As filed with the Securities and Exchange Commission on February 1,2001
Securities Act File No. 333-17217
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. / /
EQ ADVISORS TRUST
(Exact Name of Registrant as Specified in Charter)
1290 Avenue of the Americas, New York, New York 10104
(Address of Principal Executive Offices) (Zip Code)
(212) 554-1234
(Registrant's Area Code and Telephone Number)
Peter D. Noris
The Equitable Life Assurance Society of the United States
1290 Avenue of the Americas
New York, New York 10104
(Name and Address of Agent for Service)
With copies to:
Patricia Louie Jane A. Kanter
The Equitable Life Assurance Society Dechert
of the United States 1775 Eye Street, N.W.
1290 Avenue of the Americas Washington, D.C. 20006
New York, NY 10104
------------------------
Approximate Date of Proposed Public Offering:
As soon as practicable after this Registration Statement becomes effective.
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It is proposed that this filing will become effective on March 5, 2001 pursuant
to Rule 488 under the Securities Act of 1933.
No filing fee is required because an indefinite number of shares have previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES ("EQUITABLE")
EQ ADVISORS TRUST ("TRUST")
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF T. ROWE PRICE
EQUITY INCOME PORTFOLIO SCHEDULED FOR APRIL 23, 2001
Dear Equitable Client:
The net premiums or contributions you paid under your Equitable variable life
insurance policy or variable annuity contract or certificate ("Contract") 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 the Trust. As an owner of a
Contract ("Contractowner") of record at the close of business on January 22,
2001 ("Record Date") with premiums or contributions allocated to the T. Rowe
Price Equity Income Portfolio ("Price Portfolio"), you are entitled to instruct
Equitable as the sole shareholder of record of all of the shares issued by the
Price Portfolio that are held in investment divisions of each Separate Account,
as to how it should vote on certain proposals to be considered at a Special
Meeting of Shareholders of the Price Portfolio of the Trust ("Special Meeting").
The Special Meeting is scheduled to be held on April 23, 2001 at 10:00 a.m.,
local time, at 1290 Avenue of the Americas, New York, New York 10104.
Contractowners will be asked, as appropriate, to provide Equitable with voting
instructions on the following proposals:
1. Approval of an Agreement and Plan of Reorganization providing for the
acquisition of all of the assets of the Price Portfolio by the Trust's
EQ/Bernstein Diversified Value Portfolio ("Bernstein Portfolio") and
the assumption of all liabilities of the Price Portfolio by the
Bernstein Portfolio in exchange for shares of the Bernstein Portfolio
and the subsequent liquidation of the Price Portfolio;
2. To transact such other business as may properly come before the Special
Meeting or any adjournments thereof.
You are urged to read both the Information Statement of Equitable and the Proxy
Statement/Prospectus of the Trust, attached to this notice prior to completing
your ballot.
IT IS VERY IMPORTANT THAT YOUR CONTRACT 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 VOTING INSTRUCTIONS. YOU ALSO MAY PROVIDE VOTING
INSTRUCTIONS BY PHONE AT 1-800-404-3299, OR BY INTERNET AT OUR WEBSITE AT
WWW.PROXYWEB.COM.
Pauline Sherman
Secretary of Equitable
Patricia Louie
Secretary of the Trust
New York, New York
March 9, 2001
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
INFORMATION STATEMENT
REGARDING A SPECIAL MEETING OF THE SHAREHOLDERS OF THE
T. ROWE PRICE EQUITY INCOME PORTFOLIO OF EQ ADVISORS TRUST
TO BE HELD ON APRIL 23, 2001
MARCH 9, 2001
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
January 22, 2001 ("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").
The T. Rowe Price Equity Income Portfolio ("Price Portfolio") and the
EQ/Bernstein Diversified Value Portfolio ("Bernstein Portfolio") are two of
those separate Portfolios.
Equitable is required to offer Contractowners the opportunity to instruct
Equitable, as the owner of all the shares of the Price Portfolio held by the
Separate Accounts, as to how it should vote on the proposal to be considered at
the Special Meeting of Shareholders of the Price Portfolio of the Trust referred
to in the preceding Notice and at any adjournments ("Special Meeting"). The
proposal to be considered at the Special Meeting is discussed in the Trust's
Proxy Statement/Prospectus, which is enclosed. Contractowners are urged to read
the Proxy Statement/Prospectus prior to completing the ballot.
Equitable is a wholly-owned subsidiary of AXA Financial, Inc., itself a
wholly-owned 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 March 9, 2001.
HOW TO INSTRUCT EQUITABLE
To instruct Equitable as to how to vote the shares of the Price Portfolio
("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
1-800-404-3299, or by Internet at our website at www.proxyweb.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 THE PROPOSAL.
The number of Shares held in the investment division of each Separate Account
corresponding to the Price Portfolio 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 each Separate Account by (ii) the net asset value of one
share of the Price Portfolio. At any time prior to Equitable's voting at the
Special Meeting of the Shares held in the
investment division of each Separate Account corresponding to the Price
Portfolio, 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.
HOW EQUITABLE WILL VOTE
Equitable will vote the shares for which Equitable receives timely voting
instructions from Contractowners in accordance with those instructions.
Equitable will vote shares attributable to contracts for which Equitable is the
Contractowner for the proposal. Shares in each investment division of a Separate
Account for which Equitable receives no timely voting instructions from
Contractowners, 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 the proposal, or as an abstention, in the same proportion as the shares for
which Contractowners (other than Equitable) have provided voting instructions to
Equitable.
In addition, Equitable is the fiduciary of The Equitable Investment Plan for
Employees, Managers, and Agents ("Equitable Plan"). The Equitable Plan holds
Shares of the Price Portfolio. Equitable, in its capacity as the Equitable Plan
fiduciary, will vote the Shares of the Price Portfolio held by the Equitable
Plan in favor of the proposal.
OTHER MATTERS
Equitable is not aware of any matters, other than the specified proposal, 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 voting instructions 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 the 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 voting
instructions. The persons named as proxies will vote in favor of such
adjournment with respect to those voting instructions which have been voted in
favor of the proposal and will vote against any such adjournment those voting
instructions 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 1-800-404-3299 OR BY INTERNET AT OUR
WEBSITE AT WWW.PROXYWEB.COM. IT IS IMPORTANT THAT YOUR POLICY, CONTRACT OR
CERTIFICATE BE REPRESENTED.
PROXY STATEMENT/PROSPECTUS
OF EQ ADVISORS TRUST
SPECIAL MEETING OF SHAREHOLDERS OF T. ROWE PRICE EQUITY INCOME PORTFOLIO
OF EQ ADVISORS TRUST SCHEDULED FOR
APRIL 23, 2001
TABLE OF CONTENTS
PAGE
----
INTRODUCTION.......................................................................................1
APPROVAL OF AGREEMENT AND PLAN OF REORGANIZATION...................................................4
SUMMARY............................................................................................4
Comparison of Investment Objectives and Strategies..............................................5
Comparison of Investment Techniques and Risks of the Price Portfolio and
Bernstein Portfolio...........................................................................7
Performance of the Price Portfolio, the Bernstein Portfolio and the Bernstein
Diversified Value Composite...................................................................8
COMPARISON OF FEES AND EXPENSES...................................................................10
Annual Portfolio Operating Expenses............................................................11
ADDITIONAL INFORMATION ABOUT THE BERNSTEIN PORTFOLIO..............................................13
INFORMATION ABOUT THE REORGANIZATION..............................................................14
ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS.......................................................18
GENERAL INFORMATION ABOUT THE PROXY STATEMENT.....................................................20
Solicitation of Voting Instructions............................................................20
Voting Rights..................................................................................20
Other Matters to Come Before the Special Meeting...............................................21
Reports to Shareholders........................................................................21
APPENDIX A.......................................................................................A-1
APPENDIX B.......................................................................................B-1
i
PROXY STATEMENT/PROSPECTUS
OF EQ ADVISORS TRUST
SPECIAL MEETING OF SHAREHOLDERS OF T. ROWE PRICE EQUITY INCOME PORTFOLIO OF
EQ ADVISORS TRUST SCHEDULED FOR
APRIL 23, 2001
INTRODUCTION
------------
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, among others,
The Equitable Life Assurance Society of the United States ("Equitable") and
other insurance companies affiliated and unaffiliated with Equitable
(collectively, "Shareholders"). Shares of the Trust's T. Rowe Price Equity
Income Portfolio ("Price Portfolio") are also sold to The Equitable Investment
Plan for Employees, Managers and Agents ("Equitable Plan"). 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. Owners of Contracts ("Contractowners") with amounts
allocated to the Price Portfolio are being provided the opportunity to provide
voting instructions concerning the proposals contained in the Proxy
Statement/Prospectus.
This Proxy Statement/Prospectus is being provided to Shareholders and mailed to
Contractowners on or about March 9, 2001. This Proxy Statement/Prospectus is
being furnished on behalf of the Board of Trustees of the Trust ("Board") to
Shareholders of the Price Portfolio for their use in obtaining instructions from
Contractowners as to how to vote on the proposal to be considered at the Special
Meeting of Shareholders of the Price Portfolio to be held at 1290 Avenue of the
Americas, New York, New York 10104, on April 23, 2001 at 10:00 a.m., Eastern
time and at any adjournments thereof ("Special Meeting"). It is expected that
the Shareholders will 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 from Contractowners 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 from
Contractowners, or which are attributable to amounts retained by Equitable as
surplus or seed money, will be voted by Equitable for or against approval of the
proposal, or as an abstention, in the same proportion as the shares for which
Contractowners (other than Equitable) have provided voting instructions to
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 January 22, 2001 ("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 duly received, 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
Equitable, as the sole Shareholder of the Price Portfolio, as well as this Proxy
Statement/Prospectus,
will be mailed to the Contractowners by Equitable on or about March 9, 2001 in
order to obtain voting instructions from the Contractowners.
The Proxy Statement/Prospectus is soliciting Contractowners to approve an
Agreement and Plan of Reorganization ("Reorganization Agreement"). The
Reorganization Agreement contemplates the transfer of all of the assets of the
Price Portfolio to the Trust's EQ/Bernstein Diversified Value Portfolio (which
prior to March 1, 2001 was known as the Lazard Large Cap Value Portfolio)
("Bernstein Portfolio") and the assumption by the Bernstein Portfolio of all of
the liabilities of the Price Portfolio in exchange for Class IA and Class IB
shares of the Bernstein Portfolio having an aggregate value equal to the assets
and liabilities of Price Portfolio ("Reorganization"). The Price Portfolio would
then distribute to its Shareholders and the Equitable Plan the portion of the
Class IA and Class IB shares of the Bernstein Portfolio to which each
Shareholder and the Equitable Plan is entitled. This would result in a
liquidation of the Price Portfolio. Each Shareholder and the Equitable Plan
would receive either Class IA or Class IB shares of the Bernstein Portfolio
having an aggregate value equal to the aggregate value of the same class of
shares of the Price Portfolio held by that Shareholder and the Equitable Plan,
as of the close of business on the business day of the closing of the
Reorganization. You are being asked to provide voting instructions concerning
your approval of the Reorganization Agreement pursuant to which these
Reorganization transactions would be accomplished. Because Shareholders of the
Price Portfolio are being asked to approve a transaction that will result in
their holding of shares of the Bernstein Portfolio, this Proxy Statement also
serves as a Prospectus for the Bernstein Portfolio.
For purposes of voting on the proposal to approve the Reorganization Agreement,
Class IA and Class IB shares of the Price Portfolio will vote together as a
single class. Each whole share of the Price 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 the Price Portfolio:
------------------------------------------------------------------------
NUMBER OF CLASS IA SHARES NUMBER OF CLASS IB SHARES
------------------------------------------------------------------------
542,512.772 20,819,785.476
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VOTING INFORMATION
PROXY SOLICITATION. The costs of the Special Meeting, including the costs of
solicitation of proxies and voting instructions, will be allocated in its
entirety to Equitable and its affiliates. The principal solicitation will be by
mail, but voting instructions 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) in order to obtain the necessary representation at the Special
Meeting. Solicitations made by Shareholder Communications Corporation will be
made at a cost that is not expected to exceed $150,000. Contractowners can
provide voting instructions: (1) by Internet at our website at www.proxyweb.com;
(2) by telephone at 1-800-404-3299; or (3) by mail, with the enclosed ballot.
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.
2
INFORMATION ABOUT THE BERNSTEIN PORTFOLIO
This Proxy Statement/Prospectus, which you should retain for future reference,
contains important information about the Bernstein Portfolio that you should
know before investing. For a more detailed discussion of the investment
objectives, investment strategies, restrictions and risks of the Bernstein
Portfolio and those of the Price Portfolio, please see the Trust's Prospectus
dated May 1, 2000, as supplemented on January 31, 2001, and the Trust's
Statement of Additional Information dated May 1, 2000, as revised September 1,
2000 ("SAI"), which are incorporated herein by reference and which may be
obtained, without charge, by calling 1-800-528-0204. The Trust also provides
periodic reports to its shareholders that highlight certain important
information about the Price and Bernstein Portfolios, including investment
results and financial information. A copy of the Annual Report of the Trust for
the fiscal year ended December 31, 2000, including financial statements, has
been mailed separately to Contractowners on or about the time of the mailing of
this Proxy Statement/Prospectus and is incorporated herein by reference. THE
TRUST WILL FURNISH, WITHOUT CHARGE, TO ANY CONTRACTOWNER, UPON REQUEST, A COPY
OF THE 2000 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).
You can copy and review information about each Portfolio (including the SAI) at
the Securities and Commission's ("SEC" or "Commission") Public Reference Room in
Washington, D.C. You may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-202-942-8090. Reports and other
information about the Price and Bernstein Portfolios are available on the EDGAR
Database on the Commission's Internet site at http://www.sec.gov. You may obtain
copies of this information, after paying a duplicating fee, by electronic
request at the following E-mail address: publicinfo@sec.gov, or by writing the
Commission's Public Reference Section, Washington, D.C. 20549.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED THAT
THIS PROXY STATEMENT/PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
3
APPROVAL OF AGREEMENT AND PLAN OF REORGANIZATION
- ------------------------------------------------
SUMMARY
-------
You should read this entire Proxy Statement/Prospectus carefully. For additional
information, you should consult the Trust's Prospectus and the Reorganization
Agreement, which is attached hereto as Appendix A.
THE PROPOSED REORGANIZATION. On January 19, 2001, the Board approved the
Reorganization Agreement. Subject to shareholder approval, the Reorganization
Agreement provides for:
o the transfer of all of the assets of the Price Portfolio to the
Bernstein Portfolio, in exchange for shares of the Bernstein Portfolio
having an aggregate value equal to the assets and liabilities of the
Price Portfolio;
o the assumption by the Bernstein Portfolio of all of the liabilities of
the Price Portfolio;
o the distribution to Shareholders and the Equitable Plan of either Class
IA or Class IB shares of the Bernstein Portfolio having an aggregate
value equal to the aggregate value of the shares of the Price Portfolio
held by that Shareholder or the Equitable Plan; and
o the complete liquidation of the Price Portfolio.
