EXHIBIT 10.4
FORM OF AMENDED AND RESTATED ACCOUNTING, VALUATION, REPORTING AND
TREASURY SERVICES AGREEMENT
[DRAFT OF AUGUST 2, 1999]
1
As of January 1, 1999
The Equitable Life Assurance Society of the United States
1290 Avenue of the Americas
Xxx Xxxx, XX 00000
AMENDED AND RESTATED ACCOUNTING, VALUATION, REPORTING AND TREASURY
SERVICES AGREEMENT FOR THE GENERAL ACCOUNT AND CERTAIN SEPARATE
ACCOUNTS OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Dear Sir or Madam:
Alliance Capital Management L.P. (together with any affiliated successor to its
business, "Servicer") and The Equitable Life Assurance Society of the United
States ("Client") hereby confirm our mutual agreement as set forth below.
Client desires to avail itself of Servicer's experience, assistance and
facilities with respect to certain accounting, valuation and reporting and
treasury services set forth on Schedules A through E, annexed to and made part
of this Agreement, to be provided for Client's General Account and certain of
its Separate Accounts specified in such schedules. Servicer is willing to
perform such services upon the terms and conditions set forth below.
1. Client agrees to pay Servicer's fees (the "Fees") for providing
the services set forth on Schedules A through E. During the initial 12-month
period of this Agreement, as amended and restated, the annual Fees for the
services set forth on Schedules A through D will be as set forth below and the
annual Fee for the services set forth on Schedule E will be determined in
accordance with the fee rate section of Schedule E.
Schedule A For these services provided for the assets in the General
Account and Separate Accounts 43, 46 and 48 (the "Primary Assets"),
$4,146,000. Client agrees to pay bank custody fees.
Schedule B For these services provided for (i) Association Plan assets as
to which neither Servicer nor a subsidiary of Servicer provides investment
advisory services (the "Unmanaged Association Plan Assets") and (ii)
Annuity Separate Account assets as to which neither Servicer nor its
subsidiary provides investment advisory services, $15,000 for Mellon Bank
Account 157, $20,000 each for British American Account 176A and Ethyl
Corp. Account 177A, and $30,000 for each other Association Plan account or
Annuity Separate Account with another investment adviser. Client also
agrees to pay with respect to these assets outside audit fees and bank
custody fees (unless the contract with Client's client provides that such
charges shall be borne by such client).
Schedule C For these services provided for Association Plan assets in
Pooled Separate Accounts as to which Servicer or its subsidiary provides
investment advisory services, $15,000 for each Association Plan account.
2
Schedule D For these services provided for assets in (i) the investment
divisions of Separate Account A and of Separate Account 301 which invest
in the corresponding portfolios of The Xxxxxx River Trust and (ii)
Equipension Q and G which participate in Pooled Separate Accounts 4 and 5
as to which Servicer or its subsidiary provide investment advisory
services, $164,000.
Schedule E For these treasury services provided for the Primary Assets
and the Unmanaged Association Plan Assets, the fee determined by applying
the fee rate schedule of Schedule E separately to the Primary Assets
allocated to each segment of Client's General Account as to which Servicer
or its subsidiary provides investment advisory services, to the invested
assets in Client's General Account as to which Client's Treasurer provides
investment advisory services, and to the Unmanaged Association Plan
Assets.
The Fees for each successive 12-month period in which this Agreement, as amended
and restated, is in effect will be adjusted as mutually agreed by Client and
Servicer. It is understood that the Fees are based upon certain assumptions
relating to the number of accounts, transactions and assets. It is agreed that
if the nature of these services change at any time during any 12-month period,
otherwise than solely as a result of an increase in asset base, then Servicer
shall receive from Client an increase for providing services under this
Agreement for such period. All adjustments to the Fees in subsequent periods or
for changes in the nature of the services during any period shall be based on
either (i) fees being charged by Servicer to other clients for similar services,
or (ii) if Servicer is not providing similar services to other clients, then on
Servicer's costs (direct and indirect) and expenses incurred in furnishing
services pursuant to this Agreement. In determining such costs and expenses,
specific identification or estimates based on time, company assets, square
footage or other mutually agreeable methods providing for a fair and reasonable
allocation of costs may be used, provided such method is in conformity with
generally accepted accounting principles and with the requirements of Section
1505(a) of the New York Insurance Law and New York Insurance Department
Regulation No. 33.
