<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
(X) Preliminary Proxy Statement ( ) Confidential, for Use of the
( ) Definitive Proxy Statement Commission Only (as permitted by
( ) Definitive Additional Materials Rule 14c-6(e)(2)
( ) Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
<PAGE>
PRELIMINARY DRAFT (02/03/00)
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES ("EQUITABLE")
NOTICE OF A SPECIAL MEETING OF THE
SHAREHOLDERS OF EQ ADVISORS TRUST
TO BE HELD ON APRIL 14, 2000
Dear Equitable Client:
The net premiums or contributions you paid under your Equitable
variable life insurance policy or variable annuity contract or certificate have
been allocated at your direction to the investment divisions of a separate
account or accounts of Equitable ("Separate Accounts"). The Separate Account
divisions invest in corresponding Portfolios of EQ Advisors Trust ("Trust"). As
a contractowner or policyowner ("Contractowner") of record at the close of
business on February 4, 2000 ("Record Date"), you are entitled to instruct
Equitable as to how it should vote on certain proposals to be considered at a
Special Meeting of the Trust's shareholders.
The Special Meeting will be held at 1290 Avenue of the Americas, New
York, NY 10104, on April 14, 2000, at 10:00 a.m. As specified in greater detail
in the table on pages ________ of the Proxy Statement of the Trust, attached to
this notice, you will be asked, as appropriate, to provide Equitable with voting
instructions on the following proposals to be voted upon:
1. election of trustees to the Board of Trustees of the Trust;
2. permission for Equitable, in its capacity as Investment Manager
of the Trust ("Manager"), subject to approval of the Board of Trustees
of the Trust, to rely upon exemptive relief granted by the Securities
and Exchange Commission enabling the Manager, without obtaining
shareholder approval, to: (i) select new or additional investment
advisers for each of the Trust's Portfolios; (ii) enter into and
materially modify existing investment advisory agreements; and (iii)
terminate and replace investment advisers;
3. approval of an Amended and Restated Investment Management
Agreement between the Trust and Equitable, in its capacity as Manager;
and
4. approval of changes to certain fundamental investment policies
of each Portfolio of the Trust, except three of the Portfolios. You are
urged to read both the Information Statement of Equitable and the Proxy
Statement of the Trust, attached to this notice, prior to completing
your ballot.
IT IS IMPORTANT THAT YOUR POLICY, CONTRACT OR CERTIFICATE BE REPRESENTED. PLEASE
PROMPTLY MARK YOUR VOTING INSTRUCTIONS ON THE ENCLOSED BALLOT; THEN, SIGN, DATE
AND MAIL IT IN THE ACCOMPANYING ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES. YOUR PROMPT RESPONSE WILL HELP AVOID THE UNNECESSARY EXPENSE
OF A FURTHER SOLICITATION OF BALLOTS. YOU ALSO MAY PROVIDE VOTING INSTRUCTIONS
BY PHONE AT 1-800-XXX-XXXX, OR BY INTERNET AT OUR WEBSITE AT WWW.__________.COM.
New York, NY Pauline Sherman, Secretary of Equitable
February 21, 2000
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
INFORMATION STATEMENT
REGARDING A SPECIAL MEETING OF THE
SHAREHOLDERS OF EQ ADVISORS TRUST
TO BE HELD ON APRIL 14, 2000
FEBRUARY 21, 2000
GENERAL
This Information Statement is furnished by The Equitable Life Assurance
Society of the United States ("Equitable"), a New York stock life insurance
company, to owners of its variable life insurance policies and variable annuity
contracts or certificates ("Contractowners") who had net premiums allocated to
the investment divisions of certain of Equitable's Separate Accounts ("Separate
Accounts") on February 4, 2000 ("Record Date"). The assets in each investment
division of the Separate Accounts are invested in shares of corresponding
separate series ("Portfolios") of EQ Advisors Trust, a registered investment
company ("Trust").
Equitable is required to offer Contractowners the opportunity to
instruct Equitable, as owner of all shares of each Portfolio held by the
Separate Accounts, as to how it should vote on certain proposals to be
considered at the Special Meeting of Shareholders of the Trust referred to in
the preceding Notice and at any adjournments ("Special Meeting"). The proposals
to be considered at the Special Meeting are discussed in the Trust's Proxy
Statement which is enclosed. Contractowners are urged to read the Proxy
Statement prior to completing the ballot.
Equitable is a wholly-owned subsidiary of AXA Financial, Inc., a
subsidiary of AXA, a French insurance holding company. The principal executive
offices of AXA Financial, Inc. and Equitable are located at 1290 Avenue of the
Americas, New York, New York 10104.
This Information Statement and the accompanying ballot are being mailed
to Contractowners on or about February 21, 2000.
HOW TO INSTRUCT EQUITABLE
To instruct Equitable as to how to vote the shares of corresponding
Portfolios of the Trust ("Shares") held in the investment divisions of the
Separate Accounts, Contractowners are asked to promptly mark their voting
instructions on the enclosed ballot; then sign, date and mail it in the
accompanying postage-paid envelope. Contractowners also may provide voting
instructions by phone at 1-800-xxx-xxxx, or by Internet at our website at
www.__________.com.
IF A BALLOT IS NOT MARKED TO INDICATE VOTING INSTRUCTIONS BUT IS
SIGNED, DATED AND RETURNED, IT WILL BE TREATED AS AN INSTRUCTION TO VOTE, AS
APPROPRIATE, THE SHARES IN FAVOR OF EACH PROPOSAL.
1
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The number of Shares held in each investment division of a Separate
Account for which a Contractowner may provide voting instructions was determined
as of the Record Date by dividing (i) a contract's Account Value (minus any
contract indebtedness) allocable to that investment division of a Separate
Account by (ii) the net asset value of one share of the corresponding Portfolio
of the Trust. At any time prior to Equitable's voting of the Shares held in an
investment division of a Separate Account at the Special Meeting, a
Contractowner may revoke his or her ballot with respect to that investment
division by written notice, or proper telephone or Internet instructions to the
Secretary of Equitable or by properly executing a later-dated ballot, or
properly providing later telephone or Internet instructions.
VOTING PRIVILEGES OF OTHERS
The Trust also sells Shares to separate accounts of insurance companies
unaffiliated with Equitable (together with Equitable, "Shareholders").
Currently, Equitable owns approximately 99% of the Trust Shares and, therefore,
may be deemed to control the Trust. Equitable will attend the Special Meeting.
It is expected that each of the other Shareholders will also offer its owners of
variable annuity contracts and variable life insurance policies
("contractowners") the opportunity to provide voting instructions in a manner
similar to the opportunity being provided to you.
HOW EQUITABLE WILL VOTE
Equitable will vote the shares for which Equitable receives timely
voting instructions in accordance with those instructions. Equitable will vote
shares attributable to contracts for which Equitable is the Contractowner for
each proposal. Shares in each investment division of a Separate Account for
which Equitable receives no timely voting instructions, or which are
attributable to amounts retained by Equitable as surplus or seed money, will be
voted by Equitable either for or against approval of a proposal, or as an
abstention, in the same proportion as the shares for which Contractowners (other
than Equitable) have provided voting instructions to Equitable.
OTHER MATTERS
Equitable is not aware of any matters, other than the specified
proposals, to be acted on at the Special Meeting. If any other matters come
before the Special Meeting, Equitable will vote the Shares upon such matters in
its discretion. Ballots may be solicited by employees of Equitable and its
subsidiaries as well as officers and agents of the Trust. Shareholder
Communications Corporation has been retained to assist with solicitation
activities (including assembly and mailing of materials to Shareholders and
Contractowners). The principal solicitation will be by mail but proxies may also
be solicited by telephone, personal interview or the Internet.
If the necessary quorum to transact business or the vote required to
approve or reject any proposal is not obtained at the Special Meeting, the
persons named as proxies may propose one or more adjournments of the Special
Meeting in accordance with applicable law, to permit further solicitation of
proxies. The persons named as proxies will vote in favor of such
2
<PAGE>
adjournment those proxies which have been voted in favor of the proposal and
will vote against any such adjournment those proxies which have been voted
against the proposal.
Pauline Sherman, Secretary of Equitable
PLEASE PROMPTLY MARK YOUR VOTING INSTRUCTIONS ON THE ENCLOSED BALLOT; THEN SIGN,
DATE AND MAIL IT IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE. YOU MAY ALSO PROVIDE
YOUR VOTING INSTRUCTIONS BY TELEPHONE AT 1-800-XXX-XXXX OR BY INTERNET AT OUR
WEBSITE AT WWW.__________.COM. IT IS IMPORTANT THAT YOUR POLICY, CONTRACT OR
CERTIFICATE BE REPRESENTED.
3
<PAGE>
PROXY STATEMENT
EQ ADVISORS TRUST
1290 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10104
(212) 554-1234
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 14, 2000
EQ Advisors Trust ("Trust") serves as an investment vehicle for use in
connection with variable life insurance contracts and variable annuity
certificates and contracts (collectively, "Contracts") issued by The Equitable
Life Assurance Society of the United States ("Equitable"), Equitable of
Colorado, Inc. ("EOC") and insurance companies unaffiliated with Equitable or
EOC (together, with Equitable and EOC, "Shareholders"). Shares of the Trust are
also sold to The Equitable Investment Plan for Employees, Managers and Agents
("Equitable Plan") and to certain unregistered separate accounts of insurance
companies unaffiliated with Equitable or EOC. As a technical matter, the
Shareholders hold Trust shares in their respective separate accounts in which
contributions and premiums received under the Contracts are initially invested;
these separate accounts in turn purchase Trust shares, as described in the
Trust's prospectus. The Trust expects that each of the Shareholders will offer
its owners of Contracts ("Contractowners") the opportunity to provide voting
instructions in a manner similar to the opportunity being provided to you.
This Proxy Statement is being mailed to Shareholders on or about
February 21, 2000. This Proxy Statement is being furnished on behalf of the
Board of Trustees of the Trust ("Board") to the Shareholders of the Trust for
their use in obtaining instructions from the Contractowners as to how to vote on
the proposals to be considered at the Special Meeting of Shareholders of the
Trust to be held at 1290 Avenue of the Americas, New York, New York 10104, on
April 14, 2000 at 10:00 a.m., Eastern time and at any adjournments thereof
("Special Meeting"). It is expected that the Shareholders will each attend the
Special Meeting in person or by proxy and will vote shares of the Trust held by
them in accordance with voting instructions received from Contractowners and in
accordance with voting procedures established by the Trust.
Equitable will vote the shares for which Equitable receives timely
voting instructions in accordance with those instructions. Equitable will vote
shares attributable to contracts for which Equitable is the Contractowner for
each proposal. Shares in each investment division of a Separate Account for
which Equitable receives no timely voting instructions, or which are
attributable to amounts retained by Equitable as surplus or seed money, will be
voted by Equitable for or against approval of a proposal, or as an abstention,
in the same proportion as the shares for which Contractowners (other than
Equitable) have provided voting instructions to
1
<PAGE>
Equitable. THE NUMBER OF SHARES FOR WHICH A CONTRACTOWNER HAS THE RIGHT TO GIVE
VOTING INSTRUCTIONS WITH RESPECT TO THE SPECIAL MEETING OR ANY ADJOURNMENT
THEREOF WAS DETERMINED AS OF FEBRUARY 4, 2000 ("RECORD DATE").
Voting instructions executed by a Contractowner may be revoked at any
time prior to the Shareholders voting the shares represented thereby by the
Contractowner providing the Shareholders with a properly executed written
revocation of such voting instructions, or by the Contractowner providing the
Shareholders with proper later dated voting instructions by telephone or by the
Internet. Proxies executed by Shareholders may be revoked at any time before
they are exercised by a written revocation received by the Secretary of the
Trust, by properly executing a later-dated proxy or by attending the meeting and
voting in person, by telephone or by the Internet. The Trust expects that
information statements and ballots, prepared for use by the Shareholders, as
well as this Proxy Statement, will be mailed to the Contractowners by the
Shareholders on or about February 21, 2000 in order to obtain voting
instructions from the Contractowners.
Shares of the Trust are divided into forty (40) series, each
representing shares of a portfolio of the Trust (collectively, "Portfolios" and,
individually, "Portfolio").
As indicated in the table directly below, all Shareholders are entitled
to vote on Proposal 1 and Proposal 3, and certain Shareholders are entitled to
vote on Proposal 2, Proposal 4(a), and Proposal 4(b). The Proposals are
summarized below and described further in this Proxy Statement.
1. election of trustees to the Board (voted on together by
Shareholders of each Portfolio);
2. permission for Equitable, in its capacity as Investment Manager
of the Trust ("Manager"), subject to approval of the Board, to rely
upon exemptive relief granted by the Securities and Exchange Commission
("SEC") enabling the Manager, without obtaining shareholder approval,
to: (i) select new or additional investment advisers for each of the
Portfolios; (ii) enter into and materially modify existing investment
advisory agreements; and (iii) terminate and replace investment
advisers (voted on separately by Shareholders of 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
Money Market, Alliance Quality Bond, and Alliance Small Cap Growth
Portfolios (collectively, the "former Hudson River Trust Portfolios"));
3. approval of an Amended and Restated Investment Management
Agreement, with respect to each of the Portfolios, between the Trust
and Equitable in its capacity as Investment Manager of the Trust (voted
on separately by Shareholders of each Portfolio); and
2
<PAGE>
4. approval of a change to certain fundamental investment policies
of each Portfolio (voted on separately by Shareholders of each
Portfolio except Lazard Small Cap Value, Merrill Lynch World Strategy
and Morgan Stanley Emerging Markets Equity Portfolios).
TABLE OF PROPOSALS
The following is a list of Portfolios indicating whose Shareholders are
entitled to vote on each Proposal.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
PORTFOLIO PROPOSAL 1 PROPOSAL 2 PROPOSAL 3 PROPOSAL 4(a) PROPOSAL 4(b)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance Balanced X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance Global X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance High Yield X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance International X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance Money Market X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond X X X X X
- ------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth X X X X X
- ------------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index X X X X
- ------------------------------------------------------------------------------------------------------------------------
BT International Equity Index X X X X
- ------------------------------------------------------------------------------------------------------------------------
BT Small Company Index X X X X
- ------------------------------------------------------------------------------------------------------------------------
Calvert Socially Responsive X X X X
- ------------------------------------------------------------------------------------------------------------------------
Capital Guardian International X X X X
- ------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research X X X X
- ------------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity X X X X
- ------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth X X X X
- ------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen X X X X
- ------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation X X X X
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced X X X X
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value X X X X
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity X X X X
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth X X X X
- ------------------------------------------------------------------------------------------------------------------------
JPM Core Bond X X X X
- ------------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value X X X X
- ------------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value X X
- ------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity X X X X
- ------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy X X
- ------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies X X X X
- ------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income X X X X
- ------------------------------------------------------------------------------------------------------------------------
MFS Research X X X X
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity X X
- ------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income X X X X
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
PORTFOLIO PROPOSAL 1 PROPOSAL 2 PROPOSAL 3 PROPOSAL 4(a) PROPOSAL 4(b)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
T. Rowe Price International Stock X X X X
- ------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value X X X X
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
All shares of the Trust (including all Portfolios) will vote together
as a single class with respect to Proposal 1. The shares of each Portfolio being
voted on a proposal will vote separately with respect to Proposal 2, Proposal 3,
Proposal 4(a) and Proposal 4(b), respectively. Thus, for example, if the
Shareholders of any Portfolio do not approve Proposal 3 (the proposed Amended
and Restated Investment Management Agreement), the current Investment Management
Agreement would remain in effect with respect to that particular Portfolio. The
same result would also pertain to Proposals 2 and 4(a) and 4(b). In the event
that a particular Portfolio does not approve Proposal 2, 3, 4(a) or 4(b), the
Board may take such further action as it deems to be in the best interests of
the Shareholders of that Portfolio.
Although the Trust offers two classes of shares (Class IA and Class IB
shares) on behalf of certain Portfolios, for purposes of voting on each
Proposal, Class IA and Class IB shares of each Portfolio will vote together as a
single class.
Each whole share of each Portfolio is entitled to one vote as to each
matter with respect to which it is entitled to vote, as described above, and
each fractional share is entitled to a proportionate fractional vote. Votes cast
by proxy or in person by Shareholders at the Special Meeting will be counted by
persons appointed as election inspectors for the Special Meeting. As of the
Record Date, there were the following number of issued and outstanding shares of
each class of shares of each Portfolio:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
NUMBER OF NUMBER OF
CLASS IA CLASS IB
PORTFOLIO SHARES SHARES
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Aggressive Stock 113,400,082 8,855,821
- ----------------------------------------------------------------------------------------------------------------------
Alliance Balanced 109,916,519 654,473
- ----------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 557,763,561 65,929,530
- ----------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors 31,234,375 7,037,550
- ----------------------------------------------------------------------------------------------------------------------
Alliance Equity Index 82,874,441 976,903
- ----------------------------------------------------------------------------------------------------------------------
Alliance Global 75,796,165 5,347,540
- ----------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income 68,536,047 15,258,612
- ----------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 110,923,381 9,653,786
- ----------------------------------------------------------------------------------------------------------------------
Alliance High Yield 44,280,861 31,523,043
- ----------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities 16,515,800 5,085,037
- ----------------------------------------------------------------------------------------------------------------------
Alliance International 19,417,814 1,422,773
- ----------------------------------------------------------------------------------------------------------------------
Alliance Money Market 81,570,179 46,562,045
- ----------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond 55,199,770 157,245
- ----------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth 18,387,560 11,606,956
- ----------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index N/A 48,738,928
- ----------------------------------------------------------------------------------------------------------------------
BT International Equity Index 285,921 7,073,788
- ----------------------------------------------------------------------------------------------------------------------
BT Small Company Index N/A 5,802,620
- ----------------------------------------------------------------------------------------------------------------------
Calvert Socially Responsive N/A 247,464
- ----------------------------------------------------------------------------------------------------------------------
Capital Guardian International N/A 4,800,538
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
NUMBER OF NUMBER OF
CLASS IA CLASS IB
PORTFOLIO SHARES SHARES
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Capital Guardian Research N/A 3,647,491
- ----------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity N/A 7,484,743
- ----------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth 2,753,573 78,421,044
- ----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen N/A 486,331
- ----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation N/A 923,012
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced N/A 9,023,066
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value N/A 46,796,918
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity N/A 16,790,099
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth N/A 18,486,240
- ----------------------------------------------------------------------------------------------------------------------
JPM Core Bond N/A 16,320,315
- ----------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value N/A 11,603,560
- ----------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value N/A 8,132,720
- ----------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity N/A 22,524,195
- ----------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy N/A 2,882,668
- ----------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 1,967,195 66,721,684
- ----------------------------------------------------------------------------------------------------------------------
MFS Growth with Income N/A 11,611,380
- ----------------------------------------------------------------------------------------------------------------------
MFS Research N/A 41,524,266
- ----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity N/A 21,607,237
- ----------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income 406,599 21,354,904
- ----------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock N/A 16,216,199
- ----------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value 211,765 13,544,319
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SHAREHOLDER REPORTS. A copy of the Annual Report of the Trust for the
fiscal year ended December 31, 1998, including financial statements, and a copy
of the Semi-annual Report dated June 30, 1999 has previously been furnished to
Contractowners. An Annual Report of the Trust for the fiscal year ended December
31, 1999 is expected to be mailed to Contractowners on or about February 28,
2000. THE TRUST WILL FURNISH, WITHOUT CHARGE, TO ANY CONTRACTOWNER, UPON
REQUEST, A COPY OF THE 1998 ANNUAL REPORT AND THE 1999 SEMI-ANNUAL REPORT, AND
WHEN AVAILABLE, A COPY OF THE 1999 ANNUAL REPORT. SUCH REQUESTS MAY BE DIRECTED
TO THE TRUST AT 1290 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10104
(TELEPHONE: 1-800-528-0204).