The Reorganization is expected to be effective upon the closing of business on
April 30, 2001, or on a later date as the parties may agree ("Closing"). As a
result of the Reorganization, each owner of shares of the Price Portfolio would
become an owner of shares in the Bernstein Portfolio. Each owner of shares would
hold, immediately after the Closing, either Class IA or Class IB shares of the
Bernstein Portfolio having an aggregate value equal to the aggregate value of
the same class of shares of the Price Portfolio held by that owner of shares as
of the close of business on the business day of the Closing.
In considering whether to approve the Reorganization Agreement, you should note
that:
o Alliance Capital Management, L.P. ("Alliance") replaced the Bernstein
Portfolio's previous investment adviser ("Adviser") effective March 1,
2001 ("Alliance Appointment"). Alliance is an affiliate of Equitable,
the Trust's investment manager ("Manager"), and the two distributors of
the Trust's shares, AXA Advisors, LLC ("AXA Advisors") and Equitable
Distributors, Inc. ("EDI").
o Alliance provides the day-to-day investment advice to the Bernstein
Portfolio through its Bernstein Investment Research and Management unit
("Bernstein"). The Bernstein Portfolio's investment objective is to
seek capital appreciation by investing primarily in equity securities
of companies with relatively large capitalizations that appear to the
Adviser to be inexpensively priced relative to the return on total
capital or equity. In contrast, the Price Portfolio's investment
objective is to provide substantial dividend income and also capital
appreciation by investing primarily in dividend-paying common stocks of
established companies.
o Both the Price Portfolio and the Bernstein Portfolio are categorized by
Equitable as U.S. Equity Value Portfolios. The reorganization would
consolidate the assets attributable to the Portfolios in a single
Portfolio, thereby eliminating duplicative Portfolios and
4
potentially permitting shareholders of both Portfolios to benefit from
greater economies of scale.
o The Trust Portfolios serve as investment vehicles for Contracts issued
by Equitable. Those Contracts are utilized by financial professionals
to implement personalized financial strategies for their customers and
clients. Equitable believes that Price Associates' "equity income"
style of managing the Price Portfolio is generally inconsistent with
implementing those personalized financial planning.
o The Price Portfolio's annual contractual management fee equals 0.60% of
average daily net assets. The Bernstein Portfolio's annual contractual
management fee rate equals 0.65% of average daily net assets.
Equitable, in its capacity as the Trust's investment manager
("Manager"), has agreed to waive or limit its fees and to assume other
expenses of the Price Portfolio and the Bernstein Portfolio so that the
total annual operating expenses (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 each Portfolio's
business and amounts payable pursuant to a plan adopted in accordance
with Rule 12b-1 under the 1940 Act), including 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, of
each Portfolio are limited to 0.70% of that Portfolio's average daily
net assets.
Approval of the Reorganization Agreement requires the vote of a majority of the
shares of the Price Portfolio present at the Special Meeting, if a quorum is
present at the Special Meeting. The Declaration of Trust defines a "quorum" as
33 1/3 percent of the shares entitled to vote. Abstentions will have the effect
of a vote against the Reorganization Agreement.
AFTER CAREFUL CONSIDERATION, THE BOARD UNANIMOUSLY APPROVED THE PROPOSED
REORGANIZATION AGREEMENT. THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSED
REORGANIZATION AGREEMENT.
COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES
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Price Portfolio Bernstein Portfolio
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Seeks to provide substantial dividend income and Seeks capital appreciation by investing primarily in
Objective also capital appreciation by investing primarily equity securities of companies with relatively large
in dividend-paying common stocks of established capitalizations that appear to the Adviser to be
companies. inexpensively priced relative to the return on total
capital or equity.
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Normally invests at least 65% of its total assets Normally invests at least 80% of its total assets Strategies
in dividend-paying common stocks of well- primarily in equity securities of large capitalization
established companies paying above-average companies that appear to the Adviser to be inexpensively
dividends. priced relative to the total return on capital or equity.
- ----------------------------------------------------------------------------------------------------------------------------------
The Adviser bases its investment decisions on The Portfolio uses a value-oriented approach in searching
three premises: (1) over time, dividend income for securities. The Adviser uses a "bottom-up" approach
can account for a significant portion of the to find companies that have: low price to earnings
Portfolio's return; (2) dividends are a more ratios; high yield; unrecognized assets; the possibility
stable and predictable source of return; and (3) of management change; and/or the prospect of improved
prices of stocks that pay a high current income profitability.
tend to be less volatile than those paying average
dividends.
- ----------------------------------------------------------------------------------------------------------------------------------
5
- ----------------------------------------------------------------------------------------------------------------------------------
The Adviser uses a value approach in choosing
securities. The Adviser's in-house research team
seeks companies that appear to be undervalued by
various measures and may be temporarily out of
favor, but have good prospects for capital
appreciation and dividend growth. It looks for
common stocks of companies that have: established
operating histories; above-average dividend yields
relative to the Standard & Poor's 500 Composite
Stock Price Index ("S&P 500"); low price to
earnings ratios relative to the S&P 500; sound
balance sheets and other positive financial
characteristics; and low stock price relative to
the company's asset value, cash flow or business
franchises.
- ----------------------------------------------------------------------------------------------------------------------------------
The Portfolio may purchase preferred stocks, The Portfolio may also invest up to 20% of its assets in
convertible securities, warrants, futures, options, U.S. government securities and investment grade debt
U.S. government securities, high quality money securities of domestic corporations rated BBB or better
market securities, as well as investment grade by S&P or Baa or better by Moody's.
debt securities and high yielding debt securities
("junk bonds").
The Portfolio may invest up to 25% of its total The Portfolio may also invest up to 10% of its assets in
assets in foreign securities. These securities foreign equity or debt securities, or depositary receipts.
include non-dollar denominated securities traded
outside the United States and dollar denominated
securities of foreign issuers traded in the U.S.
such as American Depositary Receipts.
- ----------------------------------------------------------------------------------------------------------------------------------
When market or financial conditions warrant, the When market or financial conditions warrant, the
Portfolio may invest without limitation in high Portfolio may invest, without limit, in money market
quality money market securities and United States securities for temporary or defensive purposes.
government securities for temporary or defensive
purposes.
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Investment Equitable Equitable
Manager
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Price Associates Alliance
Adviser
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio Brian Rogers Marilyn Goldstein Fedak and Steven Pisarkiewicz
Manager(s)
- ----------------------------------------------------------------------------------------------------------------------------------
As you can see from the chart above, the investment objectives and strategies of
the Price Portfolio are similar to the investment objectives and strategies of
the Bernstein Portfolio. However, unlike the Bernstein Portfolio, the Price
Portfolio seeks substantial dividend income in addition to capital appreciation.
6
COMPARISON OF INVESTMENT TECHNIQUES AND RISKS OF THE PRICE PORTFOLIO AND
BERNSTEIN PORTFOLIO
Risk is the chance that you will lose money on your investment or that it will
not earn as much as you expect. In general, the greater the risk, the more money
your investment can earn for you and the more money you can lose. Like other
investment companies, the value of each Portfolio's shares may be affected by
the Portfolio's investment objective(s), principal investment strategies and
particular risk factors. Consequently, each Portfolio may be subject to
different principal risks. Some of the principal risks of investing in the
Portfolios are discussed below. However, other factors may also affect each
Portfolio's net asset value.
There is no guarantee that a Portfolio will achieve its investment objective(s)
or that it will not lose principal value.
Both Portfolios invest in common stocks, therefore, their performance may go up
or down depending on general market conditions. Additionally, the Price
Portfolio's emphasis on stocks of established companies paying high dividends
and its potential investments in fixed income securities may limit its potential
for appreciation in broad market advance. Securities of companies paying high
dividends and fixed income securities may also be hurt when interest rates rise
sharply. Also a company may reduce or eliminate its dividend. Other principal
risks include:
MARKET RISK. The value of each Portfolio's securities may be affected by market
risk. This is the risk that the value of the Portfolio's investments will
fluctuate as the stock markets fluctuate and that prices overall will decline
over short- or long-term periods.
VALUE INVESTING RISK. Both Portfolios use a value-oriented approach select their
portfolio securities. Value investing is subject to the risk that a value
stock's intrinsic value may never be fully recognized or realized by the market,
or that its price may go down. There is also the risk that a stock judged to be
undervalued may actually be appropriately priced.
FOREIGN SECURITIES RISK. The Price Portfolio may invest up to 25% of its total
assets in foreign securities. The Bernstein Portfolio may invest up to 10% of
its assets in foreign securities. The Portfolios' investments in foreign
securities involve risks not associated with investing in U.S. securities, which
can adversely affect each Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to clear
and settle. In addition, the value of foreign investments can be adversely
affected by: unfavorable currency exchange rates (relative to the U.S. dollar
for securities denominated in foreign currencies); inadequate or inaccurate
information about foreign companies; higher transaction, brokerage and custody
costs; adverse changes in foreign economic and tax policies; and foreign
government instability, war or other adverse political or economic actions.
FIXED INCOME RISK. To the extent that a substantial amount of either Portfolio's
assets are invested in fixed income securities, that portion of that Portfolio's
performance will be affected by changes in interest rates, the credit risk of
the issuer, the duration or maturity of the Portfolio's fixed income holdings,
and adverse market or economic conditions. When interest rates rise, the value
of a Portfolio's fixed income securities, particularly those with longer
durations or maturities, will go down. When interest rates fall, the reverse is
true. The risk that an issuer or guarantor of a fixed income security or
counterparty to a Portfolio's fixed income transaction is unable to meet its
financial obligations is particularly significant for the Price Portfolio
because this Portfolio may invest a portion of its assets in "junk bonds" (i.e.,
securities rated below investment grade). Junk bonds are issued by companies
with questionable credit strength and, consequently, are considered to be
speculative in nature and may be subject to greater
7
market fluctuations than investment grade fixed-income securities. To the extent
that the Bernstein Portfolio invests in investment grade securities which are
rated BBB by S&P or an equivalent rating by any other nationally recognized
statistical rating organization, it will be exposed to greater risk than
higher-rated obligations because BBB-rated investment grade securities are
regarded as having only an adequate capacity to pay principal and interest, are
considered to lack outstanding investment characteristics, and may be
speculative.
PERFORMANCE OF THE PRICE PORTFOLIO, THE BERNSTEIN PORTFOLIO AND THE BERNSTEIN
DIVERSIFIED VALUE COMPOSITE
PERFORMANCE OF THE PRICE PORTFOLIO AND THE BERNSTEIN PORTFOLIO. The bar charts
below illustrate, with respect to each Portfolio's Class IB shares, the
Portfolio's annual total return for 1998, 1999 and 2000, the Portfolio's first
three full years of operations, and some of the risks of investing in the
Portfolios by showing yearly changes in the Portfolios' performance. The tables
below show the Portfolios' average annual total returns for one year and since
inception. The tables below also compare the Portfolios' performance to the
returns of broad based indices. Both the bar chart and table assume reinvestment
of dividends and distributions. Past performance is not an indication of future
performance. In addition, the Bernstein Portfolio's performance presented below
was achieved under the Portfolio's previous Adviser, which has been replaced by
Alliance effective March 1, 2001.
Total returns include reinvestment of dividends and capital gains distributions,
if any. The performance results presented below do not reflect any insurance and
Contract-related fees and expenses which would reduce the performance results.
All indices are unmanaged.
PRICE PORTFOLIO - CLASS IB SHARES BERNSTEIN PORTFOLIO - CLASS IB SHARES
CALENDAR YEAR-BY-YEAR RETURNS (%) (1) CALENDAR YEAR-BY-YEAR RETURNS(%) (2)
9.11 3.54 12.87 20.11 3.55 -1.94
---- ---- ---- ---- ---- ---- ----
1998 1999 2000 1997 1998 1999 2000
(1) The Price Portfolio commenced operations on May 1, 1997. During the period
shown in the chart, the Portfolio's best quarterly performance was 13.29%
for the quarter ended June 30, 1999, and the Portfolio's worst quarterly
performance was (8.56)% for the quarter ended September 30, 1999.
(2) The Bernstein Portfolio commenced operations on January 1, 1998. During the
period shown in the chart, the Portfolio's best quarterly performance was
23.34% or the quarter ended December 31, 1998, and the Portfolio's worst
quarterly performance was (13.43)% for the quarter ended September 30,
1998.
The table below shows what the average annual total returns of the two
Portfolios would have been for certain periods compared to the S&P 500 Index and
Russell 1000 Value Index ("Russell 1000 Value"). Each index is unmanaged and is
not subject to fees and expenses typically associated with managed investment
company portfolios. Each index also is not subject to contract and
insurance-related expenses and charges. Investments cannot be made directly in
the indices. Comparisons with the indices, therefore, are of limited use. They
are included because they are widely known and may help you to understand the
universe of securities from which each Portfolio is likely to select its
holdings.
8
- ----------------------------------------------------------------------------------------------------------
Since Inception
04/30/1997 12/31/1997
12/31/2000 12/31/2000
1998 1999 2000 (Annualized) ) (Annualized)
- ----------------------------------------------------------------------------------------------------------
Price Portfolio(1) 9.11% 3.54% 12.87% 12.82% 8.43%
- ----------------------------------------------------------------------------------------------------------
Bernstein Portfolio (2) 20.01% 3.55% -1.94% ---% 6.81%
- ----------------------------------------------------------------------------------------------------------
Russell 1000 Value(3) 15.63% 7.35 7.01% 15.20% 9.93%
- ----------------------------------------------------------------------------------------------------------
S&P 500(4) 28.60 21.03% -9.10% 16.91% 12.26%
- ----------------------------------------------------------------------------------------------------------
(1) The Price Portfolio commenced operations on May 1, 1997.
(2) The Bernstein Portfolio commenced operations on January 1, 1998.
(3) The Russell 1000 Value Index measures the performance of those companies
included in the Russell 1000 Index ("Russell 1000") with lower
price-to-book ratios and lower forecasted growth values. The Russell 1000
is an unmanaged index which tracks the performance of 1,000 publicly-traded
U.S. stocks. It is often used to indicate the performance of larger company
stocks. The Russell 1000 universe of securities is compiled by Frank
Russell Company and is segmented into two style indices, the Russell 1000
Growth Index and the Russell 1000 Value Index.
(4) The S&P 500 Index is an unmanaged weighted index containing common stocks
of 500 industrial, transportation, utility and financial companies,
regarded as generally representative of the larger capitalization portion
of the United States stock market. The S&P 500 returns reflect the
reinvestment of dividends, if any, but do not reflect fees, brokerage
commissions or other expenses of investing.