2. The monthly amount due is calculated at 1/12 of that 12-month
period's annual amount due on the Fees and shall be billed within 15 days of the
end of the preceding calendar month. Each xxxx shall be due and payable on the
thirtieth day after the end of the preceding calendar month and will accrue
interest on the unpaid balance from the due date at a compounded interest rate
which is the equivalent of the prime rate announced from time to time by The
Chase Manhattan Bank, N.A. if not paid by the due date. If the initial period is
shorter than a calendar month, the amounts due for such period are the monthly
payments prorated to the end of the calendar month. The amounts due for periods
shorter than a calendar month due to termination of this Agreement are the
monthly amounts prorated to the termination date. Such amounts are due and
payable upon termination of this Agreement.
3. Client shall have the right to conduct a review of the books,
records and accounts of Servicer relating to provision of services hereunder
upon giving reasonable notice of its intent to conduct such a review. In the
event of such review, Servicer shall give to Client reasonable cooperation and
access to all books, records and accounts necessary to the review.
4. Each party shall be and remain sole owner of its records,
including but not limited to business and corporate records, regardless of the
use or possession by either party of the other party's records in connection
with the services provided under this Agreement. Upon termination of this
3
Agreement, Servicer shall deliver to Client, or as Client may direct, all of
Client's records held by it in the course of providing services under this
Agreement.
5. Should an irreconcilable difference of opinion between Servicer
and Client arise as to the interpretation of any matter respecting this
Agreement, it is hereby mutually agreed that such differences shall be submitted
to arbitration as the sole remedy available to both parties. Such arbitration
shall be in accordance with the rules of the American Arbitration Association,
the arbitrators shall have extensive experience in the insurance and/or
investment advisory industries, and the arbitration shall take place in New
York, New York.
6. No assignment of this Agreement shall be made by either party,
except that the Servicer may assign this Agreement to an affiliated successor to
its business.
7. Servicer may contract with one or more of its wholly owned
subsidiaries for the performance of its obligations hereunder, provided that the
terms and conditions of such contracts shall not be inconsistent herewith and
that Servicer shall not be relieved of its duties and obligations to Client
hereunder. Servicer shall be solely liable for all fees owed by it under any
such contract, irrespective of whether Servicer's compensation pursuant hereto
is sufficient to pay such fees.
8. This Agreement will continue through December 31, 1999. After such
date this Agreement shall be effective for successive 12-month periods unless
either Client or Servicer notifies the other in writing not later than the first
day of the then current 12-month period that this Agreement shall not be renewed
at the end of such period. Notwithstanding the foregoing, after the end of the
initial 12-month period, Client may terminate this Agreement upon 90 days
written notice to Servicer and Servicer may terminate this Agreement upon 120
days written notice to Client. Pursuant to various agreements with Client and
its life insurance subsidiary, The Equitable of Colorado, Inc., Servicer and
Alliance Corporate Finance Group Incorporated, an indirect wholly owned
subsidiary of Servicer, are providing investment advisory services and Servicer
is providing accounting, valuation, reporting and treasury services to Client
and such subsidiaries. Client and Adviser agree that it would not be appropriate
for Client or Adviser to be able to terminate this Agreement without terminating
concurrently all such agreements. Therefore, Client and Servicer agree that
neither Client nor Servicer shall give a notice of termination or notice of
nonrenewal under this Agreement other than a deemed termination notice as a
result of the giving of a notice of termination or notice of nonrenewal under
the Amended and Restated Investment Advisory and Management Agreement, dated as
of January 1, 1999, between Servicer and Alliance Corporate Finance Group
Incorporated, as adviser, and Client (the "Investment Advisory and Management
Agreement") or a termination notice pursuant to the third paragraph of this
section 8. Upon termination of this Agreement Client will pay to Servicer all
fees accrued and unpaid to the date of termination.
If Client or Servicer gives notice of termination of this Agreement,
Client and Servicer will take all necessary steps, including, without
limitation, Servicer providing Client with access to and the opportunity to
consult with Servicer's employees, in order to facilitate a smooth transition of
the records and responsibilities so as to avoid a disruption of services to
Client. Any such transition shall begin on the giving of such termination
notice, and the parties shall use their best efforts to complete such transition
by the termination date. If such transition is not completed by the termination
date and if
4
Servicer continues to provide services or undertake duties and
responsibilities under this Agreement, this Agreement, including without
limitation the fee provisions, shall be deemed to continue in effect with
respect to the services so provided or duties and responsibilities so
undertaken.
