608,808 | 535,844 | (7.1 | ) | 13.6 | ||||||||||||||
Global
and International
|
282,451 | 349,749 | 345,332 | (19.2 | ) | 1.3 | ||||||||||||||
847,777 | 958,557 | 881,176 | (11.6 | ) | 8.8 | |||||||||||||||
Distribution
Revenues
|
2,053 | 2,112 | 1,705 | (2.8 | ) | 23.9 | ||||||||||||||
Total
|
$ | 849,830 | $ | 960,669 | $ | 882,881 | (11.5 | ) | 8.8 |
(1)
|
Includes
index, structured and asset allocation
services.
|
Years Ended
December 31,
|
%
Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07 | 2007-06 | ||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Transaction
Execution and Research:
|
||||||||||||||||||||
SCB
LLC
|
$ | 372,067 | $ | 317,892 | $ | 303,204 | 17.0 | % | 4.8 | % | ||||||||||
SCBL
|
99,649
|
105,661
|
71,871
|
(5.7 | ) | 47.0 | ||||||||||||||
Total
|
$ | 471,716 | $ |
423,553
|
$ | 375,075 | 11.4 | 12.9 |
|
•
|
revising
our code of ethics to better align the interests of our employees with
those of our clients;
|
|
•
|
forming
two committees composed primarily of executive management to oversee and
resolve code of ethics and compliance-related
issues;
|
|
•
|
creating
an ombudsman office, where employees and others can voice concerns on a
confidential basis;
|
|
•
|
initiating
firm-wide compliance and ethics training programs;
and
|
|
•
|
appointing
a Conflicts Officer and establishing a Conflicts Committee to identify and
manage conflicts of interest.
|
|
•
|
establishing
a $250 million restitution fund to compensate fund shareholders for the
adverse effects of market timing (“Restitution
Fund”);
|
|
•
|
reducing
by 20% (on a weighted average basis) the advisory fees on U.S. long-term
open-end retail mutual funds by reducing our advisory fee rates (we are
required to maintain these reduced fee rates for at least the five-year
period that commenced January 1, 2004; we have not sought to increase our
advisory fees -- an increase would generally require the approval of the
boards of directors and shareholders of our U.S. Funds -- and we do not
intend to do so); and
|
|
•
|
agreeing
to have an independent third party perform a comprehensive compliance
review biannually.
|
(1)
|
Direct
and indirect ownership including unallocated Holding Units held in a trust
for our deferred compensation
plans.
|
|
•
|
our
investment performance for clients;
|
|
•
|
our
commitment to place the interests of our clients
first;
|
|
•
|
the
quality of our research;
|
|
•
|
our
ability to attract, retain, and motivate highly skilled, and often highly
specialized, personnel;
|
|
•
|
the
array of investment products we
offer;
|
|
•
|
the
fees we charge;
|
|
•
|
our
operational effectiveness;
|
|
•
|
our
ability to further develop and market our brand;
and
|
|
•
|
our
global presence.
|
Item 1A.
|
Risk
Factors
|
|
•
|
causing
disruptions in U.S. or global economic conditions, thus decreasing
investor confidence and making investment products generally less
attractive;
|
|
•
|
inflicting
loss of life;
|
|
•
|
triggering
massive technology failures or delays;
and
|
|
•
|
requiring
substantial capital expenditures and operating expenses to remediate
damage and restore operations.
|
Item 1B.
|
Unresolved
Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal
Proceedings
|
Item 4.
|
Submission
of Matters to a Vote of Security
Holders
|
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
Quarters Ended
2008
|
Total
|
|||||||||||||||||||
December
31
|
September
30
|
June
30
|
March
31
|
|||||||||||||||||
Cash
distributions per AllianceBernstein Unit(1)
|
$ | 0.37 | $ | 0.70 | $ | 1.06 | $ | 0.94 | $ | 3.07 | ||||||||||
Cash
distributions per Holding Unit(1)
|
$ | 0.29 | $ | 0.60 | $ | 0.96 | $ | 0.83 | $ | 2.68 | ||||||||||
Holding
Unit prices:
|
||||||||||||||||||||
High
|
$ | 38.90 | $ | 57.11 | $ | 67.75 | $ | 78.00 | ||||||||||||
Low
|
$ | 11.49 | $ | 32.00 | $ | 54.50 | $ | 53.63 | ||||||||||||
Quarters Ended
2007(2)
|
Total
|
|||||||||||||||||||
December
31
|
September
30
|
June
30
|
March
31
|
|||||||||||||||||
Cash
distributions per AllianceBernstein Unit(1)
|
$ | 1.17 | $ | 1.32 | $ | 1.27 | $ | 1.01 | $ | 4.77 | ||||||||||
Cash
distributions per Holding Unit(1)
|
$ | 1.06 | $ | 1.20 | $ | 1.16 | $ | 0.91 | $ | 4.33 | ||||||||||
Holding
Unit prices:
|
||||||||||||||||||||
High
|
$ | 92.87 | $ | 91.66 | $ | 94.94 | $ | 94.40 | ||||||||||||
Low
|
$ | 71.31 | $ | 72.33 | $ | 82.90 | $ | 79.06 |
(1)
|
Declared
and paid during the following
quarter.
|
(2)
|
The
low trading price during the quarters ended September 30, 2007 and June
30, 2007, and the high trading price during the quarter ended March 31,
2007, have been updated to reflect the prices on the NYSE composite
transaction tape.
|
(a)
Total
Number of
Holding Units Purchased
|
(b)
Average
Price Paid
Per
Holding Unit,
net of Commissions
|
(c)
Total
Number of Holding
Units Purchased
as Part
of Publicly Announced
Plans or
Programs
|
(d)
Maximum
Number
(or
Approximate Dollar
Value) of Holding
Units that May
Yet Be Purchased
Under the
Plans or Programs
|
|||||||||||||
Period
|
||||||||||||||||
10/1/08-10/31/08(1)
|
3,100 | $ | 34.70 | — | — | |||||||||||
11/1/08-11/30/08(2)
|
900 | 20.13 | — | — | ||||||||||||
12/1/08-12/31/08(3)(4)
|
11,115
|
16.00 |
—
|
—
|
||||||||||||
Total
|
15,115
|
$ |
20.08
|
—
|
—
|
(1)
|
On
October 2, 2008, we purchased these Holding Units from employees to allow
them to fulfill statutory withholding tax requirements at the time of
distribution of deferred compensation
awards.
|
(2)
|
On
each of November 4, 2008 and November 26, 2008, we purchased 217 Holding
Units and 683 Holding Units, respectively, from employees to allow them to
fulfill statutory withholding tax requirements at the time of distribution
of equity compensation awards.
|
(3)
|
On
December 1, 2008, we purchased these Holding Units from employees to allow
them to fulfill statutory withholding tax requirements at the time of
distribution of deferred compensation
awards.
|
(4)
|
On
December 17, 2008, ECMC, LLC (“ECMC”), a wholly-owned subsidiary of AXA
Equitable, transferred 722,178 Holding Units to AXA
Equitable. We have not reflected this transaction in the table
because no “purchase” took place.
|
|
•
|
On
December 17, 2008, AXA Financial transferred 40,861,854 AllianceBernstein
Units to AXA Financial Services, LLC, a wholly-owned subsidiary of AXA
Financial, which in turn transferred them to AXA Financial (Bermuda) Ltd.
(“AXF Bermuda”), also a wholly-owned subsidiary of AXA
Financial.
|
|
•
|
On
December 17, 2008, ECMC transferred 40,880,637 AllianceBernstein Units to
Equitable Holdings LLC, a wholly-owned subsidiary of AXA Equitable, which
in turn transferred them to AXA
Equitable.
|
|
•
|
On
December 30, 2008, AXA Equitable transferred an aggregate of 20,164,587
AllianceBernstein Units, consisting of: the transfer of 2,452,450
AllianceBernstein Units to MONY Life Insurance Company (“MONY”), a
wholly-owned subsidiary of AXA Financial; the transfer of 1,362,472
AllianceBernstein Units to MONY Life Insurance Company of America, a
wholly-owned subsidiary of MONY; and 16,349,665 AllianceBernstein Units to
AXF Bermuda.
|
Item 6.
|
Selected
Financial Data
|
Years Ended December 31,
|
||||||||||||||||||||
2008
|
2007(1)
|
2006(1)
|
2005(1)
|
2004(1)
|
||||||||||||||||
(in
thousands, except per unit amounts and unless otherwise
indicated)
|
||||||||||||||||||||
INCOME
STATEMENT DATA:
|
||||||||||||||||||||
Revenues:
|
||||||||||||||||||||
Investment
advisory and services fees
|
$ | 2,839,526 | $ | 3,386,188 | $ | 2,890,229 | $ | 2,259,392 | $ | 1,996,819 | ||||||||||
Distribution
revenues
|
378,425 | 473,435 | 421,045 | 397,800 | 447,283 | |||||||||||||||
Institutional
research services(2)
|
471,716 | 423,553 | 375,075 | 352,757 | 420,141 | |||||||||||||||
Dividend
and interest income
|
91,752 | 284,014 | 266,520 | 152,781 | 72,743 | |||||||||||||||
Investment
gains (losses)
|
(349,172 | ) | 29,690 | 62,200 | 29,070 | 14,842 | ||||||||||||||
Other
revenues
|
118,436 | 122,869 | 123,171 | 116,788 | 136,401 | |||||||||||||||
Total
revenues
|
3,550,683 | 4,719,749 | 4,138,240 | 3,308,588 | 3,088,229 | |||||||||||||||
Less:
interest expense
|
36,524 | 194,432 | 187,833 | 95,863 | 32,796 | |||||||||||||||
Net
revenues
|
3,514,159 | 4,525,317 | 3,950,407 | 3,212,725 | 3,055,433 | |||||||||||||||
Expenses:
|
||||||||||||||||||||
Employee
compensation and benefits
|
1,454,691 | 1,833,796 | 1,547,627 | 1,262,198 | 1,085,163 | |||||||||||||||
Promotion
and servicing:
|
||||||||||||||||||||
Distribution
plan payments
|
274,359 | 335,132 | 292,886 | 291,953 | 374,184 | |||||||||||||||
Amortization
of deferred sales commissions
|
79,111 | 95,481 | 100,370 | 131,979 | 177,356 | |||||||||||||||
Other
|
207,506 | 252,468 | 218,944 | 198,004 | 202,327 | |||||||||||||||
General
and administrative
|
539,198 | 574,506 | 574,904 | 378,856 | 410,240 | |||||||||||||||
Interest
on borrowings
|
13,077 | 23,970 | 23,124 | 25,109 | 24,232 | |||||||||||||||
Amortization
of intangible assets
|
20,716 | 20,716 | 20,710 | 20,700 | 20,700 | |||||||||||||||
Total
expenses
|
2,588,658 | 3,136,069 | 2,778,565 | 2,308,799 | 2,294,202 | |||||||||||||||
Operating
income
|
925,501 | 1,389,248 | 1,171,842 | 903,926 | 761,231 | |||||||||||||||
Non-operating
income
|
18,728 | 15,756 | 20,196 | 34,446 | — | |||||||||||||||
Income
before income taxes and non-controlling interest in earnings of
consolidated entities
|
944,229 | 1,405,004 | 1,192,038 | 938,372 | 761,231 | |||||||||||||||
Income
taxes
|
95,803 | 127,845 | 75,045 | 64,571 | 39,932 | |||||||||||||||
Non-controlling
interest in earnings of consolidated entities, net of tax
|
9,186 | 16,715 | 8,392 | 5,483 | 16,149 | |||||||||||||||
Net
income
|
$ | 839,240 | $ | 1,260,444 | $ | 1,108,601 | $ | 868,318 | $ | 705,150 | ||||||||||
Basic
net income per unit
|
$ | 3.18 | $ | 4.80 | $ | 4.26 | $ | 3.37 | $ | 2.76 | ||||||||||
Diluted
net income per unit
|
$ | 3.18 | $ | 4.77 | $ | 4.22 | $ | 3.35 | $ | 2.74 | ||||||||||
Operating
margin(3)
|
26.1 | % | 30.3 | % | 29.5 | % | 28.0 | % | 24.4 | % | ||||||||||
CASH
DISTRIBUTIONS PER UNIT(4)
|
$ | 3.07 | $ | 4.77 | $ | 4.42 | $ | 3.33 | $ | 2.40 | ||||||||||
BALANCE
SHEET DATA AT PERIOD END:
|
||||||||||||||||||||
Total
assets
|
$ | 8,503,459 | $ | 9,368,754 | $ | 10,601,105 | $ | 9,490,480 | $ | 8,779,330 | ||||||||||
Debt
|
$ | 284,779 | $ | 533,872 | $ | 334,901 | $ | 407,291 | $ | 407,517 | ||||||||||
Partners’
capital
|
$ | 4,317,659 | $ | 4,541,226 | $ | 4,570,997 | $ | 4,302,674 | $ | 4,183,698 | ||||||||||
ASSETS
UNDER MANAGEMENT AT PERIOD END (in millions)
|
$ | 461,951 | $ | 800,390 | $ | 716,921 | $ | 578,552 | $ | 538,764 |
(1)
|
Certain
prior-year amounts have been reclassified to conform to our 2008
presentation. See Note 2
to AllianceBernstein’s
consolidated financial statements in Item 8 for a discussion of
reclassifications.
|
(2)
|
Includes
revenues of $0.3 million, $0.5 million, $1.8 million, $31.5 million and
$116.5 million from brokerage transactions executed on behalf of
AllianceBernstein (acting on behalf of certain of its U.S. asset
management clients that have authorized AllianceBernstein to use SCB for
trade execution) in 2008, 2007, 2006, 2005 and 2004,
respectively. The significant decrease beginning in 2005 is
primarily due to our elimination of transaction charges for most private
clients.
|
(3)
|
Operating
income less non-controlling interest in earnings of consolidated entities
as a percentage of net
revenue.
|
(4)
|
AllianceBernstein
is required to distribute all of its Available Cash Flow, as defined in
the AllianceBernstein Partnership Agreement, to its unitholders and the
General Partner.
|
Item 7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
•
|
Client
satisfaction – Our ability to understand and articulate what has happened,
to describe the lessons learned and the enhancements we have put in place,
and to communicate substantial opportunities we perceive, are all critical
to retaining client confidence in our ability to recover lost
performance.
|
•
|
Investment
performance – We underperformed benchmarks, in some cases by substantial
amounts, in virtually all of our services. We owe our clients
and unitholders much better performance and we will strive to provide
it.
|
•
|
Operational
cost savings – We reduced headcount from 5,580 at December 31, 2007 to
4,997 at December 31, 2008 and imposed a salary freeze for 2009 as part of
our initiative to lower operating costs. We are seeking
additional operational cost savings to counteract potential continuing
declines in revenues.
|
•
|
Capital
spending – Capital spending projects are being prioritized by business
need, with lower priority projects being delayed or
canceled.
|
•
|
Liquidity
– We currently have sufficient liquidity and financial flexibility (i.e., practically no
troubled investments or derivatives on our balance sheet, $4.3 billion of
partners’ capital, a $1.0 billion committed credit facility, only $0.3
billion of debt, and strong credit ratings). However,
additional sources of liquidity are being explored in the case of further
significant deterioration of capital and credit
markets.
|
•
|
Asset
impairment – We are more frequently monitoring the possibility that the
goodwill, intangible assets or deferred sales commissions recorded on our
balance sheet could become impaired, or that our debt covenants may not be
met, if financial conditions continue to deteriorate and AUM and
corresponding revenues continue to
decline.
|
•
|
Counterparty
risk – We are mindful of the possibility that counterparties in our
financial transactions, or suppliers of some of our services, will be
unable to perform as a result of their own deteriorating financial
conditions.
|
(1)
|
Many
of these items are discussed in greater detail later in this Item 7
(including “Cautions
Regarding Forward-Looking Statements”), “Risk Factors” (see Item 1A) or other
sections of this Form 10-K.
|
As of December 31,
|
% Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07 | 2007-06 | ||||||||||||||||
(in
billions)
|
||||||||||||||||||||
Institutional
Investments
|
$ | 291.4 | $ | 508.1 | $ | 455.1 | (42.7 | )% | 11.6 | % | ||||||||||
Retail
|
101.6 | 183.2 | 166.9 | (44.5 | ) | 9.7 | ||||||||||||||
Private
Client
|
69.0 | 109.1 | 94.9 | (36.8 | ) | 15.0 | ||||||||||||||
Total
|
$ | 462.0 | $ | 800.4 | $ | 716.9 | (42.3 | ) | 11.6 |
As of December 31,
|
% Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07 | 2007-06 | ||||||||||||||||
(in
billions)
|
||||||||||||||||||||
Equity
|
||||||||||||||||||||
Value:
|
||||||||||||||||||||
U.S.
|
$ | 47.9 | $ | 108.0 | $ | 119.0 | (55.6 | )% | (9.3 | )% | ||||||||||
Global &
international
|
124.5 | 274.5 | 216.5 | (54.7 | ) | 26.8 | ||||||||||||||
172.4 | 382.5 | 335.5 | (54.9 | ) | 14.0 | |||||||||||||||
Growth:
|
||||||||||||||||||||
U.S.
|
33.0 | 72.5 | 78.5 | (54.5 | ) | (7.6 | ) | |||||||||||||
Global &
international
|
55.3 | 124.4 | 95.6 | (55.6 | ) | 30.1 | ||||||||||||||
88.3 | 196.9 | 174.1 | (55.2 | ) | 13.1 | |||||||||||||||
Total
Equity
|
260.7 | 579.4 | 509.6 | (55.0 | ) | 13.7 | ||||||||||||||
Fixed
Income:
|
||||||||||||||||||||
U.S.
|
105.3 | 113.4 | 109.9 | (7.1 | ) | 3.2 | ||||||||||||||
Global &
international
|
71.8 | 84.5 | 67.1 | (15.0 | ) | 25.9 | ||||||||||||||
177.1 | 197.9 | 177.0 | (10.5 | ) | 11.8 | |||||||||||||||
Other
(1):
|
||||||||||||||||||||
U.S.
|
16.5 | 16.9 | 24.8 | (2.5 | ) | (31.9 | ) | |||||||||||||
Global &
international
|
7.7 | 6.2 | 5.5 | 24.6 | 10.9 | |||||||||||||||
24.2 | 23.1 | 30.3 | 4.7 | (24.1 | ) | |||||||||||||||
Total:
|
||||||||||||||||||||
U.S.
|
202.7 | 310.8 | 332.2 | (34.8 | ) | (6.4 | ) | |||||||||||||
Global &
international
|
259.3 | 489.6 | 384.7 | (47.0 | ) | 27.3 | ||||||||||||||
Total
|
$ | 462.0 | $ | 800.4 | $ | 716.9 | (42.3 | ) | 11.6 |
(1)
|
Includes
index, structured and asset allocation
services.
|
Distribution Channel
|
Investment Service
|
|||||||||||||||||||||||||||||||||||
Institutional
Investments
|
Retail
|
Private
Client
|
Total
|
Value
Equity
|
Growth
Equity
|
Fixed
Income
|
Other
(1)
|
Total
|
||||||||||||||||||||||||||||
(in
billions)
|
||||||||||||||||||||||||||||||||||||
Balance
as of December 31, 2007
|
$ | 508.1 | $ | 183.2 | $ | 109.1 | $ | 800.4 | $ | 382.5 | $ | 196.9 | $ | 197.9 | $ | 23.1 | $ | 800.4 | ||||||||||||||||||
Long-term
flows:
|
||||||||||||||||||||||||||||||||||||
Sales/new
accounts
|
38.5 | 23.3 | 11.0 | 72.8 | 30.9 | 16.3 | 21.8 | 3.8 | 72.8 | |||||||||||||||||||||||||||
Redemptions/terminations
|
(34.9 | ) | (39.8 | ) | (8.3 | ) | (83.0 | ) | (41.1 | ) | (23.0 | ) | (18.6 | ) | (0.3 | ) | (83.0 | ) | ||||||||||||||||||
Cash
flow/unreinvested dividends
|
(18.0 | ) | (8.6 | ) | (7.4 | ) | (34.0 | ) | (19.1 | ) | (11.5 | ) | (10.6 | ) | 7.2 | (34.0 | ) | |||||||||||||||||||
Net
long-term (outflows) inflows
|
(14.4 | ) | (25.1 | ) | (4.7 | ) | (44.2 | ) | (29.3 | ) | (18.2 | ) | (7.4 | ) | 10.7 | (44.2 | ) | |||||||||||||||||||
Transfers
|
(10.6 | ) | 10.6 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Market
depreciation
|
(191.7 | ) | (67.1 | ) | (35.4 | ) | (294.2 | ) | (180.8 | ) | (90.4 | ) | (13.4 | ) | (9.6 | ) | (294.2 | ) | ||||||||||||||||||
Net
change
|
(216.7 | ) | (81.6 | ) | (40.1 | ) | (338.4 | ) | (210.1 | ) | (108.6 | ) | (20.8 | ) | 1.1 | (338.4 | ) | |||||||||||||||||||
Balance
as of December 31, 2008
|
$ | 291.4 | $ | 101.6 | $ | 69.0 | $ | 462.0 | $ | 172.4 | $ | 88.3 | $ | 177.1 | $ | 24.2 | $ | 462.0 |
(1)
|
Includes
index, structured and asset allocation
services.
|
Distribution Channel
|
Investment Service
|
|||||||||||||||||||||||||||||||||||
Institutional
Investments
|
Retail
|
Private
Client
|
Total
|
Value
Equity
|
Growth
Equity
|
Fixed
Income
|
Other
(1)
|
Total
|
||||||||||||||||||||||||||||
(in
billions)
|
||||||||||||||||||||||||||||||||||||
Balance
as of December 31, 2006
|
$ | 455.1 | $ | 166.9 | $ | 94.9 | $ | 716.9 | $ | 335.5 | $ | 174.1 | $ | 177.0 | $ | 30.3 | $ | 716.9 | ||||||||||||||||||
Long-term
flows:
|
||||||||||||||||||||||||||||||||||||
Sales/new
accounts
|
70.8 | 46.2 | 18.3 | 135.3 | 71.4 | 30.0 | 32.9 | 1.0 | 135.3 | |||||||||||||||||||||||||||
Redemptions/terminations
|
(33.2 | ) | (37.0 | ) | (4.5 | ) | (74.7 | ) | (25.3 | ) | (25.0 | ) | (16.0 | ) | (8.4 | ) | (74.7 | ) | ||||||||||||||||||
Cash
flow/unreinvested dividends
|
(19.9 | ) | (3.3 | ) | (5.2 | ) | (28.4 | ) | (14.0 | ) | (7.9 | ) | (4.8 | ) | (1.7 | ) | (28.4 | ) | ||||||||||||||||||
Net
long-term inflows (outflows)
|
17.7 | 5.9 | 8.6 | 32.2 | 32.1 | (2.9 | ) | 12.1 | (9.1 | ) | 32.2 | |||||||||||||||||||||||||
Transfers
|
(0.2 | ) | (0.5 | ) | 0.7 | — | — | — | — | — | — | |||||||||||||||||||||||||
Market
appreciation
|
35.5 | 10.9 | 4.9 | 51.3 | 14.9 | 25.7 | 8.8 | 1.9 | 51.3 | |||||||||||||||||||||||||||
Net
change
|
53.0 | 16.3 | 14.2 | 83.5 | 47.0 | 22.8 | 20.9 | (7.2 | ) | 83.5 | ||||||||||||||||||||||||||
Balance
as of December 31, 2007
|
$ | 508.1 | $ | 183.2 | $ | 109.1 | $ | 800.4 | $ | 382.5 | $ | 196.9 | $ | 197.9 | $ | 23.1 | $ | 800.4 |
(1)
|
Includes
index, structured and asset allocation
services.
|
Years Ended December 31,
|
% Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07 | 2007-06 | ||||||||||||||||
(in
billions)
|
||||||||||||||||||||
Distribution
Channel:
|
||||||||||||||||||||
Institutional
Investments
|
$ | 426.5 | $ | 491.1 | $ | 405.6 | (13.1 | )% | 21.1 | % | ||||||||||
Retail
|
145.4 | 180.5 | 150.8 | (19.4 | ) | 19.7 | ||||||||||||||
Private
Client
|
93.2 | 104.8 | 84.6 | (11.1 | ) | 23.8 | ||||||||||||||
Total
|
$ | 665.1 | $ | 776.4 | $ | 641.0 | (14.3 | ) | 21.1 |
Investment
Service:
|
||||||||||||||||||||
Value
Equity
|
$ | 297.9 | $ | 373.3 | $ | 281.1 | (20.2 | )% | 32.8 | % | ||||||||||
Growth
Equity
|
152.6 | 186.0 | 160.2 | (17.9 | ) | 16.1 | ||||||||||||||
Fixed
Income
|
193.2 | 188.3 | 169.2 | 2.6 | 11.3 | |||||||||||||||
Other(1)
|
21.4 | 28.8 | 30.5 | (25.6 | ) | (5.8 | ) | |||||||||||||
Total
|
$ | 665.1 | $ | 776.4 | $ | 641.0 | (14.3 | ) | 21.1 |
(1)
|
Includes
index, structured and asset allocation
services.
|
Years
Ended December 31,
|
%
Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07 | 2007-06 | ||||||||||||||||
(in
millions, except per unit amounts)
|
||||||||||||||||||||
Net
revenues
|
$ | 3,514.2 | $ | 4,525.3 | $ | 3,950.4 | (22.3 | )% | 14.6 | % | ||||||||||
Expenses
|
2,588.7 | 3,136.1 | 2,778.6 | (17.5 | ) | 12.9 | ||||||||||||||
Operating
income
|
925.5 | 1,389.2 | 1,171.8 | (33.4 | ) | 18.6 | ||||||||||||||
Non-operating
income
|
18.7 | 15.8 | 20.2 | 18.9 | (22.0 | ) | ||||||||||||||
Income
before income taxes and non-controlling interest in earnings of
consolidated entities
|
944.2 | 1,405.0 | 1,192.0 | (32.8 | ) | 17.9 | ||||||||||||||
Income
taxes
|
95.8 | 127.9 | 75.0 | (25.1 | ) | 70.4 | ||||||||||||||
Non-controlling
interest in earnings of consolidated entities, net of tax
|
9.2 | 16.7 | 8.4 | (45.0 | ) | 99.2 | ||||||||||||||
Net
income
|
$ | 839.2 | $ | 1,260.4 | $ | 1,108.6 | (33.4 | ) | 13.7 | |||||||||||
Diluted
net income per unit
|
$ | 3.18 | $ | 4.77 | $ | 4.22 | (33.3 | ) | 13.0 | |||||||||||
Distributions
per unit
|
$ | 3.07 | $ | 4.77 | $ | 4.42 | (35.6 | ) | 7.9 | |||||||||||
Operating
margin(1)
|
26.1 | % | 30.3 | % | 29.5 | % |
(1)
|
Operating income less
non-controlling interest in earnings of consolidated entities as a
percentage of net revenues.
|
Years Ended December 31,
|
%
Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07 | 2007-06 | ||||||||||||||||
(in
millions)
|
||||||||||||||||||||
Investment
advisory and services fees:
|
||||||||||||||||||||
Institutional
Investments:
|
||||||||||||||||||||
Base
fees
|
$ | 1,229.1 | $ | 1,416.0 | $ | 1,108.2 | (13.2 | )% | 27.8 | % | ||||||||||
Performance-based
fees
|
11.5 | 65.6 | 113.0 | (82.4 | ) | (42.0 | ) | |||||||||||||
1,240.6 | 1,481.6 | 1,221.2 | (16.3 | ) | 21.3 | |||||||||||||||
Retail:
|
||||||||||||||||||||
Base
fees
|
751.0 | 946.0 | 787.5 | (20.6 | ) | 20.1 | ||||||||||||||
Performance-based
fees
|
0.1 | — | 0.3 | n/m | (96.0 | ) | ||||||||||||||
751.1 | 946.0 | 787.8 | (20.6 | ) | 20.1 | |||||||||||||||
Private
Client:
|
||||||||||||||||||||
Base
fees
|
846.0 | 943.0 | 758.8 | (10.3 | ) | 24.3 | ||||||||||||||
Performance-based
fees
|
1.8 | 15.6 | 122.4 | (88.3 | ) | (87.3 | ) | |||||||||||||
847.8 | 958.6 | 881.2 | (11.6 | ) | 8.8 | |||||||||||||||
Total:
|
||||||||||||||||||||
Base
fees
|
2,826.1 | 3,305.0 | 2,654.5 | (14.5 | ) | 24.5 | ||||||||||||||
Performance-based
fees
|
13.4 | 81.2 | 235.7 | (83.4 | ) | (65.6 | ) | |||||||||||||
2,839.5 | 3,386.2 | 2,890.2 | (16.1 | ) | 17.2 | |||||||||||||||
Distribution
revenues
|
378.4 | 473.4 | 421.0 | (20.1 | ) | 12.4 | ||||||||||||||
Institutional
research services
|
471.7 | 423.5 | 375.1 | 11.4 | 12.9 | |||||||||||||||
Dividend
and interest income
|
91.8 | 284.0 | 266.5 | (67.7 | ) | 6.6 | ||||||||||||||
Investment
gains (losses)
|
(349.2 | ) | 29.7 | 62.2 | n/m | (52.3 | ) | |||||||||||||
Other
revenues
|
118.5 | 122.9 | 123.2 | (3.6 | ) | (0.2 | ) | |||||||||||||
Total
revenues
|
3,550.7 | 4,719.7 | 4,138.2 | (24.8 | ) | 14.1 | ||||||||||||||
Less:
Interest expense
|
36.5 | 194.4 | 187.8 | (81.2 | ) | 3.5 | ||||||||||||||
Net
revenues
|
$ | 3,514.2 | $ | 4,525.3 | $ | 3,950.4 | (22.3 | ) | 14.6 |
Years Ended December 31,
|
% Change
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-07
|
2007-06
|
||||||||||||||||
(in millions)
|
||||||||||||||||||||
Employee compensation and
benefits
|
$ | 1,454.7 | $ | 1,833.8 | $ | 1,547.6 | (20.7 | )% | 18.5 | % | ||||||||||
Promotion and
servicing
|
561.0 | 683.1 | 612.2 | (17.9 | ) | 11.6 | ||||||||||||||
General and
administrative
|
539.2 | 574.5 | 574.9 | (6.1 | ) | (0.1 | ) | |||||||||||||
Interest
|
13.1 | 24.0 | 23.2 | (45.4 | ) | 3.7 | ||||||||||||||
Amortization of intangible
assets
|
20.7 | 20.7 | 20.7 | — | — | |||||||||||||||
Total
|
$ | 2,588.7 | $ | 3,136.1 | $ | 2,778.6 | (17.5 | ) | 12.9 |
% Change
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2008 - 07 | 2007 - 06 | ||||||||||||||||
(in
millions, except per unit amounts)
|
||||||||||||||||||||
As
of December 31:
|
||||||||||||||||||||
Partners’
capital
|
$ | 4,317.7 | $ | 4,541.2 | $ | 4,571.0 | (4.9 | ) | (0.7 | )% | ||||||||||
Cash
and cash equivalents
|
552.6 | 576.4 | 546.8 | (4.1 | ) | 5.4 | ||||||||||||||
For
the years ended December 31:
|
||||||||||||||||||||
Cash
flow from operations
|
1,380.8 | 1,291.4 | 1,103.9 | 6.9 | 17.0 | |||||||||||||||
Proceeds
from sales (purchases) of investments, net
|
21.0 | 26.5 | (42.0 | ) | (20.6 | ) | n/m | |||||||||||||
Capital
expenditures
|
(75.2 | ) | (137.5 | ) | (97.1 | ) | (45.3 | ) | 41.7 | |||||||||||
Distributions
paid to General Partners and unitholders
|
(1,019.7 | ) | (1,364.6 | ) | (1,025.5 | ) | (25.3 | ) | 33.1 | |||||||||||
Purchases
of Holding Units to fund deferred compensation plans, net
|
(2.4 | ) | (50.9 | ) | (22.3 | ) | (95.4 | ) | 127.6 | |||||||||||
Additional
investment by Holding through issuance of Holding Units in exchange for
cash awards made under the Partners Compensation Plan
|
— | — | 47.2 | — | (100.0 | ) | ||||||||||||||
Additional
investment by Holding with proceeds from exercise of compensatory options
to buy Holding Units
|
13.5 | 50.1 | 100.5 | (73.0 | ) | (50.2 | ) | |||||||||||||
(Repayment)
issuance of commercial paper, net
|
(260.1 | ) | 175.8 | 328.1 | n/m | (46.4 | ) | |||||||||||||
Repayment
of long-term debt
|
— | — | (408.1 | ) | — | (100.0 | ) | |||||||||||||
Available
Cash Flow
|
810.2 | 1,253.2 | 1,153.4 | (35.3 | ) | 8.7 |
December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||||||
Credit
Available
|
Debt
Outstanding
|
Interest
Rate
|
Credit
Available
|
Debt
Outstanding
|
Interest
Rate
|
|||||||||||||||||||
(in millions)
|
||||||||||||||||||||||||
Revolving
credit facility(1)
|
$ | 715.2 | $ | — | — | % | $ | 466.1 | $ | — | — | % | ||||||||||||
Commercial
paper(1)(2)
|
284.8 | 284.8 | 1.8 | 533.9 | 533.9 | 4.3 | ||||||||||||||||||
Total
revolving credit facility(1)
|
1,000.0 | 284.8 | 1.8 | 1,000.0 | 533.9 | 4.3 | ||||||||||||||||||
Revolving
credit facility – SCB LLC
|
950.0 | — | — | — | — | — | ||||||||||||||||||
Unsecured
bank loan(3)
|
— | — | — | — | — | — | ||||||||||||||||||
Total
|
$ | 1,950.0 | $ | 284.8 | 1.8 | $ | 1,000.0 | $ | 533.9 | 4.3 |
(1)
|
Our
$1.0 billion revolving credit facility supports our commercial paper
program; amounts borrowed under the commercial paper program reduce
amounts available for direct borrowing under the revolving credit facility
on a dollar-for-dollar basis.
