<PAGE>
SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Check the appropriate box:
(X) Preliminary information statement ( ) Confidential, for use of the
Commission only (as permitted
( ) Definitive information statement by Rule 14c-5(d)(2))
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EQ ADVISORS TRUST
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(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
( ) Fee paid with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Filed Pursuant to
Rule 497(e)
Registration File No. 333-17217
SUPPLEMENT DATED FEBRUARY 7, 2000 TO THE CURRENT PROSPECTUSES FOR THE:
o EQUITABLE LIFE VARIABLE ANNUITY PROSPECTUSES
o EQUITABLE LIFE VARIABLE LIFE PROSPECTUSES
o EQ ADVISORS TRUST PROSPECTUS AND STATEMENT OF ADDITIONAL
INFORMATION AND
INFORMATION STATEMENT
- --------------------------------------------------------------------------------
This Supplement updates the current prospectuses issued by The
Equitable Life Assurance Society of the United States ("variable life product"
or "variable annuity product") and the Prospectus and Statement of Additional
Information ("SAI") of EQ Advisors Trust ("Trust"). You should read this
Supplement in conjunction with the Prospectuses and retain them for future
reference. In addition, the information in this document should be considered to
be an information statement for purposes of Schedule 14C under the Securities
Exchange Act of 1934, as amended ("Exchange Act").
There are proposed changes with respect to the investment management
fees, administration fees and total expenses associated with certain Portfolios
of the Trust as described below. These proposed changes will affect
illustrations and performance information of the variable life and variable
annuity products that are funded through those Portfolios of Trust. For example,
to the extent that a Portfolio's investment management fees, administration fees
and total expenses have increased, there will be a corresponding decrease in the
Portfolio's performance which will be reflected in the performance and unit
values of the corresponding variable investment options under your product.
EQ ADVISORS TRUST OFFERS 40 PORTFOLIOS SOME OF WHICH ARE NOT AVAILABLE
TO ALL OF EQUITABLE'S VARIABLE LIFE AND ANNUITY PRODUCTS. PLEASE CONSULT YOUR
VARIABLE LIFE OR VARIABLE ANNUITY PRODUCT PROSPECTUS TO SEE WHICH PORTFOLIOS ARE
AVAILABLE UNDER YOUR CONTRACT.
REASONS FOR THE SUPPLEMENT AND INFORMATION STATEMENT. The primary
purpose of this Supplement and Information Statement is to provide you with
information about certain actions taken by the Board of Trustees of the Trust
("Board") at a meeting of the Board of Trustees held on January 28, 2000. At
that meeting, the Board took the following actions: (i) approved an Amended and
Restated Investment Management Agreement ("Amended Agreement") between the Trust
and The Equitable Life Assurance Society of the United States, investment
manager of the Trust ("Equitable" or "Manager"); (ii) with respect to "former
HRT Portfolios", as defined herein, approved a proposal to permit the Manager,
subject to Board approval, to rely on exemptive relief granted by the Securities
and Exchange Commission to the Trust and Manager ("Multi-Manager Order"); and
(iii) approved two changes in the fundamental investment policies of each series
of the Trust ("Portfolio"), except for three of the Portfolios, in order to
provide maximum operating flexibility in the future to permit each Portfolio to
function as a fund-of-funds, if such a restructuring is later determined by the
Board and the Manager to be advantageous. With respect to each affected
Portfolio, each of these proposals requires the approval by that Portfolio's
shareholders voting separately. The Trust is expected to hold a Special Meeting
of Shareholders of the Trust ("Meeting") on April 14, 2000 to seek approval of
each of these proposals.
In addition, the Supplement and Information Statement briefly
describes: (i) changes in the Trust's current Expense Limitation Agreement for
certain Portfolios; (ii) provides information about additional investment
advisers ("Advisers") for one of the former HRT Portfolios (assuming the
requisite approvals regarding the Multi-Manager Order are obtained); and (iii)
provides information about the new Administrator for the Trust.
AMENDED AND RESTATED MANAGEMENT AGREEMENT. If approved by shareholders,
the currently effective Investment Management Agreement ("Current Agreement")
between the Trust and the Manager would be amended, as set forth in the Amended
Agreement, in order primarily to (i) modify the current investment management
fee schedule and breakpoint schedule for the Portfolios, as specified in Table
1-B to the Appendix A to this Supplement; and (ii) to facilitate the ability of
the Manager, subject to Board approval, to (a) select new or
<PAGE>
additional Advisers for each Portfolio, (b) enter into and materially modify
existing investment advisory agreements, and (c) terminate and replace Advisers,
as permitted under the Multi-Manager Order. The Amended Agreement also will
permit the Trust, the Manager and the Advisers to pay broker-dealers
compensation for receipt of brokerage or research services as permitted under
Section 28(e) of the Exchange Act. In addition, the Amended Agreement will
permit the Trust to direct the Manager to cause Advisers to effect securities
transactions through broker-dealers in a manner that would help to generate
resources to (i) pay the cost of certain expenses which the Trust is required to
pay or for which the Trust is required to arrange payment, or (ii) finance
activities that are primarily intended to result in the sale of Trust shares.