If this Agreement is deemed to be terminated as a result of a
termination notice by Servicer under the Investment Advisory and Management
Agreement, then Servicer shall not be entitled with respect to any period after
the effective date of termination, to any fees of any kind other than any fees
contemplated by the following paragraph, including, without limitation, any fees
contemplated by Section 1. Notwithstanding anything to the contrary herein
contained, Servicer may terminate this Agreement if Client fails to pay any fees
due and owing under this Agreement and such failure remains uncured for a period
of 90 days after receipt by Client of written notice of such breach during which
period Client and Servicer shall work together to resolve any disagreement
concerning the calculation of such fees, provided that termination pursuant to
this provision shall not become effective until completion of any arbitration
under Section 5 of this Agreement with respect to the calculation of such fees
unless otherwise provided in the arbitration proceedings.
If this Agreement is deemed to be terminated or not renewed (i) by
Client as a result of a termination by Client of the Investment Advisory and
Management Agreement other than for Cause (as defined in the Investment Advisory
and Management Agreement) prior to December 31, 2003, or (ii) by Servicer
pursuant to the second full sentence of the fifth paragraph of Section 11 of the
Investment Advisory and Management Agreement, other than a termination which is
a termination by Client for Cause under such agreement, prior to December 31,
2003, then Client agrees, in recognition of Servicer's willingness to provide
such services until December 31, 2003, that it will pay Servicer a one-time fee,
depending on the date of termination set forth below, for the transfer of books
and records and such systems as are agreed by Client and Servicer, for the
opportunity to consult with Servicer's employees and for the facilitation by
Servicer of the transfer of responsibilities hereunder by Servicer to Client or
such other person as may be designated by Client:
Date of Termination Fee
------------------- ---
Prior to 12/31/99 $80,000,000
1/1/00 to 12/31/00 $60,000,000
1/1/01 to 12/31/01 $40,000,000
1/1/02 to 12/31/02 $20,000,000
1/1/03 to 12/31/03 $10,000,000
9. This Agreement shall not be amended, changed or modified except by
an instrument in writing signed by Client and Servicer. Any such amendment,
change or modification shall comply with all applicable requirements of the New
York Insurance Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of New York.
If you agree to the foregoing, kindly sign the enclosed copy of this letter of
agreement and return the copy so signed.
ALLIANCE CAPITAL MANAGEMENT L.P., or ANY
AFFILIATED SUCCESSOR TO ITS BUSINESS
5
By ALLIANCE CAPITAL MANAGEMENT
CORPORATION,
its General Partner
By:
-----------------------------------
Name:
Title:
Accepted as of the date first
above written
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By:
-----------------------------------
Name:
Title:
6
SCHEDULE A
SERVICES PROVIDED FOR THE ASSETS IN THE GENERAL ACCOUNT AND SEPARATE
ACCOUNTS 43, 46 & 48
STATUTORY, GAAP AND OTHER REPORTS AND JOURNAL ENTRIES PREPARED FOR THE
CONTROLLER'S DEPARTMENT
REPORTS, JOURNAL ENTRIES, ETC. FREQUENCY
------------------------------ ---------
Journal entries to record all transactions and activity Monthly
related to said assets, purchases, sales, amortization of
premiums, accrual of discounts, profits and losses, equity
trading portfolios, equity in subsidiaries (including ERAC),
bonds held for sale, short-term reclassification for cash
equivalents, joint ventures (equity basis earnings, capital
contributions/distributions, unrealized foreign exchange
gain/loss, Deal Flow Fund) open block/closed block
calculations, , etc.