|
(2)
|
Commercial
paper outstanding is short-term in nature, and as such, book value
approximates fair value.
|
(3)
|
As
of December 31, 2008, SCB LLC maintained five separate uncommitted credit
facilities with various banks totaling $775
million.
|
Contractual Obligations
|
||||||||||||||||||||
Total
|
Less than
1
Year
|
1-3 Years
|
3-5 Years
|
More than 5
Years
|
||||||||||||||||
(in millions)
|
||||||||||||||||||||
Commercial
paper
|
$ | 284.8 | $ | 284.8 | $ | — | $ | — | $ | — | ||||||||||
Operating
leases, net of sublease commitments
|
2,422.9 | 124.2 | 259.0 | 266.7 | 1,773.0 | |||||||||||||||
Accrued
compensation and benefits
|
321.2 | 211.4 | 57.3 | 25.7 | 26.8 | |||||||||||||||
Unrecognized
tax benefits
|
9.7 | 3.6 | — | 6.1 | — | |||||||||||||||
Total
|
$ | 3,038.6 | $ | 624.0 | $ | 316.3 | $ | 298.5 | $ | 1,799.8 |
|
•
|
Our backlog of new
institutional mandates not yet funded: Before they are funded,
institutional mandates do not represent legally binding commitments to
fund and, accordingly, the possibility exists that not all mandates will
be funded in the amounts and at the times we currently
anticipate.
|
|
•
|
Our anticipation that
our DC business will continue to expand: The actual performance of
the capital markets and other factors beyond our control will affect our
asset flows and investment success for clients, as will our ability to
improve the poor relative investment performance we experienced in
2008.
|
|
•
|
Our expectation that
we will recover a portion of the $7.8 million remaining in accrued
liabilities related to the claims processing error-related charge:
Our ability to recover more of this cost depends on the availability of
funds from the related class-action settlement funds, the amount of which
is not known.
|
|
•
|
The possibility that
prolonged weakness in asset values may result in impairment of goodwill,
intangible assets and the deferred sales commission asset: To the
extent that securities valuations remain depressed for prolonged periods
of time and market conditions stagnate or worsen as a result of the global
financial crisis (factors that are beyond our control), our assets under
management, revenues, profitability and unit price may be adversely
affected. As a result, subsequent impairment tests may be based upon
different assumptions and future cash flow projections which may result in
an impairment of goodwill, intangible assets and the deferred sales
commission asset.
|
|
•
|
The cash flow Holding
realizes from its investment in AllianceBernstein providing Holding with
the resources necessary to meet its financial obligations:
Holding’s cash flow is dependent on the quarterly cash distributions it
receives from AllianceBernstein. Accordingly, Holding’s ability to meet
its financial obligations is dependent on AllianceBernstein’s cash flow
from its operations, which is subject to the performance of the capital
markets and other factors beyond our
control.
|
|
•
|
Our
solid financial foundation and access to public and private debt providing
adequate liquidity for our general business needs: Our solid financial foundation
is dependent on our cash flow from operations, which is subject to the
performance of the capital markets and other factors beyond our control.
Our access to public and private debt, as well as the market for debt or
equity we may choose to issue, may be limited by adverse market
conditions, our profitability and changes in government regulations,
including tax rates and interest
rates.
|
|
•
|
The outcome of
litigation: Litigation is inherently unpredictable, and excessive
damage awards do occur. Though we have stated that we do not expect
certain legal proceedings to have a material adverse effect on our results
of operations or financial condition, any settlement or judgment with
respect to a legal proceeding could be significant and could have a
material adverse effect on our results of operations or financial
condition.
|
As of December 31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Fair
Value
|
Effect of
+100
Basis Point
Change
|
Fair
Value
|
Effect of +100
Basis Point
Change
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Fixed
Income Investments:
|
||||||||||||||||
Trading
|
$ | 76,153 | $ | (3,099 | ) | $ | 106,152 | $ | (5,117 | ) | ||||||
Available-for-sale and other
investments
|
160 | (7 | ) | 28,368 | (1,367 | ) |
As of December 31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Fair
Value
|
Effect of
-10%
Equity Price
Change
|
Fair
Value
|
Effect of
-10%
Equity Price
Change
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Equity
Investments:
|
||||||||||||||||
Trading
|
$ | 246,394 | $ | (24,639 | ) | $ | 466,085 | $ | (46,609 | ) | ||||||
Available-for-sale and other
investments
|
255,136 | (25,514 | ) | 314,476 | (31,448 | ) |
December 31,
|
||||||||
2008
|
2007
|
|||||||
(in
thousands, except unit amounts)
|
||||||||
ASSETS
|
||||||||
Cash
and cash equivalents
|
$ | 552,577 | $ | 576,416 | ||||
Cash
and securities segregated, at market (cost $2,568,339 and $2,366,925
)
|
2,572,569 | 2,370,019 | ||||||
Receivables,
net:
|
||||||||
Brokers
and dealers
|
251,644 | 493,873 | ||||||
Brokerage
clients
|
398,979 | 410,074 | ||||||
Fees,
net
|
377,167 | 729,636 | ||||||
Investments:
|
||||||||
Deferred
compensation related
|
305,809 | 547,473 | ||||||
Other
|
272,034 | 367,608 | ||||||
Furniture,
equipment and leasehold improvements, net
|
365,804 | 367,279 | ||||||
Goodwill,
net
|
2,893,029 | 2,893,029 | ||||||
Intangible
assets, net
|
243,493 | 264,209 | ||||||
Deferred
sales commissions, net
|
113,541 | 183,571 | ||||||
Other
assets
|
156,813 | 165,567 | ||||||
Total
assets
|
$ | 8,503,459 | $ | 9,368,754 | ||||
LIABILITIES
AND PARTNERS’ CAPITAL
|
||||||||
Liabilities:
|
||||||||
Payables:
|
||||||||
Brokers
and dealers
|
$ | 110,655 | $ | 161,387 | ||||
Brokerage
clients
|
2,755,104 | 2,728,271 | ||||||
AllianceBernstein
mutual funds
|
195,617 | 408,185 | ||||||
Accounts
payable and accrued expenses
|
310,392 | 389,300 | ||||||
Accrued
compensation and benefits
|
360,086 | 458,861 | ||||||
Debt
|
284,779 | 533,872 | ||||||
Non-controlling
interest in consolidated entities
|
169,167 | 147,652 | ||||||
Total
liabilities
|
4,185,800 | 4,827,528 | ||||||
Commitments
and contingencies (See
Note 11)
|
||||||||
Partners’
capital:
|
||||||||
General
Partner
|
45,010 | 45,932 | ||||||
Limited
partners: 263,717,610 and 260,341,992 units issued and
outstanding
|
4,485,564 | 4,526,126 | ||||||
4,530,574 | 4,572,058 | |||||||
Capital
contributions receivable from General Partner
|
(23,168 | ) | (26,436 | ) | ||||
Deferred
compensation expense
|
(117,600 | ) | (57,501 | ) | ||||
Accumulated
other comprehensive income (loss)
|
(72,147 | ) | 53,105 | |||||
Total
partners’ capital
|
4,317,659 | 4,541,226 | ||||||
Total
liabilities and partners’ capital
|
$ | 8,503,459 | $ | 9,368,754 |
Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in
thousands, except per unit amounts)
|
||||||||||||
Revenues:
|
||||||||||||
Investment
advisory and services fees
|
$ | 2,839,526 | $ | 3,386,188 | $ | 2,890,229 | ||||||
Distribution
revenues
|
378,425 | 473,435 | 421,045 | |||||||||
Institutional
research services
|
471,716 | 423,553 | 375,075 | |||||||||
Dividend
and interest income
|
91,752 | 284,014 | 266,520 | |||||||||
Investment
gains (losses)
|
(349,172 | ) | 29,690 | 62,200 | ||||||||
Other
revenues
|
118,436 | 122,869 | 123,171 | |||||||||
Total
revenues
|
3,550,683 | 4,719,749 | 4,138,240 | |||||||||
Less:
Interest expense
|
36,524 | 194,432 | 187,833 | |||||||||
Net
revenues
|
3,514,159 | 4,525,317 | 3,950,407 | |||||||||
Expenses:
|
||||||||||||
Employee
compensation and benefits
|
1,454,691 | 1,833,796 | 1,547,627 | |||||||||
Promotion
and servicing:
|
||||||||||||
Distribution
plan payments
|
274,359 | 335,132 | 292,886 | |||||||||
Amortization
of deferred sales commissions
|
79,111 | 95,481 | 100,370 | |||||||||
Other
|
207,506 | 252,468 | 218,944 | |||||||||
General
and administrative
|
539,198 | 574,506 | 574,904 | |||||||||
Interest
on borrowings
|
13,077 | 23,970 | 23,124 | |||||||||
Amortization
of intangible assets
|
20,716 | 20,716 | 20,710 | |||||||||
Total
Expenses
|
2,588,658 | 3,136,069 | 2,778,565 | |||||||||
Operating
income
|
925,501 | 1,389,248 | 1,171,842 | |||||||||
Non-operating
income
|
18,728 | 15,756 | 20,196 | |||||||||
Income
before income taxes and non-controlling interest in earnings of
consolidated entities
|
944,229 | 1,405,004 | 1,192,038 | |||||||||
Income
taxes
|
95,803 | 127,845 | 75,045 | |||||||||
Non-controlling
interest in earnings of consolidated entities, net of tax
|
9,186 | 16,715 | 8,392 | |||||||||
Net
income
|
$ | 839,240 | $ | 1,260,444 | $ | 1,108,601 | ||||||
Net
income per unit:
|
||||||||||||
Basic
|
$ | 3.18 | $ | 4.80 | $ | 4.26 | ||||||
Diluted
|
$ | 3.18 | $ | 4.77 | $ | 4.22 |
General
Partner’s
Capital
|
Limited
Partners’
Capital
|
Capital
Contributions
Receivable
|
Deferred
Compensation
Expense
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Total
Partners’
Capital
|
|||||||||||||||||||
(in
thousands, except per unit amounts)
|
||||||||||||||||||||||||
Balance
as of December 31, 2005
|
$ | 44,065 | $ | 4,334,207 | $ | (31,775 | ) | $ | (67,895 | ) | $ | 24,072 | $ | 4,302,674 | ||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||
Net
income
|
11,086 | 1,097,515 | — | — | — | 1,108,601 | ||||||||||||||||||
Other
comprehensive income (loss), net of tax:
|
||||||||||||||||||||||||
Unrealized
gain (loss) on investments
|
— | — | — | — | 5,198 | 5,198 | ||||||||||||||||||
Foreign
currency translation adjustment
|
— | — | — | — | 10,821 | 10,821 | ||||||||||||||||||
Comprehensive
income
|
11,086 | 1,097,515 | — | — | 16,019 | 1,124,620 | ||||||||||||||||||
Adjustment
to initially apply FASB Statement No. 158, net
|
— | — | — | — | (6,924 | ) | (6,924 | ) | ||||||||||||||||
Cash
distributions to General Partner and unitholders ($3.94 per
unit)
|
(10,255 | ) | (1,015,206 | ) | — | — | — | (1,025,461 | ) | |||||||||||||||
Capital
contributions from General Partner
|
— | — | 4,303 | — | — | 4,303 | ||||||||||||||||||
Purchases
of Holding Units to fund deferred compensation plans, net
|
23 | 16,734 | — | (39,102 | ) | — | (22,345 | ) | ||||||||||||||||
Additional
investment by Holding through issuance of Holding Units in exchange for
cash awards made under the Partners Compensation Plan
|
471 | 46,690 | — | — | — | 47,161 | ||||||||||||||||||
Compensatory
Holding Unit options expense
|
— | 2,699 | — | — | — | 2,699 | ||||||||||||||||||
Amortization
of deferred compensation awards
|
— | — | — | 43,801 | — | 43,801 | ||||||||||||||||||
Compensation
plan accrual
|
21 | 2,097 | (2,118 | ) | — | — | — | |||||||||||||||||
Additional
investment by Holding with proceeds from exercise of compensatory options
to buy Holding Units
|
1,005 | 99,464 | — | — | — | 100,469 | ||||||||||||||||||
Balance
as of December 31, 2006
|
46,416 | 4,584,200 | (29,590 | ) | (63,196 | ) | 33,167 | 4,570,997 | ||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||
Net
income
|
12,605 | 1,247,839 | — | — | — | 1,260,444 | ||||||||||||||||||
Other
comprehensive income (loss), net of tax:
|
||||||||||||||||||||||||
Unrealized
gain (loss) on investments
|
— | — | — | — | (8,859 | ) | (8,859 | ) | ||||||||||||||||
Foreign
currency translation adjustment
|
— | — | — | — | 18,757 | 18,757 | ||||||||||||||||||
Changes
in retirement plan related items
|
— | — | — | — | 10,040 | 10,040 | ||||||||||||||||||
Comprehensive
income
|
12,605 | 1,247,839 | — | — | 19,938 | 1,280,382 | ||||||||||||||||||
Cash
distributions to General Partner and unitholders ($5.20 per
unit)
|
(13,646 | ) | (1,350,965 | ) | — | — | — | (1,364,611 | ) | |||||||||||||||
Capital
contributions from General Partner
|
— | — | 4,854 | — | — | 4,854 | ||||||||||||||||||
Purchases
of Holding Units to fund deferred compensation plans, net
|
35 | (12,566 | ) | — | (38,322 | ) | — | (50,853 | ) | |||||||||||||||
Compensatory
Holding Unit options expense
|
— | 5,947 | — | — | — | 5,947 | ||||||||||||||||||
Amortization
of deferred compensation awards
|
— | — | — | 44,017 | — | 44,017 | ||||||||||||||||||
Compensation
plan accrual
|
17 | 1,683 | (1,700 | ) | — | — | — | |||||||||||||||||
Impact
of initial adoption of FIN 48
|
4 | 438 | — | — | — | 442 | ||||||||||||||||||
Additional
investment by Holding with proceeds from exercise of compensatory options
to buy Holding Units
|
501 | 49,550 | — | — | — | 50,051 | ||||||||||||||||||
Balance
as of December 31, 2007
|
45,932 | 4,526,126 | (26,436 | ) | (57,501 | ) | 53,105 | 4,541,226 | ||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||
Net
income
|
8,392 | 830,848 | — | — | — | 839,240 | ||||||||||||||||||
Other
comprehensive income (loss), net of tax:
|
||||||||||||||||||||||||
Unrealized
gain (loss) on investments
|
— | — | — | — | (3,511 | ) | (3,511 | ) | ||||||||||||||||
Foreign
currency translation adjustment
|
— | — | — | — | (96,978 | ) | (96,978 | ) | ||||||||||||||||
Changes
in retirement plan related items
|
— | — | — | — | (24,763 | ) | (24,763 | ) | ||||||||||||||||
Comprehensive
income (loss)
|
8,392 | 830,848 | — | — | (125,252 | ) | 713,988 | |||||||||||||||||
Cash
distributions to General Partner and unitholders ($3.87 per
unit)
|
(10,197 | ) | (1,009,482 | ) | — | — | — | (1,019,679 | ) | |||||||||||||||
Capital
contributions from General Partner
|
— | — | 4,927 | — | — | 4,927 | ||||||||||||||||||
Purchases
of Holding Units to fund deferred compensation plans, net
|
209 | 63,609 | — | (66,176 | ) | — | (2,358 | ) | ||||||||||||||||
Additional
investment by Holding through issuance of Holding Units to fund CEO’s
Restricted Unit award
|
523 | 51,741 | — | (52,264 | ) | — | — | |||||||||||||||||
Compensatory
Holding Unit options expense
|
— | 7,737 | — | — | — | 7,737 | ||||||||||||||||||
Amortization
of deferred compensation awards
|
— | — | — | 58,341 | — | 58,341 | ||||||||||||||||||
Compensation
plan accrual
|
17 | 1,642 | (1,659 | ) | — | — | — | |||||||||||||||||
Additional
investment by Holding with proceeds from exercise of compensatory options
to buy Holding Units
|
135 | 13,390 | — | — | — | 13,525 | ||||||||||||||||||
ACM
New Alliance Liquidation
|
(1 | ) | (47 | ) | — | — | — | (48 | ) | |||||||||||||||
Balance
as of December 31, 2008
|
$ | 45,010 | $ | 4,485,564 | $ | (23,168 | ) | $ | (117,600 | ) | $ | (72,147 | ) | $ | 4,317,659 |
Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in
thousands)
|
||||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
income
|
$ | 839,240 | $ | 1,260,444 | $ | 1,108,601 | ||||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||
Amortization
of deferred sales commissions
|
79,111 | 95,481 | 100,370 | |||||||||
Amortization
of non-cash deferred compensation
|
66,078 | 49,815 | 46,500 | |||||||||
Depreciation
and other amortization
|
97,746 | 102,394 | 72,445 | |||||||||
Unrealized
losses (gains) on deferred compensation related
investments
|
254,686 | 21,701 | (29,483 | ) | ||||||||
Other,
net
|
22,268 | 9,783 | 9,585 | |||||||||
Changes
in assets and liabilities:
|
||||||||||||
(Increase)
in segregated cash and securities
|
(132,792 | ) | (360,181 | ) | (245,077 | ) | ||||||
Decrease
(increase) in receivable from brokers and dealers
|
119,423 | 1,955,260 | (324,640 | ) | ||||||||
(Increase)
decrease in receivable from brokerage clients
|
(118,633 | ) | 77,052 | (31,974 | ) | |||||||
Decrease
(increase) in fees receivable, net
|
331,126 | (161,174 | ) | (135,821 | ) | |||||||
(Increase)
in investments
|
(34,189 | ) | (211,909 | ) | (240,438 | ) | ||||||
(Increase)
in deferred sales commissions
|
(9,081 | ) | (84,101 | ) | (98,679 | ) | ||||||
Decrease
(increase) in other assets
|
6,223 | (14,648 | ) | (9,638 | ) | |||||||
Increase
(decrease) in payable to brokers and dealers
|
77,844 | (500,869 | ) | (422,492 | ) | |||||||
Increase
(decrease) in payable to brokerage clients
|
139,382 | (1,266,050 | ) | 1,035,367 | ||||||||
(Decrease)
increase in payable to AllianceBernstein mutual funds
|
(212,568 | ) | 141,336 | 126,236 | ||||||||
(Decrease)
increase in accounts payable and accrued expenses
|
(50,740 | ) | 25,370 | 41,290 | ||||||||
(Decrease)
increase in accrued compensation and benefits
|
(110,346 | ) | 75,477 | 69,330 | ||||||||
Increase
in non-controlling interests in consolidated entities
|
16, 070 | 76,249 | 32,454 | |||||||||
Net
cash provided by operating activities
|
1,380,848 | 1,291,430 | 1,103,936 | |||||||||
Cash
flows from investing activities:
|
||||||||||||
Purchases
of investments
|
(22,221 | ) | (25,932 | ) | (54,803 | ) | ||||||
Proceeds
from sales of investments
|
43,229 | 52,393 | 12,812 | |||||||||
Additions
to furniture, equipment and leasehold improvements
|
(75,208 | ) | (137,547 | ) | (97,073 | ) | ||||||
Purchase
of business, net of cash acquired
|
— | — | (16,086 | ) | ||||||||
Net
cash used in investing activities
|
(54,200 | ) | (111,086 | ) | (155,150 | ) | ||||||
Cash
flows from financing activities:
|
||||||||||||
(Repayment)
issuance of commercial paper, net
|
(260,146 | ) | 175,750 | 328,119 | ||||||||
Repayment
of long-term debt
|
— | — | (408,149 | ) | ||||||||
(Decrease)
increase in overdrafts payable
|
(11,524 | ) | 23,321 | (1,575 | ) | |||||||
Cash
distributions to General Partner and unitholders
|
(1,019,679 | ) | (1,364,611 | ) | (1,025,461 | ) | ||||||
Capital
contributions from General Partner
|
4,927 | 4,854 | 4,303 | |||||||||
Additional
investment by Holding with proceeds from exercise of compensatory options
to buy Holding Units
|
13,525 | 50,051 | 100,469 | |||||||||
Purchases
of Holding Units to fund deferred compensation plans, net
|
(2,358 | ) | (50,853 | ) | (22,345 | ) | ||||||
Net
cash used in financing activities
|
(1,275,255 | ) | (1,161,488 | ) | (1,024,639 | ) | ||||||
Effect
of exchange rate changes on cash and cash equivalents
|
(75,232 | ) | 10,783 | 12,414 | ||||||||
Net
(decrease) increase in cash and cash equivalents
|
(23,839 | ) | 29,639 | (63,439 | ) | |||||||
Cash
and cash equivalents as of beginning of the period
|
576,416 | 546,777 | 610,216 | |||||||||
Cash
and cash equivalents as of end of the period
|
$ | 552,577 | $ | 576,416 | $ | 546,777 | ||||||
Cash
paid:
|
||||||||||||
Interest
|
$ | 47,933 | $ | 218,398 | $ | 229,009 | ||||||
Income
taxes
|
132,491 | 87,329 | 59,704 | |||||||||
Non-cash
financing activities:
|
||||||||||||
Additional
investment by Holding through issuance of Holding Units to fund CEO’s
Restricted Units award
|
52,264 | — | — | |||||||||
Additional
investment by Holding through issuance of Holding Units in exchange for
cash awards made under the Partners Compensation Plan
|
— | — | 47,161 |
1.
|
Business Description and
Organization
|
|
•
|
Institutional
Investment Services - servicing our institutional clients, including
unaffiliated corporate and public employee pension funds, endowment funds,
domestic and foreign institutions and governments, and affiliates such as
AXA and certain of its insurance company subsidiaries, by means of
separately managed accounts, sub-advisory relationships, structured
products, collective investment trusts, mutual funds, hedge funds and
other investment vehicles.
|
|
•
|
Retail
Services - servicing our individual clients, primarily by means of retail
mutual funds sponsored by AllianceBernstein or an affiliated company,
sub-advisory relationships in respect of mutual funds sponsored by third
parties, separately managed account programs sponsored by financial
intermediaries worldwide and other investment
vehicles.
|
|
•
|
Private
Client Services - servicing our private clients, including high-net-worth
individuals, trusts and estates, charitable foundations, partnerships,
private and family corporations, and other entities, by means of
separately managed accounts, hedge funds, mutual funds and other
investment vehicles.
|
|
•
|
Institutional
Research Services - servicing our institutional clients seeking
independent research, portfolio strategy and brokerage-related
services.
|
|
•
|
Value
equities, generally targeting stocks that are out of favor and that
may trade at bargain prices;
|
|
•
|
Growth
equities, generally targeting stocks with under-appreciated growth
potential;
|
|
•
|
Fixed
income securities, including both taxable and tax-exempt
securities;
|
|
•
|
Blend
strategies, combining style-pure investment components with systematic
rebalancing;
|
|
•
|
Passive
management, including both index and enhanced index
strategies;
|
|
•
|
Alternative
investments, such as hedge funds, currency management strategies and
venture capital; and
|
|
•
|
Asset
allocation, by which we offer specifically-tailored investment solutions
for our clients (e.g., customized target date fund retirement services for
institutional defined contribution plan
clients).
|
AXA
and its subsidiaries
|
61.8
|
%
|
||
Holding
|
33.9
|
|||
SCB
Partners Inc. (a wholly-owned subsidiary of SCB Inc.; formerly known as
Sanford C. Bernstein Inc.)
|
3.1
|
|||
Unaffiliated
holders
|
1.2
|
|||
100.0
|
%
|
2.
|
Summary
of Significant Accounting Policies
|
|
•
|
net
cash provided by operating activities of
AllianceBernstein,
|
|
•
|
proceeds
from borrowings and from sales or other dispositions of assets in the
ordinary course of business, and
|
|
•
|
income
from investments in marketable securities, liquid investments and other
financial instruments that are acquired for investment purposes and that
have a value that may be readily
established,
|
|
•
|
payments
in respect of the principal of borrowings, and
|
|
•
|
amounts
expended for the purchase of assets in the ordinary course of
business.
|
3.
|
Cash and Securities Segregated
Under Federal Regulations and Other
Requirements
|
4.
|
Net Income Per
Unit
|
Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in thousands, except per unit amounts)
|
||||||||||||
Net
income
|
$ | 839,240 | $ | 1,260,444 | $ | 1,108,601 | ||||||
Weighted
average units outstanding—basic
|
260,965 | 259,854 | 257,719 | |||||||||
Dilutive
effect of compensatory options to buy Holding Units
|
531 | 1,807 | 2,243 | |||||||||
Weighted
average units outstanding—diluted
|
261,496 | 261,661 | 259,962 | |||||||||
Basic
net income per unit
|
$ | 3.18 | $ | 4.80 | $ | 4.26 | ||||||
Diluted
net income per unit
|
$ | 3.18 | $ | 4.77 | $ | 4.22 |
5.
|
Fees Receivables,
Net
|
December 31,
|
||||||||
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
AllianceBernstein
mutual funds
|
$ | 89,530 | $ | 173,746 | ||||
Unaffiliated
clients (net of allowance of $1,488 in 2008 and $1,792 in
2007)
|
280,288 | 545,787 | ||||||
Affiliated
clients
|
7,349 | 10,103 | ||||||
Total
fees receivables, net
|
$ | 377,167 | $ | 729,636 |
6.
|
Investments
|
Investments
consist of:
|
||||||||
December
31, 2008
|
December
31, 2007
|
|||||||
(in
thousands)
|
||||||||
Available-for-sale
|
$
|
7,566
|
$
|
48,038
|
||||
Trading:
|
||||||||
Deferred
compensation related
|
238,136
|
417,906
|
||||||
United
States Treasury Bills
|
52,694
|
89,328
|
||||||
Other
|
31,717
|
65,003
|
||||||
Investments
in limited partnership hedge funds:
|
||||||||
Deferred
compensation related
|
67,673
|
129,567
|
||||||
Other
|
2,191
|
27,111
|
||||||
Private
equity investments
|
176,823
|
135,601
|
||||||
Other
investments
|
1,043
|
2,527
|
||||||
Total
investments
|
$
|
577,843
|
$
|
915,081
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
December 31,
2008:
|
||||||||||||||||
Available-for-sale:
|
||||||||||||||||
Equity
investments
|
$ | 11,822 | $ | 264 | $ | (4,680 | ) | $ | 7,406 | |||||||
Fixed income
investments
|
235 | 4 | (79 | ) | 160 | |||||||||||
$ | 12,057 | $ | 268 | $ | (4,759 | ) | $ | 7,566 | ||||||||
Trading:
|
||||||||||||||||
Equity
investments
|
$ | 434,909 | $ | 67 | $ | (188,582 | ) | $ | 246,394 | |||||||
Fixed income
investments
|
79,594 | 65 | (3,506 | ) | 76,153 | |||||||||||
$ | 514,503 | $ | 132 | $ | (192,088 | ) | $ | 322,547 | ||||||||
December 31,
2007:
|
||||||||||||||||
Available-for-sale:
|
||||||||||||||||
Equity
investments
|
$ | 27,492 | $ | 697 | $ | (8,519 | ) | $ | 19,670 | |||||||
Fixed income
investments
|
29,337 | 275 | (1,244 | ) | 28,368 | |||||||||||
$ | 56,829 | $ | 972 | $ | (9,763 | ) | $ | 48,038 | ||||||||
Trading:
|
||||||||||||||||
Equity
investments
|
$ | 481,989 | $ | 7,845 | $ | (23,749 | ) | $ | 466,085 | |||||||
Fixed income
investments
|
105,331 | 910 | (89 | ) | 106,152 | |||||||||||
$ | 587,320 | $ | 8,755 | $ | (23,838 | ) | $ | 572,237 |
7.
|
Fair
Value
|
|
•
|
Level
1 – Quoted prices in active markets are available for identical assets or
liabilities as of the reported
date.
|
|
•
|
Level
2 – Quoted prices in markets that are not active or other pricing inputs
that are either directly or indirectly observable as of the reported
date.
|
|
•
|
Level
3 – Prices or valuation techniques that are both significant to the fair
value measurement and unobservable as of the reported date. These
financial instruments do not have two-way markets and are measured using
management’s best estimate of fair value, where the inputs into the
determination of fair value require significant management judgment or
estimation.
|
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Cash
equivalents
|
$
|
184,404
|
$
|
—
|
$
|
—
|
$
|
184,404
|
||||||||
Securities
segregated
|
—
|
2,524,698
|
—
|
2,524,698
|
||||||||||||
Receivables
from brokers and dealers
|
(46
|
)
|
680
|
—
|
634
|
|||||||||||
Investments
– available-for-sale
|
7,566
|
—
|
—
|
7,566
|
||||||||||||
Investments
– trading
|
||||||||||||||||
Mutual
fund investments
|
237,529
|
—
|
—
|
237,529
|
||||||||||||
Equity
and fixed income securities
|
25,027
|
6,874
|
423
|
32,324
|
||||||||||||
U.S.
