Exhibit (d)(21)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated as of February 1, 2001, by and between The Equitable
Life Assurance Society of the United States, a New York Stock life insurance
corporation (the "Manager"), and Provident Investment Counsel, ("Adviser"), a
Massachusetts corporation.
WHEREAS, EQ Advisors Trust ("Trust") is registered as an investment
company under the Investment Company Act of 1940, as amended ("Investment
Company Act");
WHEREAS, the Trust's shareholders are and will be separate accounts
maintained by insurance companies for variable life insurance policies and
variable annuity contracts under which income, gains, and losses, whether or not
realized, from assets allocated to such accounts are, in accordance with such
policies and contracts, credited to or charged against such accounts without
regard to other income, gains, or losses of such insurance companies and for
qualified retirement plans ("Qualified Plans");
WHEREAS, the Trust is and will continue to be a series fund having two
or more investment portfolios, each with its own investment objectives, policies
and restrictions;
WHEREAS, the Manager is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act"), and is the
investment manager to the Trust;
WHEREAS, the Adviser is registered as an investment adviser under the
Advisers Act;
WHEREAS, the Investment Company Act prohibits any person from acting as
an investment adviser to a registered investment company except pursuant to a
written contract; and
WHEREAS, the Board of Trustees of the Trust and the Manager desire that
the Manager retain the Adviser to render investment advisory and other services
to the portion of the portfolio known as the EQ/Aggressive Stock Portfolio
("Portfolio") that has been allocated to Adviser ("Allocated Portion") in the
manner and on the terms hereinafter set forth.
NOW, THEREFORE, the Manager and the Adviser agree as follows:
1. APPOINTMENT OF ADVISER
The Manager hereby appoints the Adviser to act as one of the investment
advisers for the Portfolio, subject to the supervision and control of the
Manager and the Trustees of the Trust, and in accordance with the terms and
conditions of this Agreement. The Adviser will be an independent contractor and
will have no authority to act for or represent the Trust or the Manager in any
way or
otherwise be deemed an agent of the Trust or the Manager except as expressly
authorized in this Agreement or another writing by the Trust, the Manager and
the Adviser.
2. SERVICES TO BE RENDERED BY THE ADVISER TO THE TRUST
A. As investment adviser to the Portfolio, the Adviser will coordinate
the investment and reinvestment of the assets of the Allocated Portion and
determine the composition of the assets of the Allocated Portion, subject always
to the supervision and control of the Manager and the Trustees of the Trust.
B. As part of the services it will provide hereunder, the Adviser will:
(i) obtain and evaluate pertinent economic, statistical,
financial, and other information affecting the economy generally and
individual companies or industries, the securities of which are
included in the Allocated Portion or are under consideration for
inclusion in the Allocated Portion;
(ii) formulate and implement a continuous investment program
for the Allocated Portion;
(iii) take whatever steps are necessary to implement the
investment program for the Allocated Portion by the purchase and sale
of securities and other investments, including the placing of orders
for such purchases and sales;
(iv) keep the Trustees of the Trust and the Manager fully
informed in writing on an ongoing basis of all material facts
concerning the investment and reinvestment of the assets in the
Allocated Portion, the Adviser and its personnel and operations, make
regular and special written reports of such additional information
concerning the same as may reasonably be requested from time to time by
the Manager or the Trustees of the Trust and will attend meetings with
the Manager and/or the Trustees, as reasonably requested, to discuss
the foregoing,
(v) provide assistance in determining the fair value of
certain portfolio securities when market quotations are not readily
available for the purpose of calculating the Allocated Portion's net
asset value in accordance with procedures and methods established by
the Trustees of the Trust;
(vi) provide any and all information, records and supporting
documentation about accounts the Adviser manages, if appropriate, that
have investment objectives, policies, and strategies substantially
similar to those employed by the Adviser in managing the Allocated
Portion that may be reasonably necessary, under applicable laws, to
allow the Portfolio or its agent to present information concerning
Adviser's prior performance in the Trust's Prospectus and SAI (as
hereinafter defined)
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and any permissible reports and materials prepared by the Portfolio or
its agent; and
(vii) cooperate with and provide reasonable assistance to the
Manager, the Trust's administrator, the Trust's custodian and foreign
custodians, the Trust's transfer agent and pricing agents and all other
agents and representatives of the Trust and the Manager, keep all such
persons fully informed as to such matters as they may reasonably deem
necessary to the performance of their obligations to the Trust and the
Manager, provide prompt responses to reasonable requests made by such
persons and establish appropriate interfaces with each so as to promote
the efficient exchange of information.