PERFORMANCE OF THE BERNSTEIN DIVERSIFIED VALUE COMPOSITE. The following table
provides information concerning the historical performance of other
institutional private accounts managed by Alliance through its Bernstein unit
(and the Bernstein unit's predecessors) that have investment objectives,
policies, strategies and risks substantially similar to those of the Bernstein
Portfolio ("Bernstein Diversified Value Composite"). The data is provided to
illustrate the past performance of Bernstein in managing substantially similar
investment vehicles as measured against specified market indices. This data does
not represent the past or future performance of the Bernstein Portfolio or
Alliance. Consequently, potential investors should not consider this performance
data as an indication of the future performance of the Bernstein Portfolio or
Alliance and should not confuse this performance data with performance data for
the Price Portfolio.
Composite performance data relating to the historical performance of
institutional private accounts managed by Bernstein was calculated on a total
return basis and includes all losses. The total returns reflect the deduction of
investment advisory fees, brokerage commissions and execution costs paid by
Bernstein's institutional private accounts, without provision for federal or
state income taxes. Custodial fees, if any, were not included in the
calculation. The composite performance data includes all actual, fee-paying,
discretionary institutional private accounts managed by Bernstein that have
investment objectives, policies, strategies and risks substantially similar to
those of the relevant Portfolio. Securities transactions are accounted for on
the trade date and accrual accounting is utilized. Cash and equivalents are
included in performance returns. The institutional private accounts that are
included are not subject to the same types of expenses to which the relevant
Portfolio is subject or to the diversification requirements, specific tax
restrictions and investment limitations imposed on the Portfolio by the 1940 Act
or Subchapter M of the Internal Revenue Code. Consequently, the performance
results could have been adversely affected if the institutional private accounts
had been regulated as investment companies under the federal securities laws.
9
The major difference between the SEC prescribed calculation of average annual
total returns for registered investment companies or series thereof and total
returns for composite performance is that average annual total returns reflect
all fees and charges applicable to the registered investment company in question
and the total return calculation for the composites reflects only those fees and
charges described in the paragraph directly above.
The performance results for the Bernstein Diversified Value Composite are
subject to somewhat lower fees and expenses than the Bernstein Portfolio. In
addition, holders of Contracts representing interests in the Bernstein Portfolio
will be subject to charges and expenses related to such Contracts. The
performance results presented below do not reflect any insurance related
expenses and would be reduced if such charges were reflected. The investment
results presented below are unaudited.
---------------------------------------------------------------------------
03/31/1999(1)
12/31/2000
2000 (Annualized)
---------------------------------------------------------------------------
Bernstein Diversified Value Composite 13.32% 8.61%
---------------------------------------------------------------------------
Russell 1000 Value 7.01% 7.37%
---------------------------------------------------------------------------
S&P 500 -9.10% 2.71%
---------------------------------------------------------------------------
(1) March 31, 1999 represents the inception date of the Bernstein Diversified
Value Composite.
(2) The Russell 1000 Value Index measures the performance of those companies
included in the Russell 1000 with lower price-to-book ratios and lower
forecasted growth values. The Russell 1000 is an unmanaged index which
tracks the performance of 1,000 publicly-traded U.S. stocks. It is often
used to indicate the performance of larger company stocks. The Russell 1000
universe of securities is compiled by Frank Russell Company and is
segmented into two style indices, the Russell 1000 Growth Index and the
Russell 1000 Value Index.
(3) The S&P 500 Index is an unmanaged weighted index containing common stocks
of 500 industrial, transportation, utility and financial companies,
regarded as generally representative of the larger capitalization portion
of the United States stock market. The S&P 500 returns reflect the
reinvestment of dividends, if any, but do not reflect fees, brokerage
commissions or other expenses of investing.
COMPARISON OF FEES AND EXPENSES
-------------------------------
The following discussion describes and compares the fees and expenses of the
Portfolios.
ANNUAL PORTFOLIO OPERATING EXPENSES. The annual Portfolio operating expenses of
the Bernstein Portfolio expressed as a ratio of expenses to average daily net
assets ("expense ratio"), currently are higher than those of the Price Portfolio
before giving effect to any expense limitation agreement. The expense ratio for
Class IB shares of the Bernstein Portfolio, as of December 31, 2000, was 1.00%,
before giving effect to the Trust's Second Amended and Restated Expense
Limitation Agreement ("Expense Limitation Agreement"), compared to .93% for the
Price Portfolio. After giving effect to the Expense Limitation Agreement,
described below, the expense ratio of Class IB shares of the Bernstein Portfolio
as of December 31, 2000 was .95% compared to .92% for the Price Portfolio.
MANAGEMENT FEE. The Trust pays the Manager a fee based on each Portfolio's
average daily net assets. The Portfolio is not responsible for fees paid to the
Adviser. The table below sets forth the contractual investment management fees
payable to Equitable from each Portfolio under the current Investment Management
Agreement at the stated annual rates (expressed as a percentage of the average
daily net assets of each Portfolio):
10
- --------------------------------------------------------------------------------
BERNSTEIN PORTFOLIO PRICE PORTFOLIO
- --------------------------------------------------------------------------------
First $1 billion 0.650% 0.600%
- --------------------------------------------------------------------------------
Next $1 billion 0.600% 0.550%
- --------------------------------------------------------------------------------
Next $3 billion 0.575% 0.525%
- --------------------------------------------------------------------------------
Next $5 billion 0.550% 0.500%
- --------------------------------------------------------------------------------
Thereafter 0.525% 0.475%
- --------------------------------------------------------------------------------
EXPENSE LIMITATION ARRANGEMENTS. In the interest of limiting expenses of the
Portfolios, the Manager has entered into a voluntary Expense Limitation
Agreement with the Trust, with respect to the two Portfolios. Under the Expense
Limitation Agreement, the Manager has agreed to waive or limit its fees and to
assume other expenses so that the total annual operating expenses (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 each Portfolio's business and
amounts payable pursuant to a plan adopted in accordance with Rule 12b-1 under
the 1940 Act), including 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, of each Portfolio are limited to 0.70% of that
Portfolio's average daily net assets. The term of the current voluntary Expense
Limitation Agreement expires on April 30, 2002.
EXPENSE TABLE. The current fees and expenses of Class IA and Class IB shares of
the Price Portfolio and the Bernstein Portfolio and the estimated pro forma fees
and expenses after giving effect to the proposed Reorganization are shown in the
following table. Expenses for the Portfolios are based upon the operating
expenses incurred by Class IA and Class IB shares of the Price Portfolio and
Class IA and Class IB shares of the Bernstein Portfolio for the year ended
December 31, 2000. Pro forma fees and expenses show estimated fees of Class IA
and Class IB shares of the Bernstein Portfolio after giving effect to the
proposed Reorganization. Pro forma numbers are estimated in good faith and are
hypothetical.
ANNUAL PORTFOLIO OPERATING EXPENSES
(expenses that are deducted from Portfolio assets, shown as a ratio of expenses
to average daily net assets)(1)
TOTAL FUND FEE WAIVER
MANAGEMENT DISTRIBUTION OTHER OPERATING BY NET FUND
FEES (12B-1) FEES EXPENSES EXPENSES MANAGER(2) EXPENSES
---- ------------ -------- -------- ---------- --------
Price Portfolio (Class IA) 0.600% 0.00% 0.08% 0.68% 0.01% 0.67%
Price Portfolio (Class IB) 0.600% 0.25% 0.08% 0.93% 0.01% 0.92%
Bernstein Portfolio (Class IB)(3) 0.650% 0.25% 0.10% 1.00% 0.05% 0.95%
Bernstein Portfolio - After the 0.650% 0.00% 0.07% 0.72% 0.02% 0.70%
Reorganization (Class IA) (Pro forma)
Bernstein Portfolio - After the 0.650% 0.25% 0.07% 0.97% 0.02% 0.95%
Reorganization (Class IB) (Pro forma)
- --------------------
(1) The Price Portfolio's and Bernstein Portfolio's fiscal years end on
December 31. Expenses of the Price Portfolio and the Bernstein Portfolio
are based upon expenses incurred by each Portfolio for the 12-month period
ended December 31, 2000.
(2) Equitable has entered into an Expense Limitation Agreement with the Trust
that limits expenses (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
11
of each Portfolio's business and amounts payable pursuant to a plan adopted
in accordance with Rule 12b-1 under the 1940 Act), including 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, for both the Bernstein Portfolio and the Price Portfolio at
0.70%. The agreement will remain in effect through April 30, 2002. There is
no assurance that the Expense Limitation Agreement will be continued after
that date.
(3) The Bernstein Portfolio currently has no Class IA shares issued and
outstanding.
Following the Reorganization and in the ordinary course of business as a mutual
fund, certain holdings of the Price Portfolio that are transferred to the
Bernstein Portfolio in connection with the Reorganization may be sold. Such
sales may result in increased transaction costs for the Bernstein Portfolio,
[and the realization of taxable gains or losses for the Bernstein Portfolio].
EXAMPLES. The examples are intended to help you compare the cost of investing in
each of the Portfolios. The examples assume that you invest $10,000 in each
Portfolio for the time periods indicated and then redeem all of your shares at
the end of those periods. The examples also assume that your investment has a 5%
return each year and that each Portfolio's operating expenses remain the same.
The 5% return is an assumption and is not intended to portray past or future
investment results. Based on the above assumptions, you would pay the following
expenses if you redeem your shares at the end of each period shown. Your actual
costs may be higher or lower.
BERNSTEIN PORTFOLIO PRICE PORTFOLIO
1 3 5 10 1 3 5 10
YEAR YEARS YEARS YEARS YEAR YEARS YEARS YEARS
---- ----- ----- ----- ---- ----- ----- -----
Class IA $-- -- -- -- $68.45 $214.37 $373.20 $ 834.51
Class IB $96.92 $302.71 $525.50 $1,166.38 $93.88 $293.28 $509.28 $1,131.29
PRO FORMA:
THE PORTFOLIOS COMBINED
1 3 5 10
YEAR YEARS YEARS YEARS
---- ----- ----- -----
Class IA $71.51 $223.87 $389.62 $ 870.54
Class IB $96.92 $302.71 $525.50 $1,166.38
- --------------------
PURCHASE AND REDEMPTION
The price at which a purchase or redemption is effected is based on the next
calculation of net asset value after an order is placed by an insurance company
or qualified retirement plan investing in or redeeming from the Trust.
Net asset value per share is calculated for purchases and redemption of shares
of the Portfolio by dividing the value of total Portfolio assets, less
liabilities (including Trust expenses and class related expenses, which are
accrued daily), by the total number of outstanding shares of the Portfolio. The
net asset value per share is determined each business day at 4:00 p.m. Eastern
time. Net asset value per share is not calculated on days on which the New York
Stock Exchange ("NYSE") is closed for trading.
Portfolios that invest a significant portion of their assets in foreign
securities may experience changes in their net asset value on days when a
shareholder may not purchase or redeem shares of that Portfolio because foreign
securities (other than depositary receipts) are valued at the close of business
in the applicable foreign country.
All shares are purchased or redeemed in accordance with the Trust's Amended and
Restated Agreement and Declaration of Trust ("Declaration of Trust") and
By-Laws. Sales and redemptions of shares of the same class by the same
shareholder on the same day will be netted for the Portfolio. All redemption
requests will be processed and payment with respect thereto will normally be
made within seven days after tenders.
The Trust may suspend redemption, if permitted by the 1940 Act, for any period
during which the New York Stock Exchange is closed or during which trading is
restricted by the SEC or the SEC declares that
12
an emergency exists. Redemption may also be suspended during other periods
permitted by the SEC for the protection of the Trust's shareholders. If the
Board determines that it would be detrimental to the best interest of the
Trust's remaining shareholders to make payment in cash, the Trust may pay
redemption proceeds in whole or in part by a distribution-in-kind of readily
marketable securities.
You should note that the Trust is not designed for professional "market timing"
organizations, or other organizations or individuals engaging in market timing
strategy, making programmed transfers, frequent transfers or transfers that are
large in relation to the total assets of the Portfolio. Market timing strategies
are disruptive to the Portfolio. If we determine that your transfer patterns
among the Trust's portfolios reflect a market timing strategy, we reserve the
right to take action including, but not limited to restricting the availability
of transfer through telephone requests, facsimile transmissions, automated
telephone services, internet services or any electronic transfer services. We
may also refuse to act on transfer instructions of an agent acting under a power
of attorney who is acting on behalf of more than one owner.
HOW ASSETS ARE VALUED
Values are determined according to accepted practices and all laws and
regulations that apply. The assets of each Portfolio are generally valued as
follows:
o Stocks and debt securities which mature in more than 60 days are valued
on the basis of market quotations.
o Foreign securities not traded directly, including depositary receipts,
in the United States are valued at representative quoted prices in the
currency in the country of origin. Foreign currency is converted into
United States dollar equivalents at current exchange rates. Because
foreign markets may be open at different times than the NYSE, the value
of a Portfolio's shares may change on days when shareholders are not
able to buy or sell them. If events materially affecting the values of
a Portfolio's foreign investments occur between the close of foreign
markets and the close of regular trading on the NYSE, these investments
may be valued at their fair value.
o Short-term debt securities in a Portfolio which mature in 60 days or
less are valued at amortized cost, which approximates market value.
o Other securities and assets for which market quotations are not readily
available or for which valuation cannot be provided are valued in good
faith by the Valuation Committee of the Board using its best judgment.
ADDITIONAL INFORMATION ABOUT THE BERNSTEIN PORTFOLIO
----------------------------------------------------
Effective March 1, 2001, Alliance replaced Lazard Asset Management, a division
of Lazard Freres & Co. LLC, as the Portfolio's Adviser, and Alliance's Bernstein
unit provides the day-to-day investment advice to the Portfolio. Day-to-day
investment management decisions for the Portfolio are made by Marilyn Goldstein
Fedak and Steven Pisarkiewicz. Marilyn Goldstein Fedak has been Executive Vice
President and Chief Investment Officer - U.S. Value Equities of Alliance Capital
since October 2000 and, prior to that, served as Chief Investment Officer and
Chairman of the U.S. Equity Investment Policy Group as Sanford C. Bernstein &
Co., Inc. since 1993. Ms. Fedak has managed portfolio investments since 1976.
Steven Pisarkiewicz has served as Chief Investment Officer of Bernstein's
Structured Equities Investment Policy Group since 1989 and has been a Senior
Portfolio Manager since 1997.
13
Alliance, a publicly traded limited partnership, is indirectly majority-owned by
Equitable. Alliance manages investment companies, endowment funds, insurance
companies, foreign entities, qualified and non-tax qualified corporate funds,
public and private pension and profit-sharing plans, foundations and tax-exempt
organizations. In the fall of 2000, Sanford C. Bernstein & Co., Inc. combined
with Alliance, at which point, the Bernstein unit of Alliance was created.
Bernstein's field of expertise is the value style of investment management.
Bernstein's approach to equity investment for most of its equity services is
value-oriented, with value defined as the relationship between a security's
current price and its normal or long-term earnings power as determined by its
investment research.