Treasury bills
|
—
|
52,694
|
—
|
52,694
|
||||||||||||
Investments
– private equity
|
4,694
|
—
|
162,129
|
166,823
|
||||||||||||
Total
assets measured at fair value
|
$
|
459,174
|
$
|
2,584,946
|
$
|
162,552
|
$
|
3,206,672
|
||||||||
Payables
to brokers and dealers
|
$
|
167
|
$
|
—
|
$
|
—
|
$
|
167
|
||||||||
Total
liabilities measured at fair value
|
$
|
167
|
$
|
—
|
$
|
—
|
$
|
167
|
|
•
|
Cash
equivalents: We invest excess cash in various money market funds
that are valued based on quoted prices in active markets; as such, these
are included in Level 1 of the valuation
hierarchy.
|
|
•
|
Securities
segregated: United States Treasury Bills segregated in a special
reserve bank custody account as required by Rule 15c3-3 of the Exchange
Act. As these securities are valued based on quoted yields in secondary
markets, we have included them in Level 2 of the valuation
hierarchy.
|
|
•
|
Receivables from
brokers and dealers: We hold several exchange traded futures and
currency forward contracts with counterparties that are included in Level
1 and Level 2, respectively, of the valuation
hierarchy.
|
|
•
|
Investments –
available-for-sale and trading: Our available-for-sale investments
consist principally of company-sponsored mutual funds with exchange listed
net asset values, and our trading investments consist principally of
company-sponsored mutual funds with exchange listed net asset values,
various separately managed portfolios consisting primarily of equity
securities with quoted prices in active markets, and United States
Treasury Bills. As such, these investments are included in Level 1 or
Level 2 of the valuation hierarchy. Trading investments also include a
separately managed portfolio of fixed income securities that are included
in Level 2 or Level 3 of the valuation
hierarchy.
|
|
•
|
Investments – private
equity: The valuation of non-public private equity investments held
by a consolidated venture capital fund requires significant management
judgment due to the absence of quoted market prices, inherent lack of
liquidity, and the long-term nature of such investments. Private equity
investments are valued initially at cost. The carrying values of private
equity investments are adjusted either up or down from the transaction
price to reflect expected exit values as evidenced by financing and sale
transactions with third parties, or when determination of a valuation
adjustment is confirmed through ongoing review in accordance with our
valuation policies and procedures. A variety of factors are reviewed and
monitored to assess positive and negative changes in valuation including,
but not limited to, current operating performance and future expectations
of investee companies, industry valuations of comparable public companies,
changes in market outlook, and the third party financing environment over
time. In determining valuation adjustments resulting from the investment
review process, particular emphasis is placed on current company
performance and market conditions. Non-public equity investments are
included in Level 3 of the valuation hierarchy because they trade
infrequently and, therefore, the fair value is unobservable.
Publicly-traded equity investments are included in Level 1 of the
valuation hierarchy.
|
|
•
|
Payables to brokers
and dealers: Securities sold, but not yet purchased, are included
in Level 1 of the valuation
hierarchy.
|
Twelve
Months Ended December 31, 2008
|
||||
Balance
as of beginning of period
|
$ | 125,020 | ||
Purchases
(sales), net
|
31,070 | |||
Realized
gains (losses), net
|
9 | |||
Unrealized
gains (losses), net
|
6,453 | |||
Balance
as of December 31,
2008
|
$ | 162,552 |
8.
|
Furniture, Equipment and
Leasehold Improvements, Net
|
December 31,
|
||||||||
2008
|
2007
|
|||||||
(in thousands)
|
||||||||
Furniture and
equipment
|
$ | 522,913 | $ | 495,669 | ||||
Leasehold
improvements
|
322,803 | 306,908 | ||||||
845,716 | 802,577 | |||||||
Less: Accumulated depreciation
and amortization
|
(479,912 | ) | (435,298 | ) | ||||
Furniture, equipment and
leasehold improvements, net
|
$ | 365,804 | $ | 367,279 |
9.
|
Deferred Sales Commissions,
Net
|
December 31,(1)
|
||||||||
2008
|
2007
|
|||||||
(in thousands)
|
||||||||
Carrying amount of deferred sales
commissions
|
$ | 521,334 | $ | 478,504 | ||||
Less: Accumulated
amortization
|
(294,775 | ) | (215,664 | ) | ||||
Cumulative CDSC
received
|
(113,018 | ) | (79,269 | ) | ||||
Deferred sales commissions,
net
|
$ | 113,541 | $ | 183,571 |
(1)
|
Excludes
amounts related to fully amortized deferred sales
commissions.
|
2009
|
$
|
51,155
|
||
2010
|
32,421
|
|||
2011
|
18,873
|
|||
2012
|
8,175
|
|||
2013
|
2,652
|
|||
2014
|
265
|
|||
$
|
113,541
|
10.
|
Debt
|
December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||||||
Available
Credit
|
Debt
Outstanding
|
Interest
Rate
|
Available
Credit
|
Debt
Outstanding
|
Interest
Rate
|
|||||||||||||||||||
(in millions)
|
||||||||||||||||||||||||
Revolving
credit facility(1)
|
$ | 715.2 | $ | — | — | % | $ | 466.1 | $ | — | — | % | ||||||||||||
Commercial
paper(1)(2)
|
284.8 | 284.8 | 1.8 | 533.9 | 533.9 | 4.3 | ||||||||||||||||||
Total
revolving credit facility(1)
|
1,000.0 | 284.8 | 1.8 | 1,000.0 | 533.9 | 4.3 | ||||||||||||||||||
Revolving
credit facility – SCB LLC
|
950.0 | — | — | — | — | — | ||||||||||||||||||
Unsecured
bank loan(3)
|
— | — | — | — | — | — | ||||||||||||||||||
Total
|
$ | 1,950.0 | $ | 284.8 | 1.8 | $ | 1,000.0 | $ | 533.9 | 4.3 |
(1)
|
Our
$1.0 billion revolving credit facility supports our commercial paper
program; amounts borrowed under the commercial paper program reduce
amounts available for direct borrowing under the revolving credit facility
on a dollar-for-dollar basis.
|
(2)
|
Commercial
paper outstanding is short-term in nature, and as such, book value
approximates fair value.
|
(3)
|
As
of December 31, 2008, SCB LLC maintained five separate uncommitted credit
facilities with various banks totaling $775
million.
|
Payments
|
Sublease
Receipts
|
Net
Payments
|
||||||||||
(in millions)
|
||||||||||||
2009
|
$ | 127.3 | $ | 3.1 | $ | 124.2 | ||||||
2010
|
131.8 | 3.1 | 128.7 | |||||||||
2011
|
133.0 | 2.7 | 130.3 | |||||||||
2012
|
136.3 | 3.0 | 133.3 | |||||||||
2013
|
136.4 | 3.0 | 133.4 | |||||||||
2014 and
thereafter
|
1,783.6 | 10.6 | 1,773.0 | |||||||||
Total future minimum
payments
|
$ | 2,448.4 | $ | 25.5 | $ | 2,422.9 |
13.
|
Counterparty
Risk
|
Years Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(in thousands)
|
||||||||
Change
in projected benefit obligation:
|
||||||||
Projected
benefit obligation at beginning of year
|
$ | 76,731 | $ | 84,683 | ||||
Service
cost
|
2,995 | 3,446 | ||||||
Interest
cost
|
4,996 | 4,769 | ||||||
Actuarial
losses (gains)
|
3,891 | (8,280 | ) | |||||
Plan
amendment
|
— | (4,365 | ) | |||||
Plan
curtailment
|
(13,133 | ) | — | |||||
Benefits
paid
|
(3,250 | ) | (3,522 | ) | ||||
Projected
benefit obligation at end of year
|
72,230 | 76,731 | ||||||
Change
in plan assets:
|
||||||||
Plan
assets at fair value at beginning of year
|
56,786 | 53,315 | ||||||
Actual
return on plan assets
|
(25,770 | ) | 2,193 | |||||
Employer
contribution
|
5,617 | 4,800 | ||||||
Benefits
paid
|
(3,250 | ) | (3,522 | ) | ||||
Plan
assets at fair value at end of year
|
33,383 | 56,786 | ||||||
Funded
status
|
$ | (38,847 | ) | $ | (19,945 | ) |
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
Unrecognized
net (loss) gain from experience different from that assumed and effects of
changes and assumptions
|
$ | (20,811 | ) | $ | 5,992 | |||
Unrecognized
prior service (credit) cost
|
(3,844 | ) | 4,187 | |||||
Unrecognized
net plan assets as of January 1, 1987 being recognized over 26.3
years
|
(108 | ) | (139 | ) | ||||
Other
comprehensive income (loss)
|
$ | (24,763 | ) | $ | 10,040 |
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
Unrecognized
net loss from experience different from that assumed and effects of
changes and assumptions
|
$ | (22,249 | ) | $ | (1,438 | ) | ||
Unrecognized
prior service credit
|
— | 3,844 | ||||||
Unrecognized
net plan assets as of January 1, 1987 being recognized over 26.3
years
|
602 | 710 | ||||||
Accumulated
other comprehensive income (loss)
|
$ | (21,647 | ) | $ | 3,116 |
2008
|
2007
|
|||||||
Discount
rate on benefit obligations
|
6.20 | % | 6.55 | % | ||||
Annual
salary increases
|
3.11 | % | 3.14 | % |
2009
|
$
|
2,534
|
||
2010
|
3,122
|
|||
2011
|
3,287
|
|||
2012
|
4,129
|
|||
2013
|
3,112
|
|||
2014-2018
|
20,832
|
Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in thousands)
|
||||||||||||
Service
cost
|
$ | 2,995 | $ | 3,447 | $ | 4,048 | ||||||
Interest
cost on projected benefit obligations
|
4,996 | 4,769 | 4,578 | |||||||||
Expected
return on plan assets
|
(4,590 | ) | (4,310 | ) | (3,800 | ) | ||||||
Amortization
of prior service credit
|
(431 | ) | (59 | ) | (59 | ) | ||||||
Amortization
of transition asset
|
(143 | ) | (143 | ) | (143 | ) | ||||||
Curtailment
gain recognized
|
(3,510 | ) | — | — | ||||||||
Amortization
of loss
|
— | — | 280 | |||||||||
Net
pension (benefit) charge
|
$ | (683 | ) | $ | 3,704 | $ | 4,904 |
Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Discount
rate on benefit obligations
|
6.55 | % | 5.90 | % | 5.65 | % | ||||||
Expected
long-term rate of return on plan assets
|
8.00 | % | 8.00 | % | 8.00 | % | ||||||
Annual
salary increases
|
3.14 | % | 3.14 | % | 3.50 | % |
December 31,
|
||||||||
2008
|
2007
|
|||||||
Equity
securities
|
56 | % | 69 | % | ||||
Debt
securities
|
30 | 21 | ||||||
Real
estate
|
14 | 10 | ||||||
100 | % | 100 | % |
15.
|
Deferred Compensation
Plans
|
|
•
|
Awards
made in 1995 vested ratably over three years; awards made from 1996
through 1998 generally vested ratably over eight
years.
|
|
o
|
Until
distributed, liability for the 1995 through 1998 awards increased or
decreased through December 31, 2005 based on our earnings growth
rate.
|
|
o
|
Prior
to January 1, 2006, payment of vested 1995 through 1998 benefits was
generally made in cash over a five-year period commencing at retirement or
termination of employment although, under certain circumstances, partial
lump sum payments were made.
|
|
o
|
Effective
January 1, 2006, participant accounts were converted to notional
investments in Holding Units or a money market fund, or a combination of
both, at the election of the participant, in lieu of being subject to the
earnings-based calculation. Each participant elected a distribution date,
which could be no earlier than January 2007. Holding issued 834,864
Holding Units in January 2006 in connection with this conversion, with a
market value on that date of approximately $47.2
million.
|
|
•
|
Awards
made for 1999 and 2000 are notionally invested in Holding
Units.
|
|
o
|
A
subsidiary of AllianceBernstein purchases Holding Units to fund the
related benefits.
|
|
o
|
The
vesting periods for 1999 and 2000 awards range from eight years to
immediate depending on the age of the
participant.
|
|
•
|
For
2001, participants were required to allocate at least 50% of their awards
to notional investments in Holding Units and could allocate the remainder
to notional investments in certain of our investment
services.
|
|
•
|
For
2002 awards, participants elected to allocate their awards in a
combination of notional investments in Holding Units and notional
investments in certain of our investment
services.
|
|
•
|
Beginning
with 2003 awards, participants may elect to allocate their awards in a
combination of notional investments in Holding Units (up to 50%) and
notional investments in certain of our investment
services.
|
|
•
|
Beginning
with 2006 awards, selected senior officers may elect to allocate up to a
specified portion of their awards to investments in options to buy Holding
Units (“Special Option Program”); the firm matches this allocation on a
two-for-one basis (for additional information about the Special Option
Program, see Note
16).
|
|
•
|
Beginning
with 2008 awards, executive committee members and those senior officers
previously participating in the Special Option Program may allocate up to
half of their awards to investments in options to buy Holding Units (see Note
16).
|
16.
|
Compensatory
Unit Awards and Option Plans
|
2008
|
2007
|
2006
|
||||||||||
Risk-free
interest rate
|
3.2 | % | 3.5 – 4.9 | % | 4.9 | % | ||||||
Expected
cash distribution yield
|
5.4 | % | 5.6 – 5.7 | % | 6.0 | % | ||||||
Historical
volatility factor
|
29.3 | % | 27.7 – 30.8 | % | 31.0 | % | ||||||
Expected
term
|
6.0
years
|
6.0
– 9.5 years
|
6.5
years
|
Holding
Units
|
Weighted
Average
Exercise
Price Per Holding Unit
|
Weighted
Average
Remaining
Contractual Term
|
Aggregate
Intrinsic Value
|
|||||||||||||
|
||||||||||||||||
Outstanding
as of December 31, 2007
|
7,273,621 | $ | 64.20 | 6.9 | ||||||||||||
Granted
|
13,825 | 64.24 | ||||||||||||||
Exercised
|
(315,467 | ) | 41.98 | |||||||||||||
Forfeited
|
(123,071 | ) | 67.67 | |||||||||||||
Expired
|
(163,100 | ) | 26.31 | |||||||||||||
Outstanding
as of December 31, 2008
|
6,685,808 | 66.11 | 6.3 | $ | — | |||||||||||
Exercisable
as of December 31, 2008
|
3,277,879 | 46.69 | 3.2 | — | ||||||||||||
Expected
to vest as of December 31, 2008
|
3,239,112 | 84.78 | 9.2 | — |
Holding
Units
|
Weighted Average
Grant
Date Fair Value
|
|||||||
Unvested
as of January 1, 2008
|
4,875 | $ | 67.74 | |||||
Granted
|
2,724,387 | 19.24 | ||||||
Vested
|
(1,322 | ) | 45.45 | |||||
Forfeited
|
— | — | ||||||
Unvested
as of December 31, 2008
|
2,727,940 | 19.31 |
Holding
Units
|
Weighted Average
Grant
Date Fair Value
|
|||||||
Unvested
as of January 1, 2008
|
73,990 | $ | 72.63 | |||||
Granted
|
46,030 | 62.05 | ||||||
Vested
|
(37,504 | ) | 67.35 | |||||
Forfeited
|
(3,610 | ) | 69.23 | |||||
Unvested
as of December 31, 2008
|
78,906 | 70.77 |
17.
|
Units
Outstanding
|
Outstanding
as of December 31, 2006
|
259,062,014
|
|||
Options
to buy Holding Units exercised
|
1,234,917
|
|||
Holding
Units awarded
|
46,777
|
|||
Holding
Units forfeited
|
(1,716
|
)
|
||
Outstanding
as of December 31, 2007
|
260,341,992
|
|||
Options
to buy Holding Units exercised
|
315,467
|
|||
Issuance
of Holding Units
|
3,015,396
|
|||
Holding
Units awarded
|
48,365
|
|||
Holding
Units forfeited
|
(3,610
|
)
|
||
Outstanding
as of December 31, 2008
|
263,717,610
|
18.
|
Income
Taxes
|
Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in thousands)
|
||||||||||||
Earnings
before income taxes:
|
||||||||||||
United
States
|
$ | 669,205 | $ | 1,113,185 | $ | 1,058,545 | ||||||
Foreign
|
275,024 | 291,819 | 133,493 | |||||||||
Total
|
$ | 944,229 | $ | 1,405,004 | $ | 1,192,038 | ||||||
Income
tax expense:
|
||||||||||||
Partnership
UBT
|
$ | 9,945 | $ | 30,219 | $ | 23,696 | ||||||
Corporate
subsidiaries:
|
||||||||||||
Federal
|
13,713 | 6,852 | 4,901 | |||||||||
State
and local
|
1,762 | 2,733 | 374 | |||||||||
Foreign
|
78,367 | 87,494 | 41,061 | |||||||||
Current
tax expense
|
103,787 | 127,298 | 70,032 | |||||||||
Deferred
tax (benefit) expense
|
(7,984 | ) | 547 | 5,013 | ||||||||
Income
tax expense
|
$ | 95,803 | $ | 127,845 | $ | 75,045 |
Years Ended December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
UBT
statutory rate
|
$ | 37,769 | 4.0 | % | $ | 55,532 | 4.0 | % | $ | 47,346 | 4.0 | % | ||||||||||||
Corporate
subsidiaries’ federal, state, local, and foreign income
taxes
|
77,732 | 8.2 | 83,195 | 5.9 | 40,708 | 3.4 | ||||||||||||||||||
Effect
of FIN 48 adjustments, miscellaneous taxes, and other
|
(11,929 | ) | (1.3 | ) | 2,684 | 0.2 | 282 | — | ||||||||||||||||
Income
not taxable resulting from use of UBT business apportionment factors
and other non deductible items
|
(7,769 | ) | (0.8 | ) | (13,566 | ) | (1.0 | ) | (13,291 | ) | (1.1 | ) | ||||||||||||
Income
tax expense and effective tax rate
|
$ | 95,803 | 10.1 | $ | 127,845 | 9.1 | $ | 75,045 | 6.3 |
Twelve
Months
Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
Balance
as of beginning of period
|
$ | 19,016 | $ | 17,862 | ||||
Additions
for prior year tax positions
|
324 | 2,000 | ||||||
Reductions
for prior year tax positions
|
(603 | ) | (1,452 | ) | ||||
Additions
for current year tax positions
|
1,649 | 3,317 | ||||||
Reductions
for current year tax positions
|
(715 | ) | (303 | ) | ||||
Reductions
related to settlements with tax authorities/closed years
|
(10,866 | ) | (2,408 | ) | ||||
Balance
as of end of period
|
$ | 8,805 | $ | 19,016 |
December 31,
|
||||||||
2008
|
2007
|
|||||||
(in thousands)
|
||||||||
Deferred
tax asset:
|
||||||||
Differences
between book and tax basis:
|
||||||||
Deferred
compensation plans
|
$ | 14,704 | $ | 10,252 | ||||
Intangible
assets
|
280 | 401 | ||||||
Charge
for mutual fund matters, legal proceedings, and claims processing
contingency
|
4,179 | 4,179 | ||||||
Other,
primarily revenues taxed upon receipt and accrued expenses deductible when
paid
|
4,955 | 3,909 | ||||||
Deferred
tax asset
|
24,118 | 18,741 | ||||||
Deferred
tax liability:
|
||||||||
Differences
between book and tax basis:
|
||||||||
Furniture,
equipment and leasehold improvements
|
341 | 301 | ||||||
Investment
partnerships
|
112 | 1,634 | ||||||
Intangible
assets
|
17,075 | 14,889 | ||||||
Translation
adjustment
|
2,700 | 5,694 | ||||||
Other,
primarily undistributed earnings of certain foreign
subsidiaries
|
2,597 | 2,359 | ||||||
22,825 | 24,877 | |||||||
Net
deferred tax asset (liability)
|
$ | 1,293 | $ | (6,136 | ) |
19.
|
Business
Segment Information
|
Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in millions)
|
||||||||||||
Institutional
Investments
|
$ | 1,241 | $ | 1,482 | $ | 1,222 | ||||||
Retail
|
1,227 | 1,521 | 1,304 | |||||||||
Private
Client
|
850 | 961 | 883 | |||||||||
Institutional
Research Services
|
472 | 424 | 375 | |||||||||
Other
|
(239 | ) | 332 | 354 | ||||||||
Total
revenues
|
3,551 | 4,720 | 4,138 | |||||||||
Less:
Interest expense
|
37 | 195 | 188 | |||||||||
Net
revenues
|
$ | 3,514 | $ | 4,525 | $ | 3,950 |
2008
|
2007
|
2006
|
||||||||||
(in millions)
|
||||||||||||
Net
revenues:
|
||||||||||||
United
States
|
$ | 2,258 | $ | 3,013 | $ | 2,733 | ||||||
International
|
1,256 | 1,512 | 1,217 | |||||||||
Total
|
$ | 3,514 | $ | 4,525 | $ | 3,950 | ||||||
Long-lived
assets:
|
||||||||||||
United
States
|
$ | 3,576 | $ | 3,656 | $ | 3,619 | ||||||
International
|
40 | 52 | 42 | |||||||||
Total
|
$ | 3,616 | $ | 3,708 | $ | 3,661 |
20.
|
Related Party
Transactions
|
Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in thousands)
|
||||||||||||
Investment
advisory and services fees
|
$ | 870,524 | $ | 1,027,636 | $ | 840,994 | ||||||
Distribution
revenues
|
378,425 | 473,435 | 421,045 | |||||||||
Shareholder
servicing fees
|
99,028 | 103,604 | 97,236 | |||||||||
Other
revenues
|
6,868 | 6,502 | 6,917 | |||||||||
Institutional
research services
|
1,233 | 1,583 | 1,902 |
Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in thousands)
|
||||||||||||
Revenues:
|
||||||||||||
Investment
advisory and services fees
|
$ | 180,689 | $ | 208,786 | $ | 184,122 | ||||||
Institutional
research services
|
225 | 606 | 657 | |||||||||
Other
revenues
|
697 | 824 | 736 | |||||||||
$ | 181,611 | $ | 210,216 | $ | 185,515 | |||||||
Expenses:
|
||||||||||||
Commissions
and distribution payments to financial intermediaries
|
$ | 9,408 | $ | 7,178 | $ | 5,708 | ||||||
Other
promotion and servicing
|
703 | 1,409 | 936 | |||||||||
General
and administrative
|
13,843 | 10,219 | 9,533 | |||||||||
$ | 23,954 | $ | 18,806 | $ | 16,177 | |||||||
Balance
Sheet:
|
||||||||||||
Institutional
investment advisory and services fees receivable
|
$ | 7,349 | $ | 10,103 | $ | 7,330 | ||||||
Other
due to AXA and its subsidiaries
|
(1,278 | ) | (506 | ) | (965 | ) | ||||||
$ | 6,071 | $ | 9,597 | $ | 6,365 |
December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in thousands)
|
||||||||||||
Due from Holding,
net
|
$ | 4,825 | $ | 7,460 | $ | 7,149 | ||||||
Due from unconsolidated joint
ventures, net
|
$ | — | $ | 255 | $ | 376 |
Quarters Ended 2008
|
||||||||||||||||
December 31
|
September 30
|
June 30
|
March 31
|
|||||||||||||
(in thousands, except per unit amounts)
|
||||||||||||||||
Net
revenues
|
$ | 580,522 | $ | 840,991 | $ | 1,063,624 | $ | 1,029,022 | ||||||||
Net
income
|
$ | 91,979 | $ | 219,529 | $ | 280,289 | $ | 247,443 | ||||||||
Basic
net income per unit(1)
|
$ | 0.35 | $ | 0.83 | $ | 1.06 | $ | 0.94 | ||||||||
Diluted
net income per unit(1)
|
$ | 0.35 | $ | 0.83 | $ | 1.06 | $ | 0.94 | ||||||||
Cash
distributions per unit(2) (3)
(4)
|
$ | 0.37 | $ | 0.70 | $ | 1.06 | $ | 0.94 |
Quarters Ended 2007
|
||||||||||||||||
December 31
|
September 30
|
June 30
|
March 31
|
|||||||||||||
(in thousands, except per unit amounts)
|
||||||||||||||||
Net
revenues
|
$ | 1,169,386 | $ | 1,152,822 | $ | 1,158,773 | $ | 1,044,336 | ||||||||
Net
income
|
$ | 309,732 | $ | 348,082 | $ | 334,929 | $ | 267,701 | ||||||||
Basic
net income per unit(1)
|
$ | 1.18 | $ | 1.33 | $ | 1.28 | $ | 1.02 | ||||||||
Diluted
net income per unit(1)
|
$ | 1.17 | $ | 1.32 | $ | 1.27 | $ | 1.01 | ||||||||
Cash
distributions per unit(2)
|
$ | 1.17 | $ | 1.32 | $ | 1.27 | $ | 1.01 |
(1)
|
Basic and diluted net income per
unit are computed independently for each of the periods presented.
Accordingly, the sum of the quarterly net income per unit amounts may not
agree to the total for the
year.
|
(2)
|
Declared
and paid during the following
quarter.
|
(3)
|
During
the fourth quarter of 2006, we recorded a $56.0 million pre-tax charge
($54.5 million, net of related income tax benefit) for the estimated cost
of reimbursing certain clients for losses arising out of an error we made
in processing claims for class action settlement proceeds on behalf
of these clients, which include some AllianceBernstein-sponsored mutual
funds. During the third quarter of 2008, we recorded approximately
$35.3 million in insurance recoveries relating to this error.
AllianceBernstein’s and Holding’s fourth quarter 2006 cash distributions
were based on net income as calculated prior to AllianceBernstein
recording the charge. Accordingly, the related insurance recoveries
($0.13 per unit) were not included in AllianceBernstein’s or
Holding’s cash distribution to unitholders for the third quarter of
2008.
|
(4)
|
During
the fourth quarter of 2008, we recorded an additional $5.1 million ($0.02
per unit) provision for income taxes subsequent to the declaration of the
fourth quarter 2008 cash distribution of $0.37 per unit. As a result, the
cash distribution per unit in the fourth quarter of 2008 is $0.02 higher
than diluted net income per unit.
|
Item 9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
Item 9A.
|
Controls
and Procedures
|
|
•
|
Pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the
company;
|
|
•
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP, and that
receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company;
and
|
|
•
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the company’s assets that
could have a material effect on the financial
statements.
|
Item 9B.
|
Other
Information
|
Item 10.
|
Directors,
Executive Officers and Corporate
Governance
|
Name
|
Age
|
Position
|
Peter
S. Kraus
|
56
|
Chairman
of the Board and Chief Executive Officer
|
Lewis
A. Sanders*
|
62
|
Former
Chairman of the Board and Chief Executive Officer
|
Dominique
Carrel-Billiard
|
42
|
Director
|
Henri
de Castries
|
54
|
Director
|
Christopher
M. Condron
|
61
|
Director
|
Denis
Duverne
|
55
|
Director
|
Richard
S. Dziadzio
|
45
|
Director
|
Deborah
S. Hechinger
|
58
|
Director
|
Weston
M. Hicks
|
52
|
Director
|
Nick
Lane
|
35
|
Director
|
Gerald
M. Lieberman
|
62
|
Director,
President and Chief Operating Officer
|
Lorie
A. Slutsky
|
56
|
Director
|
A.W.
(Pete) Smith, Jr.
|
65
|
Director
|
Peter
J. Tobin
|
64
|
Director
|
Lawrence
H. Cohen
|
47
|
Executive
Vice President
|
Laurence
E. Cranch
|
62
|
Executive
Vice President, General Counsel and Corporate Secretary
|
Edward
J. Farrell
|
48
|
Senior
Vice President and Controller
|
Sharon
E. Fay
|
48
|
Executive
Vice President
|
Marilyn
G. Fedak
|
62
|
Vice
Chair of Investment Services
|
James
A. Gingrich
|
50
|
Executive
Vice President
|
Mark
R. Gordon
|
55
|
Executive
Vice President
|
Thomas
S. Hexner
|
52
|
Executive
Vice President
|
Robert
H. Joseph, Jr.
|
61
|
Senior
Vice President and Chief Financial Officer
|
Robert
M. Keith
|
48
|
Executive
Vice President
|
Mark
R. Manley
|
46
|
Senior
Vice President, Deputy General Counsel and Chief Compliance
Officer
|
Lori
A. Massad
|
44
|
Executive
Vice President and Chief Talent Officer – Talent Development and Human
Resources
|
Seth
J. Masters
|
49
|
Executive
Vice President
|
Douglas
J. Peebles
|
43
|
Executive
Vice President
|
Jeffrey
S. Phlegar
|
42
|
Executive
Vice President
|
James
G. Reilly
|
47
|
Executive
Vice President
|
Lisa
A. Shalett
|
45
|
Executive
Vice President
|
David
A. Steyn
|
49
|
Executive
Vice President
|
Richard
G. Taggart
|
47
|
Executive
Vice President and Head of Global Operations
|
Gregory
J. Tencza
|
42
|
Executive
Vice President
|
Christopher
M. Toub
|
49
|
Executive
Vice President
|
Item 11.
|
Executive
Compensation
|
Cash
Bonus Amounts
|
Deferred
Compensation
Amounts
|
Total
|
||||||||||
Consolidated
Operating Income
|
$ | 887,564 | $ | 887,564 | ||||||||
Add: total
incentive compensation expense
|
351,730 | 351,730 | ||||||||||
Add: amortization
of intangibles
|
20,716 | 20,716 | ||||||||||
Add: non-operating
income
|
17,916 | 17,916 | ||||||||||
Operating
Income Before Incentive Compensation
|
1,277,926 | 1,277,926 | ||||||||||
Less: brokerage
operating income
|
175,893 | 175,893 | ||||||||||
Total
asset management operating income
|
$ | 1,102,033 | $ | 1,102,033 | ||||||||
Calculated
Cash @ 22.2% & Deferred @ 14.8%
|
$ | 244,651 | $ | 163,101 | ||||||||
Brokerage
Business Revenues
|
$ | 492,968 | $ | 492,968 | ||||||||
Calculated
Cash @ 16.56% & Deferred @ 6.44%
|
$ | 81,636 | $ | 31,747 | ||||||||
Total
calculated incentive compensation available
|
$ | 326,287 | $ | 194,848 | ||||||||
Less: qualified
plans contributions
|
32,500 | — | ||||||||||
Total
incentive compensation available
|
$ | 293,787 | $ | 194,848 | $ | 488,635 | ||||||
Total
incentive compensation awarded to employees
|
$ | 209,790 | $ | 210,857 | $ | 420,647 |
|
•
|
Mr.
