EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, effective as of May 1, 2001 by and between
The Equitable Life Assurance Society of the United States (the "Manager") and
Equitable Trust (the "Trust"), on behalf of each series of the Trust set forth
in Schedule A attached hereto (each a "Fund").
WHEREAS, the Trust is a Delaware business trust organized under the
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 the Fund is a series of the
Trust;
WHEREAS, the Trust and the Manager have entered into an Investment
Management Agreement dated May 1, 2001, ("Management Agreement"), pursuant to
which the Manager provides investment management services to the Fund for
compensation based on the value of the average daily net assets of the Fund;
WHEREAS, the Trust and the Manager have determined that it is appropriate
and in the best interests of the Fund and its shareholders to maintain the
expenses of the Fund at a level below the level to which each such Fund would
normally be subject during its start-up period.
NOW THEREFORE, the parties hereto agree as follows:
1. Expense Limitation.
1.1. Applicable Expense Limit. To the extent that the aggregate expenses of
every character incurred by a Fund in any fiscal year, including but not limited
to organizational costs, 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 the Fund's
business and amounts payable pursuant to a plan adopted in accordance with Rule
12b-1 under the 1940 Act) ("Fund 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 the Fund shall be the amount specified in Schedule
A based on a percentage of the average daily net assets of the Fund.
1.3. Method of Computation. To determine the Manager's liability with
respect to the Excess Amount, each month the Fund Operating Expenses for the
Fund shall be annualized as of the last day of the month. If the annualized Fund
Operating Expenses for any month of the Fund exceed the Maximum Annual Operating
Expense Limit of the Fund, the Manager shall first waive or reduce its
investment management fee for such month by an amount sufficient to reduce the
annualized Fund 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 Fund 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 Fund 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 the
Fund are greater than $100 million and in which the Management Agreement is
still in effect, the estimated aggregate Fund Operating Expenses of the Fund for
the fiscal year are less than the Maximum Annual Operating Expense Limit for
that year, the Manager shall be entitled to reimbursement by the Fund, in whole
or in part as provided below, of the investment management fees waived or
reduced and other payments remitted by the Manager to the Fund 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 Fund, pursuant to Section 1
hereof, during any of the previous three (3) fiscal years, less any
reimbursement previously paid by the Fund to the Manager, pursuant to Section
2.2 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. Method of Computation. To determine the Fund's payments, if any, to
reimburse the Manager for the Reimbursement Amount, each month the Fund
Operating Expenses of the Fund shall be annualized as of the last day of the
month. If the annualized Fund Operating Expenses of the Fund for any month are
less than the Maximum Annual Operating Expense Limit of the Fund, the Fund,
shall pay to the Manager an amount sufficient to increase the annualized Fund
Operating Expenses of the Fund to an amount no greater than the Maximum Annual
Operating Expense Limit of the Fund, provided that such amount paid to the
Manager will in no event exceed the total Reimbursement Amount.
2.3. 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 Fund Operating Expenses of the Fund
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.
2.4. Limitation of Liability. The Manager shall look only to the assets of
the Fund for which it waived or reduced fees or remitted payments for
reimbursement under this Agreement and for payment of any claim hereunder, and
neither the Fund, nor any of the Trust's trustees, officers, employees, agents,
or shareholders, whether past, present or future shall be personally liable
therefor.
3. Term and Termination of Agreement.
This Agreement shall continue in effect with respect to the Fund until
October 31, 2002 and shall thereafter continue in effect with respect to the
Fund 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"). This Agreement shall terminate
automatically upon the termination of the Management Agreement; provided,
however, that a Fund's obligation to reimburse the Manager, as described above,
will survive the termination of this Agreement unless the Trust and the Manager
agree otherwise.
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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 Fund 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 Fund.
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 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.
EQUITABLE TRUST
ON BEHALF OF ITS FUND
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Xxxxx X. Xxxxx
Chairman of the Board and Trustee
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
By: /s/ Xxxxx X. X'Xxxx
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Xxxxx X. X'Xxxx
Executive Vice President
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SCHEDULE A
MAXIMUM ANNUAL OPERATING EXPENSE LIMITS
This Agreement relates to the following Fund of the Trust:
Name of Fund Maximum Annual Operating Expense Limit
------------ --------------------------------------
Class A Class B Class C Class Z
Equitable Money Market Fund 0.95% 1.70% 1.70% 0.70%
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