Bernstein attempts to forecast corporate earnings and dividend paying capability
by quantifying what it believes to be the critical variables that control
business performance and analyzing the results in order to forecast the
long-term prospects of the companies it follows and to develop expected returns
for their securities. Bernstein performs fundamental market research and draws
on diverse sources of information such as company reports, press releases,
prospectuses, SEC filings, financial and trade newspapers and magazines,
corporate rating services, scholarly journals, online quotation services and
databases compiled by governmental agencies and others, and conversations with
management, suppliers, clients, competitors and individual consultants.
Bernstein's forecasts are made within the framework of long-term economic
settings. Bernstein typically measures a company's financial performance over a
full economic cycle, including a trough and a peak, and forecasts financial
performance within the context of its projections for real economic growth,
inflation, and interest rate change. As a result, forecasts of near-term
economic events are generally not of major consequence in establishing
individual companies' long-term earnings power and dividend-paying capability.
INFORMATION ABOUT THE REORGANIZATION
------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION. The following summary of the
Reorganization Agreement is qualified in its entirety by reference to the form
of the Reorganization Agreement attached to this Prospectus/Proxy Statement as
Exhibit A. The Reorganization Agreement provides that the Bernstein Portfolio
("Acquiring Portfolio") will acquire all of the assets, subject to all of the
liabilities, of the Price Portfolio in exchange for shares of the Acquiring
Portfolio. Subject to the satisfaction of the conditions described below, such
acquisitions shall take place on May 18, 2001 ("Closing Date"), or such later
date as may be agreed upon by the parties. The net asset value per share of the
Acquiring Portfolio and the Price Portfolio will be determined by dividing the
Acquiring Portfolio's assets, less liabilities, by the total number of its
outstanding shares. Portfolio assets will be valued in accordance with the
valuation practices of the Price Portfolio and Acquiring Portfolio. See "How
Assets are Valued" in the Trust Prospectus.
The number of full and fractional Class IA and Class IB shares of the Acquiring
Portfolio received by a shareholder of the Price Portfolio will be equal in
value to the value of that shareholder's Class IA and Class IB shares of the
Price Portfolio as of the close of regularly scheduled trading on the NYSE on
the Merger Date. As promptly as practicable after the Merger Date, the Price
Portfolio will liquidate and distribute pro rata to its shareholders of record
as of the close of regularly scheduled trading on the NYSE on the Merger Date
the shares of the Class IA and Class IB Portfolio received by the Price
Portfolio in the Reorganization. The liquidation and distribution will be
accomplished by the establishment of accounts on the share records of the
Acquiring Portfolio in the names of the shareholders of the Price Portfolio,
each account representing the pro rata number of Class IA and Class IB shares of
the Acquiring Portfolio due the shareholder. After such distribution, the Trust
shall take all necessary steps under Delaware law,
14
the Declaration of Trust and any other applicable law to effect a complete
dissolution of the Price Portfolio.
The Board has determined, with respect to the Price Portfolio and the Acquiring
Portfolio, that the interests of: (i) Contractowners whose Contract values are
invested in Class IA and Class IB shares of those Portfolios; and (ii) Equitable
Plan participants who have amounts invested in Class IA shares of the Price
Portfolio, will not be diluted as a result of the Reorganization and that
participation in the Reorganization is in the best interests of those
Portfolios, Contractowners and Equitable Plan participants.
The Reorganization Agreement may be terminated and the Reorganization abandoned
at any time prior to the consummation of the Reorganization, before or after
approval by the shareholders of the Price Portfolio, if circumstances should
develop that, in the Board's opinion, make proceeding with the Agreement
inadvisable. The Reorganization Agreement provides that the Trust may waive
compliance with any of the covenants or conditions made therein for the benefit
of either Portfolio, other than the requirements that: (i) the Reorganization
Agreement be approved by shareholders of the Price Portfolio; and (ii) the Trust
receive the opinion of the Trust's counsel that the transaction contemplated by
the Reorganization Agreement will constitute a tax-free reorganization for
federal income tax purposes.
The expenses of the Reorganization, including the cost of a proxy soliciting
agent that has been retained, will be borne by Equitable and its affiliates. See
"Voting Information."
Approval of the Reorganization Agreement will require a majority of the shares
of the Price Portfolio present at the meeting if a quorum is present at the
Special Meeting. See "Voting Information." If the Reorganization Agreement is
not approved by the shareholders of the Price Portfolio or is not consummated
for any other reason, the Board will consider other possible courses of action.
THE BOARD, INCLUDING ALL OF THE DISINTERESTED TRUSTEES ("INDEPENDENT TRUSTEES")
HAS UNANIMOUSLY RECOMMENDED APPROVAL OF THE REORGANIZATION AGREEMENT
Shareholders of the Price Portfolio will receive shares of the Acquiring
Portfolio in accordance with the procedures provided for in the Reorganization
Agreement as described above. Each such share will be fully paid and
nonassessable when issued and will have no preemptive or conversion rights.
DESCRIPTION OF THE SECURITIES TO BE ISSUED. The Trust has an unlimited number of
authorized shares of beneficial interest, par value $0.01 per share. These
authorized shares may be divided into series and classes thereof. The
Declaration of Trust authorizes the Board to issue shares in different series.
In addition, the Declaration of Trust authorizes the Board to create new series
and to name the rights and preferences of the shareholders of each of the
series. The Board does not need additional shareholder action to divide the
shares into separate series or classes or to name the shareholders' rights and
preferences. The Price Portfolio and the Acquiring Portfolio are both series of
the Trust. Currently, the Trust offers two classes of shares, Class IA and Class
IB shares, which differ only in that Class IB shares are subject to a
distribution plan adopted and administered pursuant to Rule 12b-1 under the 1940
Act ("Class IB Distribution Plan"). The Class IB Distribution Plan provides that
the Trust, on behalf of each Portfolio, may pay annually up to 0.50% of the
average daily net assets of a Portfolio attributable to its Class IB shares in
respect of activities primarily intended to result in the sale of Class IB
shares. However, under the Trust's distribution agreements with respect to the
Class IA shares and Class IB shares ("Distribution Agreements"), payments to the
Distributors for activities pursuant to the Class IB Distribution Plan are
limited to payments at an annual rate equal to 0.25% of average daily net assets
of a Portfolio attributable to its Class IB shares.
15
REASONS FOR THE REORGANIZATION. The principal purpose of the Reorganization is
to provide a means by which shareholders of the Price Portfolio, in combination
with the Acquiring Portfolio, can pursue substantially similar investment
objectives and policies in the context of a larger fund with a new Adviser who
specializes in the "value" style of investment management and with potentially
greater economies of scale.
In determining whether to approve the Reorganization Agreement and recommend its
approval to shareholders, the Board (including the Independent Trustees (with
the advice and assistance of independent legal counsel), made an inquiry into a
number of matters and considered the following factors, among others: (1)
expense ratios and available information regarding the fees and expenses of the
Price Portfolio and Acquiring Portfolio (historical and pro forma), as well as
those of similar funds; (2) the compatibility of the investment objectives,
policies and restrictions of the Price Portfolio and Acquiring Portfolio (after
giving effect to the Alliance Appointment); (3) the advantages to the Bernstein
Portfolio of investing in larger asset pools with potentially greater
diversification; (4) the historical performance of the Price Portfolio and the
Bernstein Portfolio; (5) the Manager's belief that the investment style of the
Price Portfolio was inconsistent with the personalized financial planning
strategies used by financial professional in connection with the Contracts; (6)
the investment experience, expertise and resources of the current Advisers to
the Price Portfolio and the Bernstein Portfolio; (7) the terms and conditions of
the Reorganization Agreement and whether the Reorganization would result in
dilution of Contractowner and Equitable Plan participant interests; (8) any
direct and indirect costs to be incurred by the Price Portfolio or the Bernstein
Portfolio as a result of the Reorganization; (9) all expenses of the
Reorganization will be borne by Equitable and its affiliates; (10) the tax
consequences of the Reorganization; and (11) possible alternatives to the
Reorganization.
In reaching the decision to recommend approval of the Reorganization Agreement,
the Board concluded that the participation of the Price Portfolio and the
Bernstein Portfolio in the Reorganization is in the best interests of the Price
Portfolio and the Bernstein Portfolio, as well as the best interests of
Contractowners and Equitable Plan participants with amounts allocated to the
Price Portfolio and the Bernstein Portfolio, and that the interests of existing
shareholders, Contractowners and Equitable Plan participants will not be diluted
as a result of this transaction. Their conclusion was based on a number of
factors, including the following:
o The Reorganization will permit shareholders of the Price Portfolio to
pursue similar investment objectives in the context of a larger fund
immediately following consummation of the Reorganization. It is
anticipated that the consolidated Bernstein Portfolio will experience
more rapid asset growth in the future than would have been the case for
the Price Portfolio or the Bernstein Portfolio standing alone. This
should enhance the ability of the Adviser to effect portfolio
transactions on more favorable terms and give the Adviser greater
investment flexibility and the ability to select a larger number of
portfolio securities, with the attendant benefits of increased
diversification;
o Bernstein has substantial experience in managing investment vehicles
with substantially similar investment objectives, strategies, policies
and techniques as those of the Bernstein Portfolio; and
o The Reorganization will facilitate the ability of financial
professionals to implement personalized financial planning strategies
for their customers and clients in connection with the Contracts by
consolidating assets of the Price Portfolio into a Portfolio that is
managed in a manner consistent with those financial planning
strategies.
16
FEDERAL INCOME TAX CONSEQUENCES. As a condition to the consummation of the
Reorganization, the Trust will have received an opinion from Dechert to the
effect that, based on the facts and assumptions stated therein as well as
certain representations of the Trust, for federal income tax purposes: (1) the
Reorganization will constitute a reorganization within the meaning of Section
368(a)(1) of the Code with respect to the Price Portfolio and the Bernstein
Portfolio; (2) no gain or loss will be recognized by the Price Portfolio or the
Bernstein Portfolio upon the transfer of all of the assets and liabilities, if
any, of the Price Portfolio to the Bernstein Portfolio solely in exchange for
Class IA and Class IB shares of the Bernstein Portfolio or upon the distribution
of the shares of the Bernstein Portfolio to the holders of shares of the Price
Portfolio solely in exchange for all of their shares of the Price Portfolio; (3)
no gain or loss will be recognized by shareholders of the Price Portfolio upon
the exchange of Price Portfolio shares solely for Class IA or Class IB shares of
the Bernstein Portfolio; (4) the holding period and tax basis of the shares of
the Bernstein Portfolio received by each holder of shares of the Price Portfolio
pursuant to the Reorganization will be the same as the holding period and tax
basis of the shares of the Price Portfolio held by the shareholder (provided the
shares of the Price Portfolio were held as a capital asset on the date of the
Reorganization) immediately prior to the Reorganization; and (5) the holding
period and tax basis of the assets of the Price Portfolio acquired by the
Bernstein Portfolio will be the same as the holding period and tax basis of
those assets to the Price Portfolio immediately prior to the Reorganization.
CAPITALIZATION. The following tables show the capitalization of the Price
Portfolio and the Bernstein Portfolio as of December 31, 2000, and on a pro
forma combined basis as of those dates for the Reorganization giving effect to
the proposed acquisition of assets at net asset value.
NET ASSETS NET ASSET VALUE PER SHARE SHARES OUTSTANDING
---------- ------------------------- ------------------
BERNSTEIN PORTFOLIO
Class IB $176,049,030 $11.73 15,007,828
PRICE PORTFOLIO
Class IA $6,867,365 $12.85 534,415
Class IB $263,468,609 $12.85 20,566,680
PRO FORMA - BERNSTEIN PORTFOLIO
INCLUDING THE PRICE PORTFOLIO
Class IA $6,867,365 $11.73 585,453
Class IB $439,517,639 $11.73 37,468,919
17
ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS
-------------------------------------------
FORM OF ORGANIZATION. The Bernstein Portfolio and the Price Portfolio are both
series of the Trust, which is a Delaware business trust registered as an
open-end management investment company. The Trust is governed by a Board of
Trustees which consists of nine trustees.
BROKERAGE PRACTICES. In selecting brokers and dealers in accordance with Section
28(e) of the Securities Exchange Act of 1934, as amended ("1934 Act"), the
Manager and the Adviser may consider research and brokerage services received by
the Manager, the Advisers, the Trust, or any Portfolio. Subject to seeking the
most favorable net price and execution available, the Manager and the Adviser
may also consider sales of shares of the Trust as a factor in the selection of
brokers and dealers. Finally, at the discretion of the Board, the Trust may
direct the Manager to cause Advisers to effect securities transactions through
broker-dealers in a manner that would 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 or (ii) finance activities that are
primarily intended to result in the sale of Trust shares.
BROKERAGE TRANSACTIONS WITH AFFILIATES. To the extent permitted by law, the
Trust may engage in securities and other transactions with entities that may be
affiliated with the Manager or the Adviser. The 1940 Act generally prohibits the
Trust from engaging in principal securities transactions with an affiliate of
the Manager or the Adviser unless pursuant to an exemptive order from the SEC.
For these purposes, however, the Trust has considered the issue and believes,
based upon advice of counsel, that a broker-dealer affiliate of an Adviser to
one portfolio should not be treated as an affiliate of an Adviser to another
Portfolio for which such Adviser does not provide investment advice in whole or
in part. The Trust has adopted procedures that are reasonably designed to
provide that any commission it pays to affiliates of the Manager or Advisers
does not exceed the usual and customary broker's commission. The Trust has also
adopted procedures permitting it to purchase securities, under certain
restrictions prescribed by a rule under the 1940 Act, in a public offering in
which an affiliate of the Manager or the Adviser is an underwriter.
FUND DISTRIBUTION ARRANGEMENTS. The Trust offers two classes of shares on behalf
of the Portfolio: Class IA shares and Class IB shares. AXA Advisors serves as
one of the distributors for the Class IB shares of the Trust as well as one of
the distributors for the Class IA shares. EDI serves as the other distributor
for the Class IB shares of the Trust as well as the Class IA shares. Both
classes of shares are offered and redeemed at their net asset value without any
sales load. AXA Advisors and EDI are affiliates of Equitable. Both AXA Advisors
and EDI are registered broker-dealers under the 1934 Act and are members of the
National Association of Securities Dealers, Inc.
The Class IB Distribution Plan, as adopted by the Trust, on behalf of each
Portfolio, may pay annually up to 50% of the average daily net assets of a
Portfolio attributable to its Class IB shares in respect of activities primarily
intended to result in the sale of Class IB shares. However, under the
Distribution Agreements, payments to the Distributors for activities pursuant to
the Class IB Distribution Plan are limited to payments at an annual rate equal
to 0.25% of average daily net assets of a Portfolio attributable to its Class IB
shares. Over time, the fees will increase your cost of investing and may cost
you more than other types of charges.