Sanders’s business and operational goals for 2008 were established by the
terms of the October 2006 employment agreement, as amended, between
himself and our company (“Sanders Employment Agreement”). The
Sanders Employment Agreement provided that he was entitled to receive a
deferred compensation award of not less than 1% of AllianceBernstein’s
consolidated operating income before incentive compensation (as defined
with respect to the calculations of the annual incentive compensation
guideline amounts). Thus, the only goal that was established to
determine Mr. Sanders’s compensation was the goal of maximizing
AllianceBernstein’s consolidated operating income for the year, a goal
which is measured objectively. Mr. Sanders retired as Chairman
of the Board of the General Partner and CEO of the General Partner,
AllianceBernstein and Holding effective December 19, 2008. For
information regarding Mr. Sanders’s retirement agreement and additional
information regarding the Sanders Employment Agreement, see “Former CEO Arrangements”
and “Other Information regarding Compensation of Named Executive Officers”
below.
|
|
•
|
For
Mr. Lieberman, the main elements of business and operational goals that
were established to determine his incentive compensation included making
additional progress towards achieving operational excellence, especially
by ensuring our firm’s reduced workforce does not compromise intellectual
rigor, client service or key initiatives, and by working closely with the
CEOs of our firm’s global subsidiaries and the leadership of our firm’s
Institutional Investments and Private Client distribution channels to
further enhance corporate governance; people leadership, including support
of our firm’s corporate culture and our employees’ morale through
exceptionally difficult market conditions; supporting global client
service, both to existing clients and prospects; and continuing to lower
the risk of errors.
|
|
•
|
For
Ms. Fedak, the main elements of her business and operational goals
included: efforts to improve the alpha generating potential of our U.S.
Value services, including enhancements for our U.S. Diversified Value
services and reconfiguration of our U.S. Equity Investment Policy Group;
leading our U.S. Value client service efforts; operational excellence, in
particular by focusing on leadership of a new, firm-wide portfolio
management group; continuing to drive our Global Equity buy-side trading
to our best-in-class vision; and focusing, in her role as the head of our
Talent Development efforts, on implementing managerial excellence
practices so as to foster employee
engagement.
|
|
•
|
For
Ms. Fay, the main elements of her business and operational goals included
achieving: investment leadership, by improving our quantitative and
fundamental research inputs, further integrating the U.S. team into our
global platform and overseeing the evolution of our currency management
capabilities; people leadership, by focusing Bernstein Value’s senior team
on the most critical tasks (e.g., portfolio risk
control/management, research prioritization and dimensioning the return
opportunities within the equity markets) and by leading the firm’s
thinking on innovation in conjunction with the newly appointed product
champions; client leadership, by engaging clients and consultants to share
our insights and build confidence; and business leadership, by ensuring
that the firm’s cost-cutting initiatives did not impair our ability to
perform for clients or retain our most talented
staff.
|
|
•
|
For
Mr. Joseph, the main elements of his business and operational goals
included achieving: people leadership, including establishment of a
“center of excellence” culture throughout finance by setting goals and
identifying a successor CFO; operational excellence, including performing
a comprehensive risk assessment and remediation of all U.S. finance
activities and further improving the system of internal control over
financial reporting; working with information technology to complete a
number of significant financial and control systems including a headcount
reporting and control application, “purchase-through-payment” (a
procurement work flow application), and client billing and sales force
commissions applications in the Private Client distribution channel;
implementation of enhanced financial forecasting and budgeting
applications capabilities; and determining a deferred compensation funding
/ hedging strategy.
|
Christopher
M. Condron (Chair)
|
Peter
S. Kraus
|
Lorie
A. Slutsky
|
A.W.
(Pete) Smith, Jr.
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
||||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
||||||||||||||||||||||||||
Peter S. Kraus(1)(2) |
2008
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Chairman
and
Chief
Executive Officer
|
|
|
|||||||||||||||||||||||||||||||||
Lewis
A. Sanders(1)
Chairman
and
Chief
Executive Officer
|
2008
2007
2006
|
275,002
275,002
275,002
|
—
—
—
|
—
—
—
|
—
—
—
|
—
—
—
|
—
—
—
|
13,278,571
21,893,098
19,501,985
|
13,553,573
22,168,100
19,776,987
|
||||||||||||||||||||||||||
Gerald
M. Lieberman
President
and
Chief
Operating Officer
|
2008
2007
2006
|
200,000
200,000
200,000
|
1,000,000
4,050,000
4,050,000
|
—
—
—
|
—
42,908
61,192
|
—
—
—
|
—
—
—
|
2,867,920
7,568,795
6,224,070
|
4,067,920
11,861,703
10,535,262
|
||||||||||||||||||||||||||
Marilyn
G. Fedak
Vice
Chair of Investment Services
|
2008
2007
2006
|
170,000
160,000
140,769
|
1,000,000
4,000,000
4,000,000
|
—
—
—
|
—
—
—
|
—
—
—
|
—
—
—
|
2,361,356
7,356,000
6,123,707
|
3,531,356
11,516,000
10,264,476
|
||||||||||||||||||||||||||
Sharon
E. Fay
Executive
Vice
President
|
2008
2007
2006
|
170,000
160,000
150,000
|
1,000,000
3,900,000
3,900,000
|
—
—
—
|
—
—
—
|
—
—
—
|
—
—
—
|
2,581,523
8,370,008
7,284,717
|
3,751,523
12,430,008
11,334,717
|
||||||||||||||||||||||||||
Robert
H. Joseph, Jr.
Senior
Vice President
and
Chief Financial Officer
|
2008
2007
2006
|
195,000
185,000
175,000
|
400,000
1,050,000
1,050,000
|
—
—
—
|
—
16,091
22,947
|
—
—
—
|
63,612
18,664
31,041
|
692,285
1,088,406
868,726
|
1,350,897
2,358,161
2,147,714
|
(1)
|
Mr.
Sanders served as Chief Executive Officer of the General Partner,
AllianceBernstein and Holding through December 19, 2008. Mr.
Kraus succeeded Mr. Sanders in this capacity effective December 19, 2008
and received no compensation in
2008.
|
(2)
|
Mr.
Kraus did not receive any compensation in 2008. His compensation structure
is set forth in his Employment Agreement, the terms of which are described above in “Overview
of Current Chief Executive Officer’s Compensation” and described below in
“Grant of Plan-based Awards” and “Other Information regarding Compensation
of Named Executive
Officers”.
|
Estimated
future payouts under non-equity incentive plan awards
|
Estimated
future payouts under equity incentive plan awards
|
|||||||||||||||||||||||||||||||||||||||||||
Name
|
Grant
date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
All
other stock awards: Number of shares of stock or units
(#)
|
All
other option awards: Number of securities underlying options
(#)
|
Exercise
or base price of option awards
($/Sh)
|
Grant
date fair value of stock and option awards
|
|||||||||||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
(k)
|
(l)
|
|||||||||||||||||||||||||||||||||
Peter
S. Kraus (1)
|
12.19.08 | — | — | — | — | — | — | 2,722,052 | — | — | $ | 52,263,398 | ||||||||||||||||||||||||||||||||
Lewis
A. Sanders
|
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Gerald
M. Lieberman
|
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Marilyn
G. Fedak
|
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Sharon
E. Fay
|
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Robert
H. Joseph, Jr.
|
— | — | — | — | — | — | — | — | — | — | — |
(1)
|
In
connection with the commencement of Mr. Kraus’s employment, on December
19, 2008, he was granted 2,722,052 restricted Holding Units. Subject to
accelerated vesting clauses in the Kraus Employment Agreement (immediate
vesting upon AXA ceasing to control the management of AllianceBernstein’s
business or Holding ceasing to be publicly traded and certain qualifying
terminations of employment, including termination of Mr. Kraus’s
employment (i) by AllianceBernstein without cause, (ii) by Mr. Kraus for
good reason (“good reason” generally means actions taken by
AllianceBernstein resulting in a material negative change in Mr. Kraus’s
employment relationship, including assignment to Mr. Kraus of duties
materially inconsistent with his position or a requirement that Mr. Kraus
report to an officer or employee of AllianceBernstein instead of reporting
directly to the Board), and (iii) due to death or disability), Mr. Kraus’s
restricted Holding Units will vest ratably on each of the first five
anniversaries of December 19, 2008, commencing December 19, 2009,
provided, with respect to each installment, Mr. Kraus continues to be
employed by AllianceBernstein on the vesting date. Aside from
Mr. Kraus’s continued employment, there are no conditions that must be
satisfied for Mr. Kraus’s restricted Holding Units to vest. For
additional information, see “Overview of our Current
Chief Executive Officer’s Compensation” above and “Other Information
regarding Compensation of Named Executive Officers” below in this Item
11.
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||||||||||||||||||||||
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
($)
|
|||||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|||||||||||||||||||||||||||
Peter
S. Kraus
|
— | — | — | — | — | 2,722,052 | 56,591,461 | — | — | |||||||||||||||||||||||||||
Lewis
A. Sanders
|
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Gerald
M. Lieberman
|
40,000 | — | — | 33.18 |
12/06/12
|
— | — | — | — | |||||||||||||||||||||||||||
40,000 | — | — | 50.25 |
12/07/11
|
— | — | — | — | ||||||||||||||||||||||||||||
Marilyn
G. Fedak
|
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Sharon
E. Fay
|
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Robert
H. Joseph, Jr.
|
15,000 | — | — | 33.18 |
12/06/12
|
— | — | — | — | |||||||||||||||||||||||||||
15,000 | — | — | 50.25 |
12/07/11
|
— | — | — | — | ||||||||||||||||||||||||||||
15,000 | — | — | 53.75 |
12/11/10
|
— | — | — | — | ||||||||||||||||||||||||||||
50,000 | — | — | 48.50 |
06/20/10
|
— | — | — | — | ||||||||||||||||||||||||||||
15,000 | — | — | 30.25 |
12/06/09
|
— | — | — | — |
Name
|
Plan
Name
|
Number
of Years
Credited
Service
(#)
|
Present
Value of
Accumulated
Benefit
($)
|
Payments
During
Last
Fiscal Year
($)
|
||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||||||||||
Peter
S. Kraus
|
n/a
|
— | — | — | ||||||||||||
Lewis
A. Sanders
|
n/a
|
— | — | — | ||||||||||||
Gerald
M. Lieberman
|
n/a
|
— | — | — | ||||||||||||
Marilyn
G. Fedak
|
n/a
|
— | — | — | ||||||||||||
Sharon
E. Fay
|
n/a
|
— | — | — | ||||||||||||
Robert
H. Joseph, Jr.
|
Retirement
Plan
|
24 | 490,142 | — |
Name
|
Executive
Contributions
in
Last FY
($)
|
Registrant
Contributions
in
Last FY
($)
|
Aggregate
Earnings
in
Last FY
($)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance
at
Last
FYE
($)
|
|||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
|||||||||||||||
Peter
S. Kraus
|
— | — | — | — | — | |||||||||||||||
Lewis
A. Sanders
|
— | — | (19,041,629 | ) | (18,900,720 | ) | 6,191,559 | |||||||||||||
Gerald
M. Lieberman
|
— | |||||||||||||||||||
Partners
Plan
|
— | 2,600,000 | (7,337,717 | ) | (4,769,864 | ) | 7,122,670 | |||||||||||||
SCB
Deferred Plan
|
— | — | 92,556 | (1,625,658 | ) | 3,330,517 | ||||||||||||||
Total
|
— | 2,600,000 | (7,245,161 | ) | (6,395,522 | ) | 10,453,187 | |||||||||||||
Marilyn
G. Fedak
|
— | 2,330,000 | (13,916,457 | ) | — | 17,751,603 | ||||||||||||||
Sharon
E. Fay
|
— | 2,330,000 | (4,294,902 | ) | (3,822,901 | ) | 8,591,119 | |||||||||||||
Robert
H. Joseph, Jr.
|
— | 650,000 | (4,622,265 | ) | (814,455 | ) | 4,228,795 |
Name
|
Fees
Earned
or
Paid
in
Cash
($)
|
Stock
Awards(1)
($)
|
Option
Awards(2)
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|||||||||||||||||||||
Deborah
S. Hechinger
|
53,500 | 30,000 | 30,000 | — | — | — | 113,500 | |||||||||||||||||||||
Weston
M. Hicks
|
59,500 | 30,000 | 30,000 | — | — | — | 119,500 | |||||||||||||||||||||
Lorie
A. Slutsky
|
71,500 | 30,000 | 30,000 | — | — | — | 131,500 | |||||||||||||||||||||
A.W.
(Pete) Smith, Jr.
|
68,500 | 30,000 | 30,000 | — | — | — | 128,500 | |||||||||||||||||||||
Peter
J. Tobin
|
88,000 | 30,000 | 30,000 | — | — | — | 148,000 |
|
•
|
an
annual retainer of $40,000 (paid quarterly after any quarter during which
a director serves on the Board);
|
|
•
|
a
fee of $1,500 for participating in a meeting of the Board, or any duly
constituted committee of the Board, whether he or she participates in
person or by telephone;
|
|
•
|
an
annual retainer of $15,000 for acting as Chair of the Audit
Committee;
|
|
•
|
an
annual retainer of $7,500 for acting as Chair of the Corporate Governance
Committee; and
|
|
•
|
an
annual equity-based grant under the 1997 Plan consisting
of:
|
|
•
|
restricted
Holding Units having a value of $30,000 based on the closing price of
Holding Units on the NYSE as of the grant date;
and
|
|
•
|
options
to buy Holding Units with a value of $30,000 calculated using the
Black-Scholes method.
|
Item 12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
Plan
Category
|
Number
of
securities
to be
issued
upon
exercise
of
outstanding
options,
warrants
and
rights
|
Weighted
average
exercise
price of
outstanding
options,
warrants
and
rights
|
Number
of
securities
remaining
available
for future
issuance
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity
compensation plans approved by security holders
|
6,685,808 | $ | 66.11 | 22,646,342 | ||||||||
Equity
compensation plans not approved by security holders
|
— | — | — | |||||||||
Total
|
6,685,808 | $ | 66.11 | 22,646,342 |
(1)
|
The
figures in this table do not include cash awards under certain of
AllianceBernstein’s deferred compensation plans pursuant to which
employees (including those employees who qualify as “named executive
officers”; see Item
11) may choose to notionally invest a portion of such awards in
Holding Units. AllianceBernstein satisfies its obligations under these
plans by purchasing Holding Units or issuing new Holding Units under the
Amended and Restated 1997 Long Term Incentive Plan, as amended through
November 28, 2007 (“1997 Plan”). For additional information concerning our
deferred compensation plans, see Note 15 to
AllianceBernstein’s consolidated financial statements in Item
8.
|
Name
and Address of Beneficial Owner
|
Amount
and Nature of Beneficial
Ownership
Reported on Schedule
|
Percent of
Class
|
||||||||
AXA(1)(2)(3)(4)(5)(6)
|
25 avenue Matignon
75008
Paris,
France
|
170,121,745 | 64.1 | % |
(1)
|
Based
on information provided by AXA Financial, on December 31, 2008, AXA and
certain of its subsidiaries beneficially owned all of AXA Financial’s
outstanding common stock. For insurance regulatory purposes the shares of
common stock of AXA Financial beneficially owned by AXA and its
subsidiaries have been deposited into a voting trust (“Voting Trust”), the
term of which has been extended until May 12, 2012. The trustees of the
Voting Trust (the “Voting Trustees”) are Henri de Castries, Denis Duverne
and Christopher M. Condron, each of whom serves on the Management Board of
AXA. The Voting Trustees have agreed to exercise their voting rights to
protect the legitimate economic interests of AXA, but with a view to
ensuring that certain minority shareholders of AXA do not exercise control
over AXA Financial or certain of its insurance
subsidiaries.
|
(2)
|
Based
on information provided by AXA, as of December 31, 2008, 14.29% of the
issued ordinary shares (representing 23.29% of the voting power) of AXA
were owned directly and indirectly by two French mutual insurance
companies (the “Mutuelles AXA”).
|
(3)
|
The
Voting Trustees and the Mutuelles AXA, as a group, may be deemed to be
beneficial owners of all AllianceBernstein Units beneficially owned by AXA
and its subsidiaries. By virtue of the provisions of the Voting Trust
Agreement, AXA may be deemed to have shared voting power with respect to
the AllianceBernstein Units. AXA and its subsidiaries have the power to
dispose or direct the disposition of all shares of the capital stock of
AXA Financial deposited in the Voting Trust. The Mutuelles AXA, as a
group, 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 AllianceBernstein Units
beneficially owned by AXA and its subsidiaries. The address of each of AXA
and the Voting Trustees is 25 avenue Matignon, 75008 Paris, France. The
address of the Mutuelles AXA is 26, rue Drouot, 75009 Paris,
France.
|
(4)
|
By
reason of their relationships, AXA, the Voting Trustees, the Mutuelles
AXA, AXA America Holdings, Inc. (a wholly-owned subsidiary of AXA), AXA
Financial, AXA Equitable, AXA Financial (Bermuda) Ltd. (a wholly-owned
subsidiary of AXA Financial), ACMC Inc. (a wholly-owned subsidiary of AXA
Financial), MONY Life Insurance Company (a wholly-owned subsidiary of AXA
Financial) and MONY Life Insurance Company of America (a wholly-owned
subsidiary of MONY Life Insurance Company) may be deemed to share the
power to vote or to direct the vote and to dispose or direct the
disposition of all or a portion of the 170,121,745 AllianceBernstein
Units.
|
(5)
|
In
connection with the Bernstein Transaction, SCB Inc., AllianceBernstein and
AXA Financial entered into a purchase agreement under which SCB Inc. had
the right to sell or assign up to 2,800,000 AllianceBernstein Units issued
in connection with the Bernstein Transaction at any time. SCB Inc. had the
right to sell (“Put”) to AXA Financial (or its designee) up to 8,160,000
AllianceBernstein Units issued in connection with the Bernstein
Transaction each year less any AllianceBernstein Units SCB Inc. may have
otherwise sold or assigned that year. Generally, SCB Inc. could have
exercised its Put rights only once per year and SCB Inc. could not have
delivered an exercise notice regarding its Put rights until at least nine
months after it delivered its immediately preceding exercise notice. On
each of November 25, 2002, March 5, 2004, December 21, 2004, February 23,
2007 and January 6, 2009, AXA America Holdings, AXA Financial or certain
of AXA Financial’s wholly-owned subsidiaries purchased 8,160,000
AllianceBernstein Units from SCB Partners Inc., a wholly-owned subsidiary
of SCB Inc., pursuant to exercises of the Put rights by SCB
Inc. SCB does not have any Put rights remaining after its sale
on January 6, 2009. The Put rights would have expired on
October 2, 2010.
|
(6)
|
The
beneficial ownership figures in the table reflect the January 6, 2009
sale.
|
Name
of Beneficial Owner
|
Number
of Holding
Units
and Nature of
Beneficial
Ownership
|
Percent of
Class
|
||||||
Peter
S. Kraus(1)(2)
|
2,722,052 | 3.0 | % | |||||
Lewis
A. Sanders(3)
|
66,024 | * | ||||||
Dominique
Carrel-Billiard(1)
|
— | * | ||||||
Henri
de Castries(1)
|
2,000 | * | ||||||
Christopher
M. Condron(1)
|
30,000 | * | ||||||
Denis
Duverne(1)
|
2,000 | * | ||||||
Richard
S. Dziadzio(1)
|
— | * | ||||||
Deborah
S. Hechinger(4)
|
1,460 | * | ||||||
Weston
M. Hicks(5)
|
8,540 | * | ||||||
Nick
Lane(1)
|
— | * | ||||||
Gerald
M. Lieberman(1)(6)
|
218,744 | * | ||||||
Lorie
A. Slutsky(1)(7)
|
32,762 | * | ||||||
A.W.
(Pete) Smith, Jr.(8)
|
5,059 | * | ||||||
Peter
J. Tobin(1)(9)
|
46,602 | * | ||||||
Marilyn
G. Fedak(1)
|
— | * | ||||||
Sharon
E. Fay(1)(10)
|
28,003 | * | ||||||
Robert
H. Joseph, Jr.(1)(11)
|
210,282 | * | ||||||
All
directors and executive officers of the General Partner as a group (34
persons)(12)(13)
|
5,471,959 | 6.0 | % |
*
|
Number
of Holding Units listed represents less than 1% of the Units
outstanding.
|
(1)
|
Excludes
Holding Units beneficially owned by AXA and its subsidiaries. Ms. Slutsky
and Messrs. Kraus, Carrel-Billiard, de Castries, Condron, Duverne,
Dziadzio, Lane, Lieberman, and Tobin are directors and/or officers of AXA,
AXA Financial, and/or AXA Equitable. Mses. Fedak and Fay, and Messrs.
Kraus, Lieberman and Joseph, are directors and/or officers of the General
Partner.
|
(2)
|
In
connection with the commencement of Mr. Kraus’s employment, on December
19, 2008, he was granted 2,722,052 restricted Holding Units. Subject to
accelerated vesting clauses in the Kraus Employment Agreement (e.g., immediate vesting
upon AXA ceasing to control the management of AllianceBernstein’s business
or Holding ceasing to be publicly traded and certain qualifying
terminations of employment), Mr. Kraus’s restricted Holding Units will
vest ratably on each of the first five anniversaries of December 19, 2008,
commencing December 19, 2009, provided, with respect to each installment,
Mr. Kraus continues to be employed by AllianceBernstein on the vesting
date.
|
(3)
|
Mr.
Sanders retired as Chairman of the Board of the General Partner and CEO of
the General Partner, AllianceBernstein and Holding on December 19,
2008.
|
(4)
|
Includes
652 Holding Units Ms. Hechinger can acquire within 60 under the 1997
Plan.
|
(5)
|
Includes
2,270 Holding Units Mr. Hicks can acquire within 60 days under the 1997
Plan.
|
(6)
|
Includes
80,000 Holding Units Mr. Lieberman can acquire within 60 days under the
1997 Plan.
|
(7)
|
Includes
29,421 Holding Units Ms. Slutsky can acquire within 60 days under the 1997
Plan.
|
(8)
|
Includes
2,270 Holding Units Mr. Smith can acquire within 60 days under the 1997
Plan.
|
(9)
|
Includes
44,671 Holding Units Mr. Tobin can acquire within 60 days under the 1997
Plan.
|
(10)
|
Includes
8,444 Holding Units to which Ms. Fay has allocated portions of previous
awards under deferred compensation
plans.
|
(11)
|
Includes
110,000 Holding Units Mr. Joseph can acquire within 60 days under
AllianceBernstein option plans and 69,192 Holding Units to which he has
allocated portions of previous awards under deferred compensation
plans.
|
(12)
|
Includes
635,864 Holding Units the directors and executive officers as a group can
acquire within 60 days under AllianceBernstein option
plans.
|
(13)
|
Includes
3,224,443 Holding Units to which executive officers as a group have
allocated their awards under deferred compensation
plans.
|
Name
of Beneficial Owner
|
Number
of Shares
and
Nature of
Beneficial
Ownership
|
Percent of
Class
|
||||||
Peter
S. Kraus
|
— |
*
|
||||||
Lewis
A. Sanders(2)
|
— | * | ||||||
Dominique
Carrel-Billiard(3)
|
75,032 |
*
|
||||||
Henri
de Castries(4)
|
6,482,448 |
*
|
||||||
Christopher
M. Condron(5)
|
3,107,653 |
*
|
||||||
Denis
Duverne(6)
|
2,210,303 |
*
|
||||||
Richard
S. Dziadzio(7)
|
183,536 |
*
|
||||||
Deborah
S. Hechinger
|
— |
*
|
||||||
Weston
M. Hicks
|
— |
*
|
||||||
Nick
Lane(8)
|
3,490 | * | ||||||
Gerald
M. Lieberman
|
— |
*
|
||||||
Lorie
A. Slutsky(9)
|
1,196 |
*
|
||||||
A.W.
(Pete) Smith, Jr.
|
— |
*
|
||||||
Peter
J. Tobin(10)
|
17,774 |
*
|
||||||
Marilyn
G. Fedak
|
— |
*
|
||||||
Sharon
E. Fay
|
— |
*
|
||||||
Robert
H. Joseph, Jr.
|
— |
*
|
||||||
All
directors and executive officers of the General Partner as a group (34
persons)(11)
|
12,081,432 |
*
|
* |
Number
of shares listed represents less than 1% of the outstanding AXA common
stock.
|
(1)
|
Holdings
of AXA American Depositary Shares (“ADS”) are expressed as their
equivalent in AXA common stock. Each AXA ADS represents the right to
receive one AXA ordinary share.
|
(2)
|
Mr.
Sanders retired as Chairman of the Board of the General Partner and CEO of
the General Partner, AllianceBernstein and Holding on December 19,
2008.
|
(3)
|
Includes
56,500 shares Mr. Carrel-Billiard can acquire within 60 days under option
plans.
|
(4)
|
Includes
4,980,866 shares Mr. de Castries can acquire within 60 days under option
plans. Also includes 84,000 unvested AXA performance shares, which are
paid out when vested based on the price of AXA at that
time.
|
(5)
|
Includes
880,497 shares and 1,507,909 ADSs Mr. Condron can acquire within 60 days
under option plans. Also includes 149,482 unvested performance units,
which are paid out when vested based on the price of ADSs at that time;
payout will be 70% in cash and 30% in
ADSs.
|
(6)
|
Includes
1,450,392 shares Mr. Duverne can acquire within 60 days under option
plans. Also includes 99,183 unvested AXA performance shares,
which are paid out when vested based on the price of AXA at that
time.
|
(7)
|
Includes
157,618 shares Mr. Dziadzio can acquire within 60 days under option plans.
Also includes 19,029 unvested performance units, which are paid out when
vested based on the price of ADSs at that time; payout will be 70% in cash
and 30% in ADSs.
|
(8)
|
Includes
3,021 ADSs Mr. Lane can acquire within 60 days under options
plans.
|
(9)
|
Includes
294 ADSs Ms. Slutsky can acquire within 60 days under option
plans.
|
(10)
|
Includes
4,420 ADSs Mr. Tobin can acquire within 60 days under option
plans.
|
(11)
|
Includes
7,525,873 shares and 1,515,644 ADSs the directors and executive officers
as a group can acquire within 60 days under option
plans.
|
Item 13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
Parties(1)
|
General
Description of Relationship(2)
|
Amounts
Received or
Accrued for in
2008
|
|||
EQAT,
AXA Enterprise Trust and AXA
Premier VIP Trust
|
We
serve as sub-adviser to these open-end mutual funds, each of which is
sponsored by a subsidiary of AXA Financial.
|
$ | 63,567,000 | ||
AXA
Asia Pacific(2)(3)
|
$ | 45,814,000 | |||
AXA
Equitable(3)
|
We
provide investment management services and ancillary accounting,
valuation, reporting, treasury and other services to the general and
separate accounts of AXA Equitable and its insurance company
subsidiaries.
|
$ |
32,463,000
(of which $547,417 relates to
the ancillary services)
|
||
AXA
Group Life Insurance(2)(3)
|
$ | 10,361,000 | |||
MONY
Life Insurance Company and its subsidiaries(3)(4)
|
We
provide investment management services and ancillary accounting
services.
|
$ |
8,963,000
(of which $150,000 relates to
the ancillary services)
|
||
AXA
Sun Life(2)(3)
|
$ | 5,885,000 | |||
AXA
U.K. Group Pension Scheme(2)
|
$ | 2,549,000 | |||
AXA
France(2)(3)
|
$ | 2,326,000 | |||
AXA
Winterthur(2)(3)
|
$ | 2,267,000 | |||
AXA
Rosenberg Investment Management Asia
Pacific(2)(3)
|
$ | 2,138,000 | |||
AXA
(Canada)(2)(3)
|
$ | 1,614,000 | |||
AXA
Corporate Solutions(2)(3)
|
$ | 1,024,000 | |||
AXA
Germany(2)(3)
|
$ | 890,000 | |||
AXA
Bermuda(2)(3)
|
$ | 494,000 | |||
AXA
Belgium(2)(3)
|
$ | 419,000 | |||
AXA
Foundation, Inc., a subsidiary of AXA Financial(2)
|
$ | 222,000 | |||
AXA
Reinsurance Company(2)(3)
|
$ | 176,000 | |||
AXA
Investment Managers Limited(2)(3)
|
$ | 164,000 | |||
AXA
General Insurance Hong Kong Ltd.(2)(3)
|
$ | 153,000 | |||
Other
AXA subsidiaries(2)
|
$ | 122,000 |
(1)
|
AllianceBernstein
is a party to each transaction.
|
(2)
|
We
provide investment management services unless otherwise
indicated.
|
(3)
|
This
entity is a subsidiary of AXA. AXA is an indirect parent of
AllianceBernstein.
|
(4)
|
Subsidiaries
include MONY Life Insurance Company of America and U.S. Financial Life
Insurance Company.
|
Parties(1)(2)
|
General
Description of Relationship
|
Amounts
Paid or
Accrued for in
2008
|
||||
AXA
Advisors
|
AXA
Advisors distributes certain of our Retail Products and provides Private
Client referrals.
|
$ | 9,408,000 | |||
AXA
Equitable
|
AXA
Equitable provides certain data processing services and related
functions.
|
$ | 4,055,000 | |||
AXA
Business Services
|
AXA
Business Services provides data processing services and support for
certain investment operations functions.
|
$ | 3,654,000 | |||
AXA
Equitable
|
We
are covered by various insurance policies maintained by AXA
Equitable.
|
$ | 3,126,000 | |||
AXA
Technology Services India Pvt. Ltd.
|
AXA
Technology Services India Pvt. Ltd. provides certain data processing
services and functions.
|
$ | 1,755,000 | |||
GIE
Informatique AXA (“GIE”)
|
GIE
provides cooperative technology development and procurement services to us
and to various other subsidiaries of AXA.
|
$ | 1,053,000 | |||
AXA
Advisors
|
AXA
Advisors sells shares of our mutual funds under Distribution Services and
Educational Support agreements.
|
$ | 703,000 | |||
AXA Group
Solutions Pvt. Ltd.
|
AXA
Group Solution Pvt. Ltd provides maintenance and development support for
applications.
|
$ | 200,000 |
(1)
|
AllianceBernstein
is a party to each transaction.
|
(2)
|
Each
entity is a subsidiary of AXA. AXA is an indirect parent of
AllianceBernstein.
|
Item 14.
|
Principal
Accounting Fees and Services
|
2008
|
2007
|
|||||||
Audit
Fees(1)
|
$ | 7,490 | $ | 7,212 | ||||
Audit
Related Fees(2)
|
2,408 | 2,530 | ||||||
Tax
Fees(3)
|
2,376 | 2,003 | ||||||
All
Other Fees(4)
|
5 | 27 | ||||||
Total
|
$ |
12,279
|
$ |
11,772
|
(1)
|
Includes
$105,000 paid for audit services to Holding in each of 2008 and
2007.
|
(2)
|
Audit
related fees consist principally of fees for audits of financial
statements of certain employee benefit plans, internal control reviews and
accounting consultation.
|
(3)
|
Tax
fees consist of fees for tax consultation and tax compliance
services.
|
(4)
|
All
other fees in 2008 and 2007 consisted of miscellaneous non-audit
services.
|
Item
15.
|
Exhibits,
Financial Statement Schedules
|
(a)
|
There
is no document filed as part of this Form
10-K.
|
(b)
|
Exhibits.
|
Exhibit
|
Description
|
|
2.01
|
Agreement
between Federated Investors, Inc. and Alliance Capital Management L.P.
dated as of October 28, 2004 (incorporated by reference to Exhibit 2.1 to
Form 10-Q for the quarterly period ended September 30, 2004, as filed
November 8, 2004).
|
|
2.02
|
Acquisition
Agreement dated as of June 20, 2000 and Amended and Restated as of October
2, 2000 among Alliance Capital Management L.P., Alliance Capital
Management Holding L.P., Alliance Capital Management LLC, SCB Inc.,
Bernstein Technologies Inc., SCB Partners Inc., Sanford C. Bernstein &
Co., LLC and SCB LLC (incorporated by reference to Exhibit 2.1 to Form
10-K for the fiscal year ended December 31, 2000, as filed April 2,
2001).
|
|
3.01
|
Amended
and Restated Certificate of Limited Partnership dated February 24, 2006 of
Holding (incorporated by reference to Exhibit 99.06 to Form 8-K, as filed
February 24, 2006).
|
|
3.02
|
Amendment
No. 1 dated February 24, 2006 to Amended and Restated Agreement of Limited
Partnership of Holding (incorporated by reference to Exhibit 3.1 to Form
10-Q for the quarterly period ended September 30, 2006, as filed November
8, 2006).
|
|
3.03
|
Amended
and Restated Agreement of Limited Partnership dated October 29, 1999 of
Alliance Capital Management Holding L.P. (incorporated by reference to
Exhibit 3.2 to Form 10-K for the fiscal year ended December 31, 2003, as
filed March 10, 2004).
|
|
3.04
|
Amended
and Restated Certificate of Limited Partnership dated February 24, 2006 of
AllianceBernstein (incorporated by reference to Exhibit 99.07 to Form 8-K,
as filed February 24, 2006).
|
|
3.05
|
Amendment
No. 1 dated February 24, 2006 to Amended and Restated Agreement of Limited
Partnership of AllianceBernstein (incorporated by reference to Exhibit 3.2
to Form 10-Q for the quarterly period ended September 30, 2006, as filed
November 8, 2006).
|
|
3.06
|
Amended
and Restated Agreement of Limited Partnership dated October 29, 1999 of
Alliance Capital Management L.P. (incorporated by reference to Exhibit 3.3
to Form 10-K for the fiscal year ended December 31, 2003, as filed March
10, 2004).
|
|
3.07
|
Certificate
of Amendment to the Certificate of Incorporation of AllianceBernstein
Corporation (incorporated by reference to Exhibit 99.08 to Form 8-K, as
filed February 24, 2006).
|
|
3.08
|
AllianceBernstein
Corporation By-Laws with amendments through February 24, 2006
(incorporated by reference to Exhibit 99.09 to Form 8-K, as filed February
24, 2006).
|
|
Amendment
and Restatement of the Profit Sharing Plan for Employees of
AllianceBernstein L.P., as of January 1, 2008.
|
||
Amendment
and Restatement of the Retirement Plan for Employees of AllianceBernstein
L.P., as of January 1, 2008.
|
||
Amended
and Restated AllianceBernstein Partners Compensation Plan, as amended and
restated January 23, 2009.
|
||
Amended
and Restated AllianceBernstein L.P. Financial Advisor Wealth Accumulation
Plan, as amended and restated December 5, 2008.
|
||
Amended
and Restated AllianceBernstein Commission Substitution Plan, as amended
and restated December 5, 2008.
|
||
Form
of Award Agreement under the Amended and Restated AllianceBernstein
Partners Compensation Plan.
|
||
Form
of Award Agreement under the Special Option Program.
|
||
Form
of Award Agreement under the AllianceBernstein L.P. Financial Advisor
Wealth Accumulation Plan.
|
||
Summary
of AllianceBernstein L.P.’s Lease at 1345 Avenue of the Americas, New
York, New York 10105.
|
||
Guidelines
for Transfer of AllianceBernstein L.P. Units and AllianceBernstein L.P.