The Amended Agreement, if approved by shareholders will be dated on or about May
1, 2000.
Both the current and proposed new investment management fee rates and
breakpoint schedules for each Portfolio are provided in the Appendix A to this
Supplement and Information Statement.
The proposed changes to the contractual investment management fee
rates, together with the proposed revisions to the breakpoint schedules, would
cause the contractual investment management fee rates (using Portfolio assets as
of December 31, 1999) under the proposed Amended Agreement with respect to each
Portfolio to be as follows when compared to the contractual investment
management fee rates under the Current Management Agreement:
o higher for 9 of the Portfolios (Alliance Aggressive Stock, Alliance
Common Stock, Capital Guardian International, Merrill Lynch Basic
Value Equity, MFS Research, MFS Emerging Growth Companies, MFS Growth
with Income, EQ/Putnam International Equity and EQ/Putnam Investors
Growth);
o higher on a contractual basis for 2 of the Portfolios (EQ/Putnam
Growth & Income Value and Lazard Large Cap Value); however, the
Manager has agreed not to implement any management fee increase
approved by shareholders for these 2 Portfolios until July 31, 2001,
unless the Board agrees that such management fee increase should be
put into operation earlier;
o unchanged for 11 of the Portfolios (Alliance Money Market, Alliance
High Yield, JPM Core Bond, BT Equity 500 Index, BT Small Company
Index, BT International Equity Index, EQ/Alliance Premier Growth,
Capital Guardian U.S. Equity, Capital Guardian Research, Merrill Lynch
World Strategy and Morgan Stanley Emerging Markets Equity); and
o lower for the remaining 4 Portfolios (Alliance Small Cap Growth,
Lazard Small Cap Value, and EQ/Evergreen, EQ/Evergreen Foundation).
For a complete description of the current investment management fee
rates and proposed investment management fee rates for each Portfolio, see
Tables 1-A and 1-B in the Appendix A to the Supplement and Information
Statement.
MULTI-MANAGER ORDER. As described in the Prospectus, the Multi-Manager
Order permits the Manager, subject to approval of the Board, to (i) select new
or additional Advisers for each of the Trust's Portfolios, (ii) enter into new
investment advisory agreements with Advisers and to materially modify existing
investment advisory agreements, and (iii) terminate and replace the Advisers
without obtaining approval of the relevant Portfolio's shareholders.
Currently, 26 of the Trust's Portfolios are permitted to rely upon the
Multi-Manager Order. However, the former HRT Portfolios (i.e., Alliance
Aggressive Stock, Alliance High Yield, Alliance Common Stock, Alliance Money
Market and Alliance Small Cap Growth Portfolios) are not currently permitted to
rely upon the Multi-Manager Order. Shareholders of each of the former HRT
Portfolios are being asked at the Meeting to approve the use of the
Multi-Manager Order for each of those Portfolios. If this approval is obtained,
the Manager intends to utilize the powers granted it under the Multi-Manager
Order to appoint one or more additional Advisers for the
2
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Alliance Aggressive Stock Portfolio ("Aggressive Stock Portfolio"). Information
concerning the proposed additional Advisers for the Portfolio is included in
Appendix B to this Supplement. Management has no such current plans for the
other former HRT Portfolios, but approval of the proposal would allow management
the flexibility to rely on the Multi-Manager Order for the other former HRT
Portfolios in the future.
REVISIONS TO FUNDAMENTAL INVESTMENT POLICIES. Currently no Portfolio
(except the Morgan Stanley Emerging Markets Equity, Merrill Lynch World Strategy
and Lazard Small Cap Value Portfolios), with respect to 75% of the value of its
total assets, may invest more than 5% of its total assets in any other
investment company or own more than 10% of the outstanding voting securities of
any other investment company. Under certain circumstances, the 1940 Act permits
an investment company to invest more than 5% of its assets in another investment
company or to own more than 10% of an investment company's outstanding voting
securities. Those circumstances include when an investment company invests
substantially all of its assets in other investment companies, thereby creating
what is known as a "fund of funds."
