Form of Award Agreement under the AllianceBernstein L.P. Financial Advisor Wealth Accumulation Plan

 

 

 

THIS AGREEMENT, made as of the 1st day of December, 2006, by and between AllianceBernstein L.P., a Delaware limited partnership (the “Company”), and (the “Participant”).

 

 

The Participant has been authorized to receive the following Incentive Award under the AllianceBernstein Financial Advisor Wealth Accumulation Plan (the “Plan”). Unless otherwise indicated, any capitalized term used but not defined herein shall have the meaning ascribed to such term in the Plan and the Administrative Guidelines attached hereto. A copy of the Plan has been delivered to the Participant. By signing and returning this Agreement, the Participant acknowledges having received and read a copy of the Plan and agrees to comply with it and this Agreement, the attached Administrative Guidelines and all applicable laws and regulations.

 

Accordingly, the Company and the Participant agree as follows:

 

1.    Incentive Award. Subject to the restrictions, terms and conditions of the Plan and this Agreement (including its attachments), the Company hereby awards an Incentive Award to the Participant of $.

 

2.    Vesting.

 

(a)    Except as set forth in subsection (b) below, the Incentive Award shall become vested and cease to be forfeitable (but shall remain subject to the other terms of this Agreement) as follows if the Participant has been continuously employed by the Company or an Affiliate until such date:

 

VESTING DATE	VESTED PERCENTAGE
January 1, 2008	14.3%
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	14.2%

 

 

There shall be no proportionate or partial vesting in the periods prior to the applicable vesting dates and all vesting shall occur only on the appropriate vesting date.

 

(b)    Notwithstanding Paragraph (a), a Participant’s Incentive Benefit shall become immediately vested and cease to be forfeitable upon the Participant’s death or when the participant becomes Disabled or upon Termination of Employment by the Company without Cause. For purposes of this Section, “Cause” shall mean a termination of employment due to the Participant’s insubordination, dishonesty, fraud, moral turpitude, misconduct, refusal to perform his or her duties or responsibilities for any reason other than illness or incapacity or materially unsatisfactory performance of his or her duties for the Company or its Affiliates; the failure to remain licensed (to the extent required by applicable law) to perform his employment duties or the failure of the Participant to obtain all relevant licenses to perform such duties; the violation of any employment rules, policies or procedures of the Company (including internal compliance rules); an act or acts constituting a felony under the laws of the United States or any state thereof; or a violation of the federal or state securities laws.

 

3.    Forfeiture. If the Participant’s employment with the Company or any Affiliate is terminated for any reason, other than as described in Section 2(b) above, prior to becoming vested in accordance with Section 2(a) above, the Participant shall forfeit to the Company, without compensation, any and all unvested Incentive Benefits.

 

4.    Replacement of Certain Eligible Revenues. If during the first year of participation in the Plan, the revenues from a single client relationship previously used to calculate the Eligible Revenues decrease due to net asset withdrawals of more than $25 million, the Participant shall replace the lost assets in excess of $25 million with client assets from client relationships not previously used to calculate Eligible Revenues. If in any year of participation any client relationship whose revenues were used to calculate the Eligible Revenues is reassigned to another employee, the Participant shall replace the reassigned client relationships with relationships having equivalent revenues that were not previously used to calculate Eligible Revenues. The Company also shall have the right, in the foregoing circumstances, to deem revenues from other client relationships serviced by the Participant as Eligible Revenues.  The Company shall define client relationships in its sole discretion.

 

5.    Payment. The Participant may make an election using the form attached hereto to elect when and how his or her vested Incentive Benefits will be paid in lieu of the default payment method provided under the Plan.

 

6.    Post-Termination Obligations. The Participant agrees that the Plan and the Incentive Award being made thereunder are in further consideration of the Participant’s confidentiality and non-solicitation obligations, which are set forth in Paragraphs 3, 4 and 5 of the Participant’s employment agreement with AllianceBernstein L.P. Accordingly, Participant agrees that the provisions of those Paragraphs 3, 4 and 5 are incorporated in this Agreement by reference as if fully set forth.

 

7.    Death. The Participant’s Beneficiary shall be the persons designated pursuant to the form attached hereto. The Participant may change his designation of beneficiary(ies) at any time prior to his death by submitting a new beneficiary form to the Company.

 

8.    Controlling Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to conflict of law provisions.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

 

	ALLIANCEBERNSTEIN L.P.
	By	/s/ Robert H. Joseph, Jr.
		Officer

 

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.

 

These elections, upon becoming effective, shall revoke and supersede all prior elections.

Signature of
Participant:			Date:

 

 

Plan Eligibility 

Individuals who have completed eight years of service as a Financial Advisor, have $500 million or more in assets under management, and service no more than 150 eligible client relationships, as defined by the firm, at the time of any Incentive Award may be selected by the firm to participate in the AllianceBernstein L.P. Financial Advisor Wealth Accumulation Plan (the “Plan”). Unless otherwise indicated, any capitalized term used but not defined herein shall have the meaning ascribed to such term in the Plan and the Award Agreement.

After being selected, each eligible Financial Advisor may choose whether or not to participate.

A Financial Adviser selected by the firm to participate in the Plan will have 30 days from the notification of his or her selection to accept an Incentive Award, but in all cases must accept the Incentive Award by December 31 prior to the first year of participation. Each Financial Advisor should analyze his or her own circumstances when deciding to participate in the Plan. Incentive Awards are granted as of January 1 of each year. Financial Advisors will be notified of their selection annually.