VOTING INFORMATION
PROXY SOLICITATION. The costs of the Special Meeting, including the costs of
solicitation of proxies, will be allocated 80% to Equitable and 20% to the
Trust. The principal solicitation will be by mail, but proxies also may be
solicited by telephone, personal interview by officers or agents of the Trust or
the Internet. Shareholder Communications Corporation has been retained to assist
with solicitation activities (including assembly and mailing of materials to
Shareholders and Contractowners). To obtain the necessary representation at the
Special Meeting, solicitations may be made at a cost not expected to exceed
$850,000. Contractowners can provide voting instructions: (1) by Internet at our
website at www._________.com; (2) by telephone at 1_800_xxx_xxxx; or (3) by
mail, with the enclosed ballot.
CONTROL PERSON AND PRINCIPAL HOLDERS OF SECURITIES. Equitable may be
deemed to be a control person of the Trust by virtue of its direct or indirect
ownership of approximately 99% of the Trust's shares as of the Record Date. As
of that date, the following Contractowners owned
5
<PAGE>
Contracts entitling such persons to give voting instructions with respect to
more than 5% of the outstanding shares of the Portfolios listed below.
- --------------------------------------------------------------------------------
CONTRACTOWNER AND SHARES BENEFICIALLY PERCENTAGE OF
PORTFOLIO ADDRESS OWNED OWNERSHIP
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHAREHOLDER PROPOSALS. The Trust is not required to hold regular
Shareholder meetings and, in order to minimize its costs, does not intend to
hold meetings of Shareholders unless so required by applicable law, regulation,
regulatory policy, or if otherwise deemed advisable by the Trust's management.
Therefore it is not practicable to specify a date by which proposals must be
received in order to be incorporated in an upcoming proxy statement for a
meeting of Shareholders.
PROPOSAL 1
ELECTION OF TRUSTEES
REASONS FOR PROPOSAL 1. The Board is proposing that Shareholders elect
eight members to the Board ("Trustees"). The Board currently consists of six
Trustees and one vacancy exists on the Board. At a meeting of the Board on
November 3, 1999, which five of the current six Trustees attended, the Board
voted to increase the size of the Board to nine from seven members. At a meeting
of the Board on January 28, 2000, the Board: (i) elected Theodossios (Ted)
Athanassiades to serve as a Trustee effective March 1, 2000 and (ii) nominated
David W. Fox for election by the Shareholders as a Trustee at the Special
Meeting. The six other nominees currently serve as Trustees. Although election
by Shareholders for the Trust's current Trustees is not required by law, the
Board has determined that it is in the best interests of the Trust to ask the
Shareholders to vote on the election of each current Trustee and David W. Fox at
the Special Meeting.
OTHER RELATED INFORMATION. If elected at the Special Meeting, each
Trustee has agreed to continue to serve as a Trustee and David W. Fox has also
agreed to serve as a Trustee. The term of office of each person elected as a
Trustee will be until his or her successor is elected and qualified. The Trust's
Amended and Restated Agreement and Declaration of Trust ("Declaration of Trust")
does not provide for the annual election of Trustees. However, in accordance
with Investment Company Act of 1940, as amended ("1940 Act"), the Trust will
hold a Shareholders' meeting for the election of Trustees at such time (i) as
less than a majority of the Trustees holding office has been elected by
Shareholders or (ii) to fill a vacancy in the Board if, as the result of the
vacancy, less than two-thirds of the Trustees holding office have been elected
by the Shareholders. In addition, the Declaration of Trust provides that
Trustees may be removed from office by a vote of two-thirds of the outstanding
shares of the Trust at any meeting. Special
6
<PAGE>
meetings of the Shareholders may be called at any time by the Board or the
President of the Trust. Meetings of the Shareholders may be called for any
purpose deemed necessary or desirable upon the written request of the holders of
not less than 10% of the outstanding shares entitled to vote, pursuant to
Contractowner instruction.
If any of the current six Trustees and the two new nominees should be
unavailable for election at the time of the Special Meeting (which is not
currently anticipated), the Shareholders may vote for other persons in their
discretion.
BACKGROUND INFORMATION ON EACH NOMINEE. Information with respect to all
eight nominees, including the six current Trustees, including their age, length
of service on the Board and principal occupations, is listed below. Except as
shown below, each nominee's principal occupation and business experience for the
last five years has been with the employers indicated, although in some cases
the nominee may have held different positions with such employers.
LENGTH OF
SERVICE ON PRINCIPAL OCCUPATION(S)
NAME AND AGE THE BOARD DURING THE PAST FIVE YEARS
- --------------------------------------------------------------------------------
Peter D. Noris* (44) From March From May 1995 to present, Executive Vice
President and Trustee 1997 to President and Chief Investment Officer,
present Equitable; from 1992 to 1995, Vice
President, Salomon Brothers Inc.; from
July 1995 to present, Director, Alliance
Capital Management, L.P.; from July 1995
to October 1999, Trustee, Hudson River
Trust (investment company); from
November 1996 to present, Executive Vice
President, AXA Advisors.
Jettie M. Edwards (53) From March From 1986 to present, Partner and
Trustee 1997 to Consultant, Syrus Associates (business
present and marketing consulting firm); from
1992 to present, Trustee, Provident
Investment Counsel Trust (investment
company); from 1995 to present,
Director, The PBHG Funds, Inc.
(investment company).
William M. Kearns, From March From 1994 to present, President, W.M.
Jr. (64) 1997 to Kearns & Co., Inc. (private investment
Trustee present company); from 1998 to present, Vice
Chairman, Keefe Managers, Inc.
(financial services funds); Director,
Malibu Entertainment Worldwide, Inc.,
Marine Transport Corporation, Selective
Insurance Group, Inc., Transistor
Devices, Inc., as well as a number of
private and venture-backed companies.
Christopher P.A. From March From 1998 to present, President and
Komisarjevsky (54) 1997 to Chief Executive Officer,
Trustee present Burson-Marsteller Worldwide (public
relations); from 1996 to 1998, President
and Chief Executive Officer,
Burson-Marsteller USA; from 1994 to
1995, President and Chief Executive
Officer, Gavin Anderson & Company, New
York.
Harvey Rosenthal (57) From March From 1996 to present,
Trustee 1997 to Consultant/Director; from 1994 to 1996,
present President and Chief Operating Officer,
Melville Corporation (now CVS
Corporation); Director, Schein
Pharmaceutical, Inc., LoJack
Corporation.
7
<PAGE>
LENGTH OF
SERVICE ON PRINCIPAL OCCUPATION(S)
NAME AND AGE THE BOARD DURING THE PAST FIVE YEARS
- --------------------------------------------------------------------------------
Michael Hegarty* (55) From April From April 1998 to present, Director,
Trustee 1999 to President and Chief Operating Officer,
present Equitable; from 1996 to 1998, Vice
Chairman, Chase Manhattan Corporation;
from 1995 to 1996, Vice Chairman,
Chemical Bank (Chase Manhattan
Corporation and Chemical Bank merged in
1996); from 1991 to 1995, Senior
Executive Vice President, Chemical Bank.
David W. Fox (68) None Presently, Public Governor (1989 to
present) and Chairman (1996 to present)
of the Chicago Stock Exchange; Director
of USG Corporation; from 1990-1995,
Chairman and Chief Executive Officer,
Northern Trust Corporation.
Theodossios (Ted) None From 1994 to present, Director, Atlantic
Athanassiades (60) Bank of New York; 1996, Vice-Chairman,
Metropolitan Life Insurance Company;
from 1993-1995, President and Chief
Operating Officer, Metropolitan Life
Insurance Company.
- -------------------
* "Interested person" of the Trust (as that term is defined in the 1940 Act).
During the fiscal year ended December 31, 1999, there were seven
meetings of the Board including regular and special meetings. Each current
Trustee attended at least 75% of the meetings of the Board, including regular,
special and committee meetings.
As of December 31, 1999, the Trustees and officers of the Trust, as a
group, owned less than one percent of the outstanding shares of each Portfolio
in the aggregate, or of any class of shares of any Portfolio.
BOARD OF TRUSTEES' COMMITTEES. The Trust has a standing Audit Committee
consisting of all of the Trustees who are not "interested persons" of the Trust
(as that term is defined in the 1940 Act) ("Independent Trustee(s)"). The Audit
Committee's function is to recommend to the Board independent accountants to
conduct the annual audit of the Trust's financial statements; review with the
independent accountants the outline, scope and results of this annual audit; and
review the performance and fees charged by the independent accountants for
professional services. In addition, the Audit Committee meets with the
independent accountants and representatives of management to review accounting
activities and areas of financial reporting and control. During the fiscal year
ended December 31, 1999, there were two Audit Committee meetings of the Board.
The Trust has a Nominating and Compensation Committee consisting of all
of the Independent Trustees. The Nominating and Compensation Committee's
function is to nominate and evaluate Independent Trustee candidates and review
the compensation arrangements for each of the Trustees. During the fiscal year
ended December 31, 1999, there was one meeting of the Nominating and
Compensation Committee. The Trust's former Compensation Committee was
reorganized as the current Nominating and Compensation Committee on December 7,
1999. The
8
<PAGE>
former Compensation Committee did not meet during the fiscal year ended
December 31, 1999. The Nominating and Compensation Committee is not required to
consider nominees recommended by Shareholders.
COMPENSATION OF INDEPENDENT TRUSTEES AND OFFICERS. Each Independent
Trustee currently receives from the Trust an annual fee of $40,000 plus (i) an
additional fee of $4,000 for each regularly scheduled Board meeting attended,
(ii) $2,000 for each special Board meeting or special committee meeting
attended, and (iii) $1,000 for each telephone or other committee meeting
attended, plus reimbursement for expenses in attending in-person meetings. Upon
election by the Independent Trustees of a lead Independent Trustee, a
supplemental retainer of $10,000 per year will be paid to the lead Independent
Trustee. A supplemental retainer may also be paid on occasion to each chair of
the Trust's two committees for special services.
TRUSTEE COMPENSATION TABLE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
PENSION OR
RETIREMENT TOTAL
AGGREGATE BENEFIT ACCURED COMPENSATION
COMPENSATION AS PART OF FROM TRUST PAID
TRUSTEE FROM THE TRUST TRUST EXPENSES TO TRUSTEES
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Peter D. Noris $-0- $-0- $-0-
Jettie M. Edwards $39,271 $-0- $39,271
William M. Kearns, Jr. $39,271 $-0- $39,271
Christopher P.A. Komisarjevsky $38,271 $-0- $38,271
Harvey Rosenthal $39,271 $-0- $39,271
Michael Hegarty $-0- $-0- $-0-
- --------------------------------------------------------------------------------------------------
</TABLE>
*Mr. Komisarjevsky has elected to participate in the Trust's deferred
compensation plan. As of December 31, 1999, Mr. Komisarjevsky had accrued
$39,218 (including interest).
A deferred compensation plan for the benefit of the Trustees has been
adopted by the Trust. Under the deferred compensation plan, each Trustee may
defer payment of all or part of the fees payable for such Trustee's services.
Each Trustee may defer payment of such fees until his or her retirement as a
Trustee or until the earlier attainment of a specified age. Fees deferred under
the deferred compensation plan, together with accrued interest thereon, will be
disbursed to a participating Trustee in monthly installments over a five to 20
year period elected by such Trustee.
As of January 30, 2000, the Trustees and Officers of the Trust owned
Contracts entitling them to provide voting instructions in the aggregate with
respect to less than one percent of the shares of the Trust.
INFORMATION REGARDING OFFICERS OF THE TRUST. No officer of the Trust
receives any compensation paid by the Trust. Each officer of the Trust is an
employee of AXA Financial,
9
<PAGE>
Equitable, the Trust's two distributors, AXA Advisors and EDI, or the Trust's
current Administrator, Chase. The Trust's principal officers are:
NAME, AGE AND POSITION PRINCIPAL OCCUPATION
WITH TRUST DURING LAST FIVE YEARS
Peter D. Noris (44) From May 1995 to present, Executive Vice
President President and Chief Investment Officer,
Equitable; from 1992 to 1995, Vice
President, Salomon Brothers Inc.; from
July 1995 to present, Director, Alliance
Capital Management, L.P.; from July 1995
to October 1999, Trustee, Hudson River
Trust (investment company); from November
1996 to present, Executive Vice
President, AXA Advisors.
Brian S. O'Neil (47) From July 1998 to present, Executive Vice
Vice President President, AXA Financial; from 1997 to
1998, Director of Investment, AXA
Investment Managers-Europe; from 1995 to
1997, Chief Investment Officer, AXA
Investment Management Paris; from 1992 to
June 1995, Executive Vice President and
Chief Investment Officer, AXA Financial.
Steven M. Joenk (41) From July 1999 to present, Senior Vice
Vice President and Chief President, AXA Financial; from 1996 to
Financial Officer 1999, Managing Director of MeesPierson;
from 1994 to 1996, Executive Vice
President and Chief Financial Officer,
Gabelli Funds, Inc.
Kevin R. Byrne (44) From July 1997 to present, Senior Vice
Vice President and Treasurer President and Treasurer, AXA Financial
and Equitable; from 1990 to present,
Treasurer, Frontier Trust Company; from
1997 to present, President and Chief
Executive Officer, Equitable Casualty
Insurance Company.
Patricia Louie, Esq. (44) From July 1999 to present, Vice President
Vice President and Secretary and Counsel, AXA Financial and Equitable;
from 1994 to July 1999, Assistant General
Counsel of The Dreyfus Corporation.
Kenneth T. Kozlowski (38) From October 1999 to present, Assistant
Controller Vice President AXA Financial; from
October 1996 to October 1999,
Director-Fund Administration, Prudential
Investments; from 1992 to 1996, Vice
President-Fund Administration, Prudential
Securities Incorporated.
Mary E. Cantwell (38) From July 1999 to present, Vice
Vice President President, Equitable; from September 1997
to July 1999, Assistant Vice President,
Office of the Chief Investment Officer,
Equitable; from September 1997 to
present, Assistant Vice President, AXA
Advisors, LLC; from Sept. 1997 to
present, Marketing Director, Income
Management Group, Equitable.
Paul Roselli (34) From March 1997 to present, Vice
Assistant Treasurer President, Fund Administration, Chase
Global Funds Services Company; from July
1993 to March 1997, Assistant Manager of
Fund Accounting , Brown Brothers
Harriman.
Helen A. Robichaud, Esq. (47) From 1994 to present, Vice President and
Assistant Secretary Associate General Counsel, Chase Global
Funds Services Company.
REQUIRED VOTE. The election of Trustees will be by a plurality vote of
all shares of the Trust (including all Portfolios) voting together as a single
class if a quorum is present at the meeting. The Declaration of Trust defines a
"quorum" as thirty-three and one-third percent (33-1/3%) of the shares entitled
to vote.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" EACH OF THE NINE NOMINEES UNDER PROPOSAL 1. IF
EXECUTED BUT UNMARKED VOTING INSTRUCTIONS ARE RECEIVED, SHAREHOLDERS WILL VOTE
THOSE UNMARKED VOTING INSTRUCTIONS IN FAVOR OF THE NOMINEES.
10
<PAGE>
PROPOSAL 2
TO PERMIT EQUITABLE, IN ITS CAPACITY AS MANAGER OF THE TRUST, SUBJECT
TO APPROVAL OF THE BOARD, TO RELY UPON EXEMPTIVE RELIEF GRANTED BY THE SEC
ALLOWING THE MANAGER, WITHOUT OBTAINING SHAREHOLDER APPROVAL, TO: (I) SELECT NEW
OR ADDITIONAL INVESTMENT ADVISERS FOR EACH OF THE TRUST'S PORTFOLIOS; (II) ENTER
INTO AND MATERIALLY MODIFY EXISTING INVESTMENT ADVISORY AGREEMENTS; AND (III)
TERMINATE AND REPLACE THE INVESTMENT ADVISERS.
BACKGROUND INFORMATION. Section 15(a) of the 1940 Act requires that all
agreements under which persons serve as investment managers or investment
advisers to investment companies be approved by shareholders. In practice, this
requirement means that shareholders would be required to approve every instance
in which: (i) the Manager selected new or additional Advisers for each of the
Trust's Portfolios; (ii) the Trust entered into or materially modified existing
investment advisory agreements; or (iii) the Trust terminated or replaced an
Adviser. The SEC has often granted conditional exemptions from the shareholder
approval requirements in instances where the investment manager to an investment
company is responsible, subject to Board approval, for employing sub-advisers
and continuously evaluating and monitoring those sub-advisers.
The SEC has granted such exemptive relief to the Trust and the Manager
("Multi-Manager Order"). The Multi-Manager Order permits the Manager, subject to
approval of the Board, to: (i) select Advisers for each of the Trust's
Portfolios; (ii) enter into and materially modify existing investment advisory
agreements; and (iii) terminate and replace the Advisers without obtaining
approval of the relevant Portfolio's shareholders. However, the Manager may not
enter into an investment advisory agreement with an "affiliated person" of the
Manager (as that term is defined in Section 2(a)(3) of the Investment Company
Act of the 1940) ("Affiliated Adviser"), such as Alliance Capital Management
L.P. ("Alliance") unless the investment advisory agreement with the Affiliated
Adviser, including compensation thereunder, is approved by the affected
Portfolio's Shareholders, including, in instances in which the investment
advisory agreement pertains to a newly formed Portfolio, the Portfolio's initial
shareholder.
REASONS WHY APPROVAL OF PROPOSAL 2 IS REQUESTED. Under the terms of the
Multi-Manager Order, the Board and the Manager may not rely upon the
Multi-Manager Order with respect to any particular Portfolio unless and until
the utilization of the powers granted in the Multi-Manager Order has been
approved by a majority vote of that Portfolio's outstanding voting securities.
Currently, 26 of the Trust's Portfolios are permitted to rely upon the
Multi-Manager Order. However, the former Hudson River Trust Portfolios are not
currently permitted to rely upon the Multi-Manager Order. As you are aware, the
SEC approved the substitution of shares of the former Hudson River Trust
Portfolios for shares of corresponding portfolios of The Hudson River Trust in
September of 1999. In that connection, the Shareholders agreed that the Board
and the Manager would not rely upon the Multi-Manager Order with respect to any
of the former Hudson River Trust Portfolios until the use of the Multi-Manager
Order was approved by a majority of each of the former Hudson River Trust
Portfolios' outstanding voting securities.
Shareholders of each of the former Hudson River Trust Portfolios are
now being asked to approve the use of the Multi-Manager Order for each of those
Portfolios, which would permit the
11
<PAGE>
Manager, subject to Board approval, to: (i) select new or additional Advisers
for the former Hudson River Trust Portfolios; (ii) enter into and materially
modify existing investment advisory agreements relating to the former Hudson
River Trust Portfolios; and (iii) terminate and replace the Advisers to the
former Hudson River Trust Portfolios, without requiring future Shareholder
approval.
Approval of Proposal 2 is being sought at this time to provide for the
same flexibility in the management of the advisory arrangements of the former
Hudson River Trust Portfolios as is currently available to the Trust's other
Portfolios under the Multi-Manager Order. Management currently intends to
utilize this flexibility, on behalf of the Alliance Aggressive Stock Portfolio
and the Alliance Balanced Portfolio as described below, to appoint one or more
additional Advisers for these Portfolios. Management has no such current plans
for the other former Hudson River Trust Portfolios of the Trust, but approval of
Proposal 2 would allow management the flexibility to rely on the Multi-Manager
Order for the other former Hudson River Trust Portfolios in the future, without
occurring the costs and delays associated with additional shareholder
solicitations.