C. In furnishing services hereunder, the Adviser shall be subject to,
and shall perform in accordance with the following: (i) the Trust's Agreement
and Declaration of Trust, as the same may be hereafter modified and/or amended
from time to time ("Trust Declaration"); (ii) the By-Laws of the Trust , as the
same may be hereafter modified and/or amended from time to time ("By-Laws");
(iii) the currently effective Prospectus and Statement of Additional Information
of the Trust filed with the SEC, as the same may be hereafter modified, amended
and/or supplemented ("Prospectus and SAI"); (iv) the Investment Company Act,
with the requirements applicable to both regulated investment companies and
segregated asset accounts under Subchapters M and L of the Internal Revenue Code
of 1986, as amended; (v) all other applicable state and federal securities and
other laws; (vi) all regulations with respect to the foregoing; (vii) the
Trust's Compliance Manual and other policies and procedures adopted from time to
time by the Board of Trustees of the Trust; and (viii) the written instructions
of the Manager. The Manager shall provide the Adviser with current copies of the
Trust Declaration, By-Laws, Prospectus and SAI.
D. The Adviser, at its expense, will furnish: (i) all necessary
facilities and personnel, including salaries, expenses and fees of any personnel
required for them to faithfully perform their duties under this Agreement; (ii)
administrative facilities, including bookkeeping, clerical personnel and
equipment necessary for the efficient conduct of the Adviser's duties under this
Agreement; and (iii) a copy of Adviser's Form ADV (including Parts I and II) as
filed with the Securities and Exchange Commission, to Manager on an annual
basis. The Manager acknowledges receipt of Adviser's Form ADV, dated as of March
27, 2000.
E. The Adviser will select brokers and dealers to effect all portfolio
transactions subject to the conditions set forth herein. The Adviser will place
all necessary orders with brokers, dealers, or issuers, and will negotiate
brokerage commissions, if applicable. The Adviser is directed at all times to
seek to execute brokerage transactions for the Allocated Portion (i) in
accordance with any written policies, practices or procedures that may be
established by the Board of Trustees or the Manager from time to time or (ii) as
described in the Trust's Prospectus and SAI. In placing any orders for the
purchase or sale of investments for the Portfolio, in the name of the Allocated
Portion or its nominees, the Adviser shall use its best efforts to obtain for
the
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Allocated Portion the most favorable price and best execution available,
considering all of the circumstances, and shall maintain records adequate to
demonstrate compliance with this requirement.
F. Subject to the appropriate policies and procedures approved by the
Board of Trustees, Adviser may, to the extent authorized by Section 28(e) of the
Securities Exchange Act of 1934, as amended ("Exchange Act") cause the Allocated
Portion to pay a broker or dealer that provides brokerage or research services
to the Manager, the Adviser and the Allocated Portion an amount of commission
for effecting a portfolio transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if
the Adviser determines, in good faith, that such amount of commission is
reasonable in relationship to the value of such brokerage or research services
provided viewed in terms of that particular transaction or the Adviser's overall
responsibilities to the Portfolios or its or its other advisory clients. To the
extent authorized by Section 28(e) and the Trust's Board of Trustees, the
Adviser shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of such action. In
addition, subject to seeking the most favorable price and best execution
available, the Manager or the Adviser may also consider sales of shares of the
Trust as a factor in the selection of brokers and dealers. Subject to seeking
the most favorable price and execution, the Board or Trustees or the Manager may
cause the Adviser to effect transactions in portfolio securities through
broker-dealers in a manner that will 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.