TAX INFORMATION. Each Portfolio of the Trust is a separate regulated investment
company for federal income tax purposes. Regulated investment companies are not
usually taxed at the entity (Portfolio) level. They pass through their income
and gains to their shareholders by paying dividends. Their shareholders include
this income on their respective tax returns. A Portfolio will be treated as a
regulated investment company if it meets specified federal income tax rules,
including types of investments, limits
18
on investments, calculation of income, and dividend payment requirements.
Although the Trust intends that it and each Portfolio will be operated to have
no income tax liability, if they have any federal tax liability, that could hurt
the investment performance of the Portfolio. Also, any Portfolio investing in
foreign securities or holding foreign currencies could be subject to foreign
taxes which would reduce the investment performance of the Portfolio.
It is important for the Portfolio to maintain its federal income tax regulated
investment company status because the shareholders of the Portfolio that are
insurance company separate accounts will then be able to use a favorable federal
income tax diversification testing rule in determining whether the Contracts
indirectly funded by the Portfolio meet tax qualification rules for variable
insurance contracts. If the Portfolio fails to meet specified investment
diversification requirements, owners of non-pension plan Contracts funded
through the Trust could be taxed immediately on the accumulated investment
earnings under their Contracts and could lose any benefit of tax deferral.
Equitable, in its capacity as Administrator therefore carefully monitors
compliance with all of the regulated investment company rules and variable
insurance contract investment diversification rules.
FINANCIAL HIGHLIGHTS. Please refer to the most recent Annual Report of the
Trust, which has been separately mailed to you on or about the time of the
mailing of this Proxy Statement/Prospectus, for a presentation of the financial
highlights of each Portfolio.
DIVIDENDS AND OTHER DISTRIBUTIONS. Both the Bernstein Portfolio and the Price
Portfolio pay dividends from net investment income and net capital gains, if
any, on an annual basis. Dividends and distributions of each Class of a
Portfolio are automatically reinvested in additional shares of the corresponding
Class of that Portfolio.
If the Reorganization Agreement is approved by the Price Portfolio's
shareholders, then as soon as practicable before the Closing, the Price
Portfolio will pay its shareholders a cash distribution of substantially all
undistributed net investment income and undistributed realized net capital
gains.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" PROPOSAL 1. IF EXECUTED BUT UNMARKED VOTING INSTRUCTIONS
ARE RECEIVED, SHAREHOLDERS WILL VOTE THOSE UNMARKED VOTING INSTRUCTIONS IN FAVOR
OF THE PROPOSAL.
19
GENERAL INFORMATION ABOUT THE PROXY STATEMENT
---------------------------------------------
SOLICITATION OF VOTING INSTRUCTIONS
Solicitation of voting instructions is being made primarily by the mailing of
this Notice and Proxy Statement/Prospectus with its enclosures on or about March
9, 2001. In addition to the solicitation of voting instructions by mail,
employees of the Trust and its affiliates, without additional compensation, may
solicit voting instructions in person or by telephone, telegraph, facsimile, or
oral communication. The Trust, on behalf of the Price Portfolio, has retained
Shareholder Communications Corporation, a professional proxy solicitation firm,
to assist with any necessary solicitation of proxies. Contractowners with
amounts allocated to the Price Portfolio may receive a telephone call from the
professional proxy solicitation firm asking the Contractowner to provide voting
instructions.
A Contractowner may revoke the accompanying voting instructions card at any time
prior to its use by filing with Equitable a written revocation or duly executed
voting instructions card bearing a later date. In addition, any Contractowner
who attends the Special Meeting in person may provide voting instructions by
ballot at the Meeting, thereby canceling any voting instruction previously
given. The persons named in the accompanying voting instruction card will vote
as directed by the voting instruction card, but in the absence of voting
instructions in any voting instruction card that is signed and returned, they
intend to vote "FOR" the Reorganization Agreement and may vote in their
discretion with respect to other matters not now known to the Board that may be
presented at the Special Meeting.
VOTING RIGHTS
Shareholders of the Price Portfolio are entitled to one vote for each share held
as to any matter on which they are entitled to vote and each fractional share
shall be entitled to a proportionate fractional vote. Shares have no preemptive
or subscription rights.
Contractowners with amounts allocated to the Price Portfolio at the close of
business on January 22, 2001 ("Record Date") will be entitled to be present and
give voting instructions for the Price Portfolio at the Special Meeting with
respect to shares attributable to their Contracts as of the Record Date. As of
the Record Date, 21,362,298.248 shares of the Price Portfolio were outstanding
and entitled to vote.
If a Shareholder abstains from voting as to any matter, the shares represented
by the abstention will be deemed present at the Special Meeting for purposes of
determining a quorum.
To the knowledge of the Trust, as of January 22, 2001, no current Trustee owns
1% or more of the outstanding shares of the Price Portfolio, and the officers
and Trustees own, as a group, less than 1% of the shares of the Price Portfolio.
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. Appendix B hereto lists the persons that, as of January 22,
2001, owned beneficially or of record 5% or more of the outstanding shares of
any Class of the Bernstein Portfolio or the Price Portfolio.
20
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
The Trust does not know of any matters to be presented at the Special Meeting
other than those described in this Proxy Statement/Prospectus. If other business
should properly come before the Special Meeting, the proxyholders will vote
thereon in accordance with their best judgment.
REPORTS TO SHAREHOLDERS
The Trust will furnish, without charge, a copy of the most recent Annual Report
regarding the Price Portfolio on request. Requests for such reports should be
directed to the Trust at 1290 Avenue of the Americas, New York, New York 10104
or by phone at 1-800-528-0204.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED, PROMPT
EXECUTION AND RETURN OF THE ENCLOSED VOTING INSTRUCTION CARD IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
Patricia Louie,
Secretary
March 9, 2001
1290 Avenue of the Americas
New York, New York 10104
21
APPENDIX A
----------
APPENDIX A
----------
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
--------------------------------------------
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of this _____
day of _____________, 2001, by EQ Advisors Trust, a Delaware business trust
("Trust"), with its principal place of business at 1290 Avenue of the Americas,
New York, New York 10104, on behalf of the EQ/Bernstein Diversified Value
Portfolio ("Acquiring Portfolio"), a separate series of the Trust, and the T.
Rowe Price Equity Income Portfolio ("Acquired Portfolio"), another separate
series of the Trust.
This Agreement is intended to be and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a)(1) of the United States
Internal Revenue Code of 1986, as amended ("Code"). The reorganization and
liquidation will consist of the transfer of all of the assets of the Acquired
Portfolio to the Acquiring Portfolio in exchange solely for Class IA and Class
IB common shares of beneficial interest ($0.01 par value per share) of the
Acquiring Portfolio ("Acquiring Portfolio Shares"), the assumption by the
Acquiring Portfolio of all liabilities of the Acquired Portfolio, and the
distribution of the Acquiring Portfolio Shares to the shareholders of the
Acquired Portfolio in complete liquidation of the Acquired Portfolio, as
provided herein ("Reorganization"), all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Trust is an open-end, registered investment company of the
management type and the Acquired Portfolio owns securities which generally are
assets of the character in which the Acquiring Portfolio is permitted to invest;
WHEREAS, the Trustees of the Trust have determined, with respect to the
Acquiring Portfolio, that the exchange of all of the assets of the Acquired
Portfolio for Acquiring Portfolio Shares and the assumption of all liabilities
of the Acquired Portfolio by the Acquiring Portfolio is in the best interests of
the Acquiring Portfolio and its shareholders and that the interests of the
existing shareholders of the Acquiring Portfolio would not be diluted as a
result of this transaction; and
WHEREAS, the Trustees of the Trust also have determined, with respect to the
Acquired Portfolio, that the exchange of all of the assets of the Acquired
Portfolio for Acquiring Portfolio Shares and the assumption of all liabilities
of the Acquired Portfolio by the Acquiring Portfolio is in the best interests of
the Acquired Portfolio and its shareholders and that the interests of the
existing shareholders of the Acquired Portfolio would not be diluted as a result
of this transaction;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
A-1
1. TRANSFER OF ASSETS OF THE ACQUIRED PORTFOLIO TO THE ACQUIRING PORTFOLIO IN
EXCHANGE FOR ACQUIRING PORTFOLIO SHARES, THE ASSUMPTION OF ALL ACQUIRED
PORTFOLIO LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED PORTFOLIO
1.1 Subject to the requisite approval of the Acquired Portfolio
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired
Portfolio agrees to transfer all of the Acquired Portfolio's assets, as set
forth in paragraph 1.2, to the Acquiring Portfolio, and the Acquiring Portfolio
agrees in exchange therefor: (i) to deliver to the Acquired Portfolio the number
of full and fractional Class IA and Class IB Acquiring Portfolio Shares,
determined by dividing the value of the Acquired Portfolio's net assets with
respect to each class, computed in the manner and as of the time and date set
forth in paragraph 2.1, by the net asset value of one Acquiring Portfolio Share
of the same Class, computed in the manner and as of the time and date set forth
in paragraph 2.2; and (ii) to assume all liabilities of the Acquired Portfolio,
as set forth in paragraph 1.3. Such transactions shall take place at the closing
provided for in paragraph 3.1 ("Closing").
1.2 The assets of the Acquired Portfolio to be acquired by the Acquiring
Portfolio shall consist of all assets and property, including, without
limitation, all cash, securities, commodities and futures interests and
dividends or interests receivable that are owned by the Acquired Portfolio and
any deferred or prepaid expenses shown as an asset on the books of the Acquired
Portfolio on the closing date provided for in paragraph 3.1 ("Closing Date")
(collectively, "Assets").
1.3 The Acquired Portfolio will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Acquiring Portfolio
shall also assume all of the liabilities of the Acquired Portfolio, whether
accrued or contingent, known or unknown, existing at the Valuation Date defined
in paragraph 2.1 (collectively, "Liabilities"). On or as soon as practicable
prior to the Closing Date, the Acquired Portfolio will declare and pay to its
shareholders of record one or more dividends and/or other distributions so that
it will have distributed substantially all (and in no event less than 98%) of
its investment company taxable income (computed without regard to any deduction
for dividends paid) and realized net capital gain, if any, for the current
taxable year through the Closing Date.
1.4 Immediately after the transfer of assets provided for in paragraph 1.1,
the Acquired Portfolio will distribute to the Acquired Portfolio's shareholders
of record with respect to each class of its shares, determined as of immediately
after the close of business on the Closing Date ("Acquired Portfolio
Shareholders"), on a pro rata basis within that class, the Acquiring Portfolio
Shares of the same class received by the Acquired Portfolio pursuant to
paragraph 1.1, and will completely liquidate. Such distribution and liquidation
will be accomplished with respect to each class of the Acquired Portfolio's
shares, by the transfer of the Acquiring Portfolio Shares then credited to the
account of the Acquired Portfolio on the books of the Acquiring Portfolio to
open accounts on the share records of the Acquiring Portfolio in the names of
the Acquired Portfolio Shareholders. The aggregate net asset value of Class IA
and Class IB Acquiring Portfolio Shares to be so credited to Acquired Portfolio
Shareholders shall, with respect to each class, be equal to the aggregate net
asset value of the Class IA and Class IB common shares of beneficial interest
($0.01 par value per share) of the Acquired Portfolio ("Acquired Portfolio
Shares") owned by Acquired Portfolio Shareholders on the Closing Date. All
issued and outstanding shares of the Acquired Portfolio will simultaneously be
canceled on the books of the Acquired Portfolio. The Acquiring Portfolio shall
not issue certificates representing the Class IA and Class IB Acquiring
Portfolio Shares in connection with such exchange.
A-2
1.5 Ownership of Acquiring Portfolio Shares will be shown on the books of
the Acquiring Portfolio's Transfer Agent as defined in paragraph 3.3.
1.6 Any reporting responsibility of the Acquired Portfolio including, but
not limited to, the responsibility for filing regulatory reports, tax returns,
or other documents with the Securities and Exchange Commission ("Commission"),
any state securities commission, and any federal, state or local tax authorities
or any other relevant regulatory authority, is and shall remain the
responsibility of the Acquired Portfolio.
2. VALUATION
2.1 The value of the Assets shall be the value of such assets computed as
of immediately after the close of business of the New York Stock Exchange and
after the declaration of any dividends on the Closing Date (such time and date
being hereinafter called the "Valuation Date"), using the valuation procedures
in the Trust's then-current prospectus and statement of additional information,
and valuation procedures established by the Trust's Board of Trustees.
2.2 The net asset value of a Class IA or Class IB Acquiring Portfolio Share
shall be the net asset value per share computed with respect to that class as of
the Valuation Date, using the valuation procedures set forth in the Trust's
then-current prospectus and statement of additional information, and valuation
procedures established by the Trust's Board of Trustees.
2.3 The number of the Class IA and Class IB Acquiring Portfolio Shares to
be issued (including fractional shares, if any) in exchange for the Acquired
Portfolio's assets shall be determined, with respect to each such class, by
dividing the value of the net assets with respect to the Class IA and Class IB
shares of the Acquired Portfolio, as the case may be, determined using the same
valuation procedures referred to in paragraph 2.1, by the net asset value of an
Acquiring Portfolio Share of the same Class, determined in accordance with
paragraph 2.2.
2.4 All computations of value shall be made by The Equitable Life Assurance
Society of the United States, in its capacity as administrator for the Trust and
shall be subject to confirmation by the Trust's independent accountants.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be May 18, 2001, or such other date as the
parties may agree. All acts taking place at the Closing shall be deemed to take
place simultaneously as of immediately after the close of business on the
Closing Date unless otherwise agreed to by the parties. The close of business on
the Closing Date shall be as of 4:00 p.m., Eastern Time. The Closing shall be
held at the offices of the Trust or at such other time and/or place as the
parties may agree.
3.2 The Trust shall direct The Chase Manhattan Bank, as custodian for the
Acquired Portfolio ("Custodian"), to deliver, at the Closing, a certificate of
an authorized officer stating that (i) the Assets shall have been delivered in
proper form to the Acquiring Portfolio within two business days prior to or on
the Closing Date, and (ii) all necessary taxes in connection with the delivery
of the Assets, including all applicable federal and state stock transfer stamps,
if any, have been paid or provision for payment has been made. The Acquired
Portfolio's portfolio securities represented by a certificate or other written
instrument shall be transferred and delivered by the Acquired Portfolio as of
the Closing Date for the account of the Acquiring Portfolio duly endorsed in
proper form for transfer in such condition as to constitute good delivery
thereof. The Custodian shall deliver as of the Closing Date by
A-3
book entry, in accordance with the customary practices of any securities
depository, as defined in Rule 17f-4 under the Investment Company Act of 1940,
as amended ("1940 Act") in which the Acquired Portfolio's Assets are deposited
and the Custodian, the Acquired Portfolio's Assets deposited with such
depositories. The cash to be transferred by the Acquired Portfolio shall be
delivered by wire transfer of federal funds on the Closing Date.
