Exhibit (h)(2)(v)
FORM OF
AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT
AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT, effective as of
_____, 1999 by and between EQ Financial Consultants, Inc. (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
(the "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 Investment
Management Agreement dated April 14, 1997, as amended ("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, as amended ("Expense Limitation Agreement"), 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, as so amended for an additional year, with respect
to all Portfolios, regardless of the present expiration date of the Expense
Limitation Agreement as to such Portfolios;
WHEREAS, the Trust and the Manager desire to increase the Maximum
Annual Operating Expense Limits for certain Portfolios to reflect changes in the
Trust and the growth of those Portfolios since their inception as well as the
original intent of the parties that the Maximum Annual Operating Expense Limits
be continued only so long as necessary to support Portfolios during their
start-up period;
WHEREAS, fourteen new Portfolios, Alliance Money Market Portfolio,
Alliance Intermediate Government Securities Portfolio, Alliance Quality Bond
Portfolio, Alliance High Yield Portfolio, Alliance Balanced Portfolio, Alliance
Conservative Investors Portfolio, Alliance Growth Investors Portfolio, Alliance
Common Stock Portfolio, Alliance Equity Index Portfolio, Alliance Growth And
Income Portfolio, Alliance Aggressive Stock Portfolio, Alliance Small Cap Growth
Portfolio, Alliance Global Portfolio, Alliance International Portfolio
(collectively, the "New Portfolios"), are being added to the Trust;
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WHEREAS, the Trust and the Manager desire to maintain the expenses of
each New Portfolio at the Maximum Annual Operating Expense Limit specified for
such Portfolio in Schedule A during its start-up period; and
WHEREAS, the Trust and the Manager desire to modify the Expense
Limitation Agreement to document the agreement of the Manager to be liable for
the excess expenses of each New 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 1940 Act) ("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.
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.
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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 Portfolio pursuant to Section 1 hereof. The total amount of
reimbursement to which the Manager may be entitled (the "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, 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
(including the New Portfolios) until _____, 2000 and shall thereafter continue
in effect with respect to each Portfolio (including the New Portfolios) 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
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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.
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 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 SERIES
By:
-----------------------------
Xxxxx X. Xxxxx
President and Trustee
EQ FINANCIAL CONSULTANTS, INC.
By:
-----------------------------
Xxxxx X. Xxxxx
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 Operating
Name of Portfolio Expense Limit
----------------- -------------
BT Equity 500 Index Portfolio .30%
BT International Equity Index Portfolio .55%
BT Small Company Index Portfolio .35%
Capital Guardian International Portfolio .95%
Capital Guardian U.S. Equity Portfolio .70%
Capital Guardian Research Portfolio .70%
EQ/Alliance Premier Growth Portfolio .90%
EQ/Xxxxxx Balanced Portfolio .65%
EQ/Xxxxxx Growth & Income Value Portfolio .60%
EQ/Xxxxxx International Equity Portfolio .95%
EQ/Xxxxxx Investors Growth Portfolio .60%
EQ/Evergreen Foundation Portfolio .70%
EQ/Evergreen Portfolio .80%
JPM Core Bond Portfolio .55%
Lazard Large Cap Value Portfolio .65%
Lazard Small Cap Value Portfolio .95%
Xxxxxxx Xxxxx Basic Value Equity Portfolio .60%
Xxxxxxx Xxxxx World Strategy Portfolio .95%
MFS Emerging Growth Companies Portfolio .60%
MFS Growth with Income Portfolio .60%
MFS Research Portfolio .60%
Xxxxxx Xxxxxxx Emerging Markets Equity Portfolio 1.50%
X. Xxxx Price Equity Income Portfolio .60%
X. Xxxx Price International Stock Portfolio .95%
Warburg Pincus Small Company Value Portfolio .75%
Alliance Money Market Portfolio ____%
Alliance Intermediate Government Securities Portfolio ____%
Alliance Quality Bond Portfolio ____%
Alliance High Yield Portfolio ____%
Alliance Balanced Portfolio ____%
Alliance Conservative Investors Portfolio ____%
Alliance Growth Investors Portfolio ____%
Alliance Common Stock Portfolio ____%
Alliance Equity Index Portfolio ____%
Alliance Growth And Income Portfolio ____%
Alliance Aggressive Stock Portfolio ____%
Alliance Small Cap Growth Portfolio ____%
Alliance Global Portfolio ____%
Alliance International Portfolio ____%