G. On occasions when an Adviser deems the purchase or sale of a
security to be in the best interest of the Allocated Portion as well as other
clients of the Adviser, the Adviser to the extent permitted by applicable laws
and regulations, may, but shall be under no obligation to, aggregate the
securities to be purchased or sold to attempt to obtain a more favorable price
or lower brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Adviser in the manner such
Adviser considers to be the most equitable and consistent with its fiduciary
obligations to the Allocated Portion and to its other clients.
H. The Adviser will maintain all accounts, books and records with
respect to the Allocated Portion as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act and
Advisers Act and the rules thereunder and shall file with the SEC all forms
pursuant to Section 13 of the Exchange Act, with respect to its duties as are
set forth herein.
I. The Adviser will, unless and until otherwise directed by the Manager
or the Board of Trustees, vote proxies with respect to the Allocated Portion's
securities and exercise rights in corporate actions or otherwise.
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3. COMPENSATION OF ADVISER
The Manager will pay the Adviser an advisory fee with respect to the
Allocated Portion as specified in Appendix A to this Agreement. Payments shall
be made to the Adviser on or about the fifth day of each month; however, this
advisory fee will be calculated daily for the Allocated Portion based on the net
assets of the Allocated Portion on each day and accrued on a daily basis.
4. LIABILITY AND INDEMNIFICATION
A. Except as may otherwise be provided by the Investment Company Act or
any other federal securities law, the Adviser shall not be liable for any
losses, claims, damages, liabilities or litigation (including legal and other
expenses) incurred or suffered by the Manager or the Trust as a result of any
error of judgment or mistake of law by the Adviser with respect to the
Portfolio, except that nothing in this Agreement shall operate or purport to
operate in any way to exculpate, waive or limit the liability of the Adviser
for, and the Adviser shall indemnify and hold harmless the Trust, the Manager,
all affiliated persons thereof (within the meaning of Section 2(a)(3) of the
Investment Company Act) and all controlling persons (as described in Section 15
of the Securities Act of 1933, as amended ("1933 Act")) (collectively, "Manager
Indemnitees") against any and all losses, claims, damages, liabilities or
litigation (including reasonable legal and other expenses) to which any of the
Manager Indemnitees may become subject under the 1933 Act, the Investment
Company Act, the Advisers Act, or under any other statute, at common law or
otherwise arising out of or based on (i) any willful misconduct, bad faith,
reckless disregard or gross negligence of the Adviser in the performance of any
of its duties or obligations hereunder or (ii) any untrue statement of a
material fact contained in the Prospectus and SAI, proxy materials, reports,
advertisements, sales literature, or other materials pertaining to the Allocated
Portion or the omission to state therein a material fact known to the Adviser
which was required to be stated therein or necessary to make the statements
therein not misleading, if such statement or omission was made in reliance upon
information furnished to the Manager or the Trust by the Adviser Indemnitees (as
defined below) for use therein.
