THIRD AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT
THIRD AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT, effective as
of May 1, 2001 by and between The Equitable Life Assurance Society of the United
States. (the "Manager") and EQ Advisors Trust (the "Trust"), on behalf of each
series of the Trust set forth in Schedule A attached hereto (each a "Portfolio,"
and collectively, the "Portfolios").
WHEREAS, the Trust is a Delaware business trust organized under the
Amended and Restated Agreement and Declaration of Trust ("Declaration of
Trust"), and is registered under the Investment Company Act of 1940, as amended
("1940 Act"), as an open-end management company of the series type, and each
Portfolio is a series of the Trust;
WHEREAS, the Trust and the Manager have entered into an Amended and
Restated Investment Management Agreement dated May 1, 2000, ("Management
Agreement"), pursuant to which the Manager provides investment management
services to each Portfolio for compensation based on the value of the average
daily net assets of each such Portfolio;
WHEREAS, the Trust and the Manager have determined that it is
appropriate and in the best interests of each Portfolio and its shareholders to
maintain the expenses of each Portfolio at a level below the level to which each
such Portfolio would normally be subject during its start-up period and,
therefore, initially entered into an Expense Limitation Agreement, dated as of
April 14, 1997, ("Expense Limitation Agreement") and subsequently amended on
December 9, 1997, March 3, 1998, December 31, 1998, May 1, 1999, and May 1, 2000
in order to maintain each Portfolio's expense ratios at the Maximum Annual
Operating Expense Limit (as hereinafter defined) specified for such Portfolio in
Schedule A hereto;
WHEREAS, the Trust and the Manager desire to extend the term of the
Expense Limitation Agreement, with respect to each Portfolio, for an additional
one year period until May 1, 2002, regardless of the current expiration date of
the Expense Limitation Agreement as to each such Portfolios;
WHEREAS, the Trust and the Manager desire to add an additional
Portfolio, the EQ/Balanced Portfolio, to the Expense Limitation Agreement;
WHEREAS, the Trust and the Manager desire to modify the Maximum Annual
Operating Expense Limits for certain Portfolios; and
WHEREAS, the Trust and the Manager desire to amend this Agreement to
reflect that the Maximum Annual Operating Expense Limit for each Portfolio
contemplates that certain expenses of each Portfolio may be paid through the use
of brokerage commissions generated by that Portfolio.
NOW THEREFORE, the parties hereto agree that the Expense Limitation
Agreement is hereby modified, amended and restated in its entirety as of the
date hereof as follows:
1. Expense Limitation.
1.1. Applicable Expense Limit. To the extent that the aggregate
expenses of every character incurred by a Portfolio in any fiscal year,
including but not limited to investment management fees of the Manager (but
excluding 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 such Portfolio's
business and amounts payable pursuant to a plan adopted in accordance with Rule
12b-1 under the 0000 Xxx) and expenses for which payment has been made through
the use of all or a portion of brokerage commissions (or markups or markdowns)
generated by that Portfolio ("Portfolio Operating Expenses"), exceed the Maximum
Annual Operating Expense Limit, as defined in Section 1.2 below, such excess
amount (the "Excess Amount") shall be the liability of the Manager.
1.2. Maximum Annual Operating Expense Limit. The Maximum Annual
Operating Expense Limit with respect to each Portfolio shall be the amount
specified in Schedule A based on a percentage of the average daily net assets of
each Portfolio. That Maximum Annual Operating Expense Limit for each Portfolio
contemplates that certain expenses for each Portfolio may be paid through the
use of all or a portion of brokerage commissions (or markups or markdowns)
generated by that Portfolio.
1.3. Method of Computation. To determine the Manager's liability with
respect to the Excess Amount, each month the Portfolio Operating Expenses for
each Portfolio shall be annualized as of the last day of the month. If the
annualized Portfolio Operating Expenses for any month of a Portfolio exceed the
Maximum Annual Operating Expense Limit of such Portfolio, the Manager shall
first waive or reduce its investment management fee for such month by an amount
sufficient to reduce the annualized Portfolio Operating Expenses to an amount no
higher than the Maximum Annual Operating Expense Limit. If the amount of the
waived or reduced investment management fee for any such month is insufficient
to pay the Excess Amount, the Manager may also remit to the appropriate
Portfolio or Portfolios an amount that, together with the waived or reduced
investment management fee, is sufficient to pay such Excess Amount.
1.4. Year-End Adjustment. If necessary, on or before the last day of
the first month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the amount of the investment management fees
waived or reduced and other payments remitted by the Manager to the Portfolio or
Portfolios with respect to the previous fiscal year shall equal the Excess
Amount.
2. Reimbursement of Fee Waivers and Expense Reimbursements.
2.1. Reimbursement. If in any year during which the total assets of a
Portfolio are greater than $100 million and in which the Management Agreement is
still in effect, the estimated aggregate Portfolio Operating Expenses of such
Portfolio for the fiscal year are less than the Maximum Annual. Operating
Expense Limit for that year, subject to quarterly approval by the Trust's Board
of Trustees as provided in Section 2.2 below, the Manager shall be entitled to
reimbursement by such Portfolio, in whole or in part as provided below, of the
investment management fees waived or reduced and other payments remitted by the
Manager to such
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Portfolio pursuant to Section 1 hereof. The total amount of reimbursement to
which the Manager may be entitled ("Reimbursement Amount") shall equal, at any
time, the sum of all investment management fees previously waived or reduced by
the Manager and all other payments remitted by the Manager to the Portfolio,
pursuant to Section 1 hereof, during any of the previous five (5) fiscal years
(or previous three (3) fiscal years for the Capital Guardian International
Portfolio, Capital Guardian U.S. Equity Portfolio, Capital Guardian Research
Portfolio and Xxxxxxx Socially Responsible Portfolio), less any reimbursement
previously paid by such Portfolio to the Manager, pursuant to Sections 2.2 or
2.3 hereof, with respect to such waivers, reductions, and payments. The
Reimbursement Amount shall not include any additional charges or fees
whatsoever, including, e.g., interest accruable on the Reimbursement Amount.