BENEFITS TO SHAREHOLDERS OF APPROVAL OF PROPOSAL 2. As part of the
Trust's so-called "multi-manager" structure, under the Investment Management
Agreement, the Manager is required to, among other things, monitor and evaluate
each Adviser on an ongoing basis. In the course of performing those duties, the
Board expects that, from time to time, the Manager may recommend to the Board
that the Trust: (i) replace or terminate an Adviser; (ii) appoint new or
additional Advisers to a Portfolio; or (iii) change the terms of an investment
advisory agreement, depending on the Manager's assessment of each Portfolio's
investment focus and how best to optimize each Portfolio's opportunity of
achieving its investment focus. If Shareholders were required to approve each
such recommended change, such recommendations by the Manager would result in
more frequent Shareholder meetings than would otherwise be the case. As you may
be aware, Shareholder meetings entail substantial costs and may entail
substantial delays, which would reduce the desired benefits of the Trust's
current "multi-manager" structure. However, if this Proposal 2 is approved, the
Board would not be required to call a Shareholder meeting each time, for
example, a new or additional Adviser for any of the former Hudson River Trust
Portfolios is approved (or to reapprove an Adviser whose investment advisory
agreement is automatically terminated because it has been purchased by another
entity).
Of course, you should carefully weigh these cost savings and other
benefits against the need for Shareholder scrutiny of proposed investment
advisory agreements with additional or replacement Advisers or proposed changes
in existing investment advisory agreements. However, you should also take note
that before any change is made to an Adviser or existing investment advisory
agreement for any of the former Hudson River Trust Portfolios, the Manager and
the Board are required to carefully assess that Portfolio's needs and investment
focus. Moreover, any recommendations made by the Manager to implement such
changes would then have to be reviewed and approved by a majority of the Board,
including a majority of the Independent Trustees. In this regard, any selection
of new or additional Advisers or changes to an existing investment advisory
agreement would have to comply with the conditions, as described above,
contained in the Multi-Manager Order.
12
<PAGE>
It is important to note in this regard that the Board would not be able
to replace Equitable as Manager for the any of the former Hudson River Trust
Portfolios without first obtaining Shareholder approval of a new Manager. If
this Proposal 2 is not approved, the Board would be required to seek shareholder
approval to: (i) select new or additional Advisers for the former Hudson River
Trust Portfolios; (ii) enter into and materially modify existing investment
advisory agreements relating to the former Hudson River Trust Portfolios; and
(iii) terminate and replace the Advisers to the former Hudson River Trust
Portfolios.
ALLIANCE AGGRESSIVE STOCK PORTFOLIO AND ALLIANCE BALANCED PORTFOLIO.
Shareholders of each of these two Portfolios should be aware that, in the event
they approve of Proposal 2, the Manager and the Board have determined to add one
or more additional Advisers to each of those Portfolios, and to change the name
of each of those Portfolios, as described below:
ALLIANCE AGGRESSIVE STOCK PORTFOLIO. The Alliance Aggressive Stock
Portfolio will be renamed the "EQ Aggressive Stock Portfolio." At the
recommendation of the Manager, the Board, including the Independent
Trustees, at the January 28, 2000 Board meeting, unanimously approved
Massachusetts Financial Services Company ("MFS") as an additional
Adviser for this Portfolio, subject to approval of Proposal 2 by
shareholders of this Portfolio. Alliance, the current Adviser for this
Portfolio, and MFS as well as any other Adviser that may be selected by
the Board (upon recommendation of the Manager) to provide advice to
this Portfolio would, as determined by the Manager from time to time,
each be allocated a portion of the assets of this Portfolio to manage.
It is contemplated that, in addition to Alliance and MFS, one or more
additional Advisers may be added to this Portfolio in the near future.
Information about MFS, a proposed additional Adviser to this Portfolio,
is set forth in Appendix F to this proxy statement.
ALLIANCE BALANCED PORTFOLIO. The Alliance Balanced Portfolio will be
renamed the "EQ Balanced Portfolio." Alliance, the current Adviser for
this Portfolio, and any other Advisers in the future that may be
selected by the Board (upon the recommendation of the Manager) to serve
as additional Adviser(s) for this Portfolio, would, as determined by
the Manager from time to time, each be allocated a portion of this
Portfolio's assets to manage. The Manager currently intends to
recommend to the Board at its next meeting (currently scheduled for
March 14, 2000), that it approve Capital Guardian Trust Company
("Capital Guardian") as an additional Adviser for this Portfolio,
subject to approval of Proposal 2 by shareholders of this Portfolio. It
is contemplated that, in addition to Capital Guardian, one or more
additional Advisers may be added to this Portfolio in the near future.
Information about Capital Guardian is set forth in Appendix F to this
proxy statement.
Note that if Proposal 2 is approved by Shareholders of these
Portfolios, then Shareholders would not be required to approve the selection of
any new or additional Advisers for these Portfolios.
13
<PAGE>
REQUIRED VOTE. Approval of this Proposal 2 with respect to any of the
former Hudson River Trust Portfolios requires the affirmative vote of a majority
of the outstanding voting securities of that Portfolio.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 2. IF UNMARKED VOTING INSTRUCTIONS ARE
RECEIVED, SHAREHOLDERS WILL VOTE THOSE UNMARKED VOTING INSTRUCTIONS IN FAVOR OF
PROPOSAL 2.
PROPOSAL 3
APPROVAL OF AN AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
INTRODUCTION. The Board is proposing that Shareholders of each
Portfolio approve an Amended and Restated Investment Management Agreement
between the Trust and Equitable ("New Management Agreement") in order to modify
the current investment management fee schedule and breakpoint schedule, and to
make other changes to the currently effective investment management agreement,
including, among other things, certain changes to facilitate the ability of the
Manager to: (i) select new or additional Advisers for each Portfolio; (ii) enter
into and materially modify existing investment advisory agreements; and (iii)
terminate and replace Advisers, as permitted under the Multi-Manager Order.
Equitable, a New York stock life insurance company, currently serves as Manager
in accordance with an Investment Management Agreement between the Trust, on
behalf of each Portfolio, and Equitable ("Current Management Agreement"). EQ
Financial Consultants, Inc. ("EQFC") previously served as Manager of the Trust
until September 17, 1999 when the current Management Agreement was transferred
to Equitable, an indirect corporate parent of EQFC (EQFC, together with
Equitable, "Manager"). The proposed New Management Agreement would replace the
Current Management Agreement.
REASONS FOR PROPOSED CHANGES IN MANAGEMENT FEES. Equitable determined
to conduct a complete review of the level of investment management fees for each
Portfolio of the Trust, after having noted:
o a substantially increased commitment since the inception of the Trust, of
personnel and resources by Equitable to support its investment management
activities on behalf of the Trust;
o differences in the investment management fee levels among certain Portfolios
within the Trust having similar investment focus and asset types; and
o investment management fee levels for a number of the Portfolios were
significantly below the median contractual fee levels for other mutual funds
within the variable insurance products marketplace having similar investment
focus, asset types and sizes.
Management's primary goal for this review was to establish a new fee
schedule for the various Portfolios of the Trust that would: (i) be internally
consistent; (ii) remain competitive with other funds in the current variable
insurance products marketplace having a similar
14
<PAGE>
investment focus, asset type and size; and (iii) provide appropriate long-term
incentives, within the competitive environment, to support Equitable's increased
allocation, since the inception of the Trust, of personnel and resources to the
Trust.
As a result of this review, and after considering the individualized
circumstances of each Portfolio, Management began to discuss with the Board at
the December 7, 1999 Board Meeting its preliminary recommendations regarding a
proposed new investment management fee schedule for the Trust. On January 24,
2000, the Independent Trustees met to review with Equitable its proposed
recommendations regarding the proposed new investment management fee schedule.
On January 28, 2000, the Independent Trustees met separately to consider
Management's recommendations. Following that meeting, the full Board met to
consider Management's proposed recommendations. Following those meetings, the
Board, including the Independent Trustees, unanimously voted to approve proposed
changes to the investment management fee rates assessed for certain Portfolios,
changes to the breakpoint levels in the investment management fee rates for
certain Portfolios, and the implementation of breakpoint schedules for certain
Portfolios which do not currently have breakpoint schedules.
If these proposed changes are approved, assuming the asset levels for
each Portfolio remain as they were on December 31, 1999, the investment
management fees for 20 Portfolios would be increased, the investment management
fees for 14 Portfolios would remain unchanged, and the investment management
fees for 6 Portfolios would be reduced. For five of the 20 Portfolios where the
contractual management fee would increase (i.e., Lazard Large Cap Value, T. Rowe
Price International Stock, EQ/Putnam Growth and Income, EQ/Putnam Balanced, and
Warburg Pincus Small Cap Value Portfolios) the Manager has agreed not to
implement any management fee increase approved by Shareholders until July 31,
2001, unless the Board agrees that such a management fee increase should be put
into operation earlier. The proposed new schedule of investment management fee
rates for each Portfolio is included in Table 1-B of Appendix C.
BASIS FOR THE BOARD'S RECOMMENDATION. In evaluating and approving the
New Management Agreement, the Board, including the Independent Trustees, in
consultation with their separate counsel, requested and evaluated information
provided by Equitable which, in its opinion, constituted all the information
reasonably necessary for the Board to form a judgment as to whether the New
Management Agreement and management fee structure would be in the best interests
of each Portfolio and its Shareholders.
In recommending that Shareholders approve the New Management Agreement,
the Board considered all factors that it deemed relevant, including:
(i) the investment management fees and other expenses that would
be paid by the Portfolios under the New Management Agreement as
compared to those of similar funds managed by other investment
advisers. The Trustees noted in particular that, for each Portfolio
where investment management fees would be increased, the new investment
management fee would remain near or below the median contractual fee
rate at similar asset levels for funds within the current variable
insurance marketplace having
15
<PAGE>
similar investment focus and asset types, as indicated in an
independent study prepared for the Board by Lipper Analytical Services;
(ii) the significantly increased commitment of personnel and
resources by Equitable, since the inception of the Trust, to support
the investment management services provided to the Trust, and the
increased sophistication of the investment evaluation and monitoring
process used by Equitable on behalf of the Trust;
(iii) the ability of the Manager under the New Management
Agreement, in accordance with the Multi-Manager Order, to allocate and
reallocate the management of the assets of any Portfolio among new or
additional Advisers;
(iv) the impact of the proposed changes in investment management
fee rates and changes in other expenses of each Portfolio on each
Portfolio's total expense ratio, the historic subsidization of certain
of the Portfolios by Equitable and the continued willingness of
Equitable to agree to limit total operating expenses for certain
Portfolios until at least July 31, 2001;
(v) the historical investment performance of each Portfolio, as
well as performance information regarding other funds within the
current variable insurance marketplace not advised or managed by
Equitable but having similar investment focus and asset types;
(vi) their favorable experience in overseeing, on an on-going
basis, the nature and quality of investment management services
provided by the Manager to the Portfolios;
(vii) current and projected profitability and related other
benefits to Equitable in providing investment management services to
the Portfolios, both under the current investment management fee
schedule and the proposed new investment management fee schedule, and
the need to provide Equitable with sufficient long-term incentives,
within the competitive marketplace, to support Equitable's allocation
of personnel and resources to the Trust; and
(viii) possible economies of scale in managing the Trust and the
proposed breakpoints in the investment management fees for 36 out of 40
Portfolios (as noted in Table 1-B of Appendix C).
In considering the New Management Agreement, the Board reviewed the
nature, quality and scope of the services being provided on behalf of the
Portfolios by Equitable, and took into account the fee levels of other
comparable mutual funds, the current and projected profitability and related
other benefits to Equitable in providing investment management and other
services to the Portfolios. The Trustees concluded that the proposed investment
management fee schedule (including proposed breakpoints) will: (i) over the
long-term, enable Equitable to continue to provide high-quality investment
management services to the Portfolios at reasonable and competitive fee rates
and (ii) allow Equitable to provide
16
<PAGE>
investment management services to the Portfolios at levels consistent with the
increased demands of the current variable products marketplace.
In considering profitability, the Trustees considered the current and
anticipated level of profitability to Equitable in providing investment
management services to the Portfolios and pro forma information with respect to
the total expenses (as a percentage of average daily net assets of each
Portfolio) expected to be borne by each Portfolio if the New Management
Agreement was adopted by the Portfolios (and other changes described in these
proxy materials were made.)
DESCRIPTION OF PROPOSED CHANGES IN INVESTMENT MANAGEMENT FEE RATES. The
Board and Equitable are proposing to: (i) change the investment management fee
rates assessed against certain Portfolios; (ii) change the breakpoint levels in
the investment management fee rate for certain Portfolios; and (iii) implement
breakpoints in the investment management fee rates and breakpoint schedules for
certain Portfolios. Both the current and proposed new investment management fee
rates and breakpoint schedules for each Portfolio as well as the anticipated
impact on each Portfolio of any proposed changes in such rates are provided in
Appendix C to this proxy statement.
o Table 1-A in Appendix C shows the current contractual investment management
fee rates for each Portfolio and current breakpoint levels, if any.
o Table 1-B in Appendix C shows the proposed contractual investment management
fee rates for each Portfolio and proposed breakpoint levels, if any.
o Table 2-A in Appendix C shows:
o the annualized level of all fees and expenses incurred by each
Portfolio during the year ended December 31, 1999 (before giving effect
to any applicable voluntary expense limitation agreement described
below) under the current investment management fee schedule;
o the annualized level of all fees and expenses that would have been
incurred by each Portfolio during the year ended December 31, 1999
(before giving effect to any applicable voluntary expense limitation
agreement) under the proposed new investment management fee schedule;
and
o the dollar and percentage difference between the two (if any).
o Table 2-B in Appendix C shows:
o the annualized level of all fees and expenses paid by each Portfolio
under the current investment management fee schedule (after giving
effect to any voluntary expense limitation agreement currently
applicable to that Portfolio) during the year ended December 31, 1999;
17
<PAGE>
o the annualized level of all fees and expenses under the proposed
investment management fee schedule that would have been paid by each
Portfolio (after giving effect to any proposed voluntary expense
limitation agreement applicable to that Portfolio) during the year
ended December 31, 1999; and
o the dollar and percentage difference between the two (if any).
o Appendix D contains a Fee Table for each Portfolio showing the actual level
of all recurring expenses under the Current Management Agreement and other
current agreements for each Portfolio and the estimated overall expense
levels under the proposed New Management Agreement, and other agreements for
each Portfolio if those agreements had been in effect for the year ended
December 31, 1999.
DIFFERENCES BETWEEN PROPOSED NEW MANAGEMENT AGREEMENT AND CURRENT MANAGEMENT
AGREEMENT. The proposed New Management Agreement, which is provided in Appendix
A, is identical in all material respects to the Current Management Agreement,
except for the provisions described below. The principal differences between the
proposed New Management Agreement and the Current Management Agreement are as
follows:
o All of the Portfolios, except for the four index Portfolios, will have
breakpoints in their investment management fee rates. Currently, only the 14
former Hudson River Trust Portfolios have breakpoints. In addition, for the
former Hudson River Trust Portfolios, the level of certain breakpoints and
the investment management fee rates at one or more breakpoint levels are
proposed to be changed for each of the equity Portfolios and one of the debt
Portfolios. As a result, when each Portfolio reaches the point at which one
or more of the proposed breakpoints would take effect, such Portfolio's
effective maximum investment management fee rate may be higher, unchanged or
lower under the New Management Agreement than it would be under the Current
Management Agreement. It is important to note that in instances in which the
effective maximum investment management fee is unchanged, the introduction
of breakpoints in the investment management fee schedules will have the
effect of reducing the effective maximum investment management fee rate as
assets of those Portfolios increase.
o 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 New Management 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,
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<PAGE>
MFS Research, MFS Emerging Growth, 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 Equity 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,
EQ/Evergreen, and 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 Appendix C.
o The New Management Agreement will contain provisions that will facilitate
the Manager's ability to:
o select new or additional Advisers for each Portfolio;
o enter into and materially modify existing investment advisory
agreements; and
o terminate and replace Advisers.
o The New Management Agreement will allow the Manager, in accordance with the
Multi-Manager Order, to allocate and reallocate the management of the assets
of any Portfolio among new or additional Advisers.
o The New Management Agreement will allow the Manager in accordance with the
provisions of Section 28(e) of the Securities Exchange Act of 1934 ("Section
28(e)"), to pay broker-dealers for "brokerage or research services" (as
defined in Section 28(e)) received by the Manager, the Advisers, the Trust
or any Portfolio compensation in excess of the amount another broker-dealer
would have charged for effecting the transaction, provided the Manager
determines, in good faith, that
19
<PAGE>
the amount of the compensation paid to the broker-dealer is reasonable in
relationship to the value of the brokerage or research services provided in
terms of that particular transaction or the Manager's overall
responsibilities to the Portfolio, the Trust or its other clients.
o The New Management Agreement will allow the Manager subject to seeking the
most favorable price and best execution and in compliance with the Conduct
Rules of the National Association of Securities Dealers, Inc., to consider
sales of shares of the Trust as a factor in the selection of broker-dealers.
o The New Management Agreement will allow 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 pursuant to Section 3.B. of the New Management
Agreement ("Trust Expenses"); or (ii) finance activities that are primarily
intended to result in the sale of Trust shares. At the discretion of the
Board, such resources may be used to pay or cause the payment of Trust
Expenses or may be used to finance activities that are primarily intended to
result in the sale of Trust shares.
o If Shareholder approval is obtained, the New Management Agreement will be
effective for each Portfolio on May 1, 2000 and its initial term is through
May 1, 2001. If the Shareholders of any Portfolio do not approve the New
Management Agreement, the Current Management Agreement will remain in effect
with respect to that particular Portfolio. In such event, the Board will
take such further action as it deems to be in the best interests of the
Shareholders of that Portfolio.
CURRENT MANAGEMENT AGREEMENT. Each of the Trust's Portfolios is deemed
to have a separate agreement with Equitable, although the terms of these
separate agreements are contained in one document. The Current Management
Agreement is dated as of April 14, 1997. Since that date, the Current Management
Agreement has been amended on several different occasions to reflect the
addition of new Portfolios.
The Current Management Agreement imposes the following obligations upon the
Manager:
o Selecting and contracting, at its own expense, with Advisers to manage the
investment operations and composition of each Portfolio, subject to the general
supervision of the Board.
o Overall supervisory responsibility for the general management and investment
of each Portfolio's assets, subject to the Board's direction and control.
o Full investment discretion to make all determinations with respect to the
investment of a Portfolio's assets not then managed by an Adviser, subject to
the Board's direction and control.
o Monitoring compliance of each Adviser with the investment objectives, policies
and restrictions of any Portfolio(s) under the management of that Adviser.
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o Reviewing and reporting to the Board on the performance of each Adviser.
o Furnishing, or causing the appropriate Adviser(s) to furnish, to the Trust
such statistical information, with respect to the investments that a Portfolio
may hold or contemplate purchasing, as the Trust may reasonably request.
o Apprising, or causing the appropriate Adviser(s) to apprise, the Trust of
important developments materially affecting each Portfolio.
o Furnishing, or causing the appropriate Adviser(s) to furnish, to the Board
such periodic and special reports as the Board may reasonably request.
o Causing the appropriate Adviser(s) to furnish to third-party data reporting
services all currently available standardized performance information and other
customary data.