3.3 The Trust shall direct The Equitable Life Assurance Society of the
United States , in its capacity as transfer agent for the Trust ("Transfer
Agent"), to deliver at the Closing a certificate of an authorized officer
stating that its records contain the names and addresses of the Acquired
Portfolio Shareholders and the number and percentage ownership of outstanding
Class IA and Class IB shares owned by each such shareholder immediately prior to
the Closing.
3.4 In the event that on the Valuation Date (a) the New York Stock Exchange
or another primary trading market for portfolio securities of the Acquiring
Portfolio or the Acquired Portfolio (each, an "Exchange") shall be closed to
trading or trading thereupon shall be restricted, or (b) trading or the
reporting of trading on such Exchange or elsewhere shall be disrupted so that,
in the judgment of the Board of Trustees of the Trust, accurate appraisal of the
value of the net assets of the Acquiring Portfolio or the Acquired Portfolio is
impracticable, the Closing Date shall be postponed until the first business day
after the day when trading shall have been fully resumed and reporting shall
have been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Trust, on behalf of the Acquired Portfolio, represents and warrants
as follows:
(a) The Acquired Portfolio is duly organized as a series of the Trust,
which is a business trust duly organized, validly existing and in good standing
under the laws of the State of Delaware, with power under the Trust's Amended
and Restated Agreement and Declaration of Trust ("Declaration of Trust") to own
all of its properties and assets and to carry on its business as it is now being
conducted;
(b) The Trust is a registered investment company classified as a management
company of the open-end type, and its registration with the Commission as an
investment company under the 1940 Act, and the registration of the Acquired
Portfolio Shares under the Securities Act of 1933, as amended ("1933 Act"), is
in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquired
Portfolio of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the Securities Exchange Act of 1934, as amended
("1934 Act") and the 1940 Act and such as may be required by state securities
laws;
(d) The current prospectus and statement of additional information of the
Acquired Portfolio and each prospectus and statement of additional information
of the Acquired Portfolio used during the three years previous to the date of
this Agreement conforms or conformed at the time of its use in all material
respects to the applicable requirements of the 1933 Act and the 1940 Act and the
rules and regulations of the Commission thereunder; and does not or did not at
the time of its use include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not materially misleading;
(e) On the Closing Date, the Trust, on behalf of the Acquired Portfolio
will have good and marketable title to the Assets and full right, power, and
authority to sell, assign, transfer and deliver such Assets hereunder free of
any liens or other encumbrances, and upon delivery and payment for such
A-4
Assets, the Trust, on behalf of the Acquiring Portfolio, will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act, other
than as disclosed to the Acquiring Portfolio;
(f) The Acquired Portfolio is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Declaration of Trust or the Trust's By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
the Trust, on behalf of the Acquired Portfolio, is a party or by which it is
bound, or (ii) the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract, lease, judgment
or decree to which the Trust, on behalf of the Acquired Portfolio, is a party or
by which it is bound;
(g) All material contracts or other commitments of the Acquired Portfolio
(other than this Agreement and certain investment contracts including options,
futures, and forward contracts) will terminate without liability to the Acquired
Portfolio on or prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by the Trust,
on behalf of the Acquiring Portfolio, no litigation or administrative proceeding
or investigation of or before any court or governmental body is presently
pending or, to its knowledge, threatened against the Acquired Portfolio or any
of its properties or assets that, if adversely determined, would materially and
adversely affect its financial condition or the conduct of its business. The
Trust, on behalf of the Acquired Portfolio, knows of no facts which might form
the basis for the institution of such proceedings and is not a party to or
subject to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or its
ability to consummate the transactions herein contemplated;
(i) The Statement of Assets and Liabilities, Statements of Operations and
Changes in Net Assets, and Schedule of Investments of the Acquired Portfolio at
December 31, 2000 have been audited by PricewaterhouseCoopers LLP, independent
accountants, and are in accordance with generally accepted accounting principles
("GAAP") consistently applied, and such statements (copies of which have been
furnished to the Acquiring Portfolio) present fairly, in all material respects,
the financial condition of the Acquired Portfolio as of such date in accordance
with GAAP, and there are no known contingent liabilities of the Acquired
Portfolio required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date not disclosed therein;
(j) Since December 31, 2000, there has not been any material adverse change
in the Acquired Portfolio's financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquired Portfolio of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquiring Portfolio. For the purposes of this
subparagraph (j), a decline in net asset value per share of Acquired Portfolio
Shares due to declines in market values of securities held by the Acquired
Portfolio, the discharge of Acquired Portfolio liabilities, or the redemption of
Acquired Portfolio Shares by shareholders of the Acquired Portfolio shall not
constitute a material adverse change;
(k) On the Closing Date, all federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Acquired Portfolio
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Acquired Portfolio's knowledge, no
such return is currently under audit and no assessment has been asserted with
respect to such returns;
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(l) For each taxable year of its operation (including the taxable year
ending on the Closing Date), the Acquired Portfolio has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
investment company, has complied (or will comply) with the applicable
diversification requirements imposed by Subchapter L of the Code, has been (or
will be) eligible to and has computed (or will compute) its federal income tax
under Section 852 of the Code, and will have distributed all of its investment
company taxable income and net capital gain (as defined in the Code) that has
accrued through the Closing Date, and before the Closing Date will have declared
dividends sufficient to distribute all of its investment company taxable income
and net capital gain for the period ending on the Closing Date;
(m) All issued and outstanding shares of the Acquired Portfolio are, and on
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by the Trust and have been offered and sold in every state
and the District of Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act. All of the issued and
outstanding shares of the Acquired Portfolio will, at the time of Closing, be
held by the persons and in the amounts set forth in the records of the Transfer
Agent, on behalf of the Acquired Portfolio, as provided in paragraph 3.3. The
Acquired Portfolio does not have outstanding any options, warrants or other
rights to subscribe for or purchase any of the shares of the Acquired Portfolio,
nor is there outstanding any security convertible into any of the Acquired
Portfolio shares;
(n) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action, if any,
on the part of the Trustees of the Trust, on behalf of the Acquired Portfolio,
and, subject to the approval of the shareholders of the Acquired Portfolio, this
Agreement will constitute a valid and binding obligation of the Trust, on behalf
of the Acquired Portfolio, enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles; and
(o) The information to be furnished by the Acquired Portfolio for use in
registration statements, proxy materials and other documents filed or to be
filed with any federal, state or local regulatory authority (including the
National Association of Securities Dealers, Inc.), which may be necessary in
connection with the transactions contemplated hereby, shall be accurate and
complete in all material respects and shall comply in all material respects with
Federal securities and other laws and regulations thereunder applicable thereto.
4.2 The Trust, on behalf of the Acquiring Portfolio, represents and
warrants as follows:
(a) The Acquiring Portfolio is duly organized as a series of the Trust,
which is a business trust duly organized, validly existing, and in good standing
under the laws of the State of Delaware, with power under the Declaration of
Trust to own all of its properties and assets and to carry on its business as it
is now being conducted;
(b) The Trust is a registered investment company classified as a management
company of the open-end type, and its registration with the Commission as an
investment company under the 1940 Act and the registration of the Acquiring
Portfolio Shares under the 1933 Act, is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring
Portfolio of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the 1934 Act and the 1940 Act and such as may be
required by state securities laws;
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(d) The current prospectus and statement of additional information of the
Acquiring Portfolio and each prospectus and statement of additional information
of the Acquiring Portfolio used during the three years previous to the date of
this Agreement conforms or conformed at the time of its use in all material
respects to the applicable requirements of the 1933 Act and the 1940 Act and the
rules and regulations of the Commission thereunder and does not or did not at
the time of its use include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not materially misleading;
(e) On the Closing Date, the Trust, on behalf of the Acquiring Portfolio,
will have good and marketable title to the Acquiring Portfolio's assets, free of
any liens of other encumbrances, except those liens or encumbrances as to which
the Acquired Portfolio has received notice and necessary documentation at or
prior to the Closing;
(f) The Acquiring Portfolio is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Declaration of Trust or the Trust's By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
the Trust, on behalf of the Acquiring Portfolio, is a party or by which it is
bound, or (ii) the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract, lease, judgment
or decree to which the Trust, on behalf of the Acquiring Portfolio, is a party
or by which it is bound;
(g) Except as otherwise disclosed in writing to and accepted by the Trust,
on behalf of the Acquired Portfolio, no litigation or administrative proceeding
or investigation of or before any court or governmental body is presently
pending or, to its knowledge, threatened against the Acquiring Portfolio or any
of the Acquiring Portfolio's properties or assets that, if adversely determined,
would materially and adversely affect the Acquiring Portfolio's financial
condition or the conduct of the Acquiring Portfolio's business. The Trust, on
behalf of the Acquiring Portfolio, knows of no facts which might form the basis
for the institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
which materially and adversely affects its business or its ability to consummate
the transactions herein contemplated;
(h) The Statement of Assets and Liabilities, Statements of Operations and
Changes in Net Assets and Schedule of Investments of the Acquiring Portfolio at
December 31, 2000 have been audited by PricewaterhouseCoopers LLP, independent
accountants, and are in accordance with GAAP consistently applied, and such
statements (copies of which have been furnished to the Acquired Portfolio)
present fairly, in all material respects, the financial condition of the
Acquiring Portfolio as of such date in accordance with GAAP, and there are no
known contingent liabilities of the Acquiring Portfolio required to be reflected
on a balance sheet (including the notes thereto) in accordance with GAAP as of
such date not disclosed therein;
(i) Since December 31, 2000, there has not been any material adverse change
in the Acquiring Portfolio's financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquiring Portfolio of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquired Portfolio. For purposes of this subparagraph
(i), a decline in net asset value per share of the Acquiring Portfolio Shares
due to declines in market values of securities held by the Acquiring Portfolio,
the discharge of Acquiring Portfolio liabilities, or the redemption of Acquiring
Portfolio Shares by shareholders of the Acquiring Portfolio, shall not
constitute a material adverse change;
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(j) On the Closing Date, all federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Acquiring Portfolio
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Acquiring Portfolio's knowledge no
such return is currently under audit and no assessment has been asserted with
respect to such returns;
(k) For each taxable year of its operation (including the taxable year that
includes the Closing Date), the Acquiring Portfolio has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
investment company, has complied (or will comply) with the applicable
diversification requirements imposed by Subchapter L of the Code, has been
eligible to (or will be eligible to) and has computed (or will compute) its
federal income tax under Section 852 of the Code, and has distributed all of its
investment company taxable income and net capital gain (as defined in the Code)
for periods ending prior to the Closing Date;
(l) All issued and outstanding Acquiring Portfolio Shares are, and on the
Closing Date will be, duly and validly issued and outstanding, fully paid and
non-assessable and have been offered and sold in every state and the District of
Columbia in compliance in all material respects with applicable registration
requirements of the 1933 Act and state securities laws. The Acquiring Portfolio
does not have outstanding any options, warrants or other rights to subscribe for
or purchase any Acquiring Portfolio Shares, nor is there outstanding any
security convertible into any Acquiring Portfolio Shares;
(m) The execution, delivery and performance of this Agreement will have
been fully authorized prior to the Closing Date by all necessary action, if any,
on the part of the Trustees of the Trust, on behalf of the Acquiring Portfolio,
and this Agreement will constitute a valid and binding obligation of the
Acquiring Portfolio, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(n) The Class IA and Class IB Acquiring Portfolio Shares to be issued and
delivered to the Acquired Portfolio, for the account of the Acquired Portfolio
Shareholders, pursuant to the terms of this Agreement, will on the Closing Date
have been duly authorized and, when so issued and delivered, will be duly and
validly issued Acquiring Portfolio Shares, and will be fully paid and
non-assessable; and
(o) The information to be furnished by the Trust for use in the
registration statements, proxy materials and other documents that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations applicable
thereto.
5. COVENANTS OF THE ACQUIRING PORTFOLIO AND THE ACQUIRED PORTFOLIO
5.1 The Acquiring Portfolio and the Acquired Portfolio each will operate
its business in the ordinary course between the date hereof and the Closing
Date, it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions, and any other
distribution that may be advisable.
5.2 The Trust will call a meeting of the shareholders of the Acquired
Portfolio to consider and act upon this Agreement and to take all other action
necessary to obtain approval of the transactions contemplated herein.
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5.3 The Acquired Portfolio covenants that the Class IA and Class IB
Acquiring Portfolio Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof, other than in accordance with the
terms of this Agreement.
5.4 Subject to the provisions of this Agreement, the Acquiring Portfolio
and the Acquired Portfolio will each take, or cause to be taken, all action, and
do or cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.5 Immediately after the transfer of assets provided for in paragraph 1.1,
the Acquired Portfolio will make a liquidating distribution to its shareholders
consisting of the Class IA and Class IB Acquiring Portfolio Shares received at
the Closing.
5.6 The Acquiring Portfolio and the Acquired Portfolio shall each use its
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent to effect the transactions contemplated by this Agreement as promptly
as practicable.
5.7 The Trust, on behalf of the Acquired Portfolio, covenants that it will,
from time to time, as and when reasonably requested by the Acquiring Portfolio,
execute and deliver or cause to be executed and delivered all such assignments
and other instruments, and will take or cause to be taken such further action as
the Trust, on behalf of the Acquiring Portfolio, may reasonably deem necessary
or desirable in order to vest in and confirm (a) the Trust's, on behalf of the
Acquired Portfolio's, title to and possession of the Acquiring Portfolio's
Shares to be delivered hereunder, and (b) the Trust's, on behalf of the
Acquiring Portfolio's, title to and possession of all the assets and otherwise
to carry out the intent and purpose of this Agreement.
5.8 The Acquiring Portfolio will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state blue sky or securities laws as may be necessary in order to continue
its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED PORTFOLIO
The obligations of the Trust, on behalf of the Acquired Portfolio, to
consummate the transactions provided for herein shall be subject, at the Trust's
election, to the performance by the Trust, on behalf of the Acquiring Portfolio,
of all the obligations to be performed by it hereunder on or before the Closing
Date, and, in addition thereto, the following further conditions:
6.1 All representations and warranties of the Trust, on behalf of the
Acquiring Portfolio, contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as they may be affected
by the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date;
6.2 The Trust, on behalf of the Acquiring Portfolio, shall have performed
all of the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by the Trust, on behalf of the
Acquiring Portfolio, on or before the Closing Date; and
6.3 The Acquired Portfolio and the Acquiring Portfolio shall have agreed on
the number of full and fractional Acquiring Portfolio Shares of each class to be
issued in connection with the Reorganization after such number has been
calculated in accordance with paragraph 1.1.