Policy Regarding Partners’ Requests for Consent to Transfer of Limited
Partnership Interests to Third Parties.
|
||
Amended
and Restated Commercial Paper Dealer Agreement, dated as of February 10,
2009, among Banc of America Securities LLC, Merrill Lynch Money Markets
Inc., Deutsche Bank Securities Inc. and AllianceBernstein
L.P.
|
||
10.12
|
Employment
Agreement among Peter S. Kraus, AllianceBernstein Corporation,
AllianceBernstein Holding L.P. and AllianceBernstein L.P., dated as of
December 19, 2008 (incorporated by reference to Exhibit 99.02 to Form 8-K,
as filed December 24, 2008).
|
|
10.13
|
Retirement
Agreement between Lewis A. Sanders and AllianceBernstein L.P. dated as of
December 19, 2008 (incorporated by reference to Exhibit 99.01 to Form 8-K,
as filed December 24, 2008).
|
|
10.14
|
Revolving
Credit Agreement dated as of January 25, 2008 among Sanford C. Bernstein
& Co., LLC, as Borrower, AllianceBernstein L.P., as U.S. Guarantor,
Citibank, N.A., as Administrative Agent, Citigroup Global Markets Inc., as
Arranger, JPMorgan Chase Bank, N.A. and Bank of America, N.A., as
Co-Syndication Agents, HSBC Bank USA, National Association, as
Documentation Agent, and the financial institutions whose names appear on
the signature pages as “Banks” (incorporated by reference to Exhibit 10.08
to Form 10-K for the fiscal year ended December 31, 2007, as filed
February 25,
2008).
|
Exhibit
|
Description
|
|
10.15
|
Amended
and Restated 1997 Long Term Incentive Plan, as amended through November
28, 2007 (incorporated by reference to Exhibit 10.02 to Form 10-K for the
fiscal year ended December 31, 2007, as filed February 25,
2008).
|
|
10.16
|
Amended
and Restated AllianceBernstein Century Club Plan (incorporated by
reference to Exhibit 10.04 to Form 10-K for the fiscal year ended December
31, 2007, as filed February 25, 2008).
|
|
10.17
|
Uncommitted
Line of Credit Agreement dated as of January 23, 2008 between
AllianceBernstein L.P. and Citibank, N.A. (incorporated by reference to
Exhibit 10.09 to Form 10-K for the fiscal year ended December 31, 2007, as
filed February 25, 2008).
|
|
10.18
|
Supplement
dated November 2, 2007 to the Revolving Credit Facility (incorporated by
reference to Exhibit 10.10 to Form 10-K for the fiscal year ended December
31, 2007, as filed February 25, 2008). (See Exhibit
10.22.)
|
|
10.19
|
Amendment
to Letter Agreement entered into by Lewis A. Sanders and AllianceBernstein
L.P. on December 17, 2007 (incorporated by reference to Exhibit 99.01 to
Form 8-K, as filed December 20, 2007).
|
|
10.20
|
Letter
Agreement entered into by Lewis A. Sanders and AllianceBernstein L.P. on
October 26, 2006 (incorporated by reference to Exhibit 99.31 to Form 8-K,
as filed October 31, 2006).
|
|
10.21
|
Amended
and Restated Issuing and Paying Agency Agreement, dated as of May 3, 2006
(incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarterly
period ended March 31, 2006, as filed May 8, 2006).
|
|
10.22
|
Revolving
Credit Facility dated as of February 17, 2006 among AllianceBernstein
L.P., as Borrower, Bank of America, N.A., as Administrative Agent, Banc of
America Securities LLC, as Arranger, Citibank N.A. and The Bank of New
York, as Co-Syndication Agents, Deutsche Bank Securities Inc. and JPMorgan
Chase Bank, N.A., as Co-Documentation Agents, and The Various Financial
Institutions Whose Names Appear on the Signature Pages as “Banks”
(incorporated by reference to Exhibit 10.1 to Form 10-K for the fiscal
year ended December 31, 2005, as filed February 24,
2006).
|
|
10.23
|
Investment
Advisory and Management Agreement for MONY Life Insurance Company
(incorporated by reference to Exhibit 10.4 to Form 10-K for the fiscal
year ended December 31, 2004, as filed March 15, 2005).
|
|
10.24
|
Investment
Advisory and Management Agreement for the General Account of AXA Equitable
Life Insurance Company (incorporated by reference to Exhibit 10.5 to Form
10-K for the fiscal year ended December 31, 2004, as filed March 15,
2005).
|
|
10.25
|
Alliance
Capital Management L.P. Partners Plan of Repurchase adopted as of February
20, 2003 (incorporated by reference to Exhibit 10.2 to Form 10-K for the
fiscal year ended December 31, 2002, as filed March 27,
2003).
|
|
10.26
|
Services
Agreement dated as of April 22, 2001 between Alliance Capital Management
L.P. and AXA Equitable Life Insurance Company (incorporated by reference
to Exhibit 10.19 to Form 10-K for the fiscal year ended December 31, 2001,
as filed March 28, 2002).
|
|
10.27
|
Registration
Rights Agreement dated as of October 2, 2000 by and among Alliance Capital
Management L.P., SCB Inc. and SCB Partners Inc. (incorporated by reference
to Exhibit 10.17 to Form 10-K for the fiscal year ended December 31, 2000,
as filed April 2, 2001).
|
|
10.28
|
Purchase
Agreement dated as of June 20, 2000 by and among Alliance Capital
Management L.P., AXA Financial, Inc. and SCB Inc. (incorporated by
reference to Exhibit 10.18 to Form 10-K for the fiscal year ended December
31, 2000, as filed April 2, 2001).
|
|
10.29
|
Alliance
Capital Management L.P. Annual Elective Deferral Plan (incorporated by
reference to Exhibit 99 to Form S-8, as filed November 6,
2000).
|
|
10.30
|
Extendible
Commercial Notes Dealer Agreement, dated as of December 14, 1999
(incorporated by reference to Exhibit 10.10 to the Form 10-K for the
fiscal year ended December 31, 1999, as filed March 28,
2000).
|
|
10.31
|
Amended
and Restated Investment Advisory and Management Agreement dated January 1,
1999 among Alliance Capital Management Holding L.P., Alliance Corporate
Finance Group Incorporated, and AXA Equitable Life Insurance Company
(incorporated by reference to Exhibit (a)(6) to Form 10-Q/A for the
quarterly period ended September 30, 1999, as filed on September 28,
2000).
|
|
10.32
|
Amended
and Restated Accounting, Valuation, Reporting and Treasury Services
Agreement dated January 1, 1999 between Alliance Capital Management
Holding L.P., Alliance Corporate Finance Group Incorporated, and AXA
Equitable Life Insurance Company (incorporated by reference to Exhibit
(a)(7) to the Form 10-Q/A for the quarterly period ended September 30,
1999, as filed September 28, 2000).
|
|
10.33
|
Alliance
Capital Accumulation Plan (incorporated by reference to Exhibit 10.11 to
Form 10-K for the fiscal year ended December 31, 1988, as filed March 31,
1989).
|
|
AllianceBernstein
Consolidated Ratio of Earnings to Fixed Charges in respect of the years
ended December 31, 2008, 2007 and 2006.
|
||
Subsidiaries
of AllianceBernstein.
|
||
Consent
of PricewaterhouseCoopers LLP.
|
||
Certification
of Mr. Kraus furnished pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
|
||
Certification
of Mr. Joseph furnished pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
|
||
Certification
of Mr. Kraus furnished for the purpose of complying with Rule 13a-14(b) or
Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|
||
Certification
of Mr. Joseph furnished for the purpose of complying with Rule 13a-14(b)
or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of
2002.
|
AllianceBernstein
L.P.
|
||
Date:
February 20, 2009
|
By:
|
/s/
Peter S. Kraus
|
Peter
S. Kraus
|
||
Chairman
of the Board and Chief Executive
Officer
|
Date:
February 20, 2009
|
/s/
Robert H. Joseph, Jr.
|
|
Robert
H. Joseph, Jr.
|
||
Senior
Vice President and Chief Financial Officer
|
||
Date:
February 20, 2009
|
/s/
Edward J. Farrell
|
|
Edward
J. Farrell
|
||
Senior
Vice President and Chief Accounting
Officer
|
/s/
Peter S. Kraus
|
/s/
Weston M. Hicks
|
|
Peter
S. Kraus
|
Weston
M. Hicks
|
|
Chairman
of the Board
|
Director
|
|
/s/
Dominique Carrel-Billiard
|
/s/
Nick Lane
|
|
Dominique
Carrel-Billiard
|
Nick
Lane
|
|
Director
|
Director
|
|
/s/
Christopher M. Condron
|
/s/
Gerald M. Lieberman
|
|
Christopher
M. Condron
|
Gerald
M. Lieberman
|
|
Director
|
Director
|
|
/s/
Henri de Castries
|
/s/
Lorie A. Slutsky
|
|
Henri
de Castries
|
Lorie
A. Slutsky
|
|
Director
|
Director
|
|
/s/
Denis Duverne
|
/s/
A.W. (Pete) Smith, Jr.
|
|
Denis
Duverne
|
A.W.
(Pete) Smith, Jr.
|
|
Director
|
Director
|
|
/s/
Richard S. Dziadzio
|
/s/
Peter J. Tobin
|
|
Richard
S. Dziadzio
|
Peter
J. Tobin
|
|
Director
|
Director
|
|
/s/
Deborah S. Hechinger
|
||
Deborah
S. Hechinger
|
||
Director
|
Description
|
Balance
at Beginning of Period
|
Charged
(Credited) to Costs and Expenses
|
Deductions
|
Balance
at End of Period
|
|||||||||||||
(in
thousands)
|
|||||||||||||||||
For
the year ended December 31, 2006
|
$ | 939 | $ | 251 | $ | 77 |
(a)
|
$ | 1,113 | ||||||||
For
the year ended December 31, 2007
|
$ | 1,113 | $ | 955 | $ | 276 |
(b)
|
$ | 1,792 | ||||||||
For
the year ended December 31, 2008
|
$ | 1,792 | $ | (192 | ) | $ | 112 |
(c)
|
$ | 1,488 |
|
PAGE
|
|
ARTICLE
I
|
DEFINITIONS
|
2
|
ARTICLE
II
|
MEMBERSHIP
|
12
|
ARTICLE
III
|
CREDITING
OF SERVICE
|
15
|
ARTICLE
IV
|
COMPANY
CONTRIBUTIONS
|
17
|
ARTICLE
V
|
MEMBER
SALARY DEFERRAL ELECTIONS, SALARY DEFERRAL CONTRIBUTIONS AND ROLLOVER
CONTRIBUTIONS
|
19
|
ARTICLE
VI
|
ROTH
ELECTIVE DEFERRALS
|
26
|
ARTICLE
VII
|
ALLOCATIONS
OF COMPANY CONTRIBUTIONS AND FORFEITURES
|
27
|
ARTICLE
VIII
|
ACCOUNTS,
ALLOCATIONS AND LOANS
|
30
|
ARTICLE
IX
|
VALUATION
|
33
|
ARTICLE
X
|
DETERMINATION
OF BENEFITS
|
37
|
ARTICLE
XI
|
TIME
AND MANNER OF PAYMENT OF BENEFITS
|
40
|
ARTICLE
XII
|
ADMINISTRATION
OF THE PLAN
|
45
|
ARTICLE
XIII
|
THE
TRUST FUND
|
55
|
ARTICLE
XIV
|
CERTAIN
RIGHTS AND OBLIGATIONS OF THE COMPANY
|
56
|
ARTICLE
XV
|
NON-ALIENATION
OF BENEFITS
|
58
|
ARTICLE
XVI
|
AMENDMENTS
|
59
|
ARTICLE
XVII
|
LIMITATIONS
ON BENEFITS AND CONTRIBUTIONS
|
60
|
ARTICLE
XVIII
|
TOP-HEAVY
PLAN YEARS
|
61
|
ARTICLE
XIX
|
MISCELLANEOUS
|
64
|
APPENDIX
A.
|
REQUIRED
DISTRIBUTION RULES
|
60
|
APPENDIX
B.
|
COMMON
OR COLLECTIVE TRUST FUNDS OR POOLED INVESTMENT FUNDS
|
64
|
|
(a)
|
his
Company Contributions Account;
|
|
(b)
|
his
Member Contributions Account;
|
|
(c)
|
his
Member Salary Deferral Account;
|
|
(d)
|
Roth
Elective Deferral Account; and
|
|
(e)
|
his
Rollover Account.
|
|
(a)
|
Employees
with less than six (6) months of
service;
|
|
(b)
|
Employees
who normally work less than 17 ½ hours per
week;
|
|
(c)
|
Employees
who normally work less than six (6) months during a year;
and
|
|
(d)
|
Employees
who have not yet attained age 21.
|
|
Section
2.01.
|
Admission to the
Plan.
|
|
Section
2.02.
|
Termination of
Membership and Inactive
Membership.
|
|
Section
2.03.
|
Readmission to the
Plan.
|
|
Section
2.04.
|
Designation of
Beneficiary.
|
|
Section
3.01
|
Year of
Service.
|
|
Section
3.02
|
Number of Years of
Service.
|
|
Section
3.03.
|
Restoration of
Service.
|
|
Section
3.04.
|
Service with
Non-employer Affiliates.
|
|
Section
3.05.
|
Service with Equitable
Capital Management
Corporation.
|
|
Section
3.06.
|
Service with Shields
and Regent.
|
|
Section
3.07.
|
Cursitor
Service.
|
|
Section
3.08.
|
Sanford Bernstein
Members.
|
|
Section
4.01.
|
Company Profit Sharing
Contributions.
|
|
Section
4.02.
|
Company Matching
Contributions.
|
|
Section
4.03.
|
Time of
Contributions.
|
|
Section
4.04.
|
Irrevocability of
Contributions.
|
|
Section
5.01.
|
Member Salary Deferral
Elections.
|
|
Section
5.02.
|
Allocation of Member
Salary Deferral Elections.
|
|
Section
5.03.
|
Rollover Contributions
and After-Tax Rollover
Contributions.
|
|
Section
5.04.
|
Return of Excess
Member Salary Deferral
Elections.
|
|
Section
5.05.
|
Actual Deferral
Percentage Test.
|
|
Section
5.06.
|
Return of Excess
Contributions.
|
|
Section
5.07.
|
Catch-up
Contributions.
|
|
Section
6.01.
|
General
Application.
|
|
Section
6.02.
|
Separate
Accounting.
|
|
Section
6.03.
|
Correction of Excess
Contributions.
|
|
Section
7.01.
|
Contributions.
|
|
Section
7.02.
|
Allocation to Company
Contributions Accounts.
|
|
Section
7.03.
|
Actual Contribution
Percentage Test.
|
|
Section
7.04.
|
Return of Excess
Aggregate Contributions.
|
|
Section
8.01.
|
Investment
Funds.
|
|
Section
8.02.
|
Separate
Accounts.
|
|
Section
8.03.
|
Investing of the
Company Contributions.
|
|
Section
8.04.
|
Elections.
|
|
Section
8.05.
|
Inter-Account
Transfers.
|
|
Section
8.06.
|
Unallocated Forfeiture
Account.
|
|
Section
8.07.
|
Loans.
|
|
Section
9.01.
|
Valuation of Trust
Fund.
|
|
Section
9.02.
|
Valuation of Company
Contributions Accounts.
|
|
Section
9.03.
|
Valuation of Member
Contributions Account.
|
|
Section
9.04.
|
Valuation of Member
Salary Deferral Accounts.
|
|
Section
9.05.
|
Valuation of Roth
Elective Deferral Accounts.
|
|
Section
9.06.
|
Valuation of Rollover
Accounts.
|
|
Section
9.07.
|
Valuation of Uncashed
Check Account.
|
|
Section
9.08.
|
Valuation of Loan
Accounts.
|
|
Section
9.09.
|
Statement to
Members.
|
|
Section
9.10.
|
Unallocated
Forfeitures Account
|
|
Section
10.01.
|
Retirement.
|
|
Section
10.02.
|
Disability.
|
|
Section
10.03.
|
Death.
|
|
Section
10.04.
|
Vesting.
|
|
Section
10.05.
|
Other Severance from
Employment.
|
|
Section
10.06.
|
Forfeitures.
|
|
Section
11.04.
|
Termination
Benefits.
|
|
Section
11.05.
|
Direct Rollover
Distributions.
|
|
Section
11.06.
|
Latest Commencement of
Benefits.
|
|
Section
11.07.
|
Indirect Payment of
Benefits.
|
|
Section
11.08.
|
Limitations on
Distributions.
|
|
Section
11.09.
|
Consent to
Distributions.
|
|
Section
11.10.
|
Pre-Retirement
Distribution.
|
|
Section
11.11.
|
Partial
Withdrawals.
|
|
Section
12.01.
|
Administrative
Committee.
|
|
Section
12.02.
|
Investment
Committee.
|
|
Section
12.03.
|
Payment of Benefits
(Administrative Committee).
|
|
Section
12.04.
|
Powers and Authority;
Action Conclusive (Administrative
Committee).
|
|
Section
12.05.
|
Reliance on
Information (Administrative
Committee).
|
|
Section
12.06.
|
Actions to be Uniform;
Regular Personnel Policies to be
Followed.
|
|
Section
12.07.
|
Fiduciaries.
|
|
Section
12.08.
|
Plan
Administrator.
|
|
Section
12.09.
|
Notices and Elections
(Administrative Committee).
|
|
Section
12.10.
|
Misrepresentation of
Age.
|
|
Section
12.11.
|
Decisions of
Administrative Committee are
Binding.
|
|
Section
12.12.
|
Spouse’s
Consent.
|
|
Section
12.13.
|
Accounts and
Records.
|
|
Section
12.14.
|
Forms.
|
|
Section
12.15.
|
Liability and
Indemnification.
|
|
Section
12.16.
|
Claim and Appeal
Procedure.
|
|
Section
12.17.
|
Elections by Former
Employees of Equitable Capital Management
Corporation.
|
|
Section
13.01.
|
The Trust
Agreement.
|
|
Section
13.02.
|
Trustee’s Power and
Duties.
|
|
Section
13.03.
|
Use of Trust
Fund.
|
|
Section
13.04.
|
Payment of
Expenses.
|
|
Section
14.01.
|
Disclaimer of
Liability.
|
|
Section
14.02.
|
Termination.
|
|
Section
14.03.
|
Employer-Employee
Relationship.
|
|
Section
14.04.
|
Merger,
Etc.
|
|
Section
14.05.
|
Determination
Final.
|
|
Section
15.01.
|
Provisions with
Respect to Assignment and
Levy.
|
|
Section
15.02.
|
Alternate
Application.
|
|
Section
15.03.
|
Exceptions.
|
|
Section
15.04.
|
Company’s
Rights.
|
|
Section
15.05.
|
Provision Against
Diversion.
|
|
Section
16.02.
|
|
Section
18.01.
|
Binding on Heirs,
Etc.
|
|
Section
18.02.
|
Governing
Law.
|
|
Section
18.03.
|
Separability.
|
|
Section
18.04.
|
Captions and
Gender.
|
|
Section
18.05.
|
Merger of
SCOPE.
|
ARTICLE
I
|
DEFINITIONS
|
1
|
ARTICLE
II
|
ELIGIBILITY
FOR PARTICIPATION
|
21
|
ARTICLE
III
|
RETIREMENT
ON OR AFTER NORMAL RETIREMENT DATE
|
23
|
ARTICLE
IV
|
VESTING
|
29
|
ARTICLE
V
|
EARLY
RETIREMENT AND DISABILITY BENEFIT
|
31
|
ARTICLE
VI
|
OPTIONAL
METHODS OF PAYMENT
|
32
|
ARTICLE
VII
|
DEATH
BENEFIT
|
38
|
ARTICLE
VIII
|
DIRECT
ROLLOVER DISTRIBUTIONS
|
40
|
ARTICLE
IX
|
EMPLOYER
CONTRIBUTION AND FUNDING POLICY
|
42
|
ARTICLE
X
|
LIMITATIONS
ON BENEFITS
|
43
|
ARTICLE
XI
|
TOP-HEAVY
PLAN YEARS
|
48
|
ARTICLE
XII
|
NON-ALIENABILITY
|
53
|
ARTICLE
XIII
|
AMENDMENT
OF THE PLAN
|
54
|
ARTICLE
XIV
|
TERMINATION
OF THE PLAN
|
56
|
ARTICLE
XV
|
TRUST
AND ADMINISTRATION
|
60
|
ARTICLE
XVI
|
CLAIM
AND APPEAL PROCEDURE
|
65
|
ARTICLE
XVII
|
MISCELLANEOUS
|
71
|
ARTICLE
XVIII
|
ADMINISTRATION
OF THE PLAN
|
73
|
APPENDIX
A
|
REQUIRED
MINIMUM DISTRIBUTION RULES
|
|
APPENDIX
B
|
COMMON
OR COLLECTIVE TRUST FUNDS OR POOLED INVESTMENT FUNDS
|
Years of Service
|
Percentage Vested
|
Fewer
than Five
|
0%
|
Five
or more
|
100%
|
Years of Service
|
Nonforfeitable
Percentage
|
Fewer
than Two Years
|
0%
|
Two
Years but less than Three Years
|
20%
|
Three
Years but less than Four Years
|
40%
|
Four
Years but less than Five Years
|
60%
|
Five
or more Years
|
100%
|
Section
2.04
|
Earnings on an
Account.
|
Section
2.05
|
Awards Invested in Approved
Funds.
|
Section
2.06
|
Awards Invested in Restricted
Units.
|
Section
2.07
|
Awards Invested in
Options
|
Section
3.01
|
General.
|
Age
of Participant
|
|
As of Effective Date
|
Vesting Period
|
Up
to and including 61
|
4
years
|
62
|
3
years
|
63
|
2
years
|
64
|
1
year
|
65
or older
|
Fully
vested at
grant
|
Options
|
Vesting Period
|
Initial
Award
|
5
years (20% in each year)
|
Match
|
10
years (20% in each of years 6 through
10)
|
Options
|
Expiration Date
|
Initial
Award
|
10
years from grant date
|
Match
|
11
years from grant
date
|
Age
of Participant as of Effective
Date
|
Vesting Period
|
Up
to and including 47
|
8
years
|
48
|
7
years
|
49
|
6
years
|
50-57
|
5
years
|
58
|
4
years
|
59
|
3
years
|
60
|
2
years
|
61
|
1
year
|
62
or older
|
Fully
vested at
grant
|
Section
4.02
|
Distributions If Deferral
Election Is Not In Effect.
|
Section
4.03
|
Distributions If Deferral
Election Is In Effect.
|
Section
6.02
|
Pre-1999 Award
Election.
|
Section
8.04
|
General
Provisions.
|
Page
|
||
Section
1.
|
PURPOSE.
|
1
|
Section
2.
|
DEFINITIONS.
|
1
|
Section
3.
|
AWARD.
|
4
|
Section
4.
|
VESTING.
|
4
|
Section
5.
|
MEASUREMENT
OF EARNINGS.
|
4
|
Section
6.
|
DISTRIBUTION
OF INCENTIVE BENEFIT.
|
6
|
Section
7.
|
CLAIMS
PROCEDURES.
|
8
|
Section
8.
|
NO
FUNDING OBLIGATION.
|
10
|
Section
9.
|
NON-TRANSFERABILITY
OF RIGHTS UNDER THE PLAN.
|
10
|
Section
10.
|
MINORS
AND INCOMPETENTS.
|
10
|
Section
11.
|
WITHHOLDING
TAXES.
|
11
|
Section
12.
|
ASSIGNMENT.
|
11
|
Section
13.
|
LIMITATION
OF RIGHTS.
|
11
|
Section
14.
|
ADMINISTRATION.
|
11
|
Section
15.
|
AMENDMENT
OR TERMINATION OF PLAN.
|
12
|
Section
16.
|
SEVERABILITY
OF PROVISIONS.
|
13
|
Section
17.
|
ENTIRE
AGREEMENT.
|
13
|
Section
18.
|
HEADINGS
AND CAPTIONS.
|
13
|
Section
19.
|
NON-EMPLOYMENT.
|
13
|
Section
20.
|
PAYMENT
NOT SALARY.
|
13
|
Section
21.
|
GENDER
AND NUMBER.
|
13
|
Section
22.
|
CONTROLLING
LAW.
|
13
|
Section
1.
|
PURPOSE.
|
Section
2.
|
DEFINITIONS.
|
|
(a)
|
The
Participant’s Separation from Service or, with respect to each Participant
who is a Key Employee, six (6) months following his Separation from
Service, as defined under Section 409A;
or
|
|
(b)
|
Subject
to the requirements of Section 409A, a date elected by the Participant
within a period permitted by the Committee as set forth in the
Administrative Guidelines for the
Plan.
|
Section
3.
|
AWARD.
|
Section
4.
|
VESTING.
|
Section
5.
|
MEASUREMENT OF
EARNINGS.
|
|
(a)
|
Recapitalization. In
the event that the Committee determines that any distribution (whether in
the form of cash, limited partnership interests, other securities, or
other property), recapitalization (including, without limitation, any
subdivision or combination of limited partnership interests),
reorganization, consolidation, combination, repurchase, or exchange of
limited partnership interests or other securities of Holding, issuance of
warrants or other rights to purchase limited partnership interests or
other securities of Holding, any incorporation of Holding, or other
similar transaction or event affects the Holding Units such that an
adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee may, if
so authorized by the Board, in such manner as it may deem equitable,
adjust the number of Holding Units held in Participant’s
Account.
|
|
(b)
|
Deferral
of Holding Units. Any Holding Units with respect to
which a Participant has elected to notionally invest his or her Account
shall be posted to the Participant’s Account. Whenever
quarterly or special distribution are paid with respect to Holding Units,
an amount equal to the amount of such distribution per Holding Unit shall
be deemed credited to the Participant’s Account with respect to each
Holding Unit credited to the Participant’s Account and converted into
additional Holding Units at such intervals as may be established by the
Committee in such manner as determined by the Committee, but in any event
no less frequently than annually, based on the fair market value of a
Holding Unit on the date of such conversion, as determined by the
Committee, in its sole discretion. In no event shall any
distributions be paid, or any Holding Units converted pursuant to this
subsection be distributed, to the Participant before the date that the
Participant’s Incentive Benefits are paid pursuant to Section 6
hereof.
|
Section
6.
|
DISTRIBUTION OF
INCENTIVE BENEFIT.
|
|
(a)
|
Subject
to subsections (b) and (c) of this Section, such election may not take
effect until the twelve (12) month anniversary of the date the election is
made and filed with the Committee (or a designee of the
Committee);
|
|
(b)
|
In
connection with an election made by a Participant pursuant to this Section
6.3, the Participant must elect a new Elective Distribution Date that is
no earlier than the five year anniversary of the Participant’s previous
Elective Distribution Date (regardless of whether the Participant’s new
election was solely to change his Elective Distribution Form);
and
|
|
(c)
|
Any
election related to a payment of Incentive Benefits at an Elective
Distribution Date described in Section 2.12(b) shall not be effective
unless made at least twelve (12) months prior to the Elective Distribution
Date that such election is changing (regardless if the new election merely
changes the Elective Distribution
Form).
|
|
(a)
|
Upon
the request of a Participant, the Committee, in its sole discretion, may
approve, due to the Participant’s “Unforeseeable Emergency,” an immediate
lump sum distribution to the Participant of all or a portion of a
Participant’s unpaid vested Incentive Benefits. For the
purposes of this Section 6.6, an “Unforeseeable Emergency” means a severe
financial hardship to a Participant or former Participant within the
meaning of Section 409A resulting from (i) an illness or accident of the
Participant, former Participant or spouse, or a dependent (as defined in
Code Section 152 (without regard to Sections 152(b)(1), (b)(2), and
(d)(1)(B)) of the Participant or former Participant, (ii) loss of property
of the Participant or former Participant due to casualty or (iii) other
similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant or former Participant, all
as determined in the sole discretion of the
Committee.