Under the Current Management Agreement, the Manager also is required to furnish
to the Trust, at its own expense and without remuneration from or other cost to
the Trust, the following:
o Office space, all necessary office facilities and equipment.
o Necessary executive and other personnel, including personnel for the
performance of clerical and other office functions, other than those functions:
o related to and to be performed under the Trust's contract or contracts for
administration, custodial, accounting, bookkeeping, transfer and dividend
disbursing agency or similar services by the entity selected to perform such
services; or
o related to the investment advisory services to be provided by any Adviser
pursuant to an advisory agreement with the Trust ("Advisory Agreement").
o Information and services, other than services of outside counsel or
independent accountants or investment advisory services to be provided by any
Adviser under an Advisory Agreement, required in connection with the preparation
of all registration statements, prospectuses and statements of additional
information, any supplements thereto, annual, semi-annual, and periodic reports
to Trust Shareholders, regulatory authorities, or others, and all notices and
proxy solicitation materials, furnished to Shareholders or regulatory
authorities, and all tax returns.
The Current Management Agreement also requires the Manager (or its
affiliates) to pay all salaries, expenses, and fees of the Trustees and officers
of the Trust who are affiliated with the Manager or its affiliates .
The Current Management Agreement requires the Trust to pay all expenses
of its organization, operations, and business not specifically assumed or agreed
to be paid by the Manager under the Current Management Agreement, or by an
Adviser, as provided in an Advisory Agreement. Such expenses may include,
without limitation: the fees and expenses of its independent accountants and of
its legal counsel; the costs of printing and mailing annual and semi-annual
reports to Contractowners, proxy statements, prospectuses, prospectus
supplements
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and statements of additional information, all to the extent they are sent to
existing Contractowners; the costs of printing registration statements; bank
transaction charges and custodian's fees; any proxy solicitors' fees and
expenses; filing fees; any federal, state or local income or other taxes; any
interest; any membership fees of the Investment Company Institute and similar
organizations; fidelity bond and Trustees' liability insurance premiums; and any
extraordinary expenses, such as indemnification payments or damages awarded in
litigation or settlements made. In addition, the Class IB shares of each
Portfolio may pay for certain distribution-related expenses in connection with
activities primarily intended to result in the sale of its shares. All general
Trust expenses are allocated among and charged to the assets of the Portfolios
on a basis that the Board deems fair and equitable, which may be on the basis of
relative net assets of each Portfolio or the nature of the services performed
and relative applicability to each Portfolio.
The continuance of the Current Management Agreement, with respect to
each Portfolio, after the first two years must be specifically approved at least
annually (i) by the Board or by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of such Portfolio and (ii) by the
affirmative vote of a majority of the Trustees who are not parties to the
Management Agreement or "interested persons" (as defined in the 1940 Act) of any
such party by votes cast in person at a meeting called for such purpose. The
Current Management Agreement with respect to each Portfolio may be terminated
(i) at any time, without the payment of any penalty, by the Trust upon the vote
of a majority of the Trustees or by vote of the majority of the outstanding
voting securities (as defined in the 1940 Act) of such Portfolio upon sixty (60)
days' written notice to the Manager or (ii) by the Manager at any time without
penalty upon sixty (60) days' written notice to the Trust. The Current
Management Agreement will also terminate automatically in the event of its
assignment (as defined in the 1940 Act). All of the provisions discussed above
with respect to the Current Management Agreement are identical, in all material
respects to those in the proposed New Management Agreement.
OTHER AGREEMENTS BETWEEN EQUITABLE AND THE TRUST
EXPENSE LIMITATION AGREEMENT
In the interest of limiting expenses of each Portfolio (except for the
former Hudson River Trust Portfolios), 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 (as specified in
the table below). Pursuant to that current Expense Limitation Agreement, the
Manager has agreed to waive its fees and to assume other expenses so that the
total annual operating expenses of each specified Portfolio (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), do not exceed the respective expense ratios set forth in the
table below.
Equitable and the Board, including the Independent Trustees, have
unanimously approved an amendment to the current voluntary Expense Limitation
Agreement, which will take effect on
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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 and (ii) change the limit on total annual operating expenses that will
be waived or assumed by the Manager for each specified Portfolio (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 set forth in the table below.
Management is not required to seek Shareholder approval of the
amendment to the Expense Limitation Agreement and is not seeking Shareholder
approval of the amendment to that agreement in this Proxy Statement.
EXPENSE LIMITATION PROVISIONS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
LIMITATION ON AMOUNT OF LIMITATION ON AMOUNT OF TOTAL
TOTAL ANNUAL CLASS IA ANNUAL OPERATING EXPENSES
OPERATING EXPENSES THROUGH EFFECTIVE
APRIL 30, 2000 MAY 1, 2000
(% OF DAILY NET ASSETS) (% OF DAILY NET ASSETS)
PORTFOLIOS (ANNUALIZED) (ANNUALIZED)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
BT Equity 500 Index 0.30% 0.35%
- -----------------------------------------------------------------------------------------------------------
BT International Equity Index 0.75% 0.75%
- -----------------------------------------------------------------------------------------------------------
BT Small Company Index 0.50% 0.50%
- -----------------------------------------------------------------------------------------------------------
Calvert Socially Responsible 0.80% 0.80%
- -----------------------------------------------------------------------------------------------------------
Capital Guardian International 0.95% 0.95%
- -----------------------------------------------------------------------------------------------------------
Capital Guardian Research 0.70% 0.70%
- -----------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity 0.70% 0.70%
- -----------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.90% 0.90%
- -----------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation 0.70% 0.70%
- -----------------------------------------------------------------------------------------------------------
EQ/Evergreen Portfolio 0.80% 0.70%
- -----------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced 0.65% 0.65%
- -----------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value 0.60% 0.70%
- -----------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity 0.95% 1.00%
- -----------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth 0.70% 0.70%
- -----------------------------------------------------------------------------------------------------------
JPM Core Bond 0.55% 0.55%
- -----------------------------------------------------------------------------------------------------------
Lazard Large Cap Value 0.70% 0.70%
- -----------------------------------------------------------------------------------------------------------
Lazard Small Cap Value 0.95% 0.85%
- -----------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity 0.60% 0.70%
- -----------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy 0.95% 0.95%
- -----------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 0.60% 0.75%
- -----------------------------------------------------------------------------------------------------------
MFS Growth with Income 0.60% 0.70%
- -----------------------------------------------------------------------------------------------------------
MFS Research 0.60% 0.70%
- -----------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity 1.50% 1.50%
- -----------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income 0.60% 0.70%
- -----------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock 0.95% 1.00%
- -----------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value 0.75% 0.85%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Each Portfolio may at a later date, as described below, reimburse the
Manager for the management fees waived and other expenses assumed and paid by
the Manager pursuant to the
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Expense Limitation Agreement. Any reimbursement with respect to a Portfolio will
occur only if that Portfolio has reached a sufficient asset size to permit such
reimbursement to be made without causing the total annual expense ratio of each
Portfolio to exceed the percentage limits stated above. Consequently, no
reimbursement by a Portfolio will be made unless: (i) the Portfolio's assets
exceed $100 million; (ii) the Portfolio's total annual expense ratio is less
than the respective current percentages (through April 30, 2000) and new
percentages (beginning May 1, 2000) disclosed in the chart above; and (iii) the
payment of such reimbursement to the Manager has been approved by the Board on a
quarterly basis. To date, no such reimbursement to the Manager has been made by
any Portfolio.
The total amount of reimbursement to which the Manager may be entitled
will equal, at any time, the sum of (i) all investment management fees
previously waived or reduced by the Manager and (ii) all other payments
previously remitted by the Manager to the Portfolio in accordance with the
Expense Limitation Agreement, during any of the previous five (5) fiscal years
(or three (3) fiscal years for certain Portfolios), less any reimbursement that
the Portfolio has previously paid to the Manager with respect to (i) such
investment management fees previously waived or reduced and (ii) such other
payments previously remitted by the Manager to the Portfolio.
DISTRIBUTION AGREEMENTS
The Trust has distribution agreements with AXA Advisors and EDI (each
also referred to as a "Distributor," and together "Distributors"), each of which
is an indirect wholly-owned subsidiary of Equitable. The address for both AXA
Advisors and EDI is 1290 Avenue of the Americas, New York, New York 10104. AXA
Advisors and EDI each serve as a Distributor for the Trust's Class IA shares and
Class IB shares.
Pursuant to the Class IB Distribution Plan, the Trust compensates the
Distributors from assets attributable to the Class IB shares for services
rendered and expenses borne in connection with activities primarily intended to
result in the sale of the Trust's Class IB shares. A portion of the amounts
received by the Distributors may be used to defray various costs incurred or
paid by the Distributors in connection with the printing and mailing of Trust
prospectuses, statements of additional information, and any supplements thereto
and reports to Shareholders, and holding seminars and sales meetings with
wholesale and retail sales personnel designed to promote the distribution of
Class IB shares. The Distributors may also use a portion of the amounts received
to provide compensation to financial intermediaries and third-party
broker-dealers for their services in connection with the distribution of Class
IB shares. Amounts paid by each Portfolio's Class IB shares to each of the
Distributors for the period ended December 31, 1999 are set forth in Appendix E.
FUND ADMINISTRATION AGREEMENT
Effective May 1, 2000, Equitable will serve as the Administrator to the
Trust. As Administrator, Equitable will provide the Trust with necessary
administrative, fund accounting and compliance services, and will make available
the office space, equipment, personnel and facilities required to provide such
services to the Trust.
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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. (Management is not required
to seek Shareholder approval of Equitable's selection as Administrator of the
Trust and is not seeking Shareholder approval of such selection in this Proxy
Statement.)
ADDITIONAL INFORMATION ABOUT EQUITABLE. Additional information about
Equitable is set forth in Appendix B to this Proxy Statement.
BOARD APPROVAL OF NEW MANAGEMENT AGREEMENT. At the January 28, 2000
meeting of the Board, the New Management Agreement was unanimously approved by
the Board, including all of the Trustees who are not parties to the New
Management Agreement or "interested persons" (as defined in the 1940 Act) of any
such party (other than as Trustees of the Trust). The New Management Agreement,
as approved by the Board, is submitted for approval by the Shareholders of the
Portfolios.
REQUIRED VOTE. Approval of this Proposal 3 with respect to each
Portfolio will require the affirmative vote of a "majority of the outstanding
voting securities" of the applicable Portfolio, which means the affirmative vote
of the lesser of (i) more than 50% of the outstanding shares of the Portfolio,
or (ii) 67% or more of the shares of the Portfolio present at the Special
Meeting if more than 50% of the Portfolio's outstanding shares are present at
the Special Meeting in person or by proxy. Abstentions will have the effect of a
vote against this Proposal 3. If the Shareholders of any Portfolio do not
approve the New Management Agreement, the Current Management Agreement will
remain in effect with respect to that particular Portfolio. In such event, the
Board will take such further action as it deems to be in the best interests of
the Shareholders of that Portfolio.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" APPROVAL OF THE NEW INVESTMENT MANAGEMENT AGREEMENT AS
PROVIDED UNDER PROPOSAL 3. IF EXECUTED BUT UNMARKED VOTING INSTRUCTIONS ARE
RECEIVED, SHAREHOLDERS WILL VOTE THOSE UNMARKED VOTING INSTRUCTIONS IN FAVOR OF
PROPOSAL 3.
PROPOSALS 4(A) AND 4(B)
APPROVAL OF CHANGES TO CERTAIN
FUNDAMENTAL INVESTMENT POLICIES WITH RESPECT
TO INVESTMENTS IN OTHER INVESTMENT COMPANIES
The 1940 Act requires an investment company to adopt certain investment
policies that can be changed only by a shareholder vote. These policies are
often referred to as "fundamental"
25
<PAGE>
policies. Under the first of the Portfolios' current fundamental policies listed
below ("Fundamental Policy 4(a)"), each Portfolio (except the Morgan Stanley
Emerging Markets Equity, Merrill Lynch World Strategy and Lazard Small Cap Value
Portfolios (collectively, "non-diversified Portfolios")), is permitted, with
respect to 75% of total assets, to invest more than 5% of the value of the
Portfolio's total assets in securities of a single issuer only if such
securities are issued or guaranteed by the U.S. government, its agencies or
instrumentalities ("Permitted Securities"). Under the second of the Portfolios'
current fundamental policies listed below ("Fundamental Policy 4(b),"), each
Portfolio (except the non-diversified Portfolios), is permitted, with respect to
75% of total assets, to invest in more than 10% of the outstanding voting
securities of a single issuer, only if such securities are Permitted Securities.
Permitted Securities for the Trust's Portfolios (except the
non-diversified Portfolios) do not include securities of other investment
companies. As a result, no Portfolio (except the non-diversified Portfolios) 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."
It is proposed to revise Fundamental Policy 4(a) and Fundamental Policy
4(b) for each Portfolio (other than the non-diversified Portfolios) to permit
that Portfolio to invest more than 5% of its total assets in securities issued
by another investment company or to own more than 10% of another investment
company's outstanding voting securities. This ability to invest more than 5% of
a fund'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. 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 Fundamental Policy 4(a) and Fundamental Policy 4(b) 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 and incur the
expense of holding a Shareholders' meeting at that time.
The practice of investing primarily in other mutual funds would involve
the following considerations:
o An investor would indirectly bear the operating expenses of the underlying
funds, as well as his or her proportionate share of the funds' operating
expenses. An investor might also indirectly bear expenses paid by underlying
funds related to the distribution of such mutual funds' shares.
o One underlying fund might be buying the same securities that another
underlying fund is selling. An investor would indirectly bear the costs of
these transactions without accomplishing any overall investment purpose.
26
<PAGE>
FUNDAMENTAL POLICY 4(A)
CURRENT TEXT.
A Portfolio may not purchase a security if, as a result, with respect to 75%
of the value of its total assets, more than 5% of the value of the
Portfolio's total assets would be invested in the securities of a single
issuer, except securities issued or guaranteed by the United States
Government, its agencies or instrumentalities.
PROPOSED TEXT.
A Portfolio may not purchase a security if, as a result, with respect to 75%
of the value of its total assets, more than 5% of the value of the
Portfolio's total assets would be invested in the securities of a single
issuer, except (i) securities issued or guaranteed by the United States
Government, its agencies or instrumentalities, and (ii) securities of other
investment companies.
FUNDAMENTAL POLICY 4(B)
CURRENT TEXT.
A Portfolio may not purchase a security if, as a result, with respect to 75%
of the value of its total assets, more than 10% of the outstanding voting
securities of any issuer would be held by the Portfolio (other than
obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities).
PROPOSED TEXT.
A Portfolio may not purchase a security if, as a result, with respect to 75%
of the value of its total assets, more than 10% of the outstanding voting
securities of any issuer would be held by the Portfolio (other than (i)
obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities and (ii) securities of other investment
companies).
REQUIRED VOTE. Approval of each of the proposed fundamental policies
(Proposal 4(a) and Proposal 4(b)) with respect to a Portfolio requires a
separate affirmative vote of a "majority of the outstanding voting securities"
of the applicable Portfolio, as previously defined herein. Abstentions will have
the effect of a vote against both Proposal 4(a) and Proposal 4(b). If
Shareholders of any Portfolio do not approve the changes in either fundamental
policy specified above, that current fundamental policy will remain in effect
with respect to that particular Portfolio.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS OF EACH PORTFOLIO VOTE "FOR" EACH OF THE PROPOSED CHANGES TO
THE PORTFOLIO'S FUNDAMENTAL INVESTMENT POLICIES AS SET FORTH IN THIS PROPOSAL
4(A) AND PROPOSAL 4(B). IF EXECUTED BUT UNMARKED VOTING INSTRUCTIONS ARE
RECEIVED,
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SHAREHOLDERS WILL VOTE THOSE UNMARKED VOTING INSTRUCTIONS IN FAVOR OF
PROPOSAL 4(A) AND PROPOSAL 4(B).
28
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APPENDIX A
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
AMENDED AND RESTATED AGREEMENT ("AGREEMENT"), dated as of May 1, 2000, between
the EQ Advisors Trust, a Delaware business trust ("Trust"), and The Equitable
Life Assurance Society of the United States, a New York Stock life insurance
company ("Equitable" or "Manager").
WHEREAS, the Trust is registered as an investment company under the
Investment Company Act of 1940, as amended ("Investment Company Act");
WHEREAS, Equitable is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act");
WHEREAS, the Trust's shareholders are and will be primarily separate
accounts maintained by insurance companies for variable life insurance policies
and variable annuity contracts (the "Policies") under which income, gains, and
losses, whether or not realized, from assets allocated to such accounts are, in
accordance with the Policies, credited to or charged against such accounts
without regard to other income, gains, or losses of such insurance companies; as
well as other shareholders as permitted under Section 817(h) of the Internal
Revenue Code of 1986, as amended ("Code"), and the rules and regulations
thereunder with respect to the qualification of variable annuity contracts and
variable life insurance policies as insurance contracts under the Code.
WHEREAS, the Trust is and will continue to be a series fund having two
or more investment portfolios, each with its own investment objectives,
investment policies and restrictions;
WHEREAS, the Investment Company Act prohibits any person from acting as
an investment adviser to a registered investment company except pursuant to a
written contract; and
WHEREAS, the Board of Trustees of the Trust wishes to appoint Equitable
as the investment manager of the Trust;
NOW, THEREFORE, the Trust and Equitable hereby amend and restate this
Agreement as follows:
1. APPOINTMENT OF MANAGER
The Trust hereby appoints Equitable as the investment manager for each
of the portfolios of the Trust specified in Appendix A to this Agreement, as
such Appendix A may be amended by Manager and the Trust from time to time
("Portfolios"), subject to the supervision of the Trustees of the Trust and in
the manner and under the terms and conditions set forth in this Agreement.
Manager accepts such appointment and agrees to render the services and to assume
the obligations set forth in this Agreement commencing on its effective date.
Manager will be an
A-1
<PAGE>
independent contractor and will have no authority to act for or represent the
Trust in any way or otherwise be deemed an agent unless expressly authorized in
this Agreement or another writing by the Trust and Manager.
2. DUTIES OF THE MANAGER
A. Subject to the general supervision and control of the Trustees of
the Trust and under the terms and conditions set forth in this Agreement, the
Trust acknowledges and agrees that it is contemplated that Manager will, at its
own expense, select and contract with one or more investment advisers
("Advisers") to manage the investment operations and composition of each and
every Portfolio of the Trust and render investment advice for each Portfolio,
including the purchase, retention, and disposition of the investments,
securities and cash contained in each Portfolio, in accordance with each
Portfolio's investment objectives, policies and restrictions as stated in the
Trust's Amended and Restated Agreement and Declaration of Trust, By-Laws, and
such Portfolio's Prospectus and Statement of Additional Information ("SAI"), as
is from time to time in effect; provided, that any contract with an Adviser (an
"Advisory Agreement") shall be in compliance with and approved as required by
the Investment Company Act or in accordance with exemptive relief granted by the
Securities and Exchange Commission ("SEC") under the Investment Company Act.