While the Board has no present intention of authorizing a Portfolio to
invest more than 5% of its total assets in another investment company or to own
more than 10% of another investment company's outstanding voting securities, the
proposed revisions to those fundamental investment policies would provide the
Board with flexibility to authorize the creation of a "fund of funds" in the
future without the need to seek shareholder approval or to incur the expense of
holding a shareholders' meeting at that time. This ability to invest more than
5% of a Portfolio's total assets in securities issued by other investment
companies or to own more than 10% of another investment company's outstanding
voting securities is common for registered investment companies and clearly
permitted under the 1940 Act.
EXPENSE LIMITATION AGREEMENT. As described in the Prospectus, the
Manager has entered into a current voluntary Expense Limitation Agreement with
the Trust ("Expense Limitation Agreement") with respect to certain of the
Trust's Portfolios. The Manager and the Board, including the Independent
Trustees, have unanimously approved an amendment to the current voluntary
Expense Limitation Agreement, which will take effect on May 1, 2000. The
amendment to the voluntary Expense Limitation Agreement will (i) extend the
effectiveness of the Expense Limitation Agreement through April 30, 2001 for the
covered Portfolios and (ii) change the limit on total annual operating expenses
that will be waived or assumed by the Manager for the covered Portfolios (other
than interest, taxes, brokerage commissions, other expenditures which are
capitalized in accordance with generally accepted accounting principles, other
extraordinary expenses not incurred in the ordinary course of each Portfolio's
business and amounts payable pursuant to a plan adopted in accordance with Rule
12b-1 under the 1940 Act), as follows: change the limitation on the amount of
total operating expenses to 0.35% of average daily net assets for the BT Equity
500 Index Portfolio; 0.70% of average daily net assets for EQ/Evergreen,
EQ/Putnam Growth & Income Value, EQ/Putnam International Equity, Merrill Lynch
Basic Value Equity and MFS Growth with Income Portfolios; 0.75% of average daily
net assets for the MFS Emerging Growth Companies Portfolio; 0.85% of average
daily net assets for Lazard Small Cap Value Portfolio; and 1.00% of average
daily net assets for EQ/Putnam International Equity Portfolio.
ADMINISTRATOR. Effective May 1, 2000, Equitable will serve as
Administrator to the Trust. Equitable may carry out its responsibilities either
directly or through sub-contracting with third party service providers. For
these services, the Trust will pay Equitable a monthly fee at the annual rate of
0.04 of 1% of total Trust assets, plus $30,000 for each Portfolio, until the
total Trust assets reach $3 billion; 0.03 of 1% of the next $3 billion of the
total Trust assets; 0.025 of 1% of the next $4 billion of the total Trust
assets; and 0.0225 of 1% of the total Trust assets in excess of $10 billion.
3
<PAGE>
APPENDIX A
EQ ADVISORS TRUST OFFERS 40 PORTFOLIOS, SOME OF WHICH ARE NOT AVAILABLE TO ALL
OF EQUITABLE'S VARIABLE LIFE AND ANNUITY PRODUCTS. PLEASE CONSULT YOUR PRODUCT
PROSPECTUS TO SEE WHICH PORTFOLIOS ARE AVAILABLE UNDER YOUR CONTRACT.
The following two tables set forth the investment management fees payable to
Equitable from each Portfolio under the Current Management Agreement and under
the Amended Agreement (fees under the agreements being payable at the stated
annual rates expressed as a percentage of the average daily net asset value of
each Portfolio). Table 1-B does not reflect the Manager's agreement not to
immediately implement management fee increase approved by shareholders for
EQ/Putnam Growth & Income Value and Lazard Large Cap Value Portfolios, as
described above.
