<PAGE>
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 two 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;
<PAGE>
and (ii) to facilitate the ability of the Manager, subject to Board approval, to
(a) select new or 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 15 of the Portfolios (Alliance Aggressive Stock, Alliance
Balanced, Alliance Common Stock, Alliance Conservative Investors,
Alliance Growth Investors, Alliance Growth and Income, Alliance
Global, Capital Guardian International, Merrill Lynch Basic Value
Equity, MFS Research, MFS Emerging Growth Companies, MFS Growth with
Income, EQ/Putnam International Equity, EQ/Putnam Investors Growth,
and T. Rowe Price Equity Income);
o higher on a contractual basis for 5 of the Portfolios (EQ/Putnam
Balanced, EQ/Putnam Growth & Income, Lazard Large Cap Value, T. Rowe
Price International Stock, and Warburg Pincus Small Company Value);
however, the Manager has agreed not to implement any management fee
increase approved by shareholders for these 5 Portfolios until July
31, 2001, unless the Board agrees that such management fee increase
should be put into operation earlier;
o unchanged for 14 of the Portfolios (Alliance Money Market, Alliance
Intermediate Government Securities, Alliance Quality Bond, Alliance
High Yield, JPM Core Bond, BT Equity 500 Index, BT Small Company
Index, BT International Index, EQ/Alliance Premier Growth, Capital
Guardian U.S. Equity, Capital Guardian Research, Merrill Lynch World
Strategy, Calvert Socially Responsible, and Morgan Stanley Emerging
Markets Equity); and
o lower for the remaining 6 Portfolios (Alliance Equity Index, Alliance
Small Cap Growth, Alliance International, 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 Balanced, Alliance Common Stock, Alliance
Conservative Investors, Alliance Equity Index, Alliance Global, Alliance Growth
and Income, Alliance Growth Investors, Alliance High Yield, Alliance
Intermediate Government Securities, Alliance International, Alliance
2
<PAGE>
Money Market, Alliance Quality Bond, 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
Alliance Aggressive Stock Portfolio ("Aggressive Stock Portfolio") and the
Alliance Balanced Portfolio ("Balanced Portfolio"). Information concerning the
proposed additional Advisers for each of those Portfolios 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, MFS Growth
with Income, and T. Rowe Price Equity 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 and Warburg Pincus Small Company Value
Portfolios; and 1.00% of average daily net assets for EQ/Putnam International
Equity and T. Rowe Price International Stock Portfolios.
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 Balanced, EQ/Putnam Growth & Income, Lazard Large Cap Value, T. Rowe
Price International Stock, and Warburg Pincus Small Company Value Portfolios, as
described above.
<TABLE>
<CAPTION>
TABLE 1-A
- -------------------------------------------------------------------------------------------------------
FEE UNDER CURRENT MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- -------------------------------------------------------------------------------------------------------
FIRST NEXT NEXT NEXT
INDEX PORTFOLIOS $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- -------------------------------- --------------- -------------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Alliance Equity Index 0.325% 0.300% 0.275% 0.255% 0.245%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
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%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
<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 Intermediate 0.500% 0.475% 0.450% 0.430% 0.420%
Government Securities
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Money Market 0.350% 0.325% 0.300% 0.280% 0.270%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Quality Bond 0.525% 0.500% 0.475% 0.455% 0.445%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
JPM Core Bond 0.450% 0.450% 0.450% 0.450% 0.450%
- -------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- -------------------------------- --------------- -------------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
EQ Aggressive Stock 0.625% 0.575% 0.525% 0.500% 0.475%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
EQ Balanced 0.450% 0.400% 0.350% 0.325% 0.300%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Common Stock 0.475% 0.425% 0.375% 0.355% 0.345%*
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Conservative Investors 0.475% 0.400% 0.350% 0.325% 0.300%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Global 0.675% 0.600% 0.550% 0.530% 0.520%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Growth and Income 0.550% 0.525% 0.500% 0.480% 0.470%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Growth Investors 0.550% 0.500% 0.450% 0.425% 0.400%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance International 0.900% 0.825% 0.800% 0.780% 0.770%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Small Cap Growth 0.900% 0.850% 0.825% 0.800% 0.775%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Calvert Socially Responsible 0.650% 0.650% 0.650% 0.650% 0.650%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
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%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
4
<PAGE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS (CONTINUED) $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- -------------------------------- --------------- -------------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
EQ/Putnam Balanced 0.550% 0.550% 0.550% 0.550% 0.550%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
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 0.550% 0.550% 0.550% 0.550% 0.550%
Equity
- -------------------------------- --------------- -------------- ----------- -------------- ------------
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%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
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%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
T. Rowe Price Equity Income 0.550% 0.550% 0.550% 0.550% 0.550%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
T. Rowe Price International 0.750% 0.750% 0.750% 0.750% 0.750%
Stock
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Warburg Pincus Small Company
Value 0.650% 0.650% 0.650% 0.650% 0.650%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
</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>
<CAPTION>
TABLE 1-B
- -------------------------------------------------------------------------------------------------------
FEE UNDER NEW MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS) (FEE ON ALL ASSETS)
- -------------------------------------------------------------------------------------------------------
<S> <C>
INDEX PORTFOLIOS
- -------------------------------- ----------------------------------------------------------------------
Alliance Equity Index 0.250%
- -------------------------------- ----------------------------------------------------------------------
BT Equity 500 Index 0.250%