B. Subject always to the direction and control of the Trustees of the
Trust, Manager will have (i) overall supervisory responsibility for the general
management and investment of each Portfolio's assets; (ii) full discretion to
select new or additional Advisers for each Portfolio; (iii) full discretion to
enter into and materially modify existing Advisory Agreements with Advisors;
(iv) full discretion to terminate and replace any Adviser; and (v) full
investment discretion to make all determinations with respect to the investment
of a Portfolio's assets not then managed by an Adviser. In connection with
Manager's responsibilities herein, Manager will assess each Portfolio's
investment focus and will seek to implement decisions with respect to the
allocation and reallocation of each Portfolio's assets among one or more current
or additional Advisers from time to time, as the Manager deems appropriate, to
enable each Portfolio to achieve its investment goals. In addition, Manager will
monitor compliance of each Adviser with the investment objectives, policies and
restrictions of any Portfolio or Portfolios (or portions of any Portfolio) under
the management of such Adviser, and review and report to the Trustees of the
Trust on the performance of each Adviser. Manager will furnish, or cause the
appropriate Adviser(s) to furnish, to the Trust such statistical information,
with respect to the investments that a Portfolio (or portions of any Portfolio)
may hold or contemplate purchasing, as the Trust may reasonably request. On
Manager's own initiative, Manager will apprise, or cause the appropriate
Adviser(s) to apprise, the Trust of important developments materially affecting
each Portfolio (or any portion of a Portfolio that they advise) and will furnish
the Trust, from time to time, with such information as may be appropriate for
this purpose. Further, Manager agrees to furnish, or cause the appropriate
Adviser(s) to furnish, to the Trustees of the Trust such periodic and special
reports as the Trustees of the Trust may reasonably request. In addition,
Manager agrees to cause the appropriate Adviser(s) to furnish to third-party
data reporting services all currently available standardized performance
information and other customary data.
A-2
<PAGE>
C. Manager will also furnish to the Trust, at its own expense and
without renumeration from or other cost to the Trust, the following:
(i) Office Space. Manager will provide office space in the offices
of the Manager or in such other place as may be reasonably agreed upon
by the parties hereto from time to time, and all necessary office
facilities and equipment;
(ii) Personnel. Manager will provide necessary executive and other
personnel, including personnel for the performance of clerical and
other office functions, exclusive of those functions: (a) related to
and to be performed under the Trust's contract or contracts for
administration, custodial, accounting, bookkeeping, transfer, and
dividend disbursing agency or similar services by any entity, including
Manager or its affiliates, selected to perform such services under such
contracts; and (b) related to the services to be provided by any
Adviser pursuant to an Advisory Agreement; and
(iii) Preparation of Prospectus and Other Documents. Manager will
provide other information and services, other than services of outside
counsel or independent accountants or services to be provided by any
Adviser under any Advisory Agreement, required in connection with the
preparation of all registration statements and Prospectuses, prospectus
supplements, SAIs, all annual, semiannual, and periodic reports to
shareholders of the Trust, regulatory authorities, or others, and all
notices and proxy solicitation materials, furnished to shareholders of
the Trust or regulatory authorities, and all tax returns.
D. Limitations on Liability. Manager will exercise its best judgment in
rendering its services to the Trust, and the Trust agrees, as an inducement to
Manager's undertaking to do so, that the Manager will not be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust in
connection with the matters to which this Agreement relates, but will be liable
only for willful misconduct, bad faith, gross negligence, reckless disregard of
its duties or its failure to exercise due care in rendering its services to the
Trust as specified in this Agreement. Any person, even though an officer,
director, employee or agent of Manager, who may be or become an officer,
Trustee, employee or agent of the Trust, shall be deemed, when rendering
services to the Trust or when acting on any business of the Trust, to be
rendering such services to or to be acting solely for the Trust and not as an
officer, director, employee or agent, or one under the control or direction of
Manager, even though paid by it.
E. Section 11 of the Securities Exchange Act of 1934, as amended. The
Trust hereby agrees that any entity or person associated with Manager that is a
member of a national securities exchange is authorized to effect any transaction
on such exchange for the account of a Portfolio to the extent and as permitted
by Section 11(a)(1)(H) of the Securities Exchange Act of 1934, as amended ("1934
Act").
F. Section 28(e) of the 1934 Act. Subject to the appropriate policies
and procedures approved by the Board of Trustees, the Manager may, to the extent
authorized by Section 28(e) of the 1934 Act, cause a Portfolio to pay a broker
or dealer that provides brokerage or research services to the Manager, the
Adviser, the Trust and the Portfolio an amount of commission for
A-3
<PAGE>
effecting a portfolio transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if the
Manager determines, in good faith, that such amount of commission is reasonable
in relationship to the value of such brokerage or research services provided in
terms of that particular transaction or the Manager's overall responsibilities
to the Portfolio, the Trust or its other investment advisory clients. To the
extent authorized by said Section 28(e) and the Board of Trustees, the Manager
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of such action. In
addition, subject to seeking the most favorable price and best execution
available and in compliance with the Conduct Rules of the National Association
of Securities Dealers, Inc., the Manager may also consider sales of shares of
the Trust as a factor in the selection of brokers and dealers.
G. Directed Brokerage. Subject to the requirement to seek best price
and execution, and to the appropriate policies and procedures approved by the
Board of Trustees, the Trust reserves the right to direct the Manager to cause
Advisers to effect transactions in portfolio securities through broker-dealers
in a manner that will help 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 pursuant to Section 3.B. of this Agreement ("Trust
Expenses"); or (ii) finance activities that are primarily intended to result in
the sale of Trust shares. At the discretion of the Board of Trustees, such
resources may be used to pay or cause the payment of Trust Expenses or may be
used to finance activities that are primarily intended to result in the sale of
Trust shares.
3. ALLOCATION OF EXPENSES
A. Expenses Paid by the Manager:
(i) Salaries, Expenses and Fees of Certain Persons. Manager (or its
affiliates) shall pay all salaries, expenses, and fees of the Trustees and
officers of the Trust who are officers, directors/trustees, partners, or
employees of Manager or its affiliates; and
(ii) Assumption of Trust Expenses. The payment or assumption by Manager
of any expense of the Trust that Manager is not required by this Agreement
to pay or assume shall not obligate Manager to pay or assume the same or any
similar expense of the Trust on any subsequent occasion.
B. Expenses Paid by the Trust: The Trust will pay all expenses of its
organization, operations, and business not specifically assumed or agreed to be
paid by Manager, as provided in this Agreement, or by an Adviser, as provided in
an Advisory Agreement. Without limiting the generality of the foregoing, the
Trust shall pay or arrange for the payment of the following:
(i) Preparing, Printing and Mailing of Certain Documents. The costs of
preparing, setting in type, printing and mailing of Prospectuses, Prospectus
supplements, SAIs, annual, semiannual and periodic reports, and notices and
proxy solicitation materials required to be furnished to shareholders of the
Trust or regulatory authorities, and all tax returns;
A-4
<PAGE>
(ii) Officers and Trustees. Compensation of the officers and Trustees
of the Trust who are not officers, directors/trustees, partners or employees
of Manager or its affiliates;
(iii) Registration Fees and Expenses. All legal and other fees and
expenses incurred in connection with the affairs of the Trust, including
those incurred with respect to registering its shares with regulatory
authorities and all fees and expenses incurred in connection with the
preparation, setting in type, printing, and filing with necessary regulatory
authorities of any registration statement and Prospectus, and any amendments
or supplements that may be made from time to time, including registration,
filing and other fees in connection with requirements of regulatory
authorities;
(iv) Custodian and Accounting Services. All expenses of the transfer,
receipt, safekeeping, servicing and accounting for the Trust's cash,
securities, and other property, including all charges of depositories,
custodians, and other agents, if any;
(v) Independent Legal and Accounting Fees and Expenses. The charges for
the services and expenses of the independent accountants and legal counsel
retained by the Trust, for itself or its Independent Trustees (as defined
herein);
(vi) Transfer Agent. The charges and expenses of maintaining
shareholder accounts, including all charges of transfer, bookkeeping, and
dividend disbursing agents appointed by the Trust;
(vii) Brokerage Commissions. All brokers' commissions and issue and
transfer taxes chargeable to the Trust in connection with securities
transactions to which the Trust is a party;
(viii) Taxes. All taxes and corporate fees payable by or with respect
to the Trust to federal, state, or other governmental agencies;
(ix) Trade Association Fees. Any membership fees, dues or expenses
incurred in connection with the Trust's membership in any trade association
or similar organizations;
(x) Bonding and Insurance. All insurance premiums for fidelity and
other coverage;
(xi) Shareholder and Board Meetings. All expenses incidental to holding
shareholders and Trustees meetings, including the printing of notices and
proxy materials and proxy solicitation fees and expenses;
(xii) Pricing. All expenses of pricing of the net asset value per share
of each Portfolio, including the cost of any equipment or services to obtain
price quotations; and
(xiii) Nonrecurring and Extraordinary Expenses. Such extraordinary
expenses, such as indemnification payments or damages awarded in litigation
or settlements made.
A-5
<PAGE>
4. COMPENSATION OF MANAGER
For its services performed hereunder, the Trust will pay Manager with
respect to each Portfolio the compensation specified in Appendix B to this
Agreement. Such compensation shall be paid to Manager by the Trust on the first
day of each month; however, the Trust will calculate this charge on the daily
average value of the assets of each Portfolio and accrue it on a daily basis.
5. NON-EXCLUSIVITY
The services of Manager to the Trust are not to be deemed to be exclusive,
and Manager shall be free to render investment management, advisory or other
services to others (including other investment companies) and to engage in other
activities so long as the services provided hereunder by Manager are not
impaired. It is understood and agreed that the directors, officers and employees
of Manager are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors/trustees, or employees of any other firm or corporation,
including other investment companies.
6. SUPPLEMENTAL ARRANGEMENTS
Manager may enter into arrangements with its parent or other persons
affiliated or unaffiliated with Manager for the provision of certain personnel
and facilities to Manager to enable Manager to fulfill its duties and
obligations under this Agreement.
7. REGULATION
Manager shall submit to all regulatory and administrative bodies having
jurisdiction over the services provided pursuant to this Agreement any
information, reports, or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
8. RECORDS
The records relating to the services provided under this Agreement shall be
the property of the Trust and shall be under its control; however, the Trust
shall furnish to Manager such records and permit it to retain such records
(either in original or in duplicate form) as it shall reasonably require in
order to carry out its duties. In the event of the termination of this
Agreement, such records shall promptly be returned to the Trust by Manager free
from any claim or retention of rights therein. Manager shall keep confidential
any information obtained in connection with its duties hereunder and disclose
such information only if the Trust has authorized such disclosure or if such
disclosure is expressly required or lawfully requested by applicable federal or
state regulatory authorities.
A-6
<PAGE>
9. DURATION OF AGREEMENT
This Agreement, as amended and restated, shall become effective for each
Portfolio on May 1, 2000, unless the requisite approval is not obtained by May
1, 2000, in which case the effective date for any such Portfolio will be the
date indicated in Appendix A. Further amendments to this Agreement shall become
effective on the later of the date specified in such amendment (after execution
by all parties) or the date of any meeting of the shareholders of the Trust
relating to such amendment, which for these purposes may be the sole initial
shareholder of the Trust, at which meeting this Agreement is approved by the
vote of a majority of the outstanding voting securities (as defined in the
Investment Company Act) of the Portfolios. The Agreement will continue in effect
for a period more than one year from the date of its execution only so long as
such continuance is specifically approved at least annually either by (i) the
Trustees of the Trust or (ii) by the vote of either a majority of the
outstanding voting securities of the Trust or, as appropriate, a majority of the
outstanding voting securities of any affected Portfolio, provided that, in
either event, such continuance shall also be approved by the vote of a majority
of the Trustees of the Trust who are not "interested persons" ("Independent
Trustees") of any party to this Agreement, cast in person at a meeting called
for the purpose of voting on such approval. The required shareholder approval of
the Agreement or of any continuance of the Agreement shall be effective with
respect to any affected Portfolio if a "majority of the outstanding voting
securities" (as defined in Rule 18f-2(h) under the Investment Company Act) of
the affected Portfolio votes to approve the Agreement or its continuance,
notwithstanding that the Agreement or its continuance may not have been approved
by a majority of the outstanding voting securities of (a) any other Portfolio
affected by the Agreement or (b) all the Portfolios of the Trust.
If the shareholders of any Portfolio fail to approve the Agreement or any
continuance of the Agreement, Manager will continue to act as investment manager
with respect to such Portfolio pending the required approval of the Agreement or
its continuance or of a new contract with Manager or a different investment
manager or other definitive action; provided, that the compensation received by
Manager in respect of such Portfolio during such period will be no more than its
actual costs incurred in furnishing investment advisory and management services
to such Portfolio or the amount it would have received under the Agreement in
respect of such Portfolio, whichever is less.
10. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees, including a majority of the Independent Trustees of
the Trust, by the vote of a majority of the outstanding voting securities of the
Trust, or with respect to any affected Portfolio, by the vote of a majority of
the outstanding voting securities of such Portfolio, on sixty (60) days' written
notice to Manager, or by Manager on sixty (60) days' written notice to the
Trust. This Agreement will automatically terminate, without payment of any
penalty, in the event of its assignment.
A-7
<PAGE>
11. PROVISION OF CERTAIN INFORMATION BY MANAGER
Manager will promptly notify the Trust in writing of the occurrence of any
of the following events:
A. Manager fails to be registered as an investment adviser under the
Advisers Act or under the laws of any jurisdiction in which Manager is required
to be registered as an investment adviser in order to perform its obligations
under this Agreement;
B. Manager is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, involving the affairs of the Trust; and/or
C. the chief executive officer or controlling stockholder of Manager or the
portfolio manager of any Portfolio changes or there is otherwise an actual
change in control or management of Manager.
12. AMENDMENTS TO THE AGREEMENT
Except to the extent permitted by the Investment Company Act or the rules or
regulations thereunder or pursuant to any exemptive relief granted by the SEC,
this Agreement may be amended by the parties only if such amendment, if
material, is specifically approved by the vote of a majority of the outstanding
voting securities of each of the Portfolios affected by the amendment (unless
such approval is not required by Section 15 of the Investment Company Act as
interpreted by the SEC or its staff) and by the vote of a majority of the
Independent Trustees of the Trust cast in person at a meeting called for the
purpose of voting on such approval. The required shareholder approval shall be
effective with respect to any Portfolio if a majority of the outstanding voting
securities of the [series of] shares of that Portfolio vote to approve the
amendment, notwithstanding that the amendment may not have been approved by a
majority of the outstanding voting securities of (a) any other Portfolio
affected by the amendment or (b) all the Portfolios of the Trust.
13. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties.
14. HEADINGS
The headings in the sections of this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
15. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or Manager
in person or by registered mail or a private mail or delivery service providing
the sender with notice of receipt. Notice shall be deemed given on the date
delivered or mailed in accordance with this section.
A-8
<PAGE>
16. FORCE MAJEURE
Manager shall not be liable for delays or errors occurring by reason of
circumstances beyond its control, including but not limited to acts of civil or
military authority, national emergencies, work stoppages, fire, flood,
catastrophe, acts of God, insurrection, war, riot, or failure of communication
or power supply. In the event of equipment breakdowns beyond its control,
Manager shall take reasonable steps to minimize service interruptions but shall
have no liability with respect thereto.
17. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, insofar as is possible, as
if such portion had never been contained herein.
18. INTERPRETATION
Nothing herein contained shall be deemed to require the Trust to take any
action contrary to its Amended and Restated Agreement and Declaration of Trust
or By-Laws, or any applicable statutory or regulatory requirements to which it
is subject or by which it is bound, or to relieve or deprive the Trustees of
their responsibility for and control of the conduct of the affairs of the Trust.
19. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware (without giving effect to its
conflict of laws principles), or any of the applicable provisions of the
Investment Company Act. To the extent that the laws of the State of Delaware, or
any of the provisions in this Agreement, conflict with applicable provisions of
the Investment Company Act, the latter shall control. Any question of
interpretation of any term or provision of this Agreement having a counterpart
in or otherwise derived from a term or provision of the Investment Company Act
shall be resolved by reference to such term or provision of the Investment
Company Act and to interpretations thereof, if any, by the United States courts
or, in the absence of any controlling decision of any such court, by rules,
regulations or orders of the SEC validly issued pursuant to the Investment
Company Act. Specifically, the terms "vote of a majority of the outstanding
voting securities," "interested persons," "assignment," and "affiliated
persons," as used herein shall have the meanings assigned to them by Section
2(a) of the Investment Company Act unless otherwise stated herein. In addition,
where the effect of a requirement of the Investment Company Act reflected in any
provision of this Agreement is relaxed by a rule, regulation or order of the
SEC, whether of special or of general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
A-9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first mentioned above.
EQ ADVISORS TRUST
By:
----------------------------------
Peter D. Noris
President and Trustee
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By:
----------------------------------
Michael Hegarty
Director, President and Chief
Operating Officer
A-10
<PAGE>
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
APPENDIX A
Portfolios
----------
Alliance Common Stock Portfolio
Alliance Conservative Investors Portfolio
Alliance Equity Index Portfolio
Alliance Global Portfolio
Alliance Growth and Income Portfolio
Alliance Growth Investors Portfolio
Alliance High Yield Portfolio
Alliance Intermediate Government Securities Portfolio
Alliance International Portfolio
Alliance Money Market Portfolio
Alliance Quality Bond Portfolio
Alliance Small Cap Growth Portfolio
BT Equity 500 Index Portfolio
BT International Equity Index Portfolio
BT Small Company Index Portfolio
Calvert Socially Responsible Portfolio
Capital Guardian International Portfolio
Capital Guardian Research Portfolio
Capital Guardian U.S. Equity Portfolio
EQ Aggressive Stock Portfolio
EQ/Alliance Premier Growth Portfolio
EQ/Balanced Portfolio
EQ/Evergreen Foundation Portfolio
EQ/Evergreen Portfolio
EQ/Putnam Balanced Portfolio
EQ/Putnam Growth & Income Value Portfolio
EQ/Putnam International Equity Portfolio
EQ/Putnam Investors Growth Portfolio
JPM Core Bond Portfolio
Lazard Large Cap Value Portfolio
Lazard Small Cap Value Portfolio
Merrill Lynch Basic Value Equity Portfolio
Merrill Lynch World Strategy Portfolio
MFS Emerging Growth Companies Portfolio
MFS Growth with Income Portfolio
MFS Research Portfolio
Morgan Stanley Emerging Markets Equity Portfolio
T. Rowe Price Equity Income Portfolio
T. Rowe Price International Stock Portfolio
Warburg Pincus Small Company Value Portfolio
Date: May 1, 2000
A-11
<PAGE>
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
APPENDIX B
The Trust shall pay the Manager, at the end of each calendar month, compensation
computed daily at an annual rate equal to the following:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS) (FEE ON ALL ASSETS)
- --------------------------------------------------------------------------------
INDEX PORTFOLIOS
- --------------------------------------------------------------------------------
<S> <C>
Alliance Equity Index 0.250%
- --------------------------------------------------------------------------------
BT Equity 500 Index 0.250%
- --------------------------------------------------------------------------------
BT International Equity Index 0.350%
- --------------------------------------------------------------------------------
BT Small Company Index 0.250%
- --------------------------------------------------------------------------------
<CAPTION>
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- ------------------------------------------------------------------------------------------------------------------------------
FIRST NEXT NEXT NEXT
$750 $750 $1 $2.5
DEBT PORTFOLIOS MILLION MILLION BILLION 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%
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- ---------------------------------------------------------------------------------------------
FIRST NEXT NEXT NEXT
$1 $1 $3 $5
EQUITY PORTFOLIOS BILLION BILLION BILLION BILLION THEREAFTER
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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 Global0.750% 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 Aggressive Stock0.650% 0.600% 0.575% 0.550% 0.525%
- ---------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth 0.900% 0.850% 0.825% 0.800% 0.775%
- ---------------------------------------------------------------------------------------------
EQ Balanced 0.600% 0.550% 0.525% 0.500% 0.475%
- ---------------------------------------------------------------------------------------------
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%
- ---------------------------------------------------------------------------------------------
</TABLE>
A-12
<PAGE>
<TABLE>
<CAPTION>
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- ---------------------------------------------------------------------------------------------
FIRST NEXT NEXT NEXT
$1 $1 $3 $5
EQUITY PORTFOLIOS BILLION BILLION BILLION BILLION THEREAFTER
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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%
- ---------------------------------------------------------------------------------------------
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 Stock 0.850% 0.800% 0.775% 0.750% 0.725%
- ---------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value 0.750% 0.700% 0.675% 0.650% 0.625%
- ---------------------------------------------------------------------------------------------
</TABLE>
Date: May 1, 2000
A-13
<PAGE>
APPENDIX B
ADDITIONAL INFORMATION
The table below provides the dates of the most recent Shareholder approval
(by the initial sole Shareholder of each Portfolio at the time the Portfolio was
established) and the most recent Board approval of the Current Management
Agreement.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
MOST RECENT INITIAL SOLE MOST RECENT BOARD APPROVAL
SHAREHOLDER APPROVAL OF THE OF THE INVESTMENT
PORTFOLIOS INVESTMENT MANAGEMENT AGREEMENT MANAGEMENT AGREEMENT
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Aggressive Stock July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance Balanced July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance Common Stock July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance Equity Index July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance Global July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance Growth And Income July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance High Yield July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance International July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance Money Market July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index December 9, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
BT International Equity Index December 9, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
BT Small Company Index December 9, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Calvert Socially Responsible July 12, 1999 July 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Capital Guardian International April 12, 1999 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Capital Guardian Research April 12, 1999 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity April 12, 1999 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth April 12, 1999 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen December 7, 1998 December 7, 1998
- -----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation December 7, 1998 December 7, 1998
- -----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced March 31, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value March 31, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity March 31, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth March 31, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
JPM Core Bond December 9, 1997 December 7, 1999
- -----------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value December 9, 1997 December 7, 1999
- -----------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value December 9, 1997 December 7, 1999
- -----------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity March 31, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy March 31, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies March 31, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
MFS Growth with Income December 7, 1998 December 7, 1998
- -----------------------------------------------------------------------------------------------------------------------
MFS Research March 31, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
B-1
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
MOST RECENT INITIAL SOLE MOST RECENT BOARD APPROVAL
SHAREHOLDER APPROVAL OF THE OF THE INVESTMENT
PORTFOLIOS INVESTMENT MANAGEMENT AGREEMENT MANAGEMENT AGREEMENT
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Morgan Stanley Emerging Markets Equity March 31, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income March 31, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock March 31, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value March 31, 1997 April 12, 1999
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Equitable is a wholly-owned subsidiary of AXA Financial, Inc., a subsidiary
of AXA, a French insurance holding company.