B. Except as may otherwise be provided by the Investment Company Act or
any other federal securities law, the Manager and the Trust shall not be liable
for any losses, claims, damages, liabilities or litigation (including legal and
other expenses) incurred or suffered by the Adviser as a result of any error of
judgment or mistake of law by the Manager with respect to the Allocated Portion,
except that nothing in this Agreement shall operate or purport to operate in any
way to exculpate, waive or limit the liability of the Manager for, and the
Manager shall indemnify and hold harmless the Adviser, all affiliated persons
thereof (within the meaning of Section 2(a)(3) of the Investment Company Act)
and all controlling persons (as described in Section 15 of the 1933 Act)
(collectively, "Adviser Indemnitees") against any and all losses, claims,
damages, liabilities or litigation (including reasonable legal and other
expenses) to which any of the Adviser Indemnitees may become subject under the
1933 Act, the Investment Company Act, the Advisers Act, or under any other
statute, at common law or otherwise arising out of or based on (i) any willful
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misconduct, bad faith, reckless disregard or gross negligence of the Manager in
the performance of any of its duties or obligations hereunder or (ii) any untrue
statement of a material fact contained in the Prospectus and SAI, proxy
materials, reports, advertisements, sales literature, or other materials
pertaining to the Portfolio or the omission to state therein a material fact
known to the Manager which was required to be stated therein or necessary to
make the statements therein not misleading, unless such statement or omission
was made in reliance upon information furnished to the Manager or the Trust by
an Adviser Indemnitees for use therein.
5. NON-EXCLUSIVITY
The services of the Adviser to the Manager, the Allocated Portion and
the Trust are not to be deemed to be exclusive, and the Adviser shall be free to
render investment advisory or other services to others (including other
investment companies) and to engage in other activities. It is understood and
agreed that the directors, officers, and employees of the Adviser are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors,
trustees, or employees of any other firm or corporation, including other
investment companies.
6. SUPPLEMENTAL ARRANGEMENTS
The Adviser may from time to time employ or associate with itself any
person it believes to be particularly fitted to assist it in providing the
services to be performed by such Adviser hereunder, provided that no such person
shall perform any services with respect to the Allocated Portion that would
constitute an assignment or require a written advisory agreement pursuant to the
Investment Company Act. Any compensation payable to such persons shall be the
sole responsibility of the Adviser, and neither the Manager nor the Trust shall
have any obligations with respect thereto.
7. REGULATION
The Adviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information, reports, or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
8. RECORDS
The records relating to the services provided under this Agreement
shall be the property of the Trust and shall be under its control; however, the
Trust shall furnish to the Adviser such records and permit them to retain such
records (either in original or in duplicate form) as it shall reasonably require
in order to carry out their duties. In the event of the termination of this
Agreement, such records shall promptly be returned to the Trust by the Adviser
free from any claim or retention of rights therein. The Manager and the Adviser
shall keep confidential any information obtained in connection with its duties
hereunder and disclose such information only if the Trust has authorized such
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disclosure or if such disclosure is expressly required or requested by
applicable federal or state regulatory authorities.
9. DURATION OF AGREEMENT
This Agreement shall become effective with respect to the Allocated
Portion on the later of the date of its execution or the date the Adviser
commences services to the Allocated Portion. This Agreement will continue in
effect for a period more than two years from the date of its execution only so
long as such continuance is specifically approved at least annually by the Board
of Trustees provided that in such event such continuance shall also be approved
by the vote of a majority of the Trustees who are not "interested persons" (as
defined in the Investment Company Act) ("Independent Trustees") of any party to
this Agreement cast in person at a meeting called for the purpose of voting on
such approval.
10. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Trustees, including a majority of the Independent
Trustees, by the vote of a majority of the outstanding voting securities of the
Portfolio, on sixty (60) day's written notice to the Manager and the Adviser, or
by the Manager or Adviser on sixty (60) day's written notice to the Trust and
the other party. This Agreement will automatically terminate, without the
payment of any penalty, (i) in the event of its assignment (as defined in the
Investment Company Act), or (ii) in the event the Investment Management
Agreement between the Manager and the Trust is assigned or terminates for any
other reason. This Agreement will also terminate upon written notice to the
other party that the other party is in material breach of this Agreement, unless
the other party in material breach of this Agreement cures such breach to the
reasonable satisfaction of the party alleging the breach within thirty (30) days
after written notice.