Turn around documents - securities suspense Monthly
Securities suspense memorandum Monthly
Collected income on bonds & stocks Monthly
Asset valuation reserve ("AVR") and income maintenance reserve Quarterly
("IMR") aggregate and by segments (detail schedules by
maturity and by IY)
Joint venture AVR report and Deal Flow Fund look through Quarterly
Joint venture AVR look through for all JVs Annually
Securities carried in foreign currency and sales Monthly
Federal Reserve Form S foreign securities Monthly
Accrual Journals Monthly
- Interest due & accrued on bonds
- Dividends due and accrued on preferred & common stocks
- Commitment fees due & accrued
- Excess of admitted over book value stocks and bonds
- Accrued interest on borrowed funds
- Accrued income on joint ventures
- Interest due & accrued on rate swaps
- Security lending activity
- GAAP Valuation Reserve
- GAAP Permanent Impairment
- Unrealized activity for Held for Sale accounts Quarterly
Securities acquired - Schedule I to New York State Quarterly
Securities disposed - Schedule VI to New York State Quarterly
S-A-1
Comparative statement of book, admitted and GAAP value of bonds Monthly
- U.S. Department of Commerce filings, including, but not Quarterly
limited to BE-1X, BE-2X and BE-8X
- U.S. Treasury Department Filing (EC-3) Quarterly
- Derivatives Reporting Quarterly
(or more
frequently
as may be
required
by law or
regulation)
Comparative statement of book, admitted and GAAP value of Monthly
common and preferred stocks
FASB 133 Reporting as required
by FASB
guidelines
Admitted and GAAP asset value of stocks and bonds owned by class Monthly
Client Report (asset and income ledger information) Monthly
Billing Report (assets under management) Monthly
Exhibit 4 - gains/losses Monthly
Letters of credit memo Monthly
Non-accrued interest report Quarterly
Bonds on deposit with public authorities Quarterly
Foreign assets & liabilities statement Annually
Investment in British Columbia & New Brunswick Annually
PGAAP Quarterly
Equitable FAP reporting Quarterly
10K - 10Q Quarterly
Statutory Codification Ad Hoc
Annual statement requirements by State (e.g., South Dakota, Annually
Alaska, Mississippi, Louisiana, etc.)
Hawaii investment form Annually
Investments in Mexico form Annually
Canadian journal entries Monthly
Canadian annual statement Annually
Interest accrued on borrowed money (L/T and S/T) Quarterly
Regulation 130 Quarterly
S-A-2
10-Q and 10K reconciliations and footnotes (bonds, stocks, joint Quarterly
ventures, etc.) and supporting documentation as required
ACMC vs. Gemini reconciliations Quarterly
Security lending reports Monthly
IUS reports, agendas and minutes (including valuation allowance Monthly
and permanent impairments by security)
Custody reconciliation Monthly
Inventory of amounts due (payable/receivable) for completed Monthly
purchases/sales
Investment data to support cash flow statements Quarterly
Investment data to support GAAP and FAP footnote or Quarterly
Management's Discussion and Analysis and Business Section
disclosures (e.g., SFAS133 disclosures on derivatives, fair
market values, commitments, JVs > 10% and > $10 million
market risks, etc.)
Joint venture investment limitation report Semi-annually
Foreign limitation report Semi-annually
NAIC valuation and compliance Quarterly
Beneficial Ownership Systems review Quarterly
ACLI Reporting (general account/separate account) Annually
All Statutory Reporting relating to all SecuritySeparate Accounts Monthly,
Quarterly,
Annually
IYAM REPORTS PREPARED FOR THE CONTROLLER'S DEPARTMENT
-----------------------------------------------------
REPORTS FREQUENCY
------- ---------
Cash Income Monthly
- Bonds & Stocks
Earned Income Monthly
- Bonds & Stocks
- Joint Ventures
Net realized gains/losses Monthly