Equitable's Board of Directors consists of the following individuals:
- --------------------------------------------------------------------------------
Francoise Colloc'h Henri de Castries
Senior Executive VP Senior Executive Vice President
AXA AXA
23, Avenue Matignon 23, Avenue Matignon
75008 Paris, France 75008 Paris, France
- --------------------------------------------------------------------------------
Joseph L. Dionne Denis Duverne
Retired Chairman of the Board Senior Vice President
McGraw Hill Companies AXA
198 North Wilton Road 23, Avenue Matignon
New Canaan, CT 06840 75008 Paris, France
- --------------------------------------------------------------------------------
Dr. Norman C. Francis Jean-Rene Fourtou
President Vice President, Director Generale
Xavier University of Louisiana Aventis
7325 Palmetto Street 25 Quai Paul Doumer
New Orleans, Louisiana 70125 92408 Courbevoie Cedex
France
- --------------------------------------------------------------------------------
Donald J Greene John T. Hartley
Of Counsel Retired Chairman and CEO
LeBoeuf, Lamb, Greene & MacRae Harris Corporation
125 West 55th Street, 14th Floor 1025 NASA Boulevard
New York, New York 10019 Melbourne, Florida 32919
- --------------------------------------------------------------------------------
John H. F. Haskell
Senior Advisor Michael Hegarty
Warburg Dillon Read LLC President and Chief Operating Officer
299 Park Avenue, 40th Floor 1290 Avenue of the Americas
New York, New York 10171 New York, New York, 10104
- --------------------------------------------------------------------------------
Nina Henderson W. Edwin Jarmain
Vice President President
Bestfoods Jarmain Group, Inc.
International Plaza Suite 2525, Box 36
700 Sylvan Avenue 121 King Street West
Englewood Cliffs, NJ Toronto, Ontario M5H3T9 Canada
- --------------------------------------------------------------------------------
George T. Lowy Edward D. Miller
Partner Chairman and Chief Executive Officer
Cravath, Swaine & Moore 1290 Avenue of the Americas
825 Eighth Avenue 43 Floor New York, New York, 10104
- --------------------------------------------------------------------------------
B-2
<PAGE>
- --------------------------------------------------------------------------------
New York, New York 10019
- --------------------------------------------------------------------------------
Didier Pineau-Valencienne George J. Sella, Jr.
Vice Chairman Retired Chairman and CEO
Credit Suisse First Boston American Cyanamid Company
64, rue de Miromesnil P.O. Box 397
75008 Paris, France Newton, NJ 07860
- --------------------------------------------------------------------------------
Peter J. Tobin Stanley B. Tulin
Dean St. John's University Vice Chairman of the Board
8000 Utopia Parkway and Chief Financial Officer
Jamaica, New York 11439 1290 Avenue of the Americas
New York, New York 10104
- --------------------------------------------------------------------------------
Dave H. Williams
Chairman
Alliance Capital Management Corporation
1345 Avenue of the Americas 39th Floor
New York, New York 10105
- --------------------------------------------------------------------------------
AGGREGATE COMMISSIONS PAID TO AFFILIATED BROKERS
Equitable and its indirect corporate parent, AXA Financial, Inc.,
currently own approximately 72% of Donaldson, Lufkin & Jenrette, Inc. ("DLJ").
As a result, DLJ is considered to be an affiliate of Equitable under the 1940
Act. A DLJ subsidiary, Donaldson, Lufkin & Jenrette Securities Corporation, is
one of the nation's largest investment banking and securities firms. Another DLJ
subsidiary, Autranet, Inc., is a securities broker that markets independently
originated research to institutions. Through the Pershing Division of Donaldson,
Lufkin & Jenrette Securities Corporation, DLJ supplies security execution and
clearance services to financial intermediaries including broker-dealers and
banks. To the extent permitted by law, the Trust may engage in securities and
other transactions with those entities or may invest in shares of the investment
companies with which those entities have affiliations.
T. Rowe Price Associates, Inc. and Rowe Price-Fleming International,
Inc. ("Fleming"), the Advisers to the T. Rowe Price International Stock and T.
Rowe Price Equity Income Portfolios, may execute portfolio transactions through
certain affiliates of Fleming and Jardine Fleming, which are persons indirectly
related to the Advisers, acting as agent in accordance with procedures
established by the Trust's Board of Trustees. Merrill Lynch Asset Management,
L.P. ("MLAM"), the Adviser to the Merrill Lynch World Strategy and Merrill Lynch
Basic Value Equity Portfolios, may execute portfolio transactions through
certain affiliates of MLAM. Morgan Stanley Asset Management ("MSAM"), the
Adviser to the Morgan Stanley Emerging Markets Equity Portfolio, may execute
portfolio transactions through certain affiliates of MSAM. Lazard Asset
Management ("LAM"), the Adviser to the Lazard Large Cap Value and Lazard Small
Cap Value Portfolios, may execute portfolio transactions through certain
affiliates of LAM. J.P. Morgan Investment Management, Inc. ("J.P. Morgan"), the
Adviser to the JPM Core Bond Portfolio, may execute portfolio transactions
through certain affiliates of J.P. Morgan. Massachusetts Financial Services
Company ("MFS"), the Adviser to the MFS Emerging Growth Companies, MFS Growth
with Income and MFS Research Portfolios, may execute portfolio transactions
through certain affiliates of MFS, including MFS Fund Distributors, Inc. Putnam
Investment Management, Inc. ("Putnam"), the Adviser to the EQ/Putnam Balanced,
EQ/Putnam Growth & Income, EQ/Putnam International Equity, and EQ/Putnam
Investors Growth
B-3
<PAGE>
Portfolios, does not have an affiliated broker through which it would execute
portfolio transactions. Bankers Trust Company ("Bankers Trust"), the Adviser to
BT Small Company Index Portfolio, BT International Equity Index Portfolio and BT
Equity 500 Index Portfolio, may execute portfolio transactions through certain
affiliates of Bankers Trust. Evergreen Asset Management Corp. ("Evergreen"), the
Adviser to the EQ/Evergreen Foundation Portfolio and EQ/Evergreen Portfolio, may
execute portfolio transactions through certain affiliates of Evergreen and First
Union National Bank, including Lieber & Company. Alliance Capital Management,
L.P. ("Alliance"), the Adviser to the EQ/Alliance Premier Growth Portfolio,
Alliance Aggressive Stock Portfolio, Alliance Balanced Portfolio, Alliance
Common Stock Portfolio, Alliance Conservative Investors Portfolio, Alliance
Equity Index Portfolio, Alliance Global Portfolio, Alliance Growth and Income
Portfolio, Alliance Growth Investors Portfolio, Alliance High Yield Portfolio,
Alliance Intermediate Government Securities Portfolio, Alliance International
Portfolio, Alliance Money Market Portfolio, Alliance Quality Bond Portfolio,
Alliance Small Cap Growth Portfolio, may execute portfolio transactions with
certain affiliates of Alliance, including DLJ and the Pershing Division of
Donaldson, Lufkin & Jenrette Securities Corporation. Capital Guardian Trust
Company ("Capital Guardian"), the Adviser to the Capital Guardian Research
Portfolio, the Capital Guardian U.S. Equity Portfolio and the Capital Guardian
International Portfolio, does not have an affiliated broker through which it
would execute portfolio transactions. Calvert Asset Management Company, Inc.
("Calvert"), an Adviser to the Calvert Socially Responsible Portfolio, may
execute portfolio transactions through certain affiliates of Calvert, including
Ameritas Investment Corporation and The Advisors Group. Brown Capital
Management, Inc. ("Brown"), an Adviser to the Calvert Socially Responsible
Portfolio, does not have an affiliated broker through which it would execute
portfolio transactions.
To the extent permitted by law, the Trust may engage in brokerage
transactions with brokers that are affiliates of the Manager and Advisers, with
brokers who are affiliates of such brokers, or with unaffiliated brokers who
trade or clear through affiliates of the Manager and Advisers. The 1940 Act
generally prohibits the Trust from engaging in principal securities transactions
with brokers that are affiliates of the Manager and Advisers or affiliates of
such brokers, unless pursuant to an exemptive order from the SEC. The Trust may
apply for such exemptive relief. The Trust has adopted procedures, prescribed by
the 1940 Act, which are reasonably designed to provide that any commissions or
other remuneration it pays to brokers that are affiliates of the Manager and
brokers that are affiliates of an Adviser to a Portfolio for which that Adviser
provides investment advice do not exceed the usual and customary broker's
commission. In addition, the Trust will adhere to the requirements under the
1934 Act governing floor trading. Also, because of securities law limitations,
the Trust will limit purchases of securities in a public offering, if such
securities are underwritten by brokers that are affiliates of the Manager and
Advisers or their affiliates.
During the year ended December 31, 1999, the following Portfolios paid
the amounts indicated to the affiliated broker-dealers of the Manager or
affiliates of the Advisers to each Portfolio.
B-4
<PAGE>
<TABLE>
<CAPTION>
CALENDAR YEAR ENDED DECEMBER 31, 1999
PERCENTAGE OF
AGGREGATE PERCENTAGE OF TRANSACTIONS
AFFILIATED BROKERAGE TOTAL BROKERAGE (BASED ON
PORTFOLIO BROKER_DEALER COMMISSIONS PAID COMMISSIONS DOLLAR AMOUNTS)
<S> <C> <C> <C> <C>
Merrill Lynch Basic Value Equity Portfolio Donaldson, Lufkin & Jenrette $19,906 3.15% .54%
Securities Corporation ("DLJ")
Merrill Lynch and Co. $21,572 3.41% .93%
Merrill Lynch World Strategy Portfolio DLJ $386 .67% .17%
Merrill Lynch and Co. $4,852 8.41% 1.65%
Morgan Stanley Emerging Markets Morgan Stanley & Co. $11,109 1.30% .90%
Equity Portfolio DLJ $6,812 .80% .76%
T. Rowe Price Equity Income Portfolio DLJ $6,751 3.34% 1.12%
T. Rowe Price International Stock Portfolio Jardine Fleming Securities Ltd. $1,972 1.13% 1.77%
Robert Fleming Co. $3,022 1.73% 1.17%
DLJ $1,132 .65% .77%
EQ Putnam Growth & Income DLJ $920 .10% 0.05%
EQ Putnam Balanced DLJ $1,145 .86% .25%
Evergreen Foundation Lieber & Company $12,510 37.05% 50.02%
DLJ $13 0.04% 0.07%
Evergreen Portfolio Lieber & Company $11,855 91.31% 47.75%
DLJ $8 0.06% 0.06%
Capital Guardian International DLJ $99 0.14% 0.13%
Alliance Global DLJ $3,460 0.06% 0.01%
Alliance International DLJ $1,086 0.06% 0.02%
</TABLE>
<PAGE>
APPENDIX C
COMPARISON OF INVESTMENT MANAGEMENT FEES PAYABLE UNDER THE CURRENT
MANAGEMENT AGREEMENT AND NEW MANAGEMENT AGREEMENT AND OVERALL PORTFOLIO EXPENSES
UNDER CURRENT AND PROPOSED FEE STRUCTURES.
The following two tables set forth the investment management fees payable to
Equitable from each Portfolio under the Current Management Agreement and under
the New Management 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 the management fee increase approved by shareholders
for EQ/Putnam Balanced, EQ/Putnam Growth & Income, Lazard Cap Value, T. Rowe
Price International Stock, and Warburg Pincus Small Company Value Portfolios, as
described above.
TABLE 1-A
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
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%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
FEE UNDER CURRENT 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 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% 0.450% 0.450% 0.450% 0.450%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
FEE UNDER CURRENT MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock 0.625% 0.575% 0.525% 0.500% 0.475%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Alliance 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%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
</TABLE>
C-1
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
FEE UNDER CURRENT MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
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%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Putnam Balanced 0.550% 0.550% 0.550% 0.550% 0.550%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
EQ/Putnam Growth & Income Value
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
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
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
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
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
T. Rowe Price Equity Income 0.550% 0.550% 0.550% 0.550% 0.550%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
T. Rowe Price International Stock 0.750% 0.750% 0.750% 0.750% 0.750%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Warburg Pincus Small Company Value
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
</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.
C-2
<PAGE>
TABLE 1-B
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
FEE UNDER NEW MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS) (FEE ON ALL ASSETS)
- ------------------------------------------------------------------------------------------------------------------------------
INDEX PORTFOLIOS
- --------------------------------------- --------------------------------------------------------------------------------------
<S> <C>
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 CURRENT 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
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
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>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
FEE UNDER CURRENT MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS $1 BILLION $1 BILLION $3 BILLION $5 BILLION THEREAFTER
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock 0.650% 0.600% 0.575% 0.550% 0.525%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Alliance 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
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
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%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
</TABLE>
C-3
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
FEE UNDER CURRENT MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS $1 BILLION $1 BILLION $3 BILLION $5 BILLION THEREAFTER
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
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%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
MFS Emerging Growth Companies
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
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
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
T. Rowe Price Equity Income 0.600% 0.550% 0.525% 0.500% 0.475%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
T. Rowe Price International Stock 0.850% 0.800% 0.775% 0.750% 0.725%
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
Warburg Pincus Small Company Value
- --------------------------------------- ------------------ ----------------- --------------- ---------------- ----------------
</TABLE>
C-4
<PAGE>
TABLE 2-A
ANNUAL FEES AND EXPENSES INCURRED UNDER CURRENT MANAGEMENT
AGREEMENT (BEFORE GIVING EFFECT TO ANY WAIVERS AND
REIMBURSEMENTS UNDER EXPENSE LIMITATION AGREEMENTS)
AND PRO FORMA ANNUAL FEES AND EXPENSES THAT WOULD BE
INCURRED UNDER PROPOSED NEW MANAGEMENT AGREEMENT
(BEFORE GIVING EFFECT TO WAIVERS AND REIMBURSEMENTS
UNDER EXPENSE LIMITATION AGREEMENTS)
(CALENDAR YEAR ENDED DECEMBER 31, 1999)
The table below shows (i) the annualized level of all fees and expenses
incurred by each Portfolio under the current investment management fee schedule
during the year ended December 31, 1999 (before giving effect to any Expense
Limitation Agreement), (ii) the annualized level of all fees and expenses that
would have been incurred by each Portfolio under the proposed investment
management fee schedule during the year ended December 31, 1999 (before giving
effect to any Expense Limitation Agreement), and (iii) the dollar difference
between the two (if any) and the percentage difference, if any.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Difference
Between % Difference
Current And Between Current
Current Pro Forma Pro Forma and Pro Forma
Aggregate Aggregate Fees Aggregate Fees Aggregate Fees and
Portfolio Fees and Expenses and Expenses and Expenses Expenses
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock* $24,568,114 $27,397,187 $2,829,073 11.5%
- --------------------------------------------------------------------------------------------------------------------
Alliance Balanced* $8,799,076 $12,202,107 $3,403,031 38.7%
- --------------------------------------------------------------------------------------------------------------------
Alliance Common Stock* $57,766,318 $73,601,694 $15,835,376 27.4%
- --------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors* $2,396,037 $2,974,882 $578,845 24.1%
- --------------------------------------------------------------------------------------------------------------------
Alliance Equity Index* $7,252,788 $6,429,421 $(823,367) (11.3)%
- --------------------------------------------------------------------------------------------------------------------
Alliance Global* $11,256,323 $13,049,643 $1,793,320 15.9%
- --------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income* $7,493,353 $8,258,010 $764,657 10.2%
- --------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors* $12,571,375 $14,312,288 $1,740,913 13.8%
- --------------------------------------------------------------------------------------------------------------------
Alliance High Yield* $4,312,030 $4,361,459 $49,429 1.1%
- --------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government $1,217,676 $1,230,921 $13,245 1.1%
Securities*
- --------------------------------------------------------------------------------------------------------------------
Alliance International* $2,497,267 $2,405,242 $(92,025) (3.7)%
- --------------------------------------------------------------------------------------------------------------------
Alliance Money Market* $5,475,540 $5,588,423 $112,883 2.1%
- --------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond* $1,901,101 $1,903,469 $2,368 0.1%
- --------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth* $3,150,840 $2,719,565 $(431,275) (13.7)%
- --------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index $2,877,643 $2,932,465 $54,822 1.9%
- --------------------------------------------------------------------------------------------------------------------
BT International Equity Index $707,737 $713,647 $5,910 0.8%
- --------------------------------------------------------------------------------------------------------------------
BT Small Company Index $504,895 $507,052 $2,157 0.4%
- --------------------------------------------------------------------------------------------------------------------
Calvert Socially Responsible $118,478 $118,700 $222 0.2%
- --------------------------------------------------------------------------------------------------------------------
Capital Guardian International $365,113 $389,454 $24,341 6.7%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
C-5
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Difference
Between % Difference
Current And Between Current
Current Pro Forma Pro Forma and Pro Forma
Aggregate Aggregate Fees Aggregate Fees Aggregate Fees and
Portfolio Fees and Expenses and Expenses and Expenses Expenses
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Guardian Research $275,158 $277,371 $2,213 0.8%
- --------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity $332,667 $334,880 $2,213 0.6%
- --------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth $2,162,877 $2,178,931 $16,054 0.7%
- --------------------------------------------------------------------------------------------------------------------
EQ/Evergreen $75,681 $73,317 $(2,364) (3.1)%
- --------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation $87,110 $86,122 $(988) (1.1)%
- --------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced $1,025,583 $1,081,313 $55,730 5.4%
- --------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value $5,131,640 $5,427,184 $295,544 5.8%
- --------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity $2,436,901 $2,749,918 $313,017 12.8%
- --------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth $2,610,749 $2,914,643 $304,169 11.7%
- --------------------------------------------------------------------------------------------------------------------
JPM Core Bond $1,171,364 $1,178,421 $7,057 0.6%
- --------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value $1,051,775 $1,168,201 $116,426 11.1%
- --------------------------------------------------------------------------------------------------------------------
Lazard Small Cap $781,063 $757,619 $(23,444) (3.0)%
- --------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity $2,258,911 $2,394,818 $135,907 6.0%
- --------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy $429,618 $431,368 $1,750 0.4%
- --------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $8,118,150 $9,054,233 $936,083 11.5%
- --------------------------------------------------------------------------------------------------------------------
MFS Growth with Income $490,973 $517,858 $26,885 5.5%
- --------------------------------------------------------------------------------------------------------------------
MFS Research $5,045,581 $5,629,556 $583,975 11.6%
- --------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets $1,996,882 $2,007,383 $10,501 0.5%
Equity
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income $2,700,810 $2,867,379 $166,569 6.2%
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock $2,040,591 $2,217,733 $177,142 8.7%
- --------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value $1,695,804 $1,854,591 $158,787 9.4%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------
* Also reflects fees paid to the prior investment manager, Alliance, during
1999.