The amount of an Incentive Award is based upon the Financial Advisor’s Eligible Revenues, which are selected from the new account and base servicing revenue for the trailing four calendar quarters prior to the Incentive Award attributable to eligible client relationships serviced by the Advisor. Seven percent (7%) of the Eligible Revenues are multiplied by the number of years the Financial Advisor elects to be a participant in the Plan. The minimum term of participation is five years and the maximum is seven years. An Incentive Award equal to the resulting amount will be granted and recorded as a book entry in a Plan account on behalf of the Financial Advisor.

The Company determines, in its sole discretion, which revenues are Eligible Revenues. Accounts on which Base Level Servicing revenue is shared among two or more Financial Advisors do not produce Eligible Revenues and may not be included in the calculation of any Incentive Award.

Investment returns on the Incentive Award will be measured pursuant to the participating Financial Advisor’s elections in a selected family of investment products. The Financial Advisor will have the ability to change his or her investment measurement allocation with a frequency consistent with firm policies. However, any investment election in AllianceBernstein Holding Units cannot be changed after such election, and investment elections in Hedge Fund products must meet minimum investment requirements and other applicable qualifications, and abide by the Hedge Fund rules for withdrawals.

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AllianceBernstein Holding Units

·

AllianceBernstein Small Cap Growth Portfolio

·

AllianceBernstein Small/Mid-Cap Value Fund

·

AllianceBernstein Real Estate Investment Fund

·

Federated Prime Obligation Fund

·

Bernstein Strategic Value Portfolio

·

Bernstein Strategic Growth Portfolio

·

Bernstein International Portfolio

·

Bernstein Emerging Markets Fund

·

Bernstein Intermediate Duration Fund

·

Bernstein Short Duration Fund

·

AllianceBernstein Global Style Blend DBT

·

Bernstein Advanced Value Hedge Fund

·

Bernstein Global Opportunities Hedge Fund

·

Bernstein Global Diversified Hedge Fund

·

AllianceBernstein Global Diversified Strategies L.P. Hedge Fund A

·

AllianceBernstein Global Diversified Strategies L.P. Hedge Fund B

·

Bernstein Multi-Strategy Fixed Income Hedge Fund

Each Incentive Award will vest annually on January 1 on a pro-rata basis in equal installments over the term of the Incentive Award. All Incentive Awards shall vest immediately, however, upon the participant’s death or if the participant becomes Disabled as defined by the Plan. If the participant’s employment is terminated for any reason other than those set forth in the Award Agreement, any portion of the award that has not vested will be forfeited.

The vested portion of the Incentive Award will be paid in cash, except portions elected to be invested in AllianceBernstein Holding Units, which will be paid in Holding Units. Payments will be made in the first calendar quarter following the end of the third year and annually thereafter. Subject to the following paragraph, the Financial Advisor may also elect, at the time of the Incentive Award, to defer payments, once 100% vested, until termination of their employment or some date certain in the future. Additionally, they may elect to receive annual payments over an extended period of up to 10 years. Further deferrals are available as described in the plan document.

Any change in either the Elective Distribution Date or form of the distribution requires the Financial Advisor to elect a new distribution date that is no earlier than the fifth anniversary of the Participant’s previous Elective Distribution Date (regardless of whether the Participant’s new election was solely to change the Elective Distribution Form). Any change in the Elective Distribution Date must be made at least twelve months prior to the Elective Distribution Date that is changing.

The future Base Level Servicing commissions on client relationships used in the Eligible Revenues calculation will be 3% of Base Servicing Revenue for the period of the award. Upon acceptance of an Incentive Award, Base Level Servicing provisions in the Advisor’s employment agreement will be superceded by the foregoing sentence.

New accounts which are opened in the same tax relationship as accounts whose revenue was included in Eligible Revenues will be considered as additions to existing accounts and will receive a Base Level Servicing commission of 3% on those revenues during the vesting period. New accounts which are also new tax relationships will receive a Base Level Servicing payout in accordance with the compensation schedule attached to the Advisor’s employment contract, as amended from time to time. Full Production Bonus will be paid on all New Accounts regardless of when the tax relationship was established.  

Subject to the following paragraph, the firm bears the risk of poor markets or excessive negative cash flow as it relates to the Incentive Award amount. Accordingly, there is no downward adjustment to the Incentive Award due to those reasons. There also is no upward adjustment to the Award in those periods when net asset growth is positive.

If during a Participant’s first year of participation in the Plan, the revenues from a single client relationship previously used to calculate the Eligible Revenues decrease due to net asset withdrawals of more than $25 million, the Participant shall replace the lost assets in excess of $25 million with client assets from client relationships not previously used to calculate Eligible Revenues. If in any year of participation any client relationship whose revenues were used to calculate the Eligible Revenues is reassigned to another employee, the Participant shall replace the reassigned client relationships with relationships having equivalent revenues that were not previously used to calculate Eligible Revenues. The Company also shall have the right, in such circumstances, to deem revenues from other client relationships serviced by the Participant as Eligible Revenues.  The Company shall define client relationships in its sole discretion.

 

The Base Level Servicing payout on accounts used to replace Eligible Revenues will be paid at the 3% rate set forth above.

 

The Newport Group initially will administer the recordkeeping for the plan and provide monthly statements to each participant. Account access will be available via the internet at any time, and changes in investment elections may be initiated through www.plandestination.com. The firm will inform you of any change of plan administrator.

 

 

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