TABLE 1-A
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FEE UNDER CURRENT MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIRST NEXT NEXT NEXT
INDEX PORTFOLIOS $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
BT Equity 500 Index 0.250% 0.250% 0.250% 0.250% 0.250%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
BT International Equity Index 0.350% 0.350% 0.350% 0.350% 0.350%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
BT Small Company Index 0.250% 0.250% 0.250% 0.250% 0.250%
- ------------------------------------------------------------------------------------------------------------------------------
FIRST NEXT NEXT NEXT
DEBT PORTFOLIOS $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Alliance High Yield 0.600% 0.575% 0.550% 0.530% 0.520%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Alliance Money Market 0.350% 0.325% 0.300% 0.280% 0.270%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
JPM Core Bond 0.450% 0.450% 0.450% 0.450% 0.450%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQUITY PORTFOLIOS
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
FIRST NEXT NEXT NEXT
$750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Aggressive Stock 0.625% 0.575% 0.525% 0.500% 0.475%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Alliance Common Stock 0.475% 0.425% 0.375% 0.355% 0.345%*
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Alliance Small Cap Growth 0.900% 0.850% 0.825% 0.800% 0.775%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Capital Guardian International 0.750% 0.750% 0.750% 0.750% 0.750%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Capital Guardian Research 0.650% 0.650% 0.650% 0.650% 0.650%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Capital Guardian U.S. Equity 0.650% 0.650% 0.650% 0.650% 0.650%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Alliance Premier Growth 0.900% 0.900% 0.900% 0.900% 0.900%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Evergreen Foundation 0.630% 0.630% 0.630% 0.630% 0.630%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Evergreen Portfolio 0.750% 0.750% 0.750% 0.750% 0.750%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Putnam Growth & Income Value
0.550% 0.550% 0.550% 0.550% 0.550%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Putnam International Equity 0.700% 0.700% 0.700% 0.700% 0.700%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Putnam Investors Growth 0.550% 0.550% 0.550% 0.550% 0.550%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Lazard Large Cap Value 0.550% 0.550% 0.550% 0.550% 0.550%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Lazard Small Cap Value 0.800% 0.800% 0.800% 0.800% 0.800%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Merrill Lynch Basic Value Equity 0.550% 0.550% 0.550% 0.550% 0.550%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Merrill Lynch World Strategy 0.700% 0.700% 0.700% 0.700% 0.700%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
MFS Emerging Growth Companies
0.550% 0.550% 0.550% 0.550% 0.550%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
MFS Growth with Income 0.550% 0.550% 0.550% 0.550% 0.550%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
</TABLE>
4
<PAGE>
- ------------------------------------------------------------------------------
FEE UNDER NEW MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS) (FEE ON ALL ASSETS)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS (CONTINUED) $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
MFS Research 0.550% 0.550% 0.550% 0.550% 0.550%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Morgan Stanley Emerging Markets
Equity 1.150% 1.150% 1.150% 1.150% 1.150%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
</TABLE>
* On assets in excess of $10 billion, the management fee for the Alliance
Common Stock Portfolio is reduced to 0.335% of average daily net assets.
TABLE 1-B
- -------------------------------------------------------------------------------
FEE UNDER NEW MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS) (FEE ON ALL ASSETS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
INDEX PORTFOLIOS
- --------------------------------------- ---------------------------------------
BT Equity 500 Index 0.250%
- --------------------------------------- ---------------------------------------
BT International Equity Index 0.350%
- --------------------------------------- ---------------------------------------
BT Small Company Index 0.250%
- --------------------------------------- ---------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
FEE UNDER NEW MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIRST NEXT NEXT NEXT
DEBT PORTFOLIOS $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Alliance High Yield 0.600% 0.575% 0.550% 0.530% 0.520%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Alliance Money Market 0.350% 0.325% 0.300% 0.280% 0.270%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
JPM Core Bond 0.450% 0.425% 0.400% 0.380% 0.370%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEXT NEXT
EQUITY PORTFOLIOS FIRST $1 BILLION NEXT $1 BILLION $3 BILLION $5 BILLION THEREAFTER
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 0.650% 0.600% 0.575% 0.550% 0.525%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Alliance Common Stock 0.550% 0.500% 0.475% 0.450% 0.425%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Alliance Small Cap Growth 0.750% 0.700% 0.675% 0.650% 0.625%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Capital Guardian International 0.850% 0.800% 0.775% 0.750% 0.725%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Capital Guardian Research 0.650% 0.600% 0.575% 0.550% 0.525%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Capital Guardian U.S. Equity 0.650% 0.600% 0.575% 0.550% 0.525%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Alliance Premier Growth 0.900% 0.850% 0.825% 0.800% 0.775%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Evergreen Foundation 0.600% 0.550% 0.525% 0.500% 0.475%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Evergreen Portfolio 0.650% 0.600% 0.575% 0.550% 0.525%`