|
|
(b)
|
The
amount to be paid pursuant to Section 6.6(a) of the Plan shall not exceed
the amount necessary to satisfy the applicable Unforeseeable Emergency
plus amounts necessary to pay taxes reasonably anticipated as a result of
the payment, after taking into account the extent to which such hardship
is or may be relieved through reimbursement or compensation by insurance
or otherwise or by liquidation of the Participant’s assets (to the extent
such assets would not itself cause severe
hardship).
|
Section
7.
|
CLAIMS
PROCEDURES.
|
|
(a)
|
Any
claim by any employee, Participant or Beneficiary (“Claimant”) with
respect to eligibility, participation, vesting, contributions, benefits or
other aspects of the operation of the Plan shall be made in writing to the
Committee. The Committee shall provide the Claimant with the
necessary forms and make all determinations as to the right of any person
to a disputed benefit. If a Claimant is denied benefits under
the Plan, the Committee or its designee shall give written or electronic
notice to the Claimant of the denial of the claim within ninety (90) days
after the Committee or its designee receives the claim, provided that in
the event of special circumstances such period may be
extended.
|
|
(b)
|
In
the event of special circumstances, the ninety (90) day period may be
extended for a period of up to ninety (90) days (for a total of one
hundred eighty (180) days). If the initial ninety (90) day
period is extended, the Committee or its designee shall give written
notice to the Claimant within ninety (90) days of receipt of the
claim. The notice of extension shall indicate the special
circumstances requiring the extension of time and provide the date by
which the Committee expects to make a determination with respect to the
claim. If the extension is required due to the Claimant’s
failure to submit information necessary to decide the claim, the period
for making the determination shall be tolled from the date on which the
extension notice is sent to the Claimant until the earlier of (i) the
date on which the Claimant responds to the Committee’s request for
information, or (ii) expiration of the forty-five (45) day period
commencing on the date that the Claimant is notified that the requested
additional information must be
provided.
|
|
(c)
|
If
notice of the denial of a claim is not furnished within the required time
period described herein, the claim shall be deemed denied as of the last
day of such period.
|
|
(d)
|
If
a claim is wholly or partially denied, the notice to the Claimant shall
set forth:
|
|
(i)
|
The
specific reason or reasons for the
denial;
|
|
(ii)
|
Specific
reference to the pertinent Plan provisions upon which the denial is
based;
|
|
(iii)
|
A
description of any additional material or information necessary for the
Claimant to complete the claim request and an explanation of why such
material or information is
necessary;
|
|
(iv)
|
A
description of the Plan’s review procedures and steps to be taken, as well
as the applicable time limits if the Claimant wishes to submit the adverse
determination for review; and
|
|
(v)
|
A
statement of the Claimant’s right to bring a civil action under Section
502(a) of ERISA following an adverse benefit determination on
review.
|
|
(a)
|
If
a claim has been wholly or partially denied, the Claimant may submit the
claim for review by the Committee. Any request for review of a
claim must be made in writing to the Committee no later than sixty (60)
days after the Claimant receives notification of denial or, if no
notification was provided, the date the claim is deemed
denied. The Claimant or his duly authorized representative
may:
|
|
(i)
|
Upon
written request and free of charge, be provided with reasonable access to,
and copies of, relevant documents, records, and other information relevant
to the Claimant’s claim; and
|
|
(ii)
|
Submit
written comments, documents, records, and other information relating to
the claim. The review of the claim determination shall take
into account all comments, documents, records, and other information
submitted by the Claimant relating to the claim, without regard to whether
such information was submitted or considered in the initial claim
determination.
|
|
(b)
|
The
decision of the Committee upon review shall be made within sixty
(60) days after receipt of the Claimant’s request for review, unless
special circumstances (including, without limitation, the need to hold a
hearing) require an extension. In the event of special
circumstances, the sixty (60) day period may be extended by the Committee
in its sole discretion for a period of up to one hundred twenty (120)
days.
|
|
(c)
|
If
notice of the decision upon review is not furnished within the required
time period described herein, the claim on review shall be deemed denied
as of the last day of such period.
|
|
(d)
|
The
Committee, in its sole discretion, may hold a hearing regarding the claim
and request that the Claimant attend. If a hearing is held, the
Claimant shall be entitled to be represented by
counsel.
|
|
(e)
|
The
Committee’s decision upon review on the Claimant’s claim shall be
communicated in writing or electronically to the Claimant. If
the claim upon review is denied, the notice to the Claimant shall set
forth:
|
|
(i)
|
The
specific reason or reasons for the decision, with references to the
specific Plan provisions on which the determination is
based;
|
|
(ii)
|
A
statement that the Claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records and
other information relevant to the claim;
and
|
|
(iii)
|
A
statement of the Claimant’s right to bring a civil action under
Section 502(a) of ERISA.
|
Section
8.
|
NO FUNDING
OBLIGATION.
|
Section
9.
|
NON-TRANSFERABILITY OF
RIGHTS UNDER THE PLAN.
|
Section
10.
|
MINORS AND
INCOMPETENTS.
|
Section
11.
|
WITHHOLDING
TAXES.
|
Section
12.
|
ASSIGNMENT.
|
Section
13.
|
LIMITATION OF
RIGHTS.
|
Section
14.
|
ADMINISTRATION.
|
Section
15.
|
AMENDMENT OR
TERMINATION OF PLAN.
|
Section
16.
|
SEVERABILITY OF
PROVISIONS.
|
Section
17.
|
ENTIRE
AGREEMENT.
|
Section
18.
|
HEADINGS AND
CAPTIONS.
|
Section
19.
|
NON-EMPLOYMENT.
|
Section
20.
|
PAYMENT NOT
SALARY.
|
Section
21.
|
GENDER AND
NUMBER.
|
Section
22.
|
CONTROLLING
LAW.
|
Section
23.
|
SECTION
409A.
|
By:
|
/s/ Robert H.
Joseph, Jr.
|
||
Robert
H. Joseph, Jr.
|
|||
SVP
and Chief Financial Officer
|
AllianceBernstein
l.p.
|
||||
AllianceBernstein
Holding l.p.
|
||||
By:
|
/s/
Gerald M. Lieberman
|
|||
Gerald
M. Lieberman
|
||||
President
and Chief Operating Officer
|
1.
|
The
number of Units that the Participant is entitled to purchase pursuant to
the Options granted under this Agreement is <OPTS_GRANTED>.
|
2.
|
The per Unit
price to purchase Units pursuant to the Options granted under this
Agreement is $17.05 per
Unit.
|
3.
|
Percentage
of Units With Respect to
|
Vesting
Date
|
Vested
Percentage
|
|||
January
1, 2009
|
14.3%
|
|||
January
1, 2010
|
14.3%
|
|||
January
1, 2011
|
14.3%
|
|||
January
1, 2012
|
14.3%
|
|||
January
1, 2013
|
14.3%
|
|||
January
1, 2014
|
14.3%
|
|||
January
1, 2015
|
14.2%
|
ALLIANCEBERNSTEIN
L.P.
|
|||
By:
|
/s/ Robert H. Joseph, Jr. |
|
|
Robert H. Joseph, Jr. |
|
||
SVP and Chief Financial Officer |
|
||
[NAME
OF PARTICIPANT]
|
|
1.
|
In
lieu of receiving my Incentive Benefits in accordance with Section 6.1 of
the Plan, I elect to receive (or commence receiving) my vested Incentive
Benefits under the Plan on the following Elective Distribution
Date:
|
||
£
|
As
soon as administratively possible following my Separation of Service, as
defined in the Plan.
|
||
£
|
January
31,
20____ (this
date must be later than date on which the Incentive Benefits will become
100% vested under Agreement).
|
||
2.
|
In
lieu of receiving my Incentive Benefits in accordance with Section 6.1 of
the Plan, I elect to receive my Incentive Benefits under the Plan in the
following Elective Distribution Form:
|
||
£
|
Substantially
equal annual installments paid over a period of _____ years (not exceeding
10 years).
|
||
£
|
A
single lump sum.
|
Signature
of
|
||||
Participant:
|
|
Date: |
|
·
|
AllianceBernstein
Small Cap Growth Portfolio
|
|
·
|
AllianceBernstein
Small/Mid-Cap Value Fund
|
|
·
|
AllianceBernstein
Real Estate Investment Fund
|
|
·
|
Federated
Government Obligation Fund
|
|
·
|
Bernstein
Strategic Value Portfolio
|
|
·
|
Bernstein
Strategic Growth Portfolio
|
|
·
|
Bernstein
International Portfolio
|
|
·
|
Bernstein
Global Style Blend Portfolio
|
|
·
|
Bernstein
Emerging Markets Fund
|
|
·
|
Bernstein
Intermediate Duration Fund
|
|
·
|
Bernstein
Short Duration Fund
|
|
·
|
Bernstein
Advanced Value Hedge Fund
|
|
·
|
Bernstein
Global Opportunities Hedge Fund
|
|
·
|
Bernstein
Global Diversified Hedge Fund
|
|
·
|
AllianceBernstein
Global Diversified Strategies - Hedge Fund
A
|
|
·
|
AllianceBernstein
Global Diversified Strategies - Hedge Fund
B
|
|
·
|
AllianceBernstein
Holding Units1
|
1
|
AllianceBernstein
Holding Units in which Plan participants obtain a notional interest are
issued pursuant to a registration statement on Form S-8 and
prospectus. Copies of these documents are available, free of
charge, from the Company or the plan
administrator.
|
Parties
and Documents
|
1
|
Demised
Premises
|
4
|
Monthly
Fixed Rent
|
7
|
Electricity
|
12
|
Tax
Escalation
|
15
|
Expense
Escalation
|
17
|
Cleaning
|
19
|
Maintenance
and Repairs
|
22
|
Alterations
|
23
|
Miscellaneous
Matters Relating to Improvements
|
24
|
SNDA
& Estoppel
|
26
|
Insurance
and Liability
|
27
|
Use
|
28
|
Term
|
29
|
Services
|
31
|
Casualty/Condemnation
|
35
|
Assignment/Subletting
|
36
|
Rights
to Additional Space
|
38
|
Default
and Landlord Remedies
|
40
|
Access
|
42
|
Notices
|
43
|
Landlord:
|
1345
Leasehold LLC, a Delaware limited liability company
(“Landlord”)
|
Tenant:
|
AllianceBernstein
L.P. (formerly known as Alliance Capital Management L.P.), a Delaware
limited partnership (“Alliance”)
|
Floor
(entire floor unless
otherwise noted)
|
Delivery
Date
|
Concourse
(part) (Sup15 §23(a), Sup17 §13, Sup23 §2a)
|
Delivered.
|
Ground
Floor (part)
**
|
The
Ground Floor (part) formerly leased to Alliance has been surrendered and
deleted from the demised premises. Landlord has leased the
Ground Floor (part) to Wachovia Bank, National Association (“Wachovia”)
pursuant to the Agreement of Lease dated December 22, 2003 (the “Wachovia
Lease”), for a term coterminous with Alliance's lease which Wachovia may
extend pursuant to its three 5-year extension options. If the
term of the Wachovia Lease expires or terminates prior to the expiration
or termination of Alliance’s lease, then, on the day after said
termination, the Ground Floor (part) will be added back to the demised
premises on substantially the same terms (including the rent terms) as
were in effect prior to its surrender and deletion from the demised
premises (Sup21 §3). For more information regarding the terms
of the surrender of Ground Floor part, see below.
|
2,
8, 9, 11 through 14 (Sup15 §2(a); Ltr2; Sup16
§11)
|
Delivered.
|
10
(Sup19 §3(a))
***
|
Delivered.
|
15
(Sup12 §2(a))
|
Delivered.
|
16
(Sup12 §2(b))
|
Delivered.
|
17
(Sup16 §2(b); Sup17 §2(b); Sup18 §2(b); Sup22 §2(b))
|
Delivered.
|
31
(part) (Sup7 §2(c))
|
Delivered.
|
31
(part) (Sup24 §2(a))
|
Anticipated
to be May 1, 2010.
|
32
(Sup6 §2)
|
Delivered.
|
33
(Sup7 §2(a))
|
Delivered.
|
34
(NW Cor. 94) (Sup8 §2(a))
|
Delivered.
|
34
(NW Cor. 95) (Sup8 §1(c))
|
Delivered.
|
34
(balance) (Sup7 §2(b))
|
Delivered.
|
35
(Sup14 §2(a))
|
Delivered.
|
36
(Sup14 §2(b))
|
Delivered.
|
37
(NE Cor.) (orig. intro.)
|
Delivered.
|
37
(NW Cor.) (orig. §46.01)
|
Delivered.
|
37
(SE Cor.) (Sup1 §2)
|
Delivered.
|
37
(SW Cor.) (Sup5 §2)
|
Delivered.
|
38
(orig. intro.)
|
Delivered.
|
39
(Sup4 §2)
|
Delivered.
|
40,
41 and 45 (Sup9 §3(a); LTR1 par 2)
|
Delivered.
|
42
(Sup25 §2(a))
|
Delivered.
|
43
and 44 (Sup26 §2(a))
|
Anticipated
to be May 1,
2011.
|
·
|
Enforcement: Landlord
will make reasonable efforts to enforce the Wachovia Lease (including the
rent obligations). If Wachovia defaults under the Wachovia
Lease, then Alliance may, at its option, participate in any action
Landlord takes in respect of said default. If Landlord does not
take any action, then Alliance may, at its option, (1) cause the Landlord
to assign its right to proceed against Wachovia, in which case Alliance
may then proceed directly against Wachovia provided that Alliance
indemnifies Landlord from any loss arising from such action, or (2)
require the Landlord to proceed against Wachovia in which case Alliance
will reimburse Landlord within 30 days after demand for any reasonable
out-of-pocket expenses incurred by Landlord in respect of enforcing the
Wachovia Lease (Sup21 §4(f)).
|
·
|
Amendments,
Terminations, Extensions and Consents: Landlord is prohibited
from amending the Wachovia Lease or waiving any provision thereof without
first obtaining Alliance’s consent. Alliance must be reasonable
in respect of consenting to any amendment that would not have an economic
or adverse impact on Alliance and Alliance’s failure to respond to a
request for such a consent within 5 business days of receipt is deemed
consent. Landlord is prohibited from terminating the term of
the Wachovia Lease except in the event of a default thereunder or
extending the term of the Wachovia Lease except pursuant to the express
provisions thereof without first obtaining Alliance's consent (Sup21
§5(a)). Landlord is prohibited from granting its consent to any
matter contemplated by the Wachovia Lease (e.g., subleases and
alterations) without first obtaining Alliance’s
consent. Alliance's rights in respect of Wachovia signage is
summarized in more detail below. Alliance is required to be
reasonable in granting its consent to any such matter if Landlord is
obligated to be reasonable under the Wachovia Lease. Alliance
is required to respond in the same time period as Landlord is obligated to
respond to any request for consent and Alliance will be deemed to have
given its consent if it fails to respond (Sup21 §5(c); LTR3
§3).
|
·
|
Signage: Wachovia
is prohibited from displaying signage on the window, doors or the exterior
of the perimeter walls of its demised premises unless Wachovia obtains the
prior written reasonable consent of the Landlord and said signage is in
conformity with the building standard sign program (Wachovia Lease
§46.2(e)). However, Wachovia has the right to install signage
on the interior and exterior of the demised premises that conforms with
Wachovia's standard national or NYC signage program provided that said
signage pertains primarily to general retail banking, safe deposits or
electronic banking and not to certain permitted ancillary uses (e.g.
brokerage, insurance, investment services). Nevertheless,
Wachovia has the right to display temporary signage which describes said
ancillary uses in certain designated areas provided that Wachovia is
obligated to remove said signage if either Landlord or Alliance reasonably
believes that said temporary signage is not in keeping with the quality or
character of the building. The size and location of signage on
or visible from the exterior of the Ground Floor (part) is subject to the
reasonable approval and Landlord and Alliance. Wachovia also
has the right to display promotional banners provided the size, color and
location of said banners is subject to the reasonable approval of Landlord
and Alliance. Landlord's (and, therefore, Alliance's) failure
to respond within 15 business days to any request for consent regarding
signage is deemed consent (Wachovia Lease
§46.3(a)).
|
·
|
Assignment/Subletting
Profits: Landlord and Alliance will share equally any sublease
or assignment of lease profits payable to Landlord under the Wachovia
Lease (Sup21 §6(a)).
|
·
|
Hold
Over by Wachovia: If Wachovia holds over following the
termination of the Wachovia Lease term, then Landlord will promptly
commence summary dispossess proceedings and will use commercially
reasonable efforts to evict Wachovia. Landlord will pay to
Alliance any amounts recovered from Wachovia arising from said proceedings
after first deducting Landlord's actual out-of-pocket expenses, provided
that if the amounts paid over by Landlord exceed the sums paid by Alliance
in respect of the Ground Floor (part) for the corresponding period, then
Landlord will be permitted to retain 50% of said excess (Sup21
§8).
|
·
|
Reimbursement
of Landlord on Account of Payments to Cushman & Wakefield,
Inc.: Alliance will reimburse Landlord up to $601,854.52 in
respect of any amounts paid by Landlord to Cushman & Wakefield, Inc.
arising from Sup21 (Sup21 §10).
|
12/01/01
through 11/30/06:
|
$7,000
(Sup17 §13(b)(i))
|
12/01/06
through 11/30/11:
|
$8,250
(Sup17 §13(b)(ii))
|
12/01/11
through 12/31/19:
|
$9,500
(Sup17 §13(b)(iii))
|
06/01/07
through 05/31/10:
|
$107,662.50
|
06/01/10
through 05/31/13:
|
$118,428.75
|
06/01/13
through 05/31/16:
|
$130,271.58
|
06/01/16
through 12/30/19:
|
$143,298.79
|
From
the termination or expiration of the Hearst Lease through
04/30/09:
|
$203,589.75
(Sup19 §3(b)(1))
|
|
05/01/09
through 04/30/14:
|
$219,747.67
(Sup19 §3(b)(2))
|
|
05/01/14
through 12/31/19:
|
$235,905.58
(Sup19 §3(b)(3))
|
Check
Meters:
|
All
floors have check meters except for Floors 31 (part), 32-34, and 37-39,
which will have check meters on or before November 1, 2009 (Sup9 §5) and
Floor 42, which will have check meters on or before May 1, 2011 (Sup25
§4(c)(i)). The check meters measure electricity demand and
consumption for each floor during a calendar month. Alliance
pays Landlord, within 30 days after receipt of a bill, Landlord’s cost of
the electricity consumed based on the applicable rate charged to the
Landlord by the supplying utility, plus a 2% administrative fee (Sup9
§5(b) and (c); Sup12 §4(b) and (c); Sup14 §4(b) and (c); Sup15 §4(b) and
(c); Sup22 §4(b); Sup24 §4(b); Sup25 §4(c); Sup26
§4(b)). Landlord will provide check meters for any portion of
the Concourse (part) space measuring at least 3,000 contiguous rsf (Sup15
§23(f)(i)). If the check meters for Floors 31 (part), 32-34,
and 37-39 are not installed by November 1, 2009, then Alliance will pay
Landlord what Landlord’s electrical consultant determines to be Landlord’s
cost for such electricity, provided that Alliance may dispute such
determination in accordance with a specified procedure.
|
Dispute:
|
Each
bill is binding on Alliance unless Alliance disputes such bill within 90
days of receipt. In case of a dispute, Alliance’s electrical
consultant will submit its determination within such 90 day period and
Landlord and Alliance will seek a resolution. Upon Alliance’s
request, Landlord will make available its utility bills for the building
for at least the last 3 years. If Landlord and Alliance cannot agree, they
will choose a third electrical consultant to perform a limited review
(Sup12, §5(c)(ii); Sup12 §4(c)(ii); Sup14 §4(c)(ii); Sup15 §4(c)(ii);
Sup22 §4(c)(ii); Sup24 §4(c)(ii); Sup25 §4(c)(iii); Sup26
§4(b)).
|
Wattage:
|
6
watts per usable square foot excluding building HVAC systems and other
base building systems (Sup9 §5(e); Sup12 §4(e); Sup14 §4(e);
Sup15 §4(e); Sup22 §4(e); Sup24 §4(e); Sup25 §4(e); Sup26
§4(e)).
|
Additional
Capacity:
|
Upon
notice from Alliance, Landlord will provide Alliance with (1) an
additional 400 amperes in the aggregate for the 15th
and 16th
floors (Sup12 §4(e)), and (2) up to another 1,800 amperes for the entire
demised premises (Sup14 §4(f)). Such notice will be given by Alliance on
or before, with regard to the 15th
and 16th
floors, the date Alliance delivers to Landlord its plans for its initial
fit-out of the 15th
floor (but in no event later than June 30, 2001), and, with regard to the
rest of the demised premises, by December 31, 2001 (Sup12 §4(e) and Sup14
§4(e)). Alliance is responsible for any construction costs it
would incur in connection with alterations relating to such additional
electricity supply, as well as a pro-rata share of Landlord’s construction
costs (Sup12 §4(e); Sup14 §4(e); and Sup15 §4(f)).
|
Discontinuance
of Service:
|
Landlord
may discontinue furnishing electricity to Alliance only if Landlord
simultaneously discontinues service to 80% of the other building tenants
(Sup15 §4(d)), upon 60 days’ written notice, provided such period is
extended as reasonably necessary to permit Alliance to obtain electricity
from the utility company servicing the Building. In such case,
Alliance may use the existing wiring. The cost of installation
of any additional wiring will be borne, if such discontinuance is
voluntary, by Landlord, and if such discontinuance is involuntary, by
Landlord and Alliance with Alliance’s share equal to the total cost of
such additional wiring multiplied by a fraction, the numerator of which is
remaining months of the Lease term and the denominator of which is as
follows:
|
Floor(s)
|
Denominator
|
|
2,
8-14
|
188
(Sup15 §4(d))
|
|
15,
16
|
248
(Sup12 §4(d) and (h); Sup15 §4(d))
|
|
17
|
182
for the space demised by Sup22, 214 for the space demised by Sup18 and 219
for all other space on Floor 17 (Sup22 §4(d)).
|
|
31
(part), 32-34, 37-41, 45
|
294
(Sup9 §15(d); Sup15 §4(d))
|
|
31
(part)
|
116
(Sup24 §4(d))
|
|
35
and 36
|
237
(Sup14 §4(d); Sup15 §4(d))
|
|
42
|
150
(Sup25 §4(d))
|
|
43
and 44
|
104
(Sup26
§4(d))
|
Electricity Rent Inclusion
Factor for Floors 31 (part), 32-34, and 37-39:
|
Until
November 1, 2009, the charge for electricity for Floors 31 (part), 32-34,
and 37-39 (the “ERIF”) is included in fixed annual rent (orig.
§7.02(a)). Such charge, however, is separately quantified (as
listed below) and is subject to increase or decrease (but in no event
below $2.75 per s.f. per annum) in proportion to increases or decreases in
Landlord’s electricity costs for the building (orig.
§7.02(a)).
|
Floor
(entire floor unless otherwise noted)
|
Original
ERIF
|
|
31(part),
33, 34
|
$249,902.46
(Sup7 §3(g))
|
|
32
|
$104,337.75
(Sup6 §3(c))
|
|
37
(NE Cor.), 38
|
$127,187.50
(orig. §7.02(a))
|
|
37
(NW Cor.)
|
$27,500.00
(orig. §46.02(d))
|
|
37
(SE Cor.)
|
$13,750.00
(Sup1 §3(e)
|
|
37
(SW Cor.)
|
$27,912.50
(Sup5 §3(c))
|
|
39
|
$96,937.50
(Sup4
§3(c))
|
A
determination by Landlord of a change in the ERIF as a result of a survey
of electrical consumption in the Demised Premises will be binding on
Alliance unless Alliance disputes such determination within 15 days of
receipt of such determination. If Alliance disputes such
determination, it will have its own electrical consultant at its own cost,
attempt to resolve the dispute in consultation with Landlord’s electrical
consultant. If they cannot agree on a resolution, they will
choose a third electrical consultant who’s decision will control (orig.
§7.03(b)).
|
Electricity Rent Inclusion
Factor for 42nd Floor:
|
Until
May 1, 2011, the charge for electricity for Floor 42 is included in fixed
annual rent. The initial amount of such charge is $5.81 per
s.f. and is subject to increase or decrease (but in no event below $5.81
per s.f. per annum) in proportion to increases or decreases in Landlord’s
electricity costs for the building as well based on Alliance’s electricity
consumption. A determination by Landlord of a change in the
rent inclusion charge as a result of a survey of electrical consumption in
the Demised Premises will be binding on Alliance unless Alliance disputes
such determination within 30 days of receipt of such
determination. If Alliance disputes such determination, it will
have its own electrical consultant at its own cost attempt to resolve the
dispute in consultation with Landlord’s electrical
consultant. If they cannot agree on a resolution, they will
choose a third electrical consultant who’s decision will control (Sup25
§4(b)).
|
Supplies:
|
At
Landlord’s option, Alliance is required to purchase (for a reasonable
charge) from Landlord all lighting tubes, lamps, bulbs and ballasts used
in the demised premises (orig. §7.05(b)).
|
Concourse
Space:
|
Subject
to the following sentence, for any portion of the demised premises located
on the concourse consisting of less than 3,000 contiguous rsf, Alliance
will pay an ERIF of $0.75/rsf, subject to increase if Alliance uses the
space for anything other than storage (Sup15 §23(f)(ii)). For
the portion of the demised premises located on the concourse and leased
pursuant to Sup23, however, Landlord will provide electricity at no
additional charge provided that if Landlord determines on a reasonable
basis that Alliance is consuming excessive electricity, then Landlord may
commence charging Alliance for such electricity on either (at Landlord’s
option) a rent inclusion or submeter
basis.
|
FLOOR
|
BASE YEAR
|
PERCENTAGE
|
Ground
Floor (part)
|
1999/2000
(Sup13§3(c)(1)).
|
0.483%
(Sup13
§3(c)(2))
|
2,
8, 9, 11-14
|
Average
of 2000/01 and 2001/02 (Sup15 §3(d)(i)).
|
14.72%
(Sup15
§3(d)(ii); Sup19 §2(d))
|
10
|
Average
of 2000/01 and 2001/02 (Sup15 §3(d)(i)).
|
2.11%
(Sup19 §3(d))
|
15
|
1999/2000
(Sup12 §3(a)(4)(a)).
|
2.150%
(Sup12
§3 (a)(4)(b))
|
16
|
1999/2000
(Sup12 §3(b)(4)(a)).
|
2.150%
(Sup12
§3(b)(4)(b))
|
17
|
Average
of 2000/01 and 2001/02 (Sup16 §3(d)(i); Sup17 §3(d)(i); Sup18 §3(d)(i))
Except with respect to the Sup22 17th
floor space, for which it is the average of 2003/04 and 2004/05 (Sup22
§3(d)(i)).
|
2.147%
(Sup16 §3(d)(ii); Sup17 §3(d)(ii); Sup18 §3(d)(ii);
Sup22 §3(d)(ii))
|
31
(part), 33, 34
|
Average
of 1994/95 and 1995/96 (Sup7 §(3)(f)(i)). Beginning on
11/01/09, changed to 1995/96 (Sup9 §4(e)).
|
5.130%
(Sup7
§3(f)(ii))
|
31
(part)
|
Average
of 2007/08 and 2008/09 (Sup24 §3(d)(i)).
|
1.35%
(Sup24 §3(d)(ii))
|
32
|
1993/94 (Sup6
§3(b)(i)). Beginning on 11/01/09, changed to
1995/96 (Sup9 §4(e)).
|
2.150%
(Sup6
§3(b)(ii))
|
35
|
2000/01
(Sup14 §3(a)(4)(a)).
|
2.150%
(Sup14
§3(a)(4)(b))
|
36
|
2000/01
(Sup14 §3(b)(4)(a)).
|
2.150%
(Sup14
§3(b)(4)(b))
|
37
(NE Cor.), 38
|
1985/86 (orig.
§4.01(a)(i)). Beginning on 11/01/09, changed to 1995/96 (Sup9
§4(e)).
|
2.820%
(orig.
§4.01(a)(ii)
|
37
(NW Cor.)
|
1985/86 (orig.
§4.01(a)(i)). Beginning on 11/01/09, changed to 1995/96 (Sup9
§4(e)).
|
0.610%
(orig.
§46.02(b))
|
37
(SE Cor.)
|
1985/86
(Sup1 §3(a)). Beginning on 11/01/09, changed to 1995/96 (Sup9
§4(e)).
|
0.300%
(Sup1
§3(b))
|
37
(SW Cor.)
|
1988/89 (Sup5,
§3(b)(i)). Beginning on 11/01/09, changed to 1995/96 (Sup9
§4(e)).
|
0.618%
(Sup5
§3(b)(ii)
|
39
|
1988/89 (Sup4
§3(b)(i)). Beginning on 11/01/09, changed to 1995/96 (Sup9
§4(e)).
|
2.150%
(Sup4
§3(b)(ii))
|
40,
41, 45
|
1995/96 (Sup9
§4(d)(i)).
|
6.446%
(Sup10
§2(a))
|
42
|
1988/89
(Sup25 §3(d)(i)(a)). Beginning on 5/1/11, changed to average of
2007/08 and 2008/09 (Sup25 §3(d)(i)(b)).
|
2.24%
(Sup25
§3(d)(ii))
|
43
and 44
|
Average
of 2007/08 and 2008/09 (Sup26 §3(d)(i)).
|
4.45%
(Sup26
§3(d)(ii))
|
Floor
|
Base
|
Percentage
|
Ground
(part)
|
Expenses
for 1999 calendar year (Sup13 §3(c)(3)).
|
0.483%
(Sup13
§3(c)(4))
|
2,
8, 9, 11-14
|
Expenses
for 2001 calendar year (Sup15 §3(d)(ii)).
|
15.67%
(Sup15
§3(d)(iv); Sup19 §2(c))
|
15
|
Expenses
for 1999 calendar year (Sup12 §3(a)(4)(c)).
|
2.290%
(Sup12
§3(c)(4)(d))
|
16
|
Expenses
for 1999 calendar year (Sup12 §3(b)(4)(c)).
|
2.290%
(Sup12
§3(b)(4))
|
17
|
Expenses
for 2001 calendar year (Sup16 §3(d)(iii); Sup17 §3(d)(iii); Sup18
§3(d)(iii)), except for the Sup22 17th
floor space, for which it is 2004 (Sup22 §3(d)(iii)).
|
2.288%
(Sup16 §3(d)(iv); Sup17 §3(d)9iv); Sup18 §3(d)(iv) and Sup22
§3(d)(iv))
|
31
(part), 33, 34
|
Expenses
for 1995 calendar year (Sup7 §3(f)(iii); Sup9 §4(e)).
|
5.450%
(Sup7
§3(f)(iv))
|
31
(part)
|
Expenses
for 2008 calendar year (Sup24 §3(d)(iii)).
|
1.43%
(Sup24
§3(d)(iv))
|
32
|
Expenses
for 1993 calendar year (Sup6 §3(b)(iii)). As of 11/01/09,
changed to expenses for calendar year 1995 (Sup9 §4(e)).
|
2.290%
(Sup6
§3(b)(iv))
|
35
|
Expenses
for 2000 calendar year (Sup14 §3(a)(4)(c)).
|
2.290%
(Sup14
§3(a)(4)(d))
|
36
|
Expenses
for 2000 calendar year (Sup14 §3(b)(4)(c)).
|
2.290%
(Sup14
§3(b)(4)(d))
|
37
(NE Cor.) and 38
|
$6,509,748 (orig
§5.01(a)(i)). As of 11/01/09, changed to expenses for 1995
calendar year (Sup9 §4(e)).
|
3.000%
(orig
§5.01(a)(iv))
|
37
(NW Cor.)
|
$6,509,748 (orig.