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7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING PORTFOLIO
The obligations of the Trust, on behalf of the Acquiring Portfolio, to
complete the transactions provided for herein shall be subject, at the Trust's
election to the performance by the Trust, on behalf of the Acquired Portfolio,
of all of the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of the Trust, on behalf of the
Acquired Portfolio, contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date;
7.2 The Trust shall have delivered to the Acquiring Portfolio a statement
of the Acquired Portfolio's assets and liabilities, as of the Closing Date,
certified by the Treasurer of the Trust;
7.3 The Trust, on behalf of the Acquired Portfolio, shall have performed
all of the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by Trust, on behalf of the Acquired
Portfolio, on or before the Closing Date;
7.4 The Acquired Portfolio and the Acquiring Portfolio shall have agreed on
the number of full and fractional Acquiring Portfolio Shares of each class to be
issued in connection with the Reorganization after such number has been
calculated in accordance with paragraph 1.1; and
7.5 The Acquired Portfolio shall have declared and paid a distribution or
distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing Date; and (ii) any undistributed investment
company taxable income and net realized capital gains from any period to the
extent not otherwise already distributed.
7.6 The amendment to the Investment Advisory Agreement between The
Equitable Life Assurance Society of the United States and Alliance Capital
Management, L.P., to appoint Alliance Capital Management, L.P., to become the
investment adviser to the Acquiring Portfolio, including the compensation to be
paid thereunder, shall have been approved by: (i) a majority of the Trustees of
the Trust, including a majority of the Trustees of the Trust who are not
"interested persons" (as that term is defined in the 1940 Act) of any party to
the Investment Advisory Agreement; and (ii) the vote of a majority of the
outstanding voting securities of the Acquiring Portfolio.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING PORTFOLIO
AND THE ACQUIRED PORTFOLIO
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Trust, on behalf of the Acquired
Portfolio, or the Trust, on behalf of the Acquiring Portfolio, the other party
to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of the
Acquired Portfolio in accordance with the
A-10
provisions of the Declaration of Trust, the Trust's By-Laws, applicable Delaware
law and the 1940 Act. Notwithstanding anything herein to the contrary, the Trust
may not waive the conditions set forth in this paragraph 8.1;
8.2 On the Closing Date no action, suit or other proceeding shall be
pending or, to its knowledge, threatened before any court or governmental agency
in which it is sought to restrain or prohibit, or obtain damages or other relief
in connection with, this Agreement or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Trust to permit consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure to obtain any
such consent, order or permit would not involve a risk of a material adverse
effect on the assets or properties of the Acquiring Portfolio or the Acquired
Portfolio, provided that either party hereto may for itself waive any of such
conditions;
8.4 The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act; and
8.5 The parties shall have received the opinion of counsel to the Trust
addressed to the Trust substantially to the effect that, based upon certain
facts, assumptions, and representations, the transaction contemplated by this
Agreement shall constitute a tax-free reorganization for federal income tax
purposes. The delivery of such opinion is conditioned upon receipt by counsel to
the Trust of representations it shall request of the Trust. Notwithstanding
anything herein to the contrary, the Trust may not waive the condition set forth
in this paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES
9.1 The Trust, on behalf of the Acquiring Portfolio and on behalf of the
Acquired Portfolio, represents and warrants that there are no brokers or finders
entitled to receive any payments in connection with the transactions provided
for herein.
9.2 The expenses relating to the proposed Reorganization will be borne
solely by The Equitable Life Assurance Society of the United States and its
affiliates. No such expenses shall be borne by the Acquired or Acquiring
Portfolios. The costs of the Reorganization shall include, but not be limited
to, costs associated with obtaining any necessary order of exemption from the
1940 Act, preparation of the Registration Statement, printing and distributing
the Acquiring Portfolio's prospectus and the Acquired Portfolio's proxy
materials, legal fees, accounting fees, securities registration fees, and
expenses of holding shareholders' meetings. Notwithstanding any of the
foregoing, expenses will in any event be paid by the party directly incurring
such expenses if and to the extent that the payment by another person of such
expenses would result in the disqualification of such party as a "regulated
investment company" within the meaning of Section 851 of the Code.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Trust has not made any representation, warranty or covenant not
set forth herein and that this Agreement constitutes the entire agreement
between the parties.
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10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing and the obligations of each of the
Acquired Portfolio and Acquiring Portfolio in Sections 9.1 and 9.2 shall survive
the Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned by resolution of the Trust's Board of Trustees, at any time
prior to the Closing Date, if circumstances should develop that, in its opinion,
make proceeding with the Agreement inadvisable.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be deemed necessary or advisable by the authorized officers of the Trust;
provided, however, that following the meeting of the shareholders of the
Acquired Portfolio called by the Trust pursuant to paragraph 5.2 of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of Class IA and Class IB Acquiring Portfolio Shares to be
issued to the Acquired Portfolio Shareholders under this Agreement to the
detriment of such shareholders without their further approval.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
facsimile, personal service or prepaid or certified mail addressed to the Trust,
1290 Avenue of the Americas, New York, New York 10104, attn: Peter D. Noris, in
each case with a copy to Dechert, 1775 Eye Street, N.W., Washington, D.C. 20006,
attn: Jane A. Kanter.
14. HEADINGS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
14.1 The Article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to its principles of conflicts
of laws.
14.3 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
14.4 It is expressly agreed that the obligations of the parties hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents, or employees of the Trust personally, but shall bind only the trust
property of the Acquiring Portfolio or the Acquired Portfolio, as provided in
the Declaration of Trust. The execution and delivery by such officers shall not
be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
such party.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its President or Vice President and its seal to be affixed
thereto and attested by its Secretary or Assistant Secretary.
Attest: EQ ADVISORS TRUST on behalf of its
T. ROWE PRICE EQUITY INCOME PORTFOLIO
By:
-------------------------------- -------------------------------
SECRETARY
Its:
------------------------------
Attest: EQ ADVISORS TRUST on behalf of its
EQ/BERNSTEIN DIVERSIFIED VALUE PORTFOLIO
By:
-------------------------------- -------------------------------
SECRETARY
Its:
------------------------------
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APPENDIX B
----------
As of January 22, 2001, the following persons owned beneficially or of record 5%
or more of the outstanding shares of the specified Class of the Price Portfolio:
% OF CLASS % OF FUND % OF FUND
BEFORE BEFORE AFTER
NAME AND ADDRESS CLASS REORGANIZATION REORGANIZATION REORGANIZATION
---------------- ----- -------------- -------------- --------------
Patricia Steinberg Class IB 30.59% 29.81% 17.39%
2 Morgan Ct.
Smithtown, NY 11787
B-1
PART B
EQ ADVISORS TRUST
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
________________, 2001
- --------------------------------------------------------------------------------
Acquisition of the Assets and Liabilities of By and in Exchange for Shares of
T. Rowe Price Equity Income Portfolio ("Price EQ/Bernstein Diversified Value Portfolio
Portfolio") ("Bernstein Portfolio")
(a series of EQ Advisors Trust) (a series of EQ Advisors Trust)
1290 Avenue of the Americas 1290 Avenue of the Americas
New York, New York 10104 New York, New York 10104
This Statement of Additional Information is available to owners of and
participants in variable life insurance contracts and variable annuity
certificates and contracts ("Contracts") with amounts allocated to the Price
Portfolio in connection with a proposed transaction whereby all of the assets
and liabilities of the Price Portfolio will be transferred to the Bernstein
Portfolio, each a series of EQ Advisors Trust ("Trust"), in exchange for Class
IA and Class IB shares of the Bernstein Portfolio.
This Statement of Additional Information of the Trust consists of this cover
page and the following documents, each of which was filed electronically with
the Securities and Exchange Commission and is incorporated by reference herein:
1. The Statement of Additional Information for the Trust dated May 1, 2000, as
revised September 1, 2000.
2. The Financial Statements for the Bernstein Portfolio and Price Portfolio are
included in the Annual Report of the Trust dated December 31, 2000, as filed on
[ , 2001].
This Statement of Additional Information is not a prospectus. A Proxy
Statement/Prospectus dated March 9, 2001 relating to the Reorganization of the
Price Portfolio may be obtained, without charge, by writing to the Trust at 1290
Avenue of the Americas, New York, New York 10104 or calling 1-800-528-0204. This
Statement of Additional Information should be read in conjunction with the Proxy
Statement/Prospectus.
PRO FORMA FINANCIAL STATEMENTS
Shown below are unaudited pro forma financial statements for the combined
Bernstein Portfolio, assuming the Reorganization had been consummated, as of
December 31, 2001. The first table presents pro forma Statements of Assets and
Liabilities for the combined Bernstein Portfolio. The second table presents pro
forma Statements of Operations for the combined Bernstein Portfolio. The third
table presents a pro forma Portfolio of Investments for the combined Bernstein
Portfolio. The tables are followed by the Notes to the Pro Forma Financial
Statements.
[Financial Statements as of December 31, 2000 and Notes (Unaudited) to be
inserted here]
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 Equitable, by properly
executing a later-dated proxy or by attending the meeting and voting in person,
by telephone or by the Internet.
This Ballot, when properly executed, will be voted in the matter 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.
---
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE FOR
THE FOLLOWING PROPOSALS.
Please fold and detach at perforation. Return bottom portion only.
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOXES BELOW
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
1. To approve an Agreement and Plan of Reorganization providing for the
acquisition of all of the assets of the Price Portfolio by the EQ/Bernstein
Diversified Value Portfolio ("Bernstein Portfolio") in exchange for shares of
beneficial interest of Bernstein Portfolio and the assumption by Bernstein
Portfolio of all of the liabilities of Price Portfolio.
For [ ] Against [ ] Abstain [ ]
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
This Ballot is solicited primarily by mail, but voting instructions may also be
solicited by telephone, telegram, 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
1-800-404-3299, or by Internet at our website at www.proxyweb.com.
USE YOUR CONTROL NUMBER TO VOTE BY INTERNET. VOTE
EACH BALLOT RECEIVED SEPARATELY.
If voting by mail, please detach at perforation. Return bottom portion only.
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 on the reverse side 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. Receipt of
the Notice of Meeting, Equitable's Information Statement and the Trust's Proxy
Statement accompanying this Ballot is acknowledged by the undersigned.
Please mark, sign, date and mail your Ballot in the enclosed postage-paid
envelope.
If you have changed your address, please cross out the old address and write in
your new address.
Date:
----------------------------------------
SIGN BELOW. If joint owners, each should sign. When signing as executor,
trustee, etc., give full title as such.
- ---------------------------------------------
- ---------------------------------------------
Signature(s) Title(s), if applicable
PART C
OTHER INFORMATION
Item 15. Indemnification
---------------
Amended and Restated Agreement and Declaration of Trust of the Trust
("Declaration of Trust") and By-Laws.
Article VII, Section 2 of the Declaration of Trust states, in relevant part,
that a "Trustee, when acting in such capacity, shall not be personally liable to
any Person, other than the Trust or a Shareholder to the extent provided in this
Article VII, for any act, omission or obligation of the Trust, of such Trustee
or of any other Trustee. The Trustees shall not be responsible or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, Manager, or
Principal Underwriter of the Trust. The Trust shall indemnify each Person who is
serving or has served at the Trust's request as a director, officer, trustee,
employee, or agent of another organization in which the Trust has any interest
as a shareholder, creditor, or otherwise to the extent and in the manner
provided in the By-Laws." Article VII, Section 4 of the Trust's Declaration of
Trust further states, in relevant part, that the "Trustees shall be entitled and
empowered to the fullest extent permitted by law to purchase with Trust assets
insurance for liability and for all expenses reasonably incurred or paid or
expected to be paid by a Trustee, officer, employee, or agent of the Trust in
connection with any claim, action, suit, or proceeding in which he or she may
become involved by virtue of his or her capacity or former capacity as a Trustee
of the Trust."
Article VI, Section 2 of the Trust's By-Laws states, in relevant part, that
"[s]ubject to the exceptions and limitations contained in Section 3 of this
Article VI, every [Trustee, officer, employee or other agent of the Trust] shall
be indemnified by the Trust to the fullest extent permitted by law against all
liabilities and against all expenses reasonably incurred or paid by him or her
in connection with any proceeding in which he or she becomes involved as a party
or otherwise by virtue of his or her being or having been an agent." Article VI,
Section 3 of the Trust's By-Laws further states, in relevant part, that "[n]o
indemnification shall be provided hereunder to [a Trustee, officer, employee or
other agent of the Trust]: (a) who shall have been adjudicated, by the court or
other body before which the proceeding was brought, to be liable to the Trust or
its Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his or her office
(collectively, "disabling conduct"); or (b) with respect to any proceeding
disposed of (whether by settlement, pursuant to a consent decree or otherwise)
without an adjudication by the court or other body before which the proceeding
was brought that such [Trustee, officer, employee or other agent of the Trust]
was liable to the Trust or its Shareholders by reason of disabling conduct,
unless there has been a determination that such [Trustee, officer, employee or
other agent of the Trust] did not engage in disabling conduct: (i) by the court
or other body before which the proceeding was brought; (ii) by at least a
majority of those Trustees who are neither Interested Persons of the Trust nor
are parties to the proceeding based upon a review of readily available facts (as
opposed to a full trial-type inquiry); or (iii) by written opinion of
independent legal counsel based upon a review of readily available facts (as
opposed to a full trial-type inquiry); provided, however, that indemnification
shall be provided hereunder to [a Trustee, officer, employee or other agent of
the Trust] with respect to any proceeding in the event of (1) a final decision
on the merits by the court or other body before which the proceeding was brought
that the [Trustee, officer, employee or other agent of the Trust] was not liable
by reason of disabling conduct, or (2) the dismissal of the proceeding by the
court or other body before which it was brought for insufficiency of evidence of
any disabling conduct with which such [Trustee, officer, employee or other agent
of the Trust] has been charged." Article VI, Section 4 of the Trust's By-Laws
also states that the "rights of indemnification herein provided (i) may be
insured against by policies maintained by the Trust on behalf of any [Trustee,
officer, employee or other
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agent of the Trust], (ii) shall be severable, (iii) shall not be exclusive of or
affect any other rights to which any [Trustee, officer, employee or other agent
of the Trust] may now or hereafter be entitled and (iv) shall inure to the
benefit of [such party's] heirs, executors and administrators."
Insofar as indemnification for liability arising under the Securities Act of
1933 ("1933 Act") may be permitted to trustees, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 16. Exhibits
--------
(1) (A)(1) Amended and Restated Agreement and Declaration of Trust.(2)
(A)(2) Amendment No. 1 to Amended and Restated Agreement and
Declaration of Trust.(17)
(B) Certificate of Trust.(1)
(C) Certificate of Amendment.(2)
(2) Bylaws of the Trust. (1)
(3) Not Applicable
(4) Form of Agreement and Plan of Reorganization by EQ Advisors
Trust, on behalf of T. Rowe Price Equity Income Portfolio, a
separate series of the Trust and EQ/Bernstein Diversified
Value Portfolio, another separate series of the Trust -- filed
herein as Appendix A to the Proxy Statement/Prospectus.
(5) None other than Exhibits 1(A) and (2).