- -------------------------------- ----------------------------------------------------------------------
BT International Equity Index 0.350%
- -------------------------------- ----------------------------------------------------------------------
BT Small Company Index 0.250%
- -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FEE UNDER NEW MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- -------------------------------------------------------------------------------------------------------
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 Intermediate
Government Securities 0.500% 0.475% 0.450% 0.430% 0.420%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Money Market 0.350% 0.325% 0.300% 0.280% 0.270%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Quality Bond 0.525% 0.500% 0.475% 0.455% 0.445%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
JPM Core Bond 0.450% 0.425% 0.400% 0.380% 0.370%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------- --------------- -------------- ----------- -------------- ------------
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS $1 BILLION $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%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
EQ Balanced 0.600% 0.550% 0.525% 0.500% 0.475%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Common Stock 0.550% 0.500% 0.475% 0.450% 0.425%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Conservative Investors 0.600% 0.550% 0.525% 0.500% 0.475%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Global 0.750% 0.700% 0.675% 0.650% 0.625%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Growth and Income 0.600% 0.550% 0.525% 0.500% 0.475%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Growth Investors 0.600% 0.550% 0.525% 0.500% 0.475%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance International 0.850% 0.800% 0.775% 0.750% 0.725%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Alliance Small Cap Growth 0.750% 0.700% 0.675% 0.650% 0.625%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Calvert Socially Responsible 0.650% 0.600% 0.575% 0.550% 0.525%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
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 Balanced 0.600% 0.550% 0.525% 0.500% 0.475%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
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 0.600% 0.550% 0.525% 0.500% 0.475%
Equity
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Merrill Lynch World Strategy 0.700% 0.650% 0.625% 0.600% 0.575%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
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%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
T. Rowe Price Equity Income 0.600% 0.550% 0.525% 0.500% 0.475%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
T. Rowe Price International 0.850% 0.800% 0.775% 0.750% 0.725%
Stock
- -------------------------------- --------------- -------------- ----------- -------------- ------------
Warburg Pincus Small Company
Value 0.750% 0.700% 0.675% 0.650% 0.625%
- -------------------------------- --------------- -------------- ----------- -------------- ------------
</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, a 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, for 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.
CAPITAL GUARDIAN. The Board has not yet considered the Manager's proposal
to: (a) add Capital Guardian as an additional Adviser for the Balanced Portfolio
pursuant to an investment advisory agreement between the Manager and Capital
Guardian with respect to the Balanced Portfolio and (b) initially allocate
between 8 to 15 percent (based on current assets) of the total assets of the
Balanced Portfolio to Capital Guardian to manage. It is expected that the Board
will consider this proposal at an in-person meeting to be held on March 14,
2000. It is expected that the factors that the Board will consider in connection
with this proposal will be substantially similar to those factors that the Board
considered in connection with its approval of the MFS Agreement.
Capital Guardian is a wholly-owned subsidiary of Capital Group
International, Inc., which itself is a wholly-owned subsidiary of The Capital
Group Companies, Inc. The Chairman of Capital Guardian is David I. Fisher. The
other directors of Capital Guardian are Andrew F. Barth, Michael D. Beckman,
Larry P. Clemmensen, Roberta A. Conroy, David I. Fisher, William H. Hurt, Nancy
J. Kyle, Karin L. Larson, D. James Martin, John R. McIlwraith, James R. Mullaly,
Jason M. Pilalas, Robert Ronus, Theodore R. Samuels, Eugene P. Stein and Shaw B.
Wagener.
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Capital Guardian serves as investment adviser to the following mutual funds
which have investment objectives similar to those of the Balanced Portfolio:
ICMA Retirement Trust-Growth & Income Fund, ManuLife-U.S. Large Cap Value Trust
and EQ Advisors Trust-Capital Guardian U.S. Equities Portfolio.
Capital Guardian uses a multiple portfolio manager system under which the
Portfolio is divided into several segments. Each segment is individually managed
with the portfolio manager free to decide on company and industry selections as
well as valuation and transaction assessment. An additional portion of the
Portfolio is managed by a group of investment research analysts.
The individual portfolio managers of each segment of that portion of the
Balanced Portfolio proposed to be allocated to Capital Guardian, other than that
managed by the group of research analysts, would be as follows:
DONNALISA P. BARNUM. Donnalisa Barnum is a Senior Vice President and a
portfolio manager for Capital Guardian. She joined the Capital Guardian
organization in 1986.
MICHAEL R. ERICKSON. Michael Erickson is a Senior Vice President and
portfolio manager for Capital Guardian and a Senior Vice President and
Director for Capital International Limited. He joined the Capital Guardian
organization in 1987.
DAVID I. FISHER. David Fisher is Chairman of the Board of Capital Group
International, Inc. and Capital Guardian. He joined the Capital Guardian
organization in 1969.
THEODORE R. SAMUELS. Theodore Samuels is a Senior Vice President and a
Director for Capital Guardian, as well as a Director of Capital
International Research, Inc. He joined the Capital Guardian organization in
1981.
EUGENE P. STEIN. Eugene Stein is Executive Vice President, a Director, a
portfolio manager, and Chairman of the Investment Committee for Capital
Guardian. He joined the Capital Guardian organization in 1972.
It is expected that the Manager will pay Capital Guardian an investment
advisory fee equal to the aggregate annual rate of approximately .50% of the
first $150 million, .45% of the average daily net assets over $150 million and
up to and including $300 million; .35% of the average daily net assets over $300
million and up to and including $500 million; and .30% of the average daily net
assets in excess of $500 million with respect to that portion of the assets of
the Balanced Portfolio allocated to Capital Guardian.
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