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Putnam Growth & Income Value 0.600% 0.550% 0.525% 0.500% 0.475%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Putnam International Equity 0.850% 0.800% 0.775% 0.750% 0.725%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Putnam Investors Growth 0.650% 0.600% 0.575% 0.550% 0.525%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Lazard Large Cap Value 0.650% 0.600% 0.575% 0.550% 0.525%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Lazard Small Cap Value 0.750% 0.700% 0.675% 0.650% 0.625%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Merrill Lynch Basic Value Equity 0.600% 0.550% 0.525% 0.500% 0.475%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Merrill Lynch World Strategy 0.700% 0.650% 0.625% 0.600% 0.575%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
</TABLE>
5
<PAGE>
- ------------------------------------------------------------------------------
FEE UNDER NEW MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEXT NEXT
EQUITY PORTFOLIOS (CONTINUED) FIRST $1 BILLION NEXT $1 BILLION $3 BILLION $5 BILLION THEREAFTER
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
MFS Emerging Growth Companies 0.650% 0.600% 0.575% 0.550% 0.525%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
MFS Growth with Income 0.600% 0.550% 0.525% 0.500% 0.475%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
MFS Research 0.650% 0.600% 0.575% 0.550% 0.525%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Morgan Stanley Emerging Markets
Equity 1.150% 1.100% 1.075% 1.050% 1.025%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
</TABLE>
6
<PAGE>
APPENDIX B
INFORMATION CONCERNING MASSACHUSETTS FINANCIAL SERVICES COMPANY ("MFS") AND
CAPITAL GUARDIAN TRUST COMPANY ("CAPITAL GUARDIAN")
MFS. At a meeting held on January 28, 2000, the Trustees, including the
Trustees who are not "interested persons" of the Trust (as that term is defined
in the 1940 Act) ("Independent Trustee(s)"), unanimously approved the Manager's
proposal to (a) add MFS as an additional Adviser for the Aggressive Stock
Portfolio pursuant to an investment advisory agreement between the Manager and
MFS with respect to the Aggressive Stock Portfolio ("MFS Agreement") and (b)
initially allocated between 20 to 30 percent (based on current assets) of the
total assets of the Aggressive Stock Portfolio to MFS to manage. These approvals
are subject to Aggressive Stock Portfolio shareholders' approval of the proposal
to permit the use of the Multi-Manager Order. In approving MFS as an additional
Adviser, the Board considered certain factors, including: (i) the nature,
quality and extent of the services expected to be rendered by MFS, including the
credentials and investment experience of its officers and employees; (ii) MFS's
investment approach, which is expected to complement that of Alliance Capital
Management, L.P. ("Alliance"), the Aggressive Stock Portfolio's current Adviser,
and to provide additional diversification to the Aggressive Stock Portfolio;
(iii) the structure of MFS and its ability to provide services to the Aggressive
Stock Portfolio, based on both its financial condition as well as its
performance record, and the fact that MFS serves as Adviser of three of the
Trust's other Portfolios; (iv) a comparison of MFS's advisory fee with those of
other potential Advisers; and (v) indirect costs and benefits of serving as
Adviser to the Aggressive Stock Portfolio. The Trustees determined that the MFS
Agreement as well as the proposed allocation of Aggressive Stock Portfolio
assets between Alliance and MFS are in the best interests of the Aggressive
Stock Portfolio and its shareholders.
MFS is a subsidiary of Sun Life Assurance Company of Canada (U.S.)
Financial Services Holdings, Inc., which, in turn, is an indirect wholly-owned
subsidiary of Sun Life Assurance Company of Canada. Mr. Jeffrey L. Shames is the
Chairman of the Board of Directors and Chief Executive Officer of MFS. The other
directors of MFS are John W. Ballen, Thomas J. Cashman, Jr., Joseph Dello Russo,
John R. McNeil, Kevin R. Parke, Arnold D. Scott, William W. Scott, Jr. and
Donald A. Stewart. MFS serves as investment adviser to the following mutual
funds which have investment objectives and policies similar to those of the
Aggressive Stock Portfolio: MFS Emerging Growth Fund; MFS Emerging Growth
Series; MFS/Sunlife Emerging Growth Series; Travelers Emerging Growth; JPVF
Emerging Growth; Portfolio Partners Emerging Equities, and EQ Advisors Trust -
MFS Emerging Growth Companies Portfolio.
TONI Y. SHIMURA, Senior Vice President of MFS, who has been employed by
MFS as a portfolio manager since 1995 will be responsible for the day-to-day
management, and JOHN W. BALLEN, Chief Investment Officer and President of MFS,
who has been employed by MFS as a portfolio manager since 1984 will provide
general oversight, to, that portion of the Aggressive Stock Portfolio proposed
to be allocated to MFS. The Manager will pay MFS an investment advisory fee
equal to the aggregate annual rate of 0.35% with respect to that portion of the
average daily net assets of the Aggressive Stock Portfolio allocated to MFS
together with the average daily net assets of the MFS Emerging Growth Companies
Portfolio (collectively, "MFS Assets") up to and including $500 million, 0.30%
of the next $1 billion of MFS Assets, and 0.25% of MFS Assets over and above
$1.5 billion.
7