- Bonds & Stocks
- U.S. Government
Book value owned Monthly
- Bonds & Stocks
- Joint Ventures
- U.S. Government
S-A-3
Admitted value Monthly
- Bonds & Stocks
- U.S. Government
Earned Income Monthly
- Exempt Bonds
Short-term bonds excluded from IMR Quarterly
Rollover memos Annually
Securities payable in Canadian currency Quarterly
Accrued interest and dividends Monthly
S-A-4
ANNUAL STATEMENT
SCHEDULES PREPARED FOR THE CONTROLLER'S DEPARTMENT
Special deposit schedule (quarterly)
Schedule BA - Part 1 - Other Long-Term Invested Assets At Year End
(annually) - Part 2 - Other Long-Term Invested Assets Acquired During Year
- Part 3 - Other Long-Term Invested Assets Disposed Of During Year
Schedule C - Long-Term Collateral Loans
Schedule D - Summary By Country (including verification between years)
(annually)
Form for calculating AVR/IMR (annually & quarterly)
Schedule D - Part 1A - Maturity Distribution Of Bonds Owned At Year End
(aggregate and - Part 1 - All Long-Term Bonds Owned At Year End
by segment) - Part 2 - Section 1 - Preferred Stocks Owned At Year End
(quarterly - Part 2 - Section 2 - Common Stocks Owned At Year End
and annually) - Part 3 - Bonds & Stocks Acquired During Year
- Part 4 - Bonds & Stocks Disposed Of During Year
- Part 5 - Bonds & Stocks Acquired & Fully Disposed During Year
- Footnotes - Interrogatories
Schedule DA - Part 1 - All Short-Term Investments Owned At Year End
(quarterly) - Part 2 - Verification Of Short-Term Investments Between Years
Schedule DB - Part A - Options Owned, Acquired & Terminated During Year
(quarterly and - Part B - Options Written, In-Force & Terminated During Year
annually) - Part C - Futures Open, Opened & Terminated During Year
Schedule DM - Fair Value of Bonds And Preferred Stocks
(annually)
Schedule E - List Bank Accounts And Balances
(annually)
Schedule LS - List of Securities On Loan At Year End
(annually)
Schedule RR - Book Value Of Securities Subject To Reverse Repo Agreements
(annually)
S-A-5
REPORTS PREPARED FOR THE TAX OFFICE
INCOME TAX MEMORANDA
I. FEDERAL
CODE NO. MEMORANDUM TITLE FREQUENCY
------- ---------------- ---------
1.010 Tax-exempt interest Annually
1.022A Taxable accrual of discount - GNMA/FHLMC Quarterly
1.022B Original issue discount - acquired w/o coupons Quarterly
1.022C Original issue discount - acquired w/ warrants Quarterly
1.022D Accrued market discount on disposition of bonds Quarterly
issued after 7/18/84 pursuant to a tax-exempt
reorganization
1.022E Accrued market discount on disposition of bonds Quarterly
issued after 7/18/84
1.022F Taxable income (loss from hedging transactions) Quarterly
1.110 Non-taxable dividend received Quarterly
3.50 Adjusted tax basis of securities Annually
8.03 & 8.04 Gains and losses on sales or exchanges - bonds Quarterly
& stocks (summary)
8.03 & 8.04 Gains and losses on sales or exchanges - bonds Quarterly
& stocks (detail)
Maturing discount for next five years
Accrual of discount for next five years Annually
Tax basis of stocks and bonds Annually
Copy of form 1065, Schedule K-1 for all Annually
partnerships
Partial dividends received in each of general Quarterly
account and all separate accounts eligible for
the dividends received deduction
II. STATE
Foreign investments for general account and separate Quarterly
accounts classified by book value for each country
- income received
- income accrued and collected
- amortization of premium discount
- foreign taxes withheld
- Foreign tax credit pass through
S-A-6
Detailed Canadian Reports for general and separate Quarterly
accounts
AUDIT COORDINATION ACTIVITIES
Explain process and controls, and provide supporting information on all GAAP and
STAT accounting and reporting activities to Internal Auditors, External Auditors
and State Examiners.