C-6
<PAGE>
TABLE 2-B
ANNUAL FEES AND EXPENSES PAID UNDER CURRENT MANAGEMENT
AGREEMENT (AFTER GIVING EFFECT TO WAIVERS AND
REIMBURSEMENTS UNDER EXPENSE LIMITATION AGREEMENTS)
AND PRO FORMA ANNUAL FEES AND EXPENSES THAT WOULD
HAVE BEEN PAID UNDER PROPOSED NEW MANAGEMENT AGREEMENT
(AFTER GIVING EFFECT TO WAIVERS AND REIMBURSEMENTS
UNDER EXPENSE LIMITATION AGREEMENTS)
(CALENDAR YEAR ENDED DECEMBER 31, 1999)
The table below shows (i) the annualized level of all fees and expenses
paid by each Portfolio under the current investment management fee schedule
during the year ended December 31, 1999 (after giving effect to any current
Expense Limitation Agreement), (ii) the annualized level of all fees and
expenses that would have been incurred by each Portfolio under the proposed
investment management fee schedule during the year ended December 31, 1999
(after giving effect to any proposed Expense Limitation Agreement), and (iii)
the dollar difference between the two (if any), and the percentage difference,
if any.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Difference
Between % Difference
Current And Between Current
Current Pro Forma Pro Forma and Pro Forma
Aggregate Aggregate Fees Aggregate Fees Aggregate Fees and
Portfolio Fees and Expenses and Expenses and Expenses Expenses
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $24,568.114 $27,397,187 $2,829,073 11.5%
- --------------------------------------------------------------------------------------------------------------------
Alliance Balanced $8,799,076 $12.202,107 $3,403,031 38.7%
- --------------------------------------------------------------------------------------------------------------------
Alliance Common Stock $57,766,318 $73,301,694 $15,835,376 27.4%
- --------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors $2,396,037 $2,974,882 $578,845 24.1%
- --------------------------------------------------------------------------------------------------------------------
Alliance Equity Index $7,252,788 $6,429,421 $(823,367) (11.3)%
- --------------------------------------------------------------------------------------------------------------------
Alliance Global $11,256,323 $13,049,643 $1,793,320 15.9%
- --------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income $7,493,353 $8,258,010 $764,657 10.2%
- --------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors $12,571,375 $14,312,288 $1,740,913 13.8%
- --------------------------------------------------------------------------------------------------------------------
Alliance High Yield $4,312,030 $4.361,459 $49,429 1.1%
- --------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government $1,217,676 $1,230,921 $13,245 1.1%
Securities
- --------------------------------------------------------------------------------------------------------------------
Alliance International $2,497,267 $2,405,242 $(92,025) (3.7)%
- --------------------------------------------------------------------------------------------------------------------
Alliance Money Market $5,475,540 $5,588,423 $112,883 2.1%
- --------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond $1,901,101 $1,903,469 $2,368 0.1%
- --------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth $3,150,840 $2,719,565 $(431,275) (13.7)%
- --------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index $2,370,951 $2,589,384 $218,433 9.2%
- --------------------------------------------------------------------------------------------------------------------
BT International Equity Index (1) $624,122 $656,128 $32,006 5.1%
- --------------------------------------------------------------------------------------------------------------------
BT Small Company Index (2) $297,589 $314,419 $16,830 5.7%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
C-7
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Difference
Between % Difference
Current And Between Current
Current Pro Forma Pro Forma and Pro Forma
Aggregate Aggregate Fees Aggregate Fees Aggregate Fees and
Portfolio Fees and Expenses and Expenses and Expenses Expenses
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Calvert Socially Responsible $23,296 $23,296 $0 0%
- --------------------------------------------------------------------------------------------------------------------
Capital Guardian International $265,536 $265,536 $0 0%
- --------------------------------------------------------------------------------------------------------------------
Capital Guardian Research $172,533 $172,533 $0 0%
- --------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity $298,628 $298,628 $0 0%
- --------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth $1,809,700 $1,809,700 $0 0%
- --------------------------------------------------------------------------------------------------------------------
EQ/Evergreen $27,817 $25,146 $(2,671) (9.6)%
- --------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation $42,618 $42,618 $0 0%
- --------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced $862,036 $862,036 $0 0%
- --------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value $4,569,220 $5,104,747 $535,527 11.7%
- --------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity $2,322,871 $2,421,789 $98,918 4.3%
- --------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth (3) $2,470,062 $2,541,137 $71,075 3.1%
- --------------------------------------------------------------------------------------------------------------------
JPM Core Bond $1,048,201 $1,048,201 $0 0%
- --------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value (4) $986,402 $999,848 $13,446 1.4%
- --------------------------------------------------------------------------------------------------------------------
Lazard Small Cap $721,854 $661,448 $(60,406) (8.4)%
- --------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity $1,996,340 $2,230,902 $234,562 11.7%
- --------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy $367,721 $367,721 $0 0%
- --------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $7,176,576 $8,464,900 $1,288,324 18.0%
- --------------------------------------------------------------------------------------------------------------------
MFS Growth with Income $360,936 $403,274 $42,338 11.7%
- --------------------------------------------------------------------------------------------------------------------
MFS Research $4,472,345 $4,999,473 $527,128 11.8%
- --------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets $1,463,226 $1,463,226 $0 0%
Equity
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income $2,299,849 $2,556,983 $257,134 11.2%
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock $1,898,870 $1,980,749 $81,879 4.3%
- --------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value $1,495,886 $1,644,676 $148,790 9.9%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Effective May 1, 1999, expense cap increased from 0.80% to 1.00% on B
Shares, and 0.55% to 0.75% on A Shares.
2. Effective May 1, 1999, expense cap increased from 0.60% to 0.75%.
3. Effective May 1, 1999, expense cap increased from 0.85% to 0.95%.
4. Effective May 1, 1999, expense cap increased from 0.90% to 0.95%.
<PAGE>
APPENDIX D
PORTFOLIO BY PORTFOLIO FEE TABLE COMPARISONS
The tables provided below compare the actual overall recurring Portfolio
expenses under the Current Management Agreement and other current agreements for
each Portfolio for the year ended December 31, 1999 and the estimated overall
recurring Portfolio expenses under the proposed New Management Agreements and
other agreements for each Portfolio if those agreements had been in effect for
the year ended December 31, 1999, without giving effect to any applicable
Expense Limitation Agreement. The tables do not reflect separate account
expenses, including sales loads. The tables also do not reflect the effect of
the Manager's agreement not to implement any management fee increase approved by
shareholders for the Lazard Large Cap Value, T. Rowe Price International Stock,
EQ/Putnam Growth and Income, EQ/Putnam Balanced, and Warburg Pincus Small Cap
Value Portfolios until July 31, 2001, unless the Board agrees that such
management fee increase should be put into operation earlier. Each table
reflects the annual Portfolio operating expenses calculated as a percentage of
average daily net assets.
ALLIANCE AGGRESSIVE PORTFOLIO
<TABLE>
<CAPTION>
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.54% 0.60% 0.54% 0.60%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.02% 0.03% 0.02% 0.03%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.56% 0.63% 0.81% 0.88%
<CAPTION>
ALLIANCE BALANCED PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.41% 0.57% 0.41% 0.57%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.03% 0.04% 0.03% 0.04%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.44% 0.61% 0.69% 0.86%
</TABLE>
D-1
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE COMMON STOCK PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.36% 0.46% 0.36% 0.46%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.02% 0.03% 0.02% 0.03%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.38% 0.49% 0.63% 0.74%
<CAPTION>
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.48% 0.60% 0.48% 0.60%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.05% 0.06% 0.05% 0.06%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.53% 0.66% 0.78% 0.91%
<CAPTION>
ALLIANCE EQUITY INDEX PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.30% 0.25% 0.30% 0.25%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.03% 0.04% 0.03% 0.04%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.33% 0.29% 0.58% 0.54%
<CAPTION>
ALLIANCE GLOBAL PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.63% 0.73% 0.63% 0.73%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.07% 0.08% 0.07% 0.08%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.70% 0.81% 0.95% 1.06%
</TABLE>
D-2
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE GROWTH AND INCOME PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.54% 0.59% 0.54% 0.59%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.03% 0.04% 0.03% 0.04%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.57% 0.63% 0.82% 0.88%
<CAPTION>
ALLIANCE GROWTH INVESTORS PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.50% 0.57% 0.50% 0.57%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.03% 0.04% 0.03% 0.04%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.53% 0.61% 0.78% 0.86%
<CAPTION>
ALLIANCE HIGH YIELD PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.60% 0.60% 0.60% 0.60%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.03% 0.04% 0.03% 0.04%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.63% 0.64% 0.88% 0.89%
<CAPTION>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.50% 0.50% 0.50% 0.50%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.05% 0.06% 0.05% 0.06%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.55% 0.56% 0.80% 0.81%
</TABLE>
D-3
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE INTERNATIONAL PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.90% 0.85% 0.90% 0.85%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.18% 0.19% 0.18% 0.19%
---- ---- ---- ----
Total Portfolio Operating Expenses 1.08% 1.04% 1.33% 1.29%
<CAPTION>
ALLIANCE MONEY MARKET PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.34% 0.34% 0.34% 0.34%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.03% 0.04% 0.03% 0.04%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.37% 0.38% 0.62% 0.63%
<CAPTION>
ALLIANCE QUALITY BOND PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.53% 0.53% 0.53% 0.53%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.03% 0.04% 0.03% 0.04%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.56% 0.57% 0.81% 0.82%
<CAPTION>
ALLIANCE SMALL CAP GROWTH PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.90% 0.75% 0.90% 0.75%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.05% 0.06% 0.05% 0.06%
---- ---- ---- ----
Total Portfolio Operating Expenses 0.95% 0.81% 1.20% 1.06%
</TABLE>
D-4
<PAGE>
<TABLE>
<CAPTION>
BT EQUITY 500 INDEX PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.25% 0.25%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.17% 0.18%
---- ----
Total Portfolio Operating Expenses* N/A N/A 0.67% 0.68%
Fee Waiver and/or Expense Reimbursement N/A N/A (.12)% (.08)%
---- ----
Net Expenses* N/A N/A 0.55% 0.60%
<CAPTION>
BT INTERNATIONAL INDEX PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.35% 0.35% 0.35% 0.35%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.48% 0.49% 0.48% 0.49%
---- ---- ---- ----
Total Portfolio Operating Expenses* 0.83% 0.84% 1.08% 1.09%
Fee Waiver and/or Expense Reimbursement (0.13%) (0.09)% (0.13)% (0.09)%
---- ---- ---- ----
Net Expenses* 0.70% 0.75% 0.95% 1.00%
<CAPTION>
BT SMALL COMPANY INDEX PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.25% 0.25%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.70% 0.71%
---- ----
Total Portfolio Operating Expenses* N/A N/A 1.20% 1.21%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.49)% (0.46)%
---- ----
Net Expenses* N/A N/A 0.71% 0.75%
</TABLE>
D-5
<PAGE>
<TABLE>
<CAPTION>
CALVERT SOCIALLY RESPONSIBLE PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.65% 0.65%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 4.44% 4.45%
---- ----
Total Portfolio Operating Expenses* N/A N/A 5.34% 5.35%
Fee Waiver and/or Expense Reimbursement N/A N/A (4.29)% (4.30)%
---- ----
Net Expenses* N/A N/A 1.05% 1.05%
<CAPTION>
CAPITAL GUARDIAN INTERNATIONAL PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.75% 0.85%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.65% 0.66%
---- ----
Total Portfolio Operating Expenses* N/A N/A 1.65% 1.76%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.45)% (0.56)%
---- ----
Net Expenses* N/A N/A 1.20% 1.20%
<CAPTION>
CAPITAL GUARDIAN RESEARCH PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.65% 0.65%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.46% 0.47%
---- ----
Total Portfolio Operating Expenses* N/A N/A 1.36% 1.37%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.41)% (0.42)%
---- ----
Net Expenses* N/A N/A 0.95% 0.95%
</TABLE>
D-6
<PAGE>
<TABLE>
<CAPTION>
CAPITAL GUARDIAN U.S. EQUITY PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.65% 0.65%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.33% 0.34%
----- -----
Total Portfolio Operating Expenses* N/A N/A 1.23% 1.24%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.28)% (0.29)%
------- -------
Net Expenses* N/A N/A 0.95% 0.95%
<CAPTION>
EQ/ALLIANCE PREMIER GROWTH PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.90% 0.90% 0.90% 0.90%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.22% 0.23% 0.22% 0.23%
---- ---- ---- ----
Total Portfolio Operating Expenses* 1.12% 1.13% 1.37% 1.38%
Fee Waiver and/or Expense Reimbursement (0.22%) (0.23)% (0.22)% (0.23)%
---- ---- ---- ----
Net Expenses* 0.90% 0.90% 1.15% 1.15%
<CAPTION>
EQ/EVERGREEN FOUNDATION PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.63% 0.60%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 1.06% 1.07%
---- ----
Total Portfolio Operating Expenses* N/A N/A 1.94% 1.92%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.99)% (0.97)%
---- ----
Net Expenses* N/A N/A 0.95% 0.95%
</TABLE>
D-7
<PAGE>
<TABLE>
<CAPTION>
EQ/EVERGREEN PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.75% 0.65%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 1.86% 1.87%
---- ----
Total Portfolio Operating Expenses* N/A N/A 2.86% 2.77%
Fee Waiver and/or Expense Reimbursement N/A N/A (1.81)% (1.82)%
---- ----
Net Expenses* N/A N/A 1.05% 0.95%
<CAPTION>
EQ/PUTNAM BALANCED PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.55% 0.60%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.27% 0.28%
---- ----
Total Portfolio Operating Expenses* N/A N/A 1.07% 1.13%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.17)% (0.23)%
---- ----
Net Expenses* N/A N/A 0.90% 0.90%
<CAPTION>
EQ/PUTNAM GROWTH AND INCOME PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.55% 0.60%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.15% 0.16%
---- ----
Total Portfolio Operating Expenses* N/A N/A 0.95% 1.01%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.10)% (0.06)%
---- ----
Net Expenses* N/A N/A 0.85% 0.95%
</TABLE>
D-8
<PAGE>
<TABLE>
<CAPTION>
EQ/PUTNAM INTERNATIONAL PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.70% 0.85%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.31% 0.32%
---- ----
Total Portfolio Operating Expenses* N/A N/A 1.26% 1.42%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.06)% (0.17)%
---- ----
Net Expenses* N/A N/A 1.20% 1.25%
<CAPTION>
EQ/PUTNAM INVESTORS GROWTH PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.55% 0.65%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.18% 0.19%
---- ----
Total Portfolio Operating Expenses* N/A N/A 0.98% 1.09%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.05)% (0.14)%
---- ----
Net Expenses* N/A N/A 0.93% 0.95%
<CAPTION>
JPM CORE BOND PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.45% 0.45%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.19% 0.20%
---- ----
Total Portfolio Operating Expenses* N/A N/A 0.89% 0.90%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.09)% (0.10)%
---- ----
Net Expenses* N/A N/A 0.80% 0.80%
</TABLE>
D-9
<PAGE>
<TABLE>
<CAPTION>
LAZARD LARGE CAP VALUE PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.55% 0.65%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.20% 0.21%
---- ----
Total Portfolio Operating Expenses* N/A N/A 1.00% 1.11%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.05)% (0.16)%
---- ----
Net Expenses* N/A N/A 0.95% 0.95%
<CAPTION>
LAZARD SMALL CAP VALUE PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.80% 0.75%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.25% 0.26%
---- ----
Total Portfolio Operating Expenses* N/A N/A 1.30% 1.26%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.10)% (0.16)%
---- ----
Net Expenses* N/A N/A 1.20% 1.10%
<CAPTION>
MERRILL LYNCH BASIC VALUE EQUITY PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.55% 0.60%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.16% 0.17%
---- ----
Total Portfolio Operating Expenses* N/A N/A 0.96% 1.02%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.11)% (0.07)%
---- ----
Net Expenses* N/A N/A 0.85% 0.95%
</TABLE>
D-10
<PAGE>
<TABLE>
<CAPTION>
MERRILL LYNCH WORLD STRATEGY
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.70% 0.70%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.45% 0.46%
---- ----
Total Portfolio Operating Expenses* N/A N/A 1.40% 1.41%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.20)% (0.21)%
---- ----
Net Expenses* N/A N/A 1.20% 1.20%
<CAPTION>
MFS EMERGING GROWTH COMPANIES PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.55% 0.65% 0.55% 0.65%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.16% 0.17% 0.16% 0.17%
---- ---- ---- ----
Total Portfolio Operating Expenses* 0.71% 0.82% 0.96% 1.07%
Fee Waiver and/or Expense Reimbursement (0.11)% (0.07)% (0.11)% (0.07)%
---- ---- ---- ----
Net Expenses* 0.60% 0.75% 0.85% 1.00%
<CAPTION>
MFS GROWTH WITH INCOME PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.55% 0.60%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.36% 0.37%
---- ----
Total Portfolio Operating Expenses* N/A N/A 1.16% 1.22%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.31%) (0.27)%
---- ----
Net Expenses* N/A N/A 0.85% 0.95%
</TABLE>
D-11
<PAGE>
<TABLE>
<CAPTION>
MFS RESEARCH PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.55% 0.65%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.16% 0.17%
---- ----
Total Portfolio Operating Expenses* N/A N/A 0.96% 1.07%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.11)% (0.12)%
---- ----
Net Expenses* N/A N/A 0.85% 0.95%
<CAPTION>
MORGAN STANLEY EMERGING MARKETS EQUITY PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 1.15% 1.15%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.99% 1.00%
---- ----
Total Portfolio Operating Expenses* N/A N/A 2.39% 2.40%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.64)% (0.65)%
---- ----
Net Expenses* N/A N/A 1.75% 1.75%
<CAPTION>
T. ROWE PRICE EQUITY INCOME PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.55% 0.60% 0.55% 0.60%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.20% 0.21% 0.20% 0.21%
---- ---- ---- ----
Total Portfolio Operating Expenses* 0.75% 0.81% 1.00% 1.06%
Fee Waiver and/or Expense Reimbursement (0.15)% (0.11)% (0.15)% (0.11)%
---- ---- ---- ----
Net Expenses* 0.60% 0.70% 0.85% 0.95%
<CAPTION>
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee N/A N/A 0.75% 0.85%
12b-1 Fees N/A N/A 0.25% 0.25%
Other Expenses N/A N/A 0.29% 0.30%
---- ----
D-12
<PAGE>
Total Portfolio Operating Expenses* N/A N/A 1.29% 1.40%
Fee Waiver and/or Expense Reimbursement N/A N/A (0.09)% (0.15)%
------- -------
Net Expenses* N/A N/A 1.20% 1.25%
<CAPTION>
WARBURG PINCUS SMALL CAP VALUE PORTFOLIO
CLASS IA SHARES CLASS IB SHARES
--------------- ---------------
Current(1) Pro Forma(2) Current(1) Pro Forma(2)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Management Fee 0.65% 0.75% 0.65% 0.75%
12b-1 Fees None None 0.25% 0.25%
Other Expenses 0.23% 0.24% 0.23% 0.24%
----- ----- ----- -----
Total Portfolio Operating Expenses* 0.88% 0.99% 1.13% 1.24%
Fee Waiver and/or Expense Reimbursement (0.13)% (0.14)% (0.13)% (0.14)%
------- ------- ------- -------
Net Expenses* 0.75% 0.85% 1.00% 1.10%
</TABLE>
- ----------------
(1) Under Current Management Agreement.