2.2. Board Approval. No reimbursement shall be paid to the Manager with
respect to any Portfolio pursuant to this provision in any fiscal quarter,
unless the Trust's Board of Trustees has determined that the payment of such
reimbursement is in the best interests of such Portfolio and its shareholders.
The Trust's Board of Trustees shall determine quarterly in advance whether any
reimbursement may be paid to the Manager with respect to any Portfolio in such
quarter.
2.3. Method of Computation. To determine each Portfolio's payments, if
any, to reimburse the Manager for the Reimbursement Amount, each month the
Portfolio Operating Expenses of each Portfolio shall be annualized as of the
last day of the month. If the annualized Portfolio Operating Expenses of a
Portfolio for any month are less than the Maximum Annual Operating Expense Limit
of such Portfolio, such Portfolio, only with the prior approval of the Trust's
Board of Trustees, shall pay to the Manager an amount sufficient to increase the
annualized Portfolio Operating Expenses of that Portfolio to an amount no
greater than the Maximum Annual Operating Expense Limit of that Portfolio,
provided that such amount paid to the Manager will in no event exceed the total
Reimbursement Amount.
2.4. Year-End Adjustment. If necessary, on or before the last day of
the first month of each fiscal year, an adjustment payment shall be made by the
appropriate party in order that the actual Portfolio Operating Expenses of a
Portfolio for the prior fiscal year (including any reimbursement payments
hereunder with respect to such fiscal year) do not exceed the Maximum Annual
Operating Expense Limit.
3. Term and Termination of Agreement.
This Agreement shall continue in effect with respect to all Portfolios
until May 1, 2002 and shall thereafter continue in effect with respect to each
Portfolio from year to year provided such continuance is specifically approved
by a majority of the Trustees of the Trust who (i) are not "interested persons"
of the Trust or any other party to this Agreement, as defined in the 1940 Act,
and (ii) have no direct or indirect financial interest in the operation of this
Agreement ("Non-Interested Trustees"). Nevertheless, this Agreement may be
terminated by either party hereto, without payment of any penalty, upon ninety
(90) days' prior written notice to the other party at its principal place of
business; provided that, in the case of termination by the Trust, such action
shall be authorized by resolution of a majority of the Non-Interested Trustees
of the Trust or by a vote of a majority of the outstanding voting securities of
the Trust.
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4. Miscellaneous.
4.1. Captions. The captions in this Agreement are included for
convenience of reference only and in no other way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
4.2. Interpretation. Nothing herein contained shall be deemed to
require the Trust or the Portfolios to take any action contrary to the Trust's
Declaration of Trust or By-Laws, or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of its responsibility for and control of
the conduct of the affairs of the Trust or the Portfolios.
4.3. Definitions. Any question of interpretation of any term or
provision of this Agreement, including but not limited to the investment
management fee, the computations of net asset values, and the allocation of
expenses, having a counterpart in or otherwise derived from the terms and
provisions of the Management Agreement or the 1940 Act, shall have the same
meaning as and be resolved by reference to such Management Agreement or the 1940
Act.
IN WITNESS WHEREOF, the parties have caused this Third Amended and
Restated Expense Limitation Agreement to be signed by their respective officers
thereunto duly authorized and their respective corporate seals to be hereunto
affixed, as of the day and year first above written.
EQ ADVISORS TRUST
ON BEHALF OF
EACH OF ITS PORTFOLIOS
By:
-------------------------------
Xxxxx X. Xxxxx
President and Trustee
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By:
-------------------------------
Xxxxx X. X'Xxxx
Executive Vice President
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SCHEDULE A
MAXIMUM ANNUAL OPERATING EXPENSE LIMITS
This Agreement relates to the following Portfolios of the Trust:
Maximum Annual
Name of Portfolio Operating Expense Limit
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EQ International Equity Index Portfolio 0.85%
EQ Small Company Index Portfolio 0.60%
Capital Guardian International Portfolio 0.95%
Capital Guardian U.S. Equity Portfolio 0.70%
Capital Guardian Research Portfolio 0.70%
EQ/Alliance Premier Growth Portfolio 0.90%
EQ/Alliance Technology Portfolio 0.90%
EQ/Balanced Portfolio 0.65%
EQ/Xxxxxx Growth & Income Value Portfolio 0.70%
EQ/Xxxxxx International Equity Portfolio 1.00%
EQ/Xxxxxx Investors Growth Portfolio 0.70%
EQ/Evergreen Portfolio 0.70%
EQ/AXP New Dimensions Portfolio 0.70%
EQ/AXP Strategy Aggressive Portfolio 0.75%
EQ/Janus Large Cap Growth Portfolio 0.90%
FI Mid Cap Portfolio 0.75%
X.X. Xxxxxx Core Bond Portfolio 0.55%
Lazard Small Cap Value Portfolio 0.85%
Mercury Basic Value Equity Portfolio 0.70%
MFS Growth with Income Portfolio 0.70%
MFS Research Portfolio 0.70%
Xxxxxx Xxxxxxx Emerging Markets Equity Portfolio 1.55%
X. Xxxx Price International Stock Portfolio 1.00%
FI Small/Mid Cap Value Portfolio 0.85%
Xxxxxxx Socially Responsible Portfolio 0.80%
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