REPORTS & INFORMATION PROVIDED TO OCIO
REPORTS/INFORMATION FREQUENCY
------------------- ---------
Prepare and present GAAP and statutory 5-year investment plan Annually
Prepare and present GAAP and statutory forecast of investment Quarterly
results (total earnings; investment income; realized gains
(losses); unrealized gains (losses); total assets)
Prepare GAAP and statutory Flash Report of actual quarter-to-date Monthly
and remaining quarter estimate of investment results; analyze
results and explain variances
Prepare tables and text, and coordinate outside auditor review of Quarterly/
Quarterly and Annual Financial Supplement GAAP reports sorted by: Annually
- Total, investment grade & non-Investment grade by NAIC
& Moodys
- Total, continuing (open & closed block), discontinued
by amortized cost and fair market value
Prepare derivatives reports required by Operational Plan Monthly,
Quarterly,
Annually
Report titles:
- Investment Results by Asset Category
- Summary of Fixed Maturities
- Fixed Maturities Change in Assets
- Fixed Maturities Investment Results
- Fixed Maturities Valuation Allowances
- Fixed Maturities Problem, Potential Problem and Restructured
- Fixed Maturities Ratings Summary
- Fixed Maturities Portfolio Credit Quality (Total, Public, Private)
- Fixed Maturities Portfolio Credit Quality (by asset category)
- Fixed Maturities Average Life
- Fixed Maturities by Industry
- Fixed Maturities Ten Largest Holdings
- Fixed Maturities Number of Different Issuers
- Fixed Maturities Callable Corporates By Year of First Call
- Ten Largest Equity Interests Investment Results
- Ten Largest Equity in Limited Partnership Interests, Capital
Contributions and Distributions Since Inception
S-A-7
REPORTS/INFORMATION FREQUENCY
------------------- ---------
Prepare tables and text and coordinate outside auditor review of Quarterly/
10-Q and 10-K GAAP Reports sorted by: Annually
- Total, investment grade & non-Investment grade by NAIC &
Moodys
- Total, continuing (open & closed block), discontinued by
amortized cost and fair market value
Report Titles:
- Fixed Maturities by Credit Quality
- Fixed Maturities by Problems Restructured, Potential
Problems & Potential Restructured
- Fixed Maturities Held for Sale
- Fixed Maturities and Equity Interests (by asset category)
In addition, provide various information used in tables and
text of the MD & A section of 10-Q and 10-K reports including:
- Investment grade/below investment grade largest holdings
- Public and private fallen angels
- Aaa rated NAIC 1 & 2
- One to ten year treasury holdings
- Bank participations
- Industries by NAIC (IG & BIG)
- Non cash income
- Realized loss by industry
- Analysis of sales activity
- Turnover in Locom/Non Locom accounts
- Foregone interest on restructured loans
- Non accrued interest & principal
- Reconciliation of problems/restructures/potential problems
Provide data and verify Investment Income Survey of statutory Quarterly
assets, earnings & yield by asset category and portfolio
Prepare Stock Sale Activity Reports Weekly
Prepare Investment Activity Reports for Equitable board meetings Monthly &
Quarterly
Respond to ad hoc information requests such as: Daily
- Risk Based Capital Reports on largest fixed maturities and
Partnerships by company
- Analysis of quarter-to-quarter changes in investment yield
- Sale strategy for stock holdings
- Analysis of Moodys vs. S & P rating information
- Change in assets for equity interests (for Tableau de Bord)
S-A-8
Business Plans 1991 - 1995
- Total holdings (General & Separate Accounts) in certain
stocks
- Special mid-month reports of realized and unrealized gains
- Reconciliation of Xxxxx'x and NAIC investment vs.
non-Investment grade ratings
- Special analysis of gains and losses for continuing business
- Special statutory reports for presentations to rating
agencies
- Special reports for presentations to AXA
- Asset reports sorted by NAIC rating, asset type, and segment
- Reporting for private high yield CBO
Provide downloads of assets and earnings information Monthly
REPORTS & INFORMATION PREPARED ON SHORT-TERM INVESTMENTS
FOR THE CORPORATE TREASURER'S DEPARTMENT
REPORTS/INFORMATION FREQUENCY
------------------- ---------
Investment Activities Reports - Acquisitions, repayments and sales Monthly
Data by Segment - Book value, earned income Quarterly
Provide access and maintenance to investment management system
used for short-term securities management Daily
Provide Corporate Controllers, Office of the Chief Investment
Officer and Pension Operations all statutory and GAAP reports
required for the short term portfolio managed by Corporate
Treasurers Varies
S-A-9
SCHEDULE B
SERVICES PROVIDED FOR NON-MANAGED ASSOCIATION PLAN
ACCOUNTS AND ANNUITY SEPARATE ACCOUNTS
FUNCTIONS PERFORMED FREQUENCY
