AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT
AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT, effective as of
December 31, 1998 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; and
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; and
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 levels specified therein; and
WHEREAS, three new Portfolios, MFS Growth with Income Portfolio,
EQ/Evergreen Foundation Portfolio and EQ/Evergreen Portfolio (collectively, the
"New Portfolios"), are being added to the Trust;
WHEREAS, the Trust and the Manager desire to maintain the expenses of
each New Portfolio at a level below the level to which each such Portfolio would
normally be subject 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:
Expense Limitation.
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 Operating Expense
Limit, as defined in Section 1.2 below, such excess amount (the "Excess Amount")
shall be the liability of the Manager.
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Operating Expense Limit. The maximum Operating Expense Limit in any year
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.
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 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
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.
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.
Reimbursement of Fee Waivers and Expense Reimbursements.
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 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.
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.
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 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 Operating
Expense Limit of that Portfolio, provided that such amount paid to the Manager
will in no event exceed the total Reimbursement Amount.
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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 Operating Expense
Limit.
Term and Termination of Agreement.
This Agreement shall continue in effect with respect to all Portfolios
other than the New Portfolios until April 14, 1999 and with respect to the New
Portfolios until December 31, 1999. This Agreement 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 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.
Miscellaneous.
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.
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.
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.
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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
OPERATING EXPENSE LIMITS
This Agreement relates to the following Portfolios of the Trust:
Maximum Operating
Name of Portfolio Expense Limit
BT Equity 500 Index Portfolio .30%
BT International Equity Index Portfolio .55%
BT Small Company Index Portfolio .35%
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%
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