(2) Under New Management Agreement based on a Portfolio's average net assets
during the fiscal year ended December 31, 1999 and actual non-management
expenses for the fiscal year ended December 31, 1999. Non-recurring costs
associated with the solicitation of voting instructions are not reflected
in the expenses shown.
* The Manager has entered into an Expense Limitation Agreement with the Trust
with respect to this Portfolio. Pursuant to that agreement, the Manager has
agreed to waive or limit its fees and to assume other expenses so that the
total annual operating expenses of the Portfolio (other than certain
expenses described in the Expense Limitation Agreement) are limited for the
period May 1, 1999 through April 30, 2000 to the amount specified in the
table above under the heading "Current" and for the period May 1, 2000
through April 30, 2001 in the amount specified in the table above under the
heading "Pro Forma." See "Other Agreements Between Equitable and the
Trust--Expense Limitation Agreement under Proposal 3 for more detailed
information.
D-13
<PAGE>
APPENDIX E
----------
PAYMENTS UNDER DISTRIBUTION AGREEMENTS
The table below shows the amount paid by each Portfolio Class IB shares to each
of the Distributors for the period ended December 31, 1999.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Distribution Fee Distribution Fee Total
PORTFOLIO Paid to AXA Advisors Paid to EDI Distribution Fees
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Common Stock $1,479,937 $1,482,881 $2,962,818
- -------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors $140,856 $0 $140,856
- -------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index $18,163 $18 $18,181
- -------------------------------------------------------------------------------------------------------------------------
Alliance Global $142,582 $34,120 $176,702
- -------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income $450,856 $0 $450,856
- -------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors $288,343 $48,694 $337,037
- -------------------------------------------------------------------------------------------------------------------------
Alliance High Yield $172,716 $381,059 $553,775
- -------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities $100,649 $0 $100,649
- -------------------------------------------------------------------------------------------------------------------------
Alliance International $25,261 $0 $25,261
- -------------------------------------------------------------------------------------------------------------------------
Alliance Money Market $381,905 $630,827 $1,012,732
- -------------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond, $612 $0 $612
- -------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth $86,581 $197,833 $284,414
- -------------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index $300,769 $780,411 $1,081,180
- -------------------------------------------------------------------------------------------------------------------------
BT International Equity Index $24,691 $134,928 $159,619
- -------------------------------------------------------------------------------------------------------------------------
BT Small Company Index $21,053 $83,854 $104,907
- -------------------------------------------------------------------------------------------------------------------------
Calvert Socially Responsible $1,861 $0 $1,861
- -------------------------------------------------------------------------------------------------------------------------
Capital Guardian International $12,403 $24,886 $37,289
- -------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research $12,073 $18,569 $30,642
- -------------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity $12,761 $40,399 $53,160
- -------------------------------------------------------------------------------------------------------------------------
Alliance Aggressive Stock $220,153 $238,459 $458,612
- -------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth $144,448 $103,105 $247,633
- -------------------------------------------------------------------------------------------------------------------------
Alliance Balanced $17,802 $0 $17,802
- -------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen $3,114 $3,532 $6,646
- -------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation $2,225 $9,048 $11,273
- -------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced $239,443 $0 $239,443
- -------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value $390,116 $954,060 $1,344,176
- -------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity $47 $484,191 $484,238
- -------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth $81 $669,259 $669,340
- -------------------------------------------------------------------------------------------------------------------------
JPM Core Bond $0 $327,721 $327,721
- -------------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value $1 $263,501 $263,502
- -------------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value $248 $150,210 $150,458
- -------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity $410,876 $176,675 $587,551
- -------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy $58,298 $18,203 $76,501
- -------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $1,522,918 $557,262 $2,080,180
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
E-1
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Distribution Fee Distribution Fee Total
PORTFOLIO Paid to AXA Advisors Paid to EDI Distribution Fees
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MFS Growth with Income $8,783 $98,062 $106,845
- -------------------------------------------------------------------------------------------------------------------------
MFS Research $632,018 $684,220 $1,316,238
- -------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity $153,012 $56,766 $209,778
- -------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income $663,673 $0 $663,673
- -------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock $396,064 $0 $396,064
- -------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value $370,016 $0 $370,016
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
E-2
<PAGE>
APPENDIX F
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, of 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
F-1
<PAGE>
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. 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.
F-2
<PAGE>
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 upt 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 average
daily net assets of the Balanced Portfolio allocated to Capital Guardian.
F-3
<PAGE>
DRAFT 2/3/00
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
EQ ADVISORS TRUST
SPECIAL MEETING OF THE SHAREHOLDERS
The undersigned, the owner of one or more variable life insurance policies
or variable annuity contracts or certificates ("Contracts") whose account value
is invested in one or more of the Portfolios of EQ Advisors Trust ("Trust"),
hereby instructs The Equitable Life Assurance Society of the United States
("Equitable"), the owner of all shares of the Trust attributable to the
Contracts and, therefore, a shareholder of the Trust ("Shareholder"), to vote as
indicated below on each of the specific proposals that will be considered at the
Special Meeting of the Shareholders of each Portfolio of the Trust, or any
adjournment thereof, as described in the Trust's Proxy Statement, and to vote,
in adjournment thereof, as described in the Trust's Proxy Statement, and to
vote, in its discretion, on such other matters as may properly come before such
meeting.
This Ballot is solicited by Equitable as a Shareholder of the Trust.
This Ballot has been personalized to reflect only those Trust Portfolios to
which your Contract Account Value has been allocated as of February 4, 2000, the
Record Date.
This Ballot is solicited principally by mail, but voting instructions also
may be solicited by telephone, personal interview by officers or agents of the
Trust, or by the Internet. This Ballot is executed by marking voting
instructions on the Ballot, and signing, dating and mailing it in the
accompanying envelope. Voting instructions may also be provided by phone at
1-800-xxx-xxxx, or by Internet at our website at www.________.com.
This Ballot, when properly executed, will be voted in the manner directed
herein by the undersigned. IF YOU SIGN AND RETURN THIS BALLOT WITHOUT DIRECTING
US HOW TO VOTE, THIS BALLOT WILL BE VOTED FOR EACH OF THE PROPOSALS.
Voting instructions executed by a Contractowner may be revoked at any time
prior to the Shareholders voting the shares represented thereby by the
Contractowner providing the Shareholders with a properly executed written
revocation of such voting instructions, or by the Contractowner providing the
Shareholder with proper later dated voting instructions by telephone or by the
Internet. Proxies executed by Shareholders may be revoked at any time before
they are exercised by a written revocation received by the Secretary of the
Trust, by properly executing a later-dated proxy or by attending the meeting and
voting in person, by telephone or by the Internet.
Receipt of the Notice of Meeting, Equitable's Information Statement and the
Trust's Proxy Statement accompanying this Ballot is acknowledged by the
undersigned.
If you have changed your address, please cross out the old address and
write in your new address.
<PAGE>
- --------------------------------------------------------------------------------
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT CONTRACTOWNERS VOTE FOR THE
FOLLOWING PROPOSALS. Please mark your choices below X in blue or black ink, sign
and fold the Ballot and return as soon as possible in the enclosed envelope.
2
<PAGE>
PROPOSAL 1. Election of trustees to the Board of Trustees of the Trust.
Nominees for Trustee:
a. Peter D. Noris: FOR WITHHOLD
[ ] [ ]
b. Jettie M. Edwards: FOR WITHHOLD
[ ] [ ]
c. William M. Kearns, Jr.: FOR WITHHOLD
[ ] [ ]
d. Christopher P. A. Komisarjevsky: FOR WITHHOLD
[ ] [ ]
e. Harvey Rosenthal: FOR WITHHOLD
[ ] [ ]
f. Michael Hegarty: FOR WITHHOLD
[ ] [ ]
g. David W. Fox: FOR WITHHOLD
[ ] [ ]
h. Theodossios (Ted) Athanassiades: FOR WITHHOLD
[ ] [ ]
PROPOSAL 2
Permission for Equitable, in its capacity as Investment Manager of the Trust
("Manager"), subject to approval of the Board of Trustees, to rely upon
exemptive relief granted by the Securities and Exchange Commission enabling the
Manager, without obtaining shareholder approval, to: (i) select new or
additional investment advisers; (ii) enter into and materially modify existing
investment advisory agreements; and (iii) terminate and replace investment
advisers for each of the Portfolios below.
3
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO FOR AGAINST ABSTAIN PORTFOLIO FOR AGAINST ABSTAIN
- --------- --- ------- ------- --------- --- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Alliance Aggressive Stock [ ] [ ] [ ] Alliance Growth [ ] [ ] [ ]
Investors
Alliance Balanced [ ] [ ] [ ] Alliance High Yield [ ] [ ] [ ]
Alliance Common Stock [ ] [ ] [ ] Alliance Intermediate [ ] [ ] [ ]
Government Securities
Alliance Conservative [ ] [ ] [ ] Alliance International [ ] [ ] [ ]
Investors
Alliance Equity Index [ ] [ ] [ ] Alliance Money Market [ ] [ ] [ ]
Alliance Global [ ] [ ] [ ] Alliance Quality Bond [ ] [ ] [ ]
Alliance Growth and Income [ ] [ ] [ ] Alliance Small Cap [ ] [ ] [ ]
Growth
<CAPTION>
PROPOSAL 3
Approval of an Amended and Restated Investment Management Agreement, with
respect to each of the Portfolios, between the Trust and Equitable, in its
capacity as Investment Manager of the Trust.
PORTFOLIO FOR AGAINST ABSTAIN PORTFOLIO FOR AGAINST ABSTAIN
- --------- --- ------- ------- --------- --- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Alliance Aggressive Stock [ ] [ ] [ ] Capital Guardian [ ] [ ] [ ]
U.S. Equity
Alliance Balanced [ ] [ ] [ ] EQ/Alliance Premier [ ] [ ] [ ]
Growth
Alliance Common Stock [ ] [ ] [ ] EQ/Evergreen [ ] [ ] [ ]
Alliance Conservative [ ] [ ] [ ] EQ/Evergreen [ ] [ ] [ ]
Investors Foundation
Alliance Equity Index [ ] [ ] [ ] EQ/Putnam Balanced [ ] [ ] [ ]
Alliance Global [ ] [ ] [ ] EQ/Putnam Growth & [ ] [ ] [ ]
Income Value
Alliance Growth and Income [ ] [ ] [ ] EQ/Putnam [ ] [ ] [ ]
International Equity
Alliance Growth Investors [ ] [ ] [ ] EQ/Putnam Investors [ ] [ ] [ ]
Growth
Alliance High Yield [ ] [ ] [ ] JPM Core Bond [ ] [ ] [ ]
Alliance Intermediate [ ] [ ] [ ] Lazard Large Cap [ ] [ ] [ ]
Government Securities Value
Alliance International [ ] [ ] [ ] Lazard Small Cap [ ] [ ] [ ]
Value
Alliance Money Market [ ] [ ] [ ] Merrill Lynch Basic [ ] [ ] [ ]
Value Equity
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO FOR AGAINST ABSTAIN PORTFOLIO FOR AGAINST ABSTAIN
- --------- --- ------- ------- --------- --- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Alliance Quality Bond [ ] [ ] [ ] Merrill Lynch World [ ] [ ] [ ]
Strategy
Alliance Small Cap Growth [ ] [ ] [ ] MFS Emerging Growth [ ] [ ] [ ]
Companies
BT Equity 500 Index [ ] [ ] [ ] MFS Growth with [ ] [ ] [ ]
Income
BT International Equity [ ] [ ] [ ] MFS Research [ ] [ ] [ ]
Index
BT Small Company Index [ ] [ ] [ ] Morgan Stanley [ ] [ ] [ ]
Emerging Markets
Equity
Calvert Socially Responsible [ ] [ ] [ ] T. Rowe Price Equity [ ] [ ] [ ]
Income
Capital Guardian [ ] [ ] [ ] T. Rowe Price [ ] [ ] [ ]
International International Stock
Capital Guardian Research [ ] [ ] [ ] Warburg Pincus Small [ ] [ ] [ ]
Company Value
<CAPTION>
PROPOSAL 4(a)
Approval of a change to a fundamental investment policy to allow each Portfolio
listed below, with respect to 75% of the value of its total assets, to invest
more than 5% of its total assets in securities of other investment companies.
PORTFOLIO FOR AGAINST ABSTAIN PORTFOLIO FOR AGAINST ABSTAIN
- --------- --- ------- ------- --------- --- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Alliance Aggressive Stock [ ] [ ] [ ] Capital Guardian [ ] [ ] [ ]
Research
Alliance Balanced [ ] [ ] [ ] Capital Guardian [ ] [ ] [ ]
U.S. Equity
[ ]
Alliance Common Stock [ ] [ ] [ ] EQ/Alliance Premier [ ] [ ]
Growth
[ ]
Alliance Conservative [ ] [ ] [ ] EQ/Evergreen [ ] [ ]
Investors
[ ]
Alliance Equity Index [ ] [ ] [ ] EQ/Evergreen [ ] [ ]
Foundation
[ ]
Alliance Global [ ] [ ] [ ] EQ/Putnam Balanced [ ] [ ]
[ ]
Alliance Growth and Income [ ] [ ] [ ] EQ/Putnam Growth & [ ] [ ]
Income Value
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO FOR AGAINST ABSTAIN PORTFOLIO FOR AGAINST ABSTAIN
- --------- --- ------- ------- --------- --- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Alliance Growth Investors [ ] [ ] [ ] EQ/Putnam [ ] [ ]
International Equity
[ ]
Alliance High Yield [ ] [ ] [ ] EQ/Putnam Investors [ ] [ ]
Growth
[ ]
Alliance Intermediate [ ] [ ] [ ] JPM Core Bond [ ] [ ]
Government Securities
[ ]
Alliance International [ ] [ ] [ ] Lazard Large Cap [ ] [ ]
Value
[ ]
Alliance Money Market [ ] [ ] [ ] Merrill Lynch Basic [ ] [ ]
Value Equity
[ ]
Alliance Quality Bond [ ] [ ] [ ] MFS Emerging Growth [ ] [ ]
Companies
[ ]
Alliance Small Cap Growth [ ] [ ] [ ] MFS Growth with [ ] [ ]
Income
[ ]
BT Equity 500 Index [ ] [ ] [ ] MFS Research [ ] [ ]
[ ]
BT International Equity [ ] [ ] [ ] T. Rowe Price [ ] [ ]
Index Equity Income
[ ]
BT Small Company Index [ ] [ ] [ ] T. Rowe Price [ ] [ ]
International Stock
[ ]
Calvert Socially Responsible [ ] [ ] [ ] Warburg Pincus [ ] [ ]
Small Company Value
Capital Guardian [ ] [ ] [ ]
International
</TABLE>
PROPOSAL 4(b)
Approval of a change to a fundamental investment policy to allow each Portfolio
listed below, with respect to 75% of the value of its total assets, to invest in
more than 10% of the outstanding voting securities of other investment
companies.
<TABLE>
<CAPTION>
PROPOSAL FOR AGAINST ABSTAIN PROPOSAL FOR AGAINST ABSTAIN
- -------- --- ------- ------- -------- --- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Alliance Aggressive Stock [ ] [ ] [ ] Capital Guardian [ ] [ ] [ ]
Research
Alliance Balanced [ ] [ ] [ ] Capital Guardian [ ] [ ] [ ]
U.S. Equity
Alliance Common Stock [ ] [ ] [ ] EQ/Alliance Premier [ ] [ ] [ ]
Growth
Alliance Conservative [ ] [ ] [ ] EQ/Evergreen [ ] [ ] [ ]
Investors
Alliance Equity Index [ ] [ ] [ ] EQ/Evergreen [ ] [ ] [ ]
Foundation
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PROPOSAL FOR AGAINST ABSTAIN PROPOSAL FOR AGAINST ABSTAIN
- -------- --- ------- ------- -------- --- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Alliance Global [ ] [ ] [ ] EQ/Putnam Balanced [ ] [ ] [ ]
Alliance Growth and Income [ ] [ ] [ ] EQ/Putnam Growth & [ ] [ ] [ ]
Income Value
Alliance Growth Investors [ ] [ ] [ ] EQ/Putnam [ ] [ ] [ ]
International Equity
Alliance High Yield [ ] [ ] [ ] EQ/Putnam Investors [ ] [ ] [ ]
Growth
Alliance Intermediate [ ] [ ] [ ] JPM Core Bond [ ] [ ] [ ]
Government Securities
Alliance International [ ] [ ] [ ] Lazard Large Cap [ ] [ ] [ ]
Value
Alliance Money Market [ ] [ ] [ ] Merrill Lynch Basic [ ] [ ] [ ]
Value Equity
Alliance Quality Bond [ ] [ ] [ ] MFS Emerging Growth [ ] [ ] [ ]
Companies
Alliance Small Cap Growth [ ] [ ] [ ] MFS Growth with [ ] [ ] [ ]
Income
BT Equity 500 Index [ ] [ ] [ ] MFS Research [ ] [ ] [ ]
BT International Equity [ ] [ ] [ ] T. Rowe Price Equity [ ] [ ] [ ]
Index Income
BT Small Company Index [ ] [ ] [ ] T. Rowe Price [ ] [ ] [ ]
International Stock
Calvert Socially Responsible [ ] [ ] [ ] Warburg Pincus Small [ ] [ ] [ ]
Company Value
Capital Guardian [ ] [ ] [ ]
International
</TABLE>
Please mark, sign, date and mail your Ballot in the enclosed postage-paid
envelope.
Signature:
------------------------------ ------------------------
Date:
-----------------------------------
If joint owner, each should sign. When signing as executor, trustee, etc., give
full title as such.
7