§5.01(a)(i)). As of 11/01/09, changed to expenses for 1995
calendar year (Sup9 §4(e)).
|
0.650%
(orig.
§46.01(b))
|
37
(SE Cor.)
|
$6,509,748 (Sup1
§5.01(a)(i)). As of 11/01/09, changed to expenses for calendar
year 1995 (Sup9 §4(e)).
|
0.330%
(Sup1
§3(c))
|
37
(SW Cor.)
|
Expenses
for calendar year 1989 (Sup5 §3(b)(iii)). As of 11/01/09,
changed to expenses for calendar year 1995 (Sup9 §4(e)).
|
0.659%
(Sup5
§3(b)(iv)
|
39
|
Expenses
for calendar year 1989 (Sup4 §3(b)(iii)). As
of 11/01/09, changed to expenses for calendar year 1995 (Sup9
§4(e)).
|
2.290%
(Sup4
§3(b)(iv))
|
40,
41, 45
|
Expenses
for calendar year 1995 (Sup9 §4(d)9iii)).
|
6.865%
(Sup11 §2(c))
|
42
|
Expenses
for calendar year 1989 (Sup25 §3(d)(iii)(a)). As of 5/1/11,
changed to expenses for calendar year 2008 (Sup25
§3(d)(iii)(b)).
|
2.38%
(Sup25
§3(d)(iv))
|
43
and 44
|
Expenses
for calendar year 2008 (Sup26 §3(d)(iii)).
|
4.73%
(Sup26
§3(d)(iv))
|
Services:
|
The
Cleaning Contractor provides certain cleaning services for the office
areas and lavatories of the demised premises (§1(a)). The
cleaning services provided do not include the cleaning of below-grade
space, kitchen, pantry or dining space, storage, shipping, computer or
word-processing space, or private or executive lavatories
(§1(b)). The Cleaning Contractor is not responsible for
removing debris and rubbish from areas under construction in the demised
premises (§2). The quality of the cleaning services will be
comparable to that provided in first class buildings in midtown Manhattan
(§1(a)).
|
Access:
|
The
Cleaning Contractor has access to the demised premises from 6 p.m. to 2
a.m. on business days. The Cleaning Contractor has the right to
use Alliance’s light, power and water, as reasonably required
(§1(a)).
|
Term:
|
The
cleaning agreements are co-terminous with the Lease
(§2).
|
Fee:
|
Alliance
pays the Cleaning Contractor, for the office space, a fixed monthly fee of
$310,465.73, plus an amount equal to the fee for Floor 36 multiplied by
the percentage increase in the labor rate in 2000 over 1999, plus an
amount equal to the fee for Floors 2, 8, 9, 11-14 multiplied by the
percentage increase in the labor rate in 2001 over 2000, plus an amount
equal to the fee for Floor 10 multiplied by the percentage increase in the
labor rate in 2001 over 2000 (CAO §3; CAO-2 §3; CAO-3 §3; CAO-4
§3; CAO-5 §3; CAO-6 §3; CAO-7 §3; CAO-8 §3; CAO-9 §3; CAO-11
§3). Alliance pays the Cleaning Contractor a fixed monthly fee
of $2,833.33 for the ground floor space (CAG §3). The fixed
monthly fee for cleaning the office space will increase by $11,087.73 plus
an adjustment based on the increase in the labor rate in 2008 over 2007
with the addition of remainder of Floor 31 to demised premises (CAO-10 §3)
and will increase by $36,604.68 plus an adjustment based on the increase
in the labor rate in 2008 over 2007 with the addition of Floor 10 to
demised premises (CAO-12 §3). The fixed monthly fee is
inclusive of sales tax and is payable in advance on the first of each
month (§3). Payment for any additional cleaning services will
be made by Alliance within 20 days of demand. The cost of such additional
services must be comparable to services provided in comparable buildings
(§1(a)). In addition to the fixed fee, Alliance pays the
Cleaning Contractor a percentage of annual increases in cleaning costs
(which annual increases are equal to the annual percentage increase in
porters’ wages over a porter’s wage base year) over an amount representing
base year cleaning costs. The percentage for the office space
is 53.899% (CAO §3 and §4; CAO-2 §3; CAO-3 §3; CAO-4 §3; CAO-5 §3; CAO-6
§3; CAO-7 §3; CAO-8 §3; CAO-9 §3; CAO-11 §3) and 0.483% for the ground
floor space (CAG §4). The percentage for the office space will
increase by 1.46% (CAO-10 §3) to with the addition of the remainder of
Floor 31 and will increase by 4.82% with the addition of Floors 43 and
44. The other variables in such calculation are as
follows:
|
Floor
|
Base Year
for
Porter’s
Wages
|
Base for Cleaning Costs
|
|
Ground
(part)
|
1999
(CAG §4)
|
$6,286,271.55
(CAG §4)
|
|
2,
8-14
|
2001
(CAO-5, §4)
|
$6,444,056.97
(CAO-5, §4)
|
|
15
and 16
|
1999
(CAO-3 §4)
|
$6,247,986
(CAO-3, §4)
|
|
17
(except for the part demised by Sup22)
|
2001
(CAO-6 §4; CAO-7 §4; CAO-8 §4)
|
$6,629,645.81
|
|
17
(the part demised by Sup22)
|
2004
(CAO-9 §4)
|
$7,606,434.69
(CAO-9 §4)
|
|
31
(part) , 32-34, 37-41 and 45
|
1995
(CAO §4(a)(i))
|
$5,827,772
(CAO §4(a)(iii))
|
|
31
(the part demised by Sup24)
|
2008
(CAO-10 §4)
|
$8,408,948.97
(CAO-10 §4)
|
|
35
and 36
|
2000
(CAO-4 §4)
|
$6,381,693
(CAO-4 §4)
|
|
42
|
2008
(CAO-11 §4)
|
$8,408,948.97
(CAO-11 §4)
|
|
43
and 44
|
2008
(CAO-12 §4)
|
$8,408,948.97
(CAO-12 §4)
|
Dispute
with Cleaning Contractor:
|
If
Alliance believes that the Cleaning Contractor is not adequately
performing under a cleaning agreement, and the Cleaning Contractor has not
corrected such inadequate performance within 10 days after notice,
Alliance may arbitrate whether the Cleaning Contractor is adequately
performing. If a majority of the required arbitrators find that
the Cleaning Contractor is not adequately performing, then the Cleaning
Contractor will correct such inadequate performance within 10 days of such
finding. If Contractor fails to do so, Alliance may terminate
the cleaning agreement upon 10 days notice. (§5).
|
Default
by Alliance:
|
If
Alliance fails to make a payment due under a cleaning agreement within 15
days of notice of such failure, the Cleaning Contractor may, upon 10 days
notice terminate the cleaning agreement if Alliance also fails to make
such payment within such 10 day period. In case of such
termination, Alliance may only use the approved cleaning contractor for
the building (§6). If a payment is not made within 3 days of
notice of such failure, such payment accrues interest from the due date at
prime rate, provided that Cleaning Contractor is not obligated to give
such notice more than twice a year
(§12).
|
Rent
Credit:
|
Alliance
is entitled to a credit against the monthly installment of fixed rent in
the amount of $169,479.10 per month (Sup9 §4(c); Sup10 §2(c); Sup11 §2(c);
LTR1; Sup12 §3(a)(3) and §3(b)(3); Sup14 §3(a)(3) and §3(b)(3); Sup15
§3(c)) Sup16 §3(c); Sup17 §3(c); Sup18 §3(c) and Sup22 §3(c) plus an
amount equal to the credit for Floor 36 multiplied by the percentage
increase in the labor rate in 2000 over 1999 (Sup14
§3(b)(3)). The monthly credit will increase by (i) $92,734.38
plus an adjustment based on the increase in the labor rate in 2001 over
2000 with the addition of Floors 2, 8, 9, 11-14 to the demised premises
(Sup15 §3(c); Sup19 §2(c)), (ii) by $13,296.17 plus an adjustment based on
the increase in the labor rate in 2001 over 2000 with the addition of
Floor 10 to the demised premises (Sup19 §3(c)); (iii) by $11,087.72 plus
an adjustment based on the increase in the labor rate in 2008 over 2007
with the addition of remainder of Floor 31 to the demised premises (Sup24
§3(c)); (iv) by $220,539.40 plus an adjustment based on the increase in
the labor rate in 2008 over 2007 on May 1, 2011 (Sup25 §3(c)); and (v) by
$439,256.17 plus an adjustment based on the increase in the labor rate in
2008 over 2007 on May 1, 2011.
|
Termination
of Cleaning Agreement:
|
In
the event the cleaning agreement for the office space is terminated,
Landlord will provide cleaning services and Alliance will pay Landlord on
a monthly basis for the office space (assuming that all of the office
space demised under the lease is delivered to Alliance at that time)
60.17% (Sup26 §7(a)) of annual increases in cleaning costs (which annual
increases are equal to annual percentage increases in porter’s wages) over
Landlord’s cleaning costs for the entire building during the first full
calendar year after the Cleaning Agreement’s termination (orig. §6.04, as
modified by Sup9 §8(a)). Landlord’s cleaning cost escalation
statements are final and determinative unless Alliance challenges such
statement in writing within 90 days (Sup7 §6(d)) of
receipt. Alliance must make payment in accordance with such
statement pending dispute resolution. Landlord and Alliance
will resolve any dispute by arbitration with 3 arbitrators, each of whom
will have at least 10 years’ experience in the operation and management of
major Manhattan office buildings (orig.
§6.01(d)).
|
Alliance’s
Responsibility
|
Alliance
will make repairs to the demised premises necessitated by its acts,
omissions, occupancy or negligence (except for fire or other casualty
caused by Alliance’s negligence if Landlord’s insurance is not invalidated
thereby) (orig. §9.01).
|
Landlord’s
Responsibility
|
Landlord
will maintain the building and its common areas in a manner appropriate to
a first class office building. The building exterior, the
window sills outside the window and the windows are not part of the
demised premises (orig.
§9.01).
|
Approval:
|
All
alterations require Landlord’s prior written approval, which will not be
unreasonably withheld or delayed, provided that it does not (1) affect the
structural integrity of the building, (2) affect the exterior of the
building, or (3) adversely affect the building’s systems without, in
Landlord’s opinion, adequate mitigation (orig. §8.01).
|
Landlord’s
Reimbursement:
|
Alliance
will reimburse Landlord’s out-of-pocket costs incurred in reviewing
alterations (orig. §8.01).
|
Contractors:
|
Landlord’s
affiliate will act as general contractor for any alteration work performed
anywhere in the demised premises for one year after the delivery of the
2nd
and 8th-14th
floors, for a fee not to exceed 6% of the aggregate cost of such
work. In acting as general contractor, Landlord’s affiliate
will obtain competitive bids from at least 3 subcontractors approved by
Landlord for each category of work, except that there is only one approved
subcontractor for air conditioning balancing work (although Alliance may
have another subcontractor verify the work) and there are only 2
unaffiliated subcontractors for the base building work (Sup15
§6(a)). Alliance and Plaza Construction Corp., Landlord's
affiliate, have subsequently entered into that certain Master Agreement
dated January 27, 2004 pursuant to which Plaza Construction Corp. will
provide construction management services to Alliance in respect of
construction projects at the building. Landlord must have given
its approval of any contractors performing
alterations. Alliance will inform the Landlord of the name of
any contractors or subcontractors Alliance proposes to do any alterations
at least 10 days prior to work commencement (orig. §8.01
2(a)).
|
Insurance
Certificates:
|
Prior
to commencing any alterations, Alliance will deliver to Landlord an
insurance certificate evidencing the existence of workmen’s compensation
insurance covering all persons involved in such alterations and reasonable
comprehensive general liability and property damage insurance with
coverage of at least $1 million single limit (orig.
§8.01(7)).
|
Records:
|
Alliance
will keep records of alterations exceeding $25,000 in cost and provide
copies of such records to Landlord within 45 days of demand (orig.
§8.07).
|
38th/39th
Floor Staircase:
|
Alliance
has the right to install a staircase between the 38th
and 39th
floors provided that Landlord approves the plans therefor and the
staircase is installed in compliance with Articles 8 and 45 of the lease
(Sup4 §14).
|
Expiration
of Term:
|
All
improvements installed by Landlord are the property of the Landlord (orig.
§8.03) and all permanent improvements (including, therefore, any kitchen,
pantry or dining room) will remain at the expiration of the term without
Alliance being obligated to remove such permanent
improvements. (orig. §8.04) All fixtures (other than
trade fixtures) installed by Landlord become the property of the Landlord,
and will remain as part of the demised premises, upon expiration of the
lease. All furnishings and trade fixtures supplied by Alliance
at its expense are Alliance’s property and, with regard to Alliance’s
furniture and movable office equipment only (Sup7 §6(e)), will be removed
upon the expiration of the lease term following the lease expiration
unless Landlord notifies Alliance (within 30 days after Alliance’s notice,
which notice will be given at least 3 months prior to expiration of the
lease term) that such property may remain in the demised premise following
the lease term expiration (orig. §8.05). Alliance has no
obligation to remove any staircases in the demised premises (Sup9
§21).
|
Emergency
Generator:
|
Alliance
is permitted to install a 2800 KW Detroit diesel emergency generator
back-up power system in specified locations in the building (Sup27
§2(b)). Alliance is permitted to connect the back-up power
system to the building’s emergency generator system. Up to 1500
KW of the power generated by the back-up power system will back-up the
building’s emergency generator system (Sup27 §2(d)). Landlord
will operate and maintain the back-up power system at Alliance’s expense
and, as part of such obligation, Landlord will enter into a maintenance
contract for same subject to the reasonable approval of Alliance (Sup27
§2(d)). Alliance is obligated to pay a one-time fee for such
emergency generator rights equal to $75,000, adjusted for inflation based
on increases in the Consumer Price Index (Sup27
§2(f)). Alliance will pay for its proportionate share (based on
KW capacity) of fuel purchased for the emergency generator system and has
the right, subject to Landlord’s reasonable approval, to install its own
fuel storage tanks (Sup27 §2(g)). The back-up power system will
remain and not be removed at the end of the lease term (Sup27
§2(i)). Alliance has, through 1/31/10, a limited right of first
offer to lease space to install another emergency
generator. Alliance has 15 days to accept any such offer (Sup27
§3).
|
Communications
Antenna or Dish:
|
Alliance
has the right, subject to the other alteration provisions of the Lease and
to all applicable legal requirements, to install a communications antenna
or dish on the roof in a location reasonably determined by
Landlord. Landlord may require Alliance to relocate the
antenna, at Landlord’s expense, to mitigate interference with other uses,
so long as the antenna is able to function in its relocated position,
provided that if such relocation does mitigate the interference, Landlord
may require Alliance to remove the antenna so long as no other antennas
are allowed to be installed on the roof and Landlord bears the cost of
such removal and the unamortized value of the antenna. If
deemed reasonably advisable by Landlord’s engineer, Landlord will, at
Alliance’s expense, reinforce the area under the antenna and, upon lease
expiration, Alliance will remove the antenna and restore any damage caused
thereby. Alliance will pay Landlord one-half of fair market
rent for the roof space used by the antenna. Alliance, under
Landlord’s supervision (the cost of which Alliance is obligated to
reimburse, has access to the roof and other areas of the building as
reasonably necessary to maintain and repair the antenna (Sup9
§20).
|
Communications
Wiring:
|
Landlord
will provide Alliance a reasonable area in a common vertical riser shaft
in the building for the installation of data, communications and security
system cabling.
|
Initial
Fit-Out of Balance of 31st Floor:
|
Alliance,
at its expense, will prepare a complete set of plans for the work, which
is subject to the reasonable approval of Landlord (orig.
§45.01). Although Alliance is permitted to use its own
engineer, such plans ultimately are subject to the reasonable approval of
Landlord’s designated engineer. There is no deadline for the
delivery to Landlord of the plans for Alliance’s initial fit-out (Sup24
§6(a)). Landlord will provide Alliance with a $762,240
allowance for the hard costs and certain soft costs of the
fit-out. The allowance can be disbursed in installments upon
Alliance’s request and any unused portion will be credited against fixed
rent (Sup24 §6(b)(i)). Alliance may use the allowance to pay
for construction work undertaken in the demised premises leased prior to
Sup24, but if Alliance draws on the allowance prior to May 1, 2010 then
the allowance will be reduced by the future value of the amount drawn upon
calculated at 6% per year (Sup24
§6(b)(ii)).
|
Initial
Fit-Out of 42nd
Floor:
|
Alliance,
at its expense, will prepare a complete set of plans for the work, which
is subject to the reasonable approval of Landlord (orig.
§45.01). Although Alliance is permitted to use its own
engineer, such plans ultimately are subject to the reasonable approval of
Landlord’s designated engineer. There is no deadline for the
delivery to Landlord of the plans for Alliance’s initial fit-out (Sup25
§6(a)). Landlord will provide Alliance with a $1,266,090
allowance for the hard costs and certain soft costs of the
fit-out. The allowance can be disbursed in installments upon
Alliance’s request and any unused portion will be credited against fixed
rent (Sup25 §6(b)). If, however, Alliance draws on the
allowance prior to May 1, 2011 then the allowance will be reduced by the
future value of the amount drawn upon calculated at 6% per year (Sup25
§6(b)(ii)).
|
Initial
Fit-Out of 43rd
and 44th
Floors:
|
Alliance,
at its expense, will prepare a complete set of plans for the work, which
is subject to the reasonable approval of Landlord (orig.
§45.01). Although Alliance is permitted to use its own
engineer, such plans ultimately are subject to the reasonable approval of
Landlord’s designated engineer. There is no deadline for the
delivery to Landlord of the plans for Alliance’s initial fit-out (Sup26
§6(a)).
|
Subordination,
Non-Disturbance and Attornment:
|
The
Lease is subordinate to all present and future mortgages and ground leases
only to the extent Alliance receives a subordination, non-disturbance and
attornment agreement from the holder thereof (orig. §11.01; Sup15
§8). Alliance will not exercise any right to terminate the
lease due to an act or omission of Landlord without first giving notice of
such act or omission to any mortgagee or ground lessor of which Alliance
has been notified and giving such mortgagee or ground lessor an
opportunity to cure such act or omission within a reasonable period of
time after such notice provided that such mortgagee or ground lessor
notifies Alliance that it will commence and continue to remedy such act or
omission (orig. §11.02). Alliance and the property’s mortgagee
are parties to a subordination, non-disturbance and attornment agreement
(SNDA-M). Alliance and the property’s ground lessor are parties
to a subordination, non-disturbance and attornment agreement
(SNDA-G).
|
Estoppel:
|
Alliance
will provide an estoppel certificate within 10 days after Landlord’s
request. The estoppel certificate will certify:
(a)
that the Lease is unmodified and in full force and effect or, if there has
been any modification that the same is in full force and effect as
modified and state any such modification;
(b)
whether the term of the Lease has commenced and rent become payable
thereunder; and whether Alliance has accepted possession of the demised
premises;
(c)
whether or not there are then existing any defenses or offsets which are
not claims under paragraph (e) below against the enforcement of any of the
agreements, terms, covenants, or conditions of the Lease any modification
thereof upon the part of Alliance to be performed or complied with, and,
if so, specifying the same;
(d)
the dates to which the fixed annual rent, and additional rent, and other
charges hereunder, have been paid; and
(e)
whether or not Alliance has made any claim against Landlord under the
Lease and if so the nature thereof and the dollar amount, if any, of such
claim (orig. §36).
|
Insurance:
|
Alliance
will reimburse Landlord for any increases in Landlord’s fire insurance
caused by Alliance (orig. §10.03).
|
Landlord
|
Landlord
is not liable for damage or injury to property or persons unless caused by
or due to the negligence of Landlord or its agents, servants or employees
(orig. §12.01). Alliance will look solely to Landlord’s estate
in the Building for the satisfaction of any judgment (o rig.
§12.05).
|
Alliance:
|
Alliance
will reimburse Landlord for all costs incurred by Landlord that Landlord
does not recover from insurance resulting from Alliance’s breach under the
lease, by reason of damage or injury caused by Alliance in connection with
the moving of Alliance’s property except as provided in the lease, and by
reason of the negligence of Alliance or its agents, servants or employees
in the use or occupancy of the demised premises (orig.
§12.03). Alliance will indemnify, defend and save Landlord
harmless from any liability arising from Alliance’s use of the demised
premises, breach of the lease, or holding over, except for any liability
arising from Landlord’s negligence (orig. 35.01).
|
Waiver
of Subrogation
|
Both
parties are required to obtain waivers of their insurer’s rights of
subrogation provided that such waiver does not result in an additional
expense to the party waiving the right of subrogation, unless the other
party agrees to be responsible for such additional expense (orig.
§12.06(a) and (b)).
|
General:
|
The
demised premises are permitted to be used for executive and general
offices (orig. §2). Landlord represents that such use does not
violate the certificate of occupancy for the demised premises (orig.
§17). The demised premises may not be used for a banking office
open to street traffic or certain other undesirable businesses (orig.
§42.01).
|
Dwyer
Unit:
|
Alliance
may, subject to Landlord’s consent which may not be unreasonably withheld,
install in the demised premises a Dwyer Unit at its sole cost expense
provided that:
(a) it
is used for Alliance’s employees and guests;
(b) no
installation of ventilation equipment is required and no odors emanate
from the demised premises from the use thereof;
(c) no
additional air conditioning service is required thereby;
(d) use
of the unit is expressly subject to the extra cleaning and water
consumption provisions of the lease; and
(e) Alliance
will engage an extermination service (orig. §49.01; Sup7
§18).
|
Dining:
|
Alliance
may, subject to Landlord’s consent which may not unreasonably be withheld,
install a dining room with kitchen for use by Alliance’s employees and
guests in the demised premises (Sup7 §18), provided that such facilities
(a) comply with all applicable laws, (b) are properly ventilated and (c)
all wet garbage is bagged and stored so that no odor emanates therefrom
(orig. §49.06). If Alliance installs such facilities, then (a)
Alliance will pay landlord the cost of an extermination service and (b)
will have a refrigerated garbage storage room or other means of disposing
of garbage therefrom reasonably satisfactory to Landlord (orig. 32.08 (as
modified by Sup9 §6(b)); orig. §49.02), but such refrigerated room will
only be required if such wet garbage creates an odor or pest problem
(orig. §49.02). Alliance may install additional dining
facilities on any floor of the demised premises comparable to the dining
facility located on the 39th
floor (as it existed as of 8/16/94). (Sup9
§25)
|
Corporate
Training Facility:
|
Subject
to the other terms of the lease and all applicable laws, Alliance may use
a portion of the demised premises for a corporate training facility (Sup5
§11(c)).
|
Concourse:
|
Subject
to the following sentence, the portion of demised premises located on the
concourse may be used for storage, mailroom, computer printing room,
incidental office, dining room or cafeteria purposes and any other legal
purpose (Sup15 §23(e)). The portion of the demised premises
located on the concourse and leased pursuant to Sup23, however, may be
used only for storage purposes except that Alliance may also install
electrical switches therein in certain specified
locations (Sup23
§4).
|
Expiration
Date:
|
December
31, 2019 (Sup15 §12(a)).
|
|
Early
Termination (45th
Floor):
|
Provided
Alliance never occupies the 45th
floor, Alliance may upon written notice to Landlord given on or before
1/1/15, terminate the Lease with respect to the 45th
floor effective 12/31/16 without penalty (Sup15, §21).
|
|
Landlord’s
5 Year Extension Option:
|
·
|
Landlord
may upon written notice to Alliance given on or before 11/30/16, extend
the term from 12/31/19 to 12/31/24 (Sup15 §13(a)(i)).
|
·
|
Fixed
annual rent during such extension period would be at the rate of the
average fixed annual rent per s.f. being paid by Alliance on 12/30/19 for
all of its space in building (other than ground floor, concourse or
subconcourse space). The method of calculating escalations
would remain unchanged for such period (Sup15 §13(a)(ii) and (iii); Sup21
§9(a)).
|
|
Alliance’s
5 Year Extension Option:
|
·
|
If
Landlord extends the term to 12/31/24 as provided above, then on or before
12/31/16, Alliance may extend the term to 12/31/29 (Sup15
§13(b)).
|
·
|
Fixed
annual rent during such extension period would be at the rate of the
average fixed annual rent per s.f. being paid by Alliance on 12/30/19 for
all of its space in the building (other than concourse or subconcourse
space). The method of calculating escalations would remain
unchanged for such period (Sup15 §13(b)).
|
|
·
|
Upon
exercise of this 5 year extension option, Alliance loses its right to
exercise its 10 year extension option described below.
|
|
Alliance’s
10 Year Extension Option:
|
·
|
Alliance
has the option to extend the term for 10 years (Sup9 §12(a)) to expire on
12/31/29 if Landlord does not exercise its 5 year extension option, or
12/31/34 if Landlord does exercise its 5 year extension option and
Alliance does not exercise its 5 year extension option.
|
·
|
If
Landlord does not exercise its 5 year extension option, the exercise
deadline for Alliance’s 10 year extension option is no later than 1/31/17,
but no earlier than 12/1/16 (Sup15 §13(c)). If Landlord does
exercise its 5 year extension option and Alliance does not exercise its 5
year extension option, then the exercise deadline for Alliance’s 10 year
extension option is 12/31/21 (Sup9 §12(a)(i)).
|
|
·
|
As
conditions to the exercise of Alliance’s 10 year extension option, as of
the date of exercise and as of the first day of the extension period (i)
Alliance can not be in default of beyond applicable notice and grace
periods of its obligation to pay fixed annual rent, tax escalations and
expense escalations, and (ii) Alliance and its affiliates must occupy at
least 200,000 rsf (Sup9 §12(a)(ii) and (iii)).
|
|
·
|
The
fixed annual rent for Alliance’s 10 year extension period is 95% of fair
market rent determined as of 36 months before what would have been the
expiration of the term if the term had not been extended by Alliance’s ten
year extension option, as determined by Landlord and notified to Alliance
in writing within 30 days thereafter, plus an increase in proportion to
the increase over such 36 month period of the average of the CPI for Urban
Consumers and CPI for Urban Wage Earners (both New York, NY-Northeast NJ,
base year 1982-84 =100, “All Items”) (Sup9 §12(b)). If Alliance
disputes Landlord’s determination of the rent, then Landlord and Alliance
will resolve the dispute according to a specified arbitration process
(Sup9 §12(b) and §16).
|
·
|
For
purposes of calculating real estate tax escalations, the base year during
such extension period is 2019/20 if Landlord does not exercise its 5 year
extension option, or 2024/25 if Landlord does exercise its 5 year
extension option (Sup9 §12(c)(i); Sup15 §13(b) and (c)). For
purposes of calculating expense escalations, the base year for building
expenses during such extension period is calendar year 2019 if Landlord
does not exercise its 5 year extension option, or calendar year 2024 if
Landlord does exercise its 5 year extension option. (Sup9 §12(c)(ii) and
(iii); Sup15 §13(b) and
(c)).
|
Electricity:
|
See
page 14.
|
|
Elevator:
|
Passenger: Service will
be provided as necessary on business days between 8 am and 6 pm and
sufficient service at all other times (orig. §32.01). In case
of special events at the demised premises, upon 24 hours notice from
Alliance, Landlord will provide 2 dedicated elevators staffed by Landlord
personnel, the labor cost of which will be reimbursable by Alliance within
30 days of demand (Sup9 §24(a)). Landlord is required to have,
in 1996, reconfigured the elevators so that the 32nd
floor and the 37th,
38th
and 39th
floors are served by the same elevators (Sup6, §4(c)).
Freight: Landlord will
provide reasonable freight elevator service on business days from 8 am to
6 pm and after-hours service at landlord’s established rates (orig.
§32.01). During tenant’s initial fit-out of the remainder of
the 31st
floor, and the 42nd,
43rd
and 44th
floors, Alliance has priority but not exclusive use of one freight
elevator and non-priority use of a second freight elevator at no charge
(Sup14 §13(a); Sup15 §16(a); Sup24 §10(a); Sup25 §10; Sup26
§10). Subject to the terms of the alterations provisions and so
long as Alliance is leasing floors 31 (part) through
41, Alliance has the right, at its expense, to make alterations
so that any elevator servicing Floors 31 (part) through 41 can stop on any
other floor leased by Alliance (Sup15 §24).
|
|
HVAC:
|
Regular
Service: During regular hours of
operation on business days as from time to time determined by Landlord,
but always at least from 8 am to 6 pm, but excluding 9pm to 8 am (orig.
§32.02(a)).
|
|
After-Hours
Service: Available upon reasonable notice at
Landlord’s established rates, payable upon presentation of bill, provided
that:
|
||
|
||
·
|
if
any other tenants in the same air conditioning zone obtain after-hours
service, the charge therefore will be equitably pro-rated (orig.
§32.02(d)), and
|
|
|
||
·
|
Landlord
will provide HVAC to Alliance free of charge on any non-business day that
the New York Stock Exchange is open (Sup9 §24(b)).
|
|
Supplemental
AC: Subject to the lease
provisions (including the alterations section) and all applicable laws,
Alliance may at its expense install self-contained package
air-conditioning units in the demised premises. Alliance is
responsible for the maintenance and repair of such
units. Alliance may connect such units to any existing
supplementary air-conditioning systems located in the demised premises as
of the date the lease commenced with respect to the 37th
and 38th
floors (orig. §32.10). Alliance has the right to install at its
own expense additional supplemental air conditioning in the demised
premises subject to service being available from Landlord at Landlord’s
established per ton per annum connected load and line charge (Sup5
§11(d)). Alliance has the right to install a supplemental air
conditioning system on the 31 (part)-34th,
and 37th-39th
floors and Landlord will provide condenser water therefor at a connected
load and line charge fee of $500 per ton per annum increased after 1991 in
proportion to the lease’s expense escalations (Sup6 §17;
Sup7 §19).
|
Condenser Water:
|
||
·
|
Floors
2, 8-14: Alliance has reserved 190 tons of condenser water for
use on the 2nd
and 8th-14th
floors, with an option to reserve up to an additional 80 tons upon written
notice to Landlord on or before 8/30/04. Landlord’s charge for
such condenser water is $568.35 plus annual increases based on the
percentage increases in building and parking expenses. Alliance
begins paying for such condenser water upon use (but no later after 1 year
after delivery of the 2nd
and 8th
through 14th
floors). If Alliance requires more than 270 tons of condenser
water for such space, then Landlord will use best efforts to obtain
additional condenser from the building’s existing supply and, if
unsuccessful, will enter into good faith discussions regarding the
installation of an additional cooling tower and allocation of costs
relating thereto (Sup15 §16(b)).
|
|
·
|
Floors
15-16: The 15th
floor has an existing supply of 12 tons of condenser water and the 16th
floor has an existing supply of 11 tons of condenser
water. Alliance has the right to install at its own expense,
pursuant to the alterations provisions of the Lease, a supplemental
air-conditioning system on the 15th
and 16th
floors. Alliance was to have reserved its requirements of condenser water
for such supplemental system from the existing supply on or before May 1,
1999 and of additional condenser water (up to 100 tons) by June 30, 2001
(Sup14 §13(b)(ii)). We have been advised by Judd S. Meltzer Co.