------------------- ---------
Maintain client transactions for contributions and withdrawals Daily
Verify client net assets to underlying investment portfolio Daily
Calculate unit values Daily
Maintain investment portfolio based on trades reported by outside Daily
manager
Maintain and update trial balance, general ledger, cash receipts and Daily
disbursements journal for daily transactions
Provide cash flow and cash balance to outside manager Daily
Reconcile bank accounts Daily
Assure timely settlement of trades executed by outside manager Daily
Issue fund report to clients Monthly
Provide statements of account activity and month end holdings Monthly
to outside manager
Reconcile holdings to custodian bank records Monthly
Satisfy statutory accounting requirements for Separate Accounts Monthly/
(e.g., Month End Trial Balances, Investment Activity, Schedule D) Quarterly
Provide financial statements for inclusion in reports for clients Semi-annually/
Annually
Provide support to external auditors for audited accounts Annually
S-B-1
SCHEDULE C
SERVICE PROVIDED FOR ASSOCIATION PLAN
ACCOUNTS IN MANAGED SEPARATE ACCOUNTS
FUNCTIONS PERFORMED FREQUENCY
------------------- ---------
Provide financial statements for inclusion in
reports for clients Semi-annually/Annually
Prepare financial information for prospectus
and SAI including contract level per share financial Annually
information
Provide support to external auditors for audited accounts Annually
Provide financial information for periodic SEC Varies
registrations (i.e., additional units)
S-C-1
SCHEDULE D
SERVICES PROVIDED FOR THE FOLLOWING SEPARATE ACCOUNTS:
SEPARATE ACCOUNT A (5 DIVISIONS)
SEPARATE ACCOUNT 301 (7 DIVISIONS)
SEPARATE ACCOUNT 4 (EQUIPENSION Q AND G)
SEPARATE ACCOUNT 5 (EQUIPENSION Q AND G)
FUNCTIONS PERFORMED FREQUENCY
------------------- ---------
Record contributions/withdrawals Daily
Process cash receipts/disbursements Daily
Purchase/sale of units in corresponding Separate Account or
Xxxxxx River Trust Daily
Calculate insurance related expenses at contract level Daily
Determine net assets at contract level Daily
Value Equitable surplus retained in Separate Accounts Daily
Calculate unit values at contract level Daily
Transmit unit value to appropriate data center Daily
Perform bank reconciliations Daily
Issue confirmations of client transactions processed Daily
Separate Account trial balance Monthly
Cash-in-transit journal entries Monthly
Investment activity reconciliation reports Monthly
Surplus values retained in Separate Accounts Quarterly
Investment Committee Report Quarterly
Semi-annual financial statements Semi-annual
Schedule D, DA & DB Quarterly/Annually
Annual prospectus and SAI Annually
Form N-SAR Annually
Audited financial statements and per share data Annually
Contract reserves/surplus values Annually
Breakage gains and losses by contract Annually
Computations - Reserve for minimum death benefits Annually
- Annuitant Mortality Fluctuation Fund
Investment control totals Annually
S-D-1
SCHEDULE E
TREASURY SERVICES PERFORMED
Treasury Services
Confirmation Services - Includes obtaining trade confirmations, either by
mail or through automated interfaces; trade comparison function between
broker's confirmations and company records, reconciliation of trade
discrepancies and correction activity.
Settlement Services - Includes preparation and transmission of letters of
instruction to custodial agents; monitoring actual trade settlements;
investigation of and corrective action of failed trades.
Custody Services - Includes; processing corporate actions, e.g., tender
offers, stock dividends and splits, redemptions and other securities
related transactions.
Collection Services - Includes collection for principal, interest and
dividend payments; analysis, follow-up and reconciliation of overdue
payments and payment discrepancies.
Monitoring Services - Reconciliation of asset reports from custodial agents
with company records, identification and correction of out-of-balance
conditions, providing custody reports to various interested parties.
Fee Schedule
Long-Term Investments
---------------------
Month-End Book Value Treasury Service Fee (Basis Points)
-------------------- -----------------------------------
Up to $10,000,000,000 1.00
$10,000,000,001 to $20,000,000,000 .75
$20,000,000,001 to $30,000,000,000 .50
Over $30,000,000,000 .40
Short-Term Investments
----------------------
Month-End Book Value Treasury Service Fee (Basis Points)
-------------------- -----------------------------------
Up to $500,000,000 1.00
$500,000,001 to $1,000,000,000 .75
$1,000,000,001 to $1,500,000,000 .65
$1,500,000,001 to $2,000,000,000 .50
Over $2,000,000,000 .40
Securities lending - Fee is 35% of investment income
------------------
S-E-1