(6) (A)(1) Amended and Restated Investment Management Agreement, dated as
of May 1, 2000 between the Trust and Equitable.(15)
(A)(2) Revised Amendment No. 1 dated, as of September 1, 2001, to the
Amended and Restated Management Agreement between the Trust
and Equitable.(17)
(B) Investment Advisory Agreement between EQFC and T. Rowe Price
Associates, Inc. dated April 1997.(4)
(C) Investment Advisory Agreement between Equitable and T. Rowe
Price International, Inc. dated August 8, 2000.(17)
(D) Investment Advisory Agreement between EQFC and Putnam
Investment Management, Inc. dated April 1997.(4)
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(E)(1) Investment Advisory Agreement between EQFC and Massachusetts
Financial Services Company ("MFS") dated April 1997.(4)
(E)(2) Amendment No. 1, dated as of December 31, 1998 to Investment
Advisory Agreement by and between EQFC and MFS dated April
1997.(11)
(E)(3) Amendment No. 2, dated as of May 1, 2000 to Investment
Advisory Agreement by and between EQFC and MFS dated April
1997.(14)
(F) Investment Advisory Agreement between EQFC and Morgan Stanley
Asset Management Inc. dated April 1997.(4)
(G)(1) Investment Advisory Agreement between EQFC and Merrill Lynch
Asset Management, L.P. dated April 1997.(4)
(G)(2) Investment Advisory Agreement between Equitable and Fund Asset
Management dated May 1, 2000.(17)
(H) Investment Advisory Agreement between EQFC and Lazard Freres &
Co. LLC dated December 9, 1997.(7)
(I) Investment Advisory Agreement between EQFC and J.P. Morgan
Investment Management, Inc. dated December 9, 1997.(7)
(J) Investment Advisory Agreement between EQFC and Credit Suisse
Asset Management, LLC, dated as of July 1, 1999.(12)
(K) Investment Advisory Agreement between EQFC and Evergreen Asset
Management Corp., dated as of December 31, 1998.(11)
(L)(1) Form of Investment Advisory Agreement between EQFC and
Alliance Capital Management L.P. ("Alliance") dated as of
April 30, 1999.(11)
(L)(2) Amendment No. 1, dated as of October 1, 1999 to Investment
Advisory Agreement by and between EQFC and Alliance, dated as
of April 30, 1999.(14)
(L)(3) Amendment No. 2, dated May 1, 2000 to Investment Advisory
Agreement by and between Equitable and Alliance, dated as of
May 1, 2000.(15)
(L)(4) Form of Amendment No. 3 to Investment Advisory Agreement
between Equitable and Alliance, dated as of March 1, 2001.(18)
(M)(1) Investment Advisory Agreement between EQFC and Capital
Guardian Trust Company, dated as of May 1, 1999.(11)
(M)(2) Amendment No. 1 dated as of May 1, 2000 to Investment Advisory
Agreement between Equitable and Capital Guardian Trust
Company, dated as of May 1, 1999.(15)
(N) Investment Advisory Agreement between EQFC and Calvert Asset
Management Company, Inc., dated as of August 30, 1999.(12)
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(O) Investment Advisory Agreement between EQFC and Brown Capital
Management, dated as of August 30, 1999.(12)
(P) Investment Advisory Agreement between EQFC and Bankers Trust
Company dated as of December 9, 1997.(7)
(Q) Investment Advisory Agreement between Equitable and Prudential
Investment Fund Management LLC and Jennison Associates LLC,
dated as of May 15, 2000.(17)
(R) Investment Advisory Agreement between Equitable and American
Express Financial Corporation.(17)
(S) Investment Advisory Agreement between Equitable and Fidelity
Management & Research Company.(17)
(T) Investment Advisory Agreement between Equitable and Janus
Capital Corporation. (17)
(7) (A)(1) Distribution Agreement between the Trust and EQFC with respect
to the Class IA shares dated April 14, 1997.(4)
(A)(2) Amendment No. 1 dated December 9, 1997 to the Distribution
Agreement between the Trust and EQFC with respect to Class IA
shares dated April 14, 1997.(7)
(A)(3) Amendment No. 2 dated as of December 31, 1998 to the
Distribution Agreement between the Trust and EQFC with respect
to the Class IA shares dated April 14, 1997.(11)
(A)(4) Form of Amendment No. 3 dated as of April 30, 1999 to the
Distribution Agreement between the Trust and EQFC with respect
to the Class IA shares dated April 14, 1997.(11)
(A)(5) Amendment No. 4 dated as of August 30, 1999 to the
Distribution Agreement between the Trust and EQFC with respect
to the Class IA shares dated April 14, 1997.(14)
(A)(6) Amendment No. 5 dated as of May 1, 2000 to the Distribution
Agreement between the Trust and EQFC with respect to the Class
IA shares dated April 14, 1997.(14)
(A)(7) Revised Amendment No. 6, dated as of September 1, 2000, to the
Distribution Agreement between the Trust and AXA Advisors LLC
("AXA Advisors") with respect to the Class IA shares.(17)
(B)(1) Distribution Agreement between the Trust and EQFC with respect
to the Class IB shares dated April 14, 1997.(4)
(B)(2) Amendment No. 1 dated December 9, 1997 to the Distribution
Agreement between the Trust and EQFC with respect to Class IB
shares dated April 14, 1997.(7)
(B)(3) Amendment No. 2 dated as of December 31, 1998 to the
Distribution Agreement between the Trust and EQFC with respect
to Class IB shares dated April 14, 1997.(11)
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(B)(4) Form of Amendment No. 3 dated as of April 30, 1999 to the
Distribution Agreement between the Trust and EQFC with respect
to Class IB shares dated April 14, 1997.(11)
(B)(5) Amendment No. 4 dated as of August 30, 1999 to the
Distribution Agreement between the Trust and EQFC with respect
to Class IB shares dated April 14, 1997.(14)
(B)(6) Amendment No. 5 dated May 1, 2000 to the Distribution
Agreement between the Trust and AXA Advisors with respect to
Class IB shares dated April 14, 1997.(14)
(B)(7) Revised Amendment No. 6 to the Distribution Agreement between
the Trust and AXA Advisors with respect to the Class IB shares
dated April 14, 1997.(17)
(C)(1) Distribution Agreement between the Trust and Equitable
Distributors, Inc. ("EDI") with respect to the Class IA shares
dated April 14, 1997.(4)
(C)(2) Amendment No. 1 dated December 9, 1997 to the Distribution
Agreement between the Trust and EDI with respect to the Class
IA shares dated April 14, 1997.(7)
(C)(3) Amendment No. 2 dated as of December 31, 1998 to the
Distribution Agreement between the Trust and EDI with respect
to the Class IA shares dated April 14, 1997.(11)
(C)(4) Form of Amendment No. 3 dated as of April 30, 1999 to the
Distribution Agreement between the Trust and EDI with respect
to the Class IA shares dated April 14, 1997.(11)
(C)(5) Amendment No. 4 dated as of August 30, 1999 to the
Distribution Agreement between the Trust and EDI with respect
to the Class IA shares dated April 14, 1997.(14)
(C)(6) Amendment No. 5 dated as of May 1, 2000 to the Distribution
Agreement between the Trust and EDI with respect to the Class
IA shares dated April 14, 1997.(14)
(C)(7) Revised Amendment No. 6, dated as of September 1, 2000, to the
Distribution Agreement between the Trust and EDI with respect
to the Class IA shares dated April 14, 1997.(17)
(D)(1) Distribution Agreement between the Trust and EDI with respect
to Class IB shares dated April 14, 1997.(4)
(D)(2) Amendment No. 1 dated December 9, 1997 to the Distribution
Agreement between the Trust and EDI with respect to the Class
IB shares dated April 14, 1997.(7)
(D)(3) Amendment No. 2 dated as of December 31, 1998 to the
Distribution Agreement between the Trust and EDI with respect
to the Class IB shares dated April 14, 1997.(11)
(D)(4) Form of Amendment No. 3 dated as of April 30, 1999 to the
Distribution Agreement between the Trust and EDI with respect
to the Class IB shares dated April 14, 1997.(11)
(D)(5) Amendment No. 4 dated as of August 30, 1999 to the
Distribution Agreement between the Trust and EDI with respect
to the Class IB shares dated April 14, 1997.(14)
(D)(6) Amendment No. 5 dated as of May 1, 2000 to the Distribution
Agreement between the Trust and EDI with respect to the Class
IB shares dated April 14, 1997.(14)
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(D)(7) Revised Amendment No. 6 to the Distribution Agreement between
the Trust and EDI with respect to the Class IB shares dated
April 14, 1997.(17)
(8) Form of Deferred Compensation Plan.(3)
(9) (A)(1) Custodian Agreement between the Trust and The Chase Manhattan
Bank dated April 17, 1997 and Global Custody Rider.(4)
(A)(2) Amendment No. 1 dated December 9, 1997 to the Custodian
Agreement between the Trust and The Chase Manhattan Bank dated
April 17, 1997.(7)
(A)(2) Amendment No. 2 dated as of December 31, 1998 to the Custodian
Agreement between the Trust and The Chase Manhattan Bank dated
April 17, 1997.(11)
(A)(3) Form of Amendment No. 3 dated as of April 30, 1999 to the
Custodian Agreement between the Trust and The Chase Manhattan
Bank dated April 17, 1997.(11)
(A)(4) Form of Amendment No. 4 dated as of August 30, 1999 to the
Custodian Agreement between the Trust and The Chase Manhattan
Bank dated April 17, 1997.(14)
(A)(5) Form of Amendment No. 5 dated as of May 1, 2000 to the
Custodian Agreement between the Trust and The Chase Manhattan
Bank dated April 17, 1997.(14)
(A)(6) Revised Amendment No. 6 to the Custodian Agreement between the
Trust and The Chase Manhattan Bank dated April 17, 1997.(17)
(B) Amended and Restated Global Custody Rider to the Domestic
Custody Agreement for Mutual Funds between The Chase Manhattan
Bank and the Trust dated August 31, 1998.(11)
(10) (A) Distribution Plan Pursuant to Rule 12b-1 for the Trust's Class
IB shares.(4)
(B) Plan Pursuant to Rule 18f-3 under the 1940 Act.(4)
(11) Form of Opinion and Consent of Dechert regarding the legality
of the securities being registered with respect to the
Reorganization.
(12) Form of Opinion and Consent of Counsel supporting tax matters
and consequences.
(13) Not Applicable.
(14) (A) Consent of Independent Public Accountants (to be filed by
amendment)
(15) Not Applicable
(16) (A) Power of Attorney.(3)
(B) Power of Attorney for Michael Hegarty.(8)
(C) Power of Attorney for Steven M. Joenk.(12)
C-6
(D) Power of Attorney for Theodossios (Ted) Athanassiades.(15)
(E) Power of Attorney for David W. Fox.(16)
(F) Power of Attorney for Gary S. Schpero.(16)
1. Incorporated herein by reference to Registrant's Registration Statement on
Form N-1A filed on December 3, 1996 (File No. 333-17217).
2. Incorporated herein by reference to Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A filed on January 23, 1997 (File
No. 333-17217).
3. Incorporated herein by reference to Pre-Effective Amendment No. 2 to
Registrant's Registration Statement on Form N-1A filed on April 7, 1997 (File
No. 333-17217).
4. Incorporated herein by reference to Post-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A filed on August 28, 1997 (File
No. 333-17217).
5. Incorporated herein by reference to Post-Effective Amendment No. 2 to
Registrant's Registration Statement on Form N-1A filed on October 15, 1997 (File
No. 333-17217).
6. Incorporated herein by reference to Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form N-1A filed on October 31, 1997 (File
No. 333-17217).
7. Incorporated herein by reference to Post-Effective Amendment No. 4 to
Registrant's Registration Statement on Form N-1A filed on December 29, 1997
(File No. 333-17217).
8. Incorporated herein by reference to Post-Effective Amendment No. 5 to
Registrant's Registration Statement on Form N-1A filed on March 5, 1998 (File
No. 333-17217).
9. Incorporated herein by reference to Post-Effective Amendment No. 7 to
Registrant's Registration Statement on Form N-1A filed on October 15, 1998 (File
No. 333-17217).
10. Incorporated herein by reference to Post-Effective Amendment No. 8 to
Registrant's Registration Statement on Form N-1A filed on February 16, 1999
(File No. 333-17217).
11. Incorporated herein by reference to Post-Effective Amendment No. 10 to
Registrant's Registration Statement on Form N-1A filed on April 30, 1999 (File
No. 333-17217).
12. Incorporated herein by reference to Post-Effective Amendment No. 13 to
Registrant's Registration Statement on Form N-1A filed on August 30, 1999 (File
No. 333-17217).
13. Incorporated herein by reference to Post-Effective Amendment No. 14 to
Registrant's Registration Statement on Form N-1A filed on February 1, 2000 (File
No. 333-17217).
14. Incorporated herein by reference to Post-Effective Amendment No. 15 to
Registrant's Registration Statement on Form N-1A filed on February 16, 2000
(File No. 333-17217).
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15. Incorporated by reference to Post-Effective Amendment No. 16 to Registrant's
Registration Statement on Form N-1A filed on April 21, 2000. (File No.
333-17217).
16. Incorporated by reference to Post-Effective Amendment No. 17 to Registrant's
Registration Statement on Form N-1A filed on May 30, 2000. (File No. 333-17217).
17. Incorporated by reference to Post-Effective Amendment No. 18 to Registrant's
Registration Statement on Form N-1A filed on January 22, 2001. (File No.
333-17217).
18. Incorporated by reference to Registrant's Preliminary Proxy Statement filed
on January 25, 2001. (File No. 811-07953).
Item 17. Undertakings
(1) The undersigned registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a part
of this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) under the 1933 Act (17 CFR
230.145(c)), the reoffering prospectus will contain the information called
for by the applicable registration form for reofferings by persons who may
be deemed underwriters, in addition to the information called for by the
other items of the applicable form.
The undersigned registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the
securities offered therein, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering of them.
C-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement on Form N-14 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York and State of New York on the 1st day of February, 2001.
EQ ADVISORS TRUST
By:
----------------------
Peter D. Noris
President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
- -------------------------- President and Trustee February 1, 2001
Peter D. Noris
- -------------------------- Trustee February 1, 2001
Michael Hegarty*
- -------------------------- Trustee February 1, 2001
Jettie M. Edwards*
- -------------------------- Trustee February 1, 2001
William M. Kearns, Jr.*
- -------------------------- Trustee February 1, 2001
Christopher P.A. Komisarjevsky*
- -------------------------- Trustee February 1, 2001
Theodossios (Ted) Athanassiades*
- ------------------------- Trustee February 1, 2001
Harvey Rosenthal*
- ------------------------- Trustee February 1, 2001
David W. Fox*
- ------------------------- Trustee February 1, 2001
Gary S. Schpero*
- ------------------------- Vice President and Chief Financial Officer February 1, 2001
Steven M. Joenk*
* By:
---------------------------
Peter D. Noris
Attorney-in-Fact**
** Executed pursuant to powers of attorney.
C-9
EXHIBIT INDEX
-------------
(11) Form of Opinion and Consent of Counsel
(12) Form of Opinion supporting tax matters and consequences