Inc., however, that Landlord has agreed to reduce such available tonnage
to 60 tons in exchange for increasing the available tonnage to 100 tons
with respect to Floors 35-36. Landlord’s charge for such
condenser water is $552/ton per annum plus annual increases over a 1997
base year (Sup12 §14).
|
|
·
|
Floors
2, 8-14, 17 (part): Alliance was required to notify the
Landlord of the amount of additional condenser water required by Alliance
for its premises on Floors 2, 8-14 and 17 (part), which amount cannot
exceed 20 tons, by August 31, 2002. Alliance begins paying
for such condenser water upon use at a rate equal to $594.90 per ton per
annum increased annually from 2001 at the same percentage rate that
building operating expenses increase (Sup16 §10(b)).
|
|
·
|
Floors
31 (part) - 34, 40, 41, 45: We have been advised by Judd S.
Meltzer Co. Inc. that Alliance has exercised its right to have Landlord
supply Alliance with 250 tons condenser water for use in supplemental air
conditioning units on Floors 31 (part)-34 or 40, 41 and 45 at a cost
$250/ton/yr for the first 250 tons/yr and $500/ton/yr (plus annual
increases over the 1994 expenses base year). Any condenser
water already being provided for Floors 31(part)-34 and 40, 41 and 45 are
included in determining such rates. Alliance pays for the
condenser water that Landlord has agreed to commit to Alliance, regardless
of whether Alliance actually uses it (Sup9 §24(f)).
|
|
·
|
Floors
35-36: Alliance may purchase up to 60 tons (in the aggregate)
of condenser water for use in connection with its supplemental
air-conditioning on the 35th
and 36th
floors. We have been advised, however, by Judd S. Meltzer Co. Inc. that
Landlord has agreed to increase such available tonnage to 100 tons in
exchange for reducing the available tonnage of additional condenser water
to 60 tons with respect to Floors 15-16. Alliance must reserve
the condenser water it wishes to purchase by February 8, 2001 (in respect
of the 35th
floor) and December 31, 2001 (in respect of the 36th
floor) Landlord’s charge for such condenser water is $568.35/ton per annum
plus annual increases over a 1999 base year (Sup14
§13(b)).
|
Standards:
|
||
·
|
indoor
conditions to be 75° 50% RH when outdoor conditions are 92° DB and 74° WB;
indoor conditions to be 70° when outdoor conditions are
11°
|
|
·
|
outdoor
air at a minimum of 20 cfm per person
|
|
assumes
occupancy of 1 person per 100 usf, electric demand load of 5 watts per
usf, and appropriate use of blinds (Sup9 §24(c)(ii)).
|
||
Water:
|
Landlord
is required to supply an adequate quantity for ordinary lavatory,
drinking, cleaning and pantry purposes. Water consumed for any
additional purposes is subject to charge therefor and, separate
metering. Alliance is subject to charge and separate metering
for water used for any additional purposes.
|
|
Housekeeping
Supplies:
|
Landlord
must approve, in its reasonable discretion, suppliers of laundry, linen,
towels, drinking water, ice and similar supplies to be consumed in the
demised premises. Landlord may designate exclusive suppliers of
any such supply provided that such suppliers’ rates and quality are
comparable to other suppliers (orig. §32.05).
|
|
Food
& Beverages:
|
Landlord must approve, in
its reasonable discretion any vendor of food or beverages to be consumed
in the demised premises (orig. §32.06).
|
|
Cleaning:
|
See
page 21.
|
|
Building
Directory and Concierge:
|
Alliance
is provided with its proportionate share (based upon the same percentage
used in calculating Alliance’s share of operating expense escalations) of
listings for itself, and any other person or entity in occupancy of the
demised premises and their employees. Landlord may reduce the
number of such listings provided that Alliance always has its share in
proportion to the space it occupies in the building (Sup6
§23).
|
|
So
long as Alliance and its affiliates are in occupancy of at least 200,000
rsf, Alliance, at no additional cost, is permitted to station 1 or, if
practicable, 2 of its employees at the lobby’s concierge desk with a
telephone, an employee telephone directory, guest passes and an
identifying sign (Sup9 §10(f)).
|
||
Signage
and Flag:
|
So
long as Alliance and its affiliates are in occupancy of at least 200,000
rsf, Alliance has exclusive right to name the building after itself or,
subject to Landlord’s consent, any of its affiliates, and Alliance has the
right to install signage with its name and logo:
|
|
· above
the lobby entrance (which may be illuminated subject to Landlord’s
reasonable approval, but not neon, and provided that any other exterior
signage is subject to Alliance’s
approval),
|
||
|
||
·
on
the building plaza kiosks (with signage for the building’s retail tenants
on such kiosks subject to Alliance’s reasonable approval and any other
kiosk signage or retail signage subject to Alliance’s
approval),
|
||
· behind
the lobby concierge desk (which may be illuminated subject to Landlord’s
reasonable approval, but not neon, and which will be the only sign behind
the lobby concierge desk, although Landlord may install less prominent
signage for other tenants elsewhere in the lobby subject to Alliance’s
reasonable approval),
and
|
· place “tombstone”
signs on the building plaza
|
||
If
occupancy decreases to less than 200,000, Landlord may remove Alliance’s
signage (Sup9 §10(a)). Landlord has reasonable approval rights
as to the design and location of Alliance’s signage. All
installation, maintenance and removal work relating to Alliance’s signage
will be performed by Landlord at Alliance’s reasonable expense (Sup9
§10(b)).
|
||
So
long as Alliance and its affiliates are in occupancy of at least 200,000
rsf, Alliance may fly a flag bearing its name and logo, the design of
which is subject to landlord’s reasonable approval, from a flagpole on the
building plaza. No other flagpole may be installed on the
building plaza without Alliance’s approval (Sup9
§10(d)).
|
||
Landlord
is prohibited from installing any signage in the area of the lobby’s upper
elevator bank for an Alliance competitor occupying Floors 46-50, or a
majority thereof (Sup13 §19(d)).
|
||
General
Contractor:
|
Landlord’s
affiliate will act as general contractor for any alteration work performed
anywhere in the demised premises for one year after Landlord delivers the
2nd
and 8th-
14th
floors to Alliance following substantial completion of Landlord’s work
thereon, for a fee not to exceed 6% of the aggregate cost of such work
(Sup15 §6(a)). Alliance and Plaza Construction Corp., Landlord's
affiliate, have subsequently entered into that certain Master Agreement
dated January 27, 2004 pursuant to which Plaza Construction Corp. will
provide construction management services to Alliance in respect of
construction projects at the building.
|
|
Parking:
|
37
spaces in the building garage at the garage’s standard rates and terms,
but the first 25 are at a 10% discount if Alliance reserved such spaces
before the Sup9 Adjustment Date (Sup9 §18; Sup12
§12). Landlord’s parking obligations continue so long as
Landlord is the garage operator or so long as the garage is generally
available to building tenants (Sup15 §22).
|
|
Allowances
and Credits:
|
The
following allowances and credit may have been used or
applied:
|
|
10th
Floor: $130,000 credit against fixed annual rent due from and
after Floor 10 is included in the demised premises (Sup19
§9).
|
||
15th
Floor: $987,725 for tenant’s initial fit-out and professional
fees relating thereto. Any portion not used for such purposes
is credited against fixed annual rent (Sup12 §6(b)).
|
||
16th
Floor: $987,725 for cost of initial fit out and professional
fees relating thereto. Any portion not used for such purposes
is credited against fixed annual rent (Sup12
§6(c)).
|
Casualty:
|
In
case of casualty, Landlord is required to restore the building and/or the
demised premises (other than property installed by or on behalf of
Alliance). Fixed annual rent and additional rent is abated to
the extent that the demised premises or a portion thereof are unrentable
and are not occupied by Alliance for the conduct of its
business. In case of substantial casualty affecting the demised
premises, Alliance may terminate the lease if Landlord’s restoration is
not completed within 1 year, subject to extension of up to an additional 6
months for circumstances beyond Landlord’s reasonable control. (orig.
§13.01). In case the building or the demised premises are
substantially damaged in the last 2 years of the term, either Landlord or
Alliance may cancel the lease upon notice given within 60 days of such
casualty (orig. §13.02). Landlord may terminate the lease upon
30 days’ notice given within 120 days of a casualty that so damages the
building that Landlord decides to demolish it or not rebuild it (orig.
§13.03).
|
Condemnation:
|
In
case of a total condemnation of the demised premises, the lease terminates
(orig. §14.01). In case of a condemnation other than a total
condemnation of the demised premises, the lease will continue, but fixed
annual rent and additional rent, will be abated proportionately, provided
that if more than 25% of the demised premises is condemned, Alliance may
terminate the lease upon 30 days notice given within 30 days after such
condemnation (orig. §14.02). Landlord is required to repair any
damage caused by such condemnation (orig. §14.02). In case of a
condemnation of more than 25% of the demised premises, Landlord will, to
the extent of the condemnation award, repair damage caused by such
condemnation within 6 months of the condemnation, as such period may be
extended due to force majeure. If Landlord fails to complete
repairs within 6 months, as extended due to force majeure, Alliance may
terminate upon 30 days’ notice (orig. §14.04). In case of any
partial condemnation within the last 2 years of the term, either party may
terminate the lease within 32 days of the condemnation upon 30 days notice
(orig. §14.04). In case of a temporary taking of all or part of
the of the demised premises, there will be no abatement of rent, but
Alliance is entitled to any condemnation award and if such temporary
taking occurs in the last 3 years of the terms, Alliance may terminate the
lease upon 30 days’ notice given within the 30 days of title vesting in
such condemnation (orig.
§14.05).
|
Subletting
the demised premises, assigning the Lease, allowing others to use the
demised premises, and advertising for a subtenant or assignee are not
permitted without the consent of Landlord (§15.01), which consent will not
unreasonably be withheld (§15.05) except with regard to the ground floor
portion of the demised premises. Landlord has no recapture
rights. Alliance may, without Landlord’s consent, assign or
sublet to a corporation into or with which Alliance is merged, with an
entity to which substantially all of Alliance’s assets are transferred, or
to an entity which controls or is controlled by Alliance or is under
common control with Alliance, subject to a net worth test
(§15.02). Also, Alliance may, without Landlord’s consent,
permit an affiliate (defined as “an entity which controls or is controlled
by Alliance or is under common control with Alliance”) to occupy all or a
portion of the premises (orig. §15.08). Any permitted
assignment or sublease will not be effective until Alliance delivers to
Landlord a recordable sublease or assignment agreement reasonably
satisfactory to Landlord pursuant to which the subtenant or assignee
assumes all of Alliance’s obligations under the Lease. Alliance
will remain fully liable under the lease for the payment of rent and the
performance of all of Alliance’s other obligations under the Lease
notwithstanding any such assignment or sublease (orig.
§15.03).
|
|
Landlord’s
Consent to assignment or sub-subletting by an assignee or
subtenant:
|
Landlord’s
consent will not be unreasonably withheld or delayed, provided that such
further assignment or sub-sublease is subject to all of the other terms
and conditions of the Lease regarding assignment and subletting (Sup7
§12(b)).
|
Profits:
|
If
Alliance assigns the lease or sublets any portion of the demised premises
other than to a corporation into which Alliance is merged or consolidated,
or to which Alliance’s assets are transferred or to any entity which
controls or is controlled by Alliance or is under common control with
Alliance, then Alliance will pay Landlord 50% of any profits after first
deducting reasonable expenses incurred in connection with such
assignment/sublease amortized on a straight line basis over the balance of
the lease term (in case of an assignment) or over the term of the sublease
(in case of a sublease) (orig. §15.07). For the first 50% of
rsf of demised premises other than ground floor space (including Floors 2
and 8-14 after such floors are delivered to Alliance (Sup15 §19(a))
assigned or sublet by Alliance, Alliance will have the right to deduct as
such a reasonable expense a “Tenant Improvement Deduction”, determined as
of the commencement date of such sublease or assignment, and calculated as
follows:
|
((A/2
– B) ÷ C) x D, where
|
|
A =
amortized value of Alliance leasehold improvements (regardless of whether
paid for with tenant allowance) based upon the average value of Alliance’s
unamortized leasehold improvements on a per rentable square foot basis for
all of the demised premises other than any concourse space (Sup15 §19(b)
or ground floor space (Sup20 §2(a)), amortized on a straight line basis
from completion date until 10/31/09 (if located on Floors 37-39 and
completed prior to 8/16/94 and such calculation is being made prior to the
delivery of Floors 2 and 8-14 (Sup15 §19(a))) or the lease expiration date
(in all other cases)
|
|
B =
total landlord cash contribution or allowance to Alliance for leasehold
improvements under the lease,
|
C =
total rsf of the demised premises, and
|
|
D =
rsf of the space being sublet or assigned. (Sup9
§13(d))
|
|
In
determining profits, Alliance is permitted to take into account its
electricity expenses under the lease and cleaning expenses (whether under
separate agreement with Landlord’s contractor or pursuant to the lease)
(Sup9 §13(d)), and its rental cost for the space being sublet or assigned
will be determined using an average, on a rentable square foot basis, of
its rental cost for the entire demised premises other than any concourse
space or ground floor space (Sup20 §2(b)) except with respect to any
sublease or assignment of the 2nd,
8th-14th
or 17th
(part) floors made before Alliance ever occupies such space (which
is the case for Floor 10 (Sup19 §6(b)) in which case Alliance’s rental
cost will be based on its actual rental without including any deduction
for unamortized tenant improvements (Sup15 §19(d); Sup16 §12, Sup17 §11;
Sup18 §11). If Alliance subleases any part of Floors 2 and 8-14
or assigns the Lease with respect thereto after first occupying such
space, then Alliance will have the right to take a “Tenant Improvement
Deduction” as provided
above.
|
Ground
Floor:
|
Alliance
has the right of first offer to lease all or a portion of the space
occupied by European American Bank as of August 16, 1994, upon such space
(or portion thereof) becoming available, at 95% of fair market rent (as
determined by Landlord but subject to a specified arbitration process if
Landlord and Alliance cannot agree within 60 days of Alliance’s acceptance
of the offer) (Sup9 §14(a)). So long as Alliance and its
affiliates occupy at least 200,000 rsf of the building, Landlord is
restricted from leasing such space to a competitor of Alliance (Sup9
§14(a)(ii)). This right of first offer is not subject to the condition
that Alliance not be in default beyond the expiration of applicable notice
and cure periods under any of the terms, provisions and conditions of the
Lease.
|
24th
and 25th
Floors:
|
[Note: The
24th
and the 25th
floors are currently used for the building’s mechanical equipment and are
not leased to tenants.]
|
26th,
27th
and 28th
Floors:
|
Subject
to the superior rights (as of 8/16/94) of any then-existing tenant or
occupant of the building and the superior rights of any tenant that leases
floors 26 through 28, Alliance has the right of first offer to lease, at
fair market rent (as determined by Landlord but subject to a specified
arbitration process if Landlord and Alliance cannot agree within 60 days
of Alliance’s acceptance of the offer), the 26th,
27th
and 28th
floors (or a portion of any such floor, if offered to Alliance as a
partial floor), upon availability (Sup9 §14(c)). We have been
advised by Judd S. Meltzer Co. Inc. that this space is presently leased to
Avon pursuant to a lease which expires on October 31, 2016 and that Avon
has three 5-year extension options which are superior to Alliance’s right
of first offer.
|
29th
Floor:
|
Subject
to the superior rights (as of 8/16/94) of any then-existing tenant or
occupant of the building and the superior rights of any tenant that leases
floors 26 through 28, Alliance has the right of first offer to lease, at
fair market rent (as determined by Landlord but subject to a specified
arbitration process if Landlord and Alliance cannot agree within 60 days
of Alliance’s acceptance of the offer), the 29th
floor (or a portion thereof, if offered to Alliance as a partial floor),
upon availability (Sup9 §14(c)). We have been advised by Judd
S. Meltzer Co. Inc. that this space is presently leased to Dean Witter
pursuant to a lease which expires on February 28, 2005 and that Avon has
superior rights to this right of first offer.
|
30thFloor:
|
Subject
to the superior rights (as of 8/16/94) of any then-existing tenant or
occupant of the building and the superior rights of any tenant that leases
floors 26 through 28, Alliance has the right of first offer to lease, at
fair market rent (as determined by Landlord but subject to a specified
arbitration process if Landlord and Alliance cannot agree within 60 days
of Alliance’s acceptance of the offer), the 30th
floor (or a portion of any such floor, if offered to Alliance as a partial
floor), upon availability (Sup9 §14(c)). We have been advised
by Judd S. Meltzer Co. Inc. that this space is presently leased to
Rubenstein pursuant to a lease which expires on December 31, 2009 and that
Rubenstein has one 5-year extension option which may be preempted by
Alliance.
|
46th
through 50th
Floors:
|
Subject
to the superior rights (as of 8/16/94) of any then-existing tenant or
occupant of the building and the superior rights of any tenant that leases
floors 26 through 28, Alliance has the right of first offer to lease, at
fair market rent (as determined by Landlord but subject to a specified
arbitration process if Landlord and Alliance cannot agree within 60 days
of Alliance’s acceptance of the offer), the 49th
and 50th
floors (or a portion of any such floor, if offered to Alliance as a
partial floor), upon availability (Sup9 §14(c)). This right of first offer
also applies to the 46th
through 48th
floors (Sup10 §4(b); Sup14 §16). We have been advised by Judd S. Meltzer
Co. Inc. that this space is presently leased to Pimco pursuant to a lease
which expires on December 31, 2016 and that there are no superior rights
to this right of first offer.
|
||
All
other space:
|
We
have been advised by Judd S. Meltzer Co. Inc. that the companies listed
below have leased the floors under leases expiring as
follows:
|
||
Tenant
|
Floor(s)
|
Lease Expiration
|
|
Arthur
Andersen
|
3
through 7
|
04/30/04
|
|
Linklaters
|
19
|
11/30/13
|
|
Stern
Stewart
|
20
|
04/30/08
|
|
Smith
Barney
|
21
and 22
|
04/30/05
|
|
Nichimen
|
23
|
04/30/12
|
|
Alliance
has the right of first offer to lease all other space in the building it
does not already lease or that is not subject to another of Alliance’s
rights of first offer, upon availability, at fair market rent (as
determined by landlord but subject to a specified arbitration process if
Landlord and Alliance cannot agree within 60 days of Alliance’s acceptance
of the offer) (Sup15 §9(a)(1); Sup16 §14). This right of first
offer is subject to the conditions that Alliance and its affiliates are in
occupancy of at least 400,000 rsf and is subject to any rights of first
offer or refusal held by any other building occupant or tenant existing as
of August 3, 2000 (Sup15 §9(a)(i) and
(ii)). (Note: We have been advised by Judd S.
Meltzer Co. Inc. that the following superior rights
exist: Linklaters has two 5-year extension options with respect
to the 19th
floor, Smith Barney has one 5-year extension option with respect to the
21st
and 22nd
floors; Nichimen has one 5-year extension option with respect to the
23rd
floor and Avon has rights to the 23rd
floor.) Alliance may not exercise such right of first offer
during the last 10 years of the term unless (i) Alliance simultaneously
extends the lease term pursuant to the Lease, or (ii) such offer is made
during the period beginning 10 years before the expiration date and ending
5 years before the expiration date and is for 2 or fewer floors (provided
that if it is for more than 2 floors and Alliance wishes to accept the
offer, Alliance must accept Landlord’s terms (including, perhaps, a
non-coterminous expiration date) for those excess floors) (15 Sup,
§9(a)(iii)(7)).
|
Events
of Default:
|
Landlord
may terminate the lease upon 10 days’ notice if:
|
|
(i)
|
Alliance
fails to pay fixed annual rent or any other lease payment within 10 days
after notice from Landlord of such failure;
|
|
(ii)
|
Alliance
fails to cure its default under any of its other obligations under the
lease, or fails to re-occupy the demised premises after abandoning the
demised premises, within 30 days after notice from Landlord (reduced to 5
days in case of default under Alliance’s obligation to use the demised
premises in conformance with the certificate of occupancy or Alliance’s
failure to provide an estoppel), but if such default cannot be cured
within such period, such period is extended as necessary to permit
Alliance with diligence and good faith, to cure such default;
or
|
|
(iii)
|
an
execution or attachment against Alliance or its property results in a
party other than Alliance continuing to occupy the demised premises after
30 days’ notice from Landlord (orig. §19.01).
|
|
Upon
termination, Landlord may re-enter the demised premises and dispossess
Alliance (orig. §19.02).
|
||
Alliance’s
obligation to pay fixed annual rent and additional rent survives any
termination of the lease due to Alliance’s default (orig.
§19.03). Upon such termination, Alliance will pay landlord
re-letting expenses and at Landlord’s option, either a lump sum
representing the present value of the excess of Alliance’s combined fixed
annual rent and additional rent over the rental value for the terminated
portion of the term, or on a monthly basis the excess of Alliance’s
combined fixed annual rent and additional rent over the rent received from
any re-letting of the demised premises for the period representing the
terminated lease term (orig. §20.01).
|
||
Landlord’s
Right to Cure:
|
If
Alliance fails to cure a default within any applicable grace period after
notice of such default (provided that no notice is required in case of
emergency), then Landlord may cure such default and bill Alliance for the
cost of such cure, which bill will be due upon receipt (orig.
§21.01).
|
|
Right
to Contest:
|
Alliance
may contest any law that Alliance is obligated to comply with under the
lease and compliance thereunder, provided that:
|
|
(a)
|
such
non-compliance will not subject Landlord to criminal prosecution or
subject the building to lien or sale;
|
|
(b)
|
such
non-compliance does not violate any fee mortgage, ground lease or
leasehold mortgage thereon;
|
|
(c)
|
Alliance
will deliver a bond or other security to Landlord; and
|
|
(d)
|
Alliance
will diligently prosecute such
contest.
|
Arbitration:
|
Where
arbitration is required by the lease, unless otherwise expressly provided,
the arbitration will be in New York City in accordance with the Commercial
Arbitration Rules of the American Arbitration Association and the lease,
and judgment may be entered in any court having jurisdiction (orig.
§33.01).
|
Limits
on Alliance’s Remedies:
|
Alliance
cannot, in response to Landlord’s act or omission, terminate the lease or
set-off rent before giving any ground lessor or mortgagee of the fee or
ground leasehold estate for which Alliance has been given an address
notice of such act or omission and a reasonable period of time to
cure. Such ground lessor or mortgagee, however, has no
obligation to cure such act or
omission.
|
Landlord:
|
Landlord
may enter the demised premises to perform alteration work, to inspect the
demised premises or to exhibit the demised premises to prospective
purchasers, mortgagees or lessors of the building and (during the last 6
months of the term) to prospective lessees of the demised premises,
provided that Landlord provides Alliance advance notice (which may be
oral) of such entry (orig. §16.01). Landlord will exercise
reasonable diligence so as to minimize the disturbance (orig.
§16.01).
|
Carter-Wallace,
Inc.
|
Carter-Wallace,
Inc. is allowed, once a month upon reasonable notice during business
hours, access in the vicinity of column 63 on the northeast side of the
41st
floor to service a humidifier, provided that Carter-Wallace, Inc. will
move such portion of humidifier off the 41st
floor if Alliance reasonably requires Carter-Wallace, Inc. to do so as
part of Alliance’s alteration work on the 41st
floor (LTR1, par 2).
|
All
notices required to be given by the lease or by law are required to be in
writing. Notices, which are required to be sent by certified or
registered mail, are deemed sent by the sender and received by the
recipient when deposited in the exclusive care and custody of the U.S.
mail. Notices to Landlord are to be addressed as
follows:
1345
Leasehold Limited Partnership
c/o
Fisher Brothers
299
Park Avenue
New
York, New York
|
|
with
a copy to:
|
|
Fisher
Brothers
299
Park Avenue
New
York, New York
Attn: General
Counsel
|
|
(orig.
§31.01)
|
Guidelines
for Transfer of AllianceBernstein L.P.
Units
|
No
transfer of ownership of the units of AllianceBernstein L.P. (the private
partnership) is permitted without prior approval of AllianceBernstein and
AXA Equitable Life Insurance Company (“AXA
Equitable).
|
Under
the terms of the Transfer Program, transfers of ownership will be
considered once every calendar
quarter.
|
To
sell your Units to a third party:
|
To
donate the Units:
|
|||
q
|
You
must first identify the buyer for your Units. AllianceBernstein
can not maintain a list of prospective buyers nor will AllianceBernstein
act as a buyer.
|
q
|
The
donor must obtain approval of AllianceBernstein and AXA Equitable for the
transfer of units.
|
|
q
|
The
unitholder and the prospective buyer must submit a request for transfer of
ownership of the Units and obtain approval of AllianceBernstein and AXA
Equitable for the transaction.
|
q
|
Documentation
required for consideration of approval includes
- Unit
Certificate(s):
- Executed
“Stock” Power Form, with guaranteed signature
- Letter
from Transferee
|
|
q
|
Documentation required for
consideration of approval includes:
- Unit
Certificate(s)
- Executed
“Stock” Power Form, with guaranteed signature
- Letter
from Seller
- Letter
from Purchaser
|
q
|
Additional
required documentation should be verified with AllianceBernstein’s
transfer agent, BNY Mellon Shareowner Services, at
866-737-9896.
|
|
To
have private Units re-registered to your name if they have been left to
you by a deceased party:
|
To
re-register your certificate to reflect a legal change of name or change
in custodian:
|
|||
q
|
The
beneficiary must obtain approval of Alliance Capital and AXA Equitable for
the transfer of units.
|
q
|
The
unitholder must obtain approval of AllianceBernstein and AXA Equitable for
the change of name/registration on the unit certificate
|
|
q
|
Documentation required for
consideration of approval includes:
- Unit
Certificate(s)
- Executed
“Stock” Power Form, with guaranteed signature
- Copy
of death certificate
- Required
Inheritance Tax Waiver for applicable states
|
q
|
Documentation
required for consideration of approval includes:
- Unit
Certificate(s)
- Executed
“Stock” Power Form, with guaranteed signature
- Specific
instruction letter indicating the manner in which the new unit certificate
should be registered
|
|
q
|
Additional
required documentation (which varies by state) should be verified with
AllianceBernstein’s transfer agent, BNY Mellon Shareowner Services, at
866-737-9896
|
q
|
Additional
required documentation should be verified with AllianceBernstein’s
transfer agent, BNY Mellon Shareowner Services, at
866-737-9896.
|
David
Lesser
|
||
Legal
and Compliance Department – Transfer Program
|
||
AllianceBernstein
L.P.
|
||
1345
Avenue of the Americas
|
||
New
York, NY 10105
|
||
Phone:
(212) 969-1429
|
For
the Partnership:
|
|
Address:
|
1345
Avenue of the Americas
New
York, New York 10105
|
Attention:
|
Treasury
|
Telephone
number:
|
212-823-3232
|
Fax
number:
|
212-823-3250
|
For
Banc of America Securities LLC:
|
|
Address:
|
600
Montgomery Street
CA5-801-15-31
San
Francisco, California 94111
|
Attention:
|
Manager,
Money Market Finance
|
Telephone
number:
|
415-913-3689
|
Fax
number:
|
415-913-6288
|
For
Merrill Lynch Money Markets Inc.:
|
|
Address:
|
World
Financial Center, 11th Floor
New
York, New York 10080
|
Attention:
|
Money
Markets Origination
|
Telephone
number:
|
212-449-3264
|
Fax
number:
|
212-449-8939
|
For
Deutsche Bank Securities Inc.:
|
|
Address:
|
60
Wall Street
New
York, New York 10005
|
Attention:
|
Vaughn
Smith
|
Telephone
number:
|
212-250-7179
|
Fax
number:
|
212-797-5177
|
Attention:
|
Christopher
Shirk
|
Telephone
number:
|
212-250-7179
|
Fax
number:
|
212-797-5177
|
Attention:
|
Raj
Sodhi
|
Telephone
number:
|
212-250-7179
|
Fax
number:
|
212-797-5177
|
AllianceBernstein L.P. | |||
By:
|
/s/
John J. Onofrio, Jr.
|
||
Name: John
J. Onofrio, Jr.
Title: Vice
President and Treasurer
|
Banc of America Securities LLC | |||
By:
|
/s/
Robert Porter
|
||
Name: Robert
Porter
Title: Managing
Director
|
Merrill Lynch Money Markets Inc. | |||
By:
|
/s/
Robert J. Little
|
||
Name: Robert
J. Little
Title: Managing
Director
|
Deutsche Bank Securities Inc. | |||
By:
|
/s/
John Cipriani
|
||
Name: John
Cipriani
Title: Director
|
By:
|
/s/
Vaughn Smith
|
||
Name: Vaughn
Smith
Title: Director
|
Years
Ended
|
||||||||||||
12/31/2008
|
12/31/2007
|
12/31/2006
|
||||||||||
Fixed
Charges:
|
||||||||||||
Interest
Expense
|
$ | 13,077 | $ | 23,970 | $ | 23,124 | ||||||
Estimate
of Interest Component In Rent Expense (1)
|
- | - | - | |||||||||
Total
Fixed Charges
|
13,077 | 23,970 | 23,124 | |||||||||
Earnings:
|
||||||||||||
Income
Before Income Taxes and Non-Controlling Interest in Earnings of
Consolidated Entities
|
944,229 | 1,405,004 | 1,192,038 | |||||||||
Other
|
(72,965 | ) | (6,861 | ) | (9,446 | ) | ||||||
Fixed
Charges
|
13,077 | 23,970 | 23,124 | |||||||||
Total
Earnings
|
$ | 884,341 | $ | 1,422,113 | $ | 1,205,716 | ||||||
Consolidated
Ratio Of Earnings To Fixed Charges
|
67.63 | 59.33 | 52.14 |
1.
|
I
have reviewed this annual report on Form 10-K of AllianceBernstein
L.P.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date: February
20, 2009
|
/s/ Peter S. Kraus
|
||
Peter
S. Kraus
|
|||
Chief
Executive Officer
|
|||
AllianceBernstein
L.P.
|
1.
|
I
have reviewed this annual report on Form 10-K of AllianceBernstein
L.P.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date: February
20, 2009
|
/s/ Robert H. Joseph, Jr.
|
||
Robert
H. Joseph, Jr.
|
|||
Chief
Financial Officer
|
|||
AllianceBernstein
L.P.
|
(1)
|
The
Report fully complies with the requirements of section 13(a) or 15(d) of
the Exchange Act; and
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date: February
20, 2009
|
/s/ Peter S. Kraus
|
||
Peter
S. Kraus
|
|||
Chief
Executive Officer
|
|||
AllianceBernstein
L.P.
|
(1)
|
The
Report fully complies with the requirements of section 13(a) or 15(d) of
the Exchange Act; and
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date: February
20, 2009
|
/s/ Robert H. Joseph, Jr.
|
||
Robert
H. Joseph, Jr.
|
|||
Chief
Financial Officer
|
|||
AllianceBernstein
L.P.
|