11. PROVISION OF CERTAIN INFORMATION BY ADVISER
The Adviser will promptly notify the Manager in writing of the
occurrence of any of the following events:
A. the Adviser fails to be registered as an investment adviser under
the Advisers Act or under the laws of any jurisdiction in which the Adviser is
required to be registered as an investment adviser in order to perform its
obligations under this Agreement;
B. the Adviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry, or investigation, at law or in equity, before or by
any court, public board, or body, involving the affairs of the Trust; and/or
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C. the chief executive officer or controlling stockholder of the
Adviser or the portfolio managers of the Adviser changes or there is otherwise
an actual change in control or management of the Adviser.
12. USE OF ADVISER'S NAME
The parties agree that the name of the Adviser, the names of any
affiliates of the Adviser and any derivative or logo or trademark or service
xxxx or trade name are the valuable property of the Adviser and its affiliates.
The Manager and the Trust shall have the right to use such name(s), derivatives,
logos, trademarks or service marks or trade names only with the prior written
approval of the Adviser, which approval shall not be unreasonably withheld or
delayed so long as this Agreement is in effect.
Upon termination of this Agreement, the Manager and the Trust shall
forthwith cease to use such name(s), derivatives, logos, trademarks or service
marks or trade names. The Manager and the Trust agree that they will review with
the Adviser any advertisement, sales literature, or notice prior to its use that
makes reference to the Adviser or its affiliates or any such name(s),
derivatives, logos, trademarks, service marks or trade names so that the Adviser
may review the context in which it is referred to, it being agreed that the
Adviser shall have no responsibility to ensure the adequacy of the form or
content of such materials for purposes of the Investment Company Act or other
applicable laws and regulations. If the Manager or the Trust makes any
unauthorized use of the Adviser's names, derivatives, logos, trademarks or
service marks or trade names, the parties acknowledge that the Adviser shall
suffer irreparable harm for which monetary damages are inadequate and thus, the
Adviser shall be entitled to injunctive relief.
13. AMENDMENTS TO THE AGREEMENT
Except to the extent permitted by the Investment Company Act or the
rules or regulations thereunder or pursuant to exemptive relief granted by the
SEC, this Agreement may be amended by the parties only if such amendment, if
material, is specifically approved by the vote of a majority of the outstanding
voting securities of the Portfolio (unless such approval is not required by
Section 15 of the Investment Company Act as interpreted by the SEC or its staff
or unless the SEC has granted an exemption from such approval requirement) and
by the vote of a majority of the Independent Trustees cast in person at a
meeting called for the purpose of voting on such approval. The required
shareholder approval shall be effective with respect to the Portfolio if a
majority of the outstanding voting securities of the Portfolio vote to approve
the amendment, notwithstanding that the amendment may not have been approved by
a majority of the outstanding voting securities of any other Portfolio affected
by the amendment or all the Portfolios of the Trust.
14. ASSIGNMENT
No assignment (as that term is defined in the Investment Company Act)
shall be made by the Adviser without the prior written consent of the Trust and
the Manager. Notwithstanding the foregoing, no assignment shall be deemed to
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result from any changes in the directors, officers or employees of such Adviser
except as may be provided to the contrary in the Investment Company Act or the
rules or regulations thereunder. The Adviser agrees that it will notify the
Trust and the Manager of any changes in its directors, officers or employees
within a reasonable time thereafter.
15. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties with respect to the Allocated Portion.
16. HEADINGS
The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
17. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of each applicable party
in person or by registered mail or a private mail or delivery service providing
the sender with notice of receipt. The specific person to whom notice shall be
provided for each party will be specified in writing to the other party. Notice
shall be deemed given on the date delivered or mailed in accordance with this
paragraph.
18. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void
in law or in equity, the Agreement shall be construed, insofar as is possible,
as if such portion had never been contained herein.
19. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York, or any of the applicable
provisions of the Investment Company Act. To the extent that the laws of the
State of New York, or any of the provisions in this Agreement, conflict with
applicable provisions of the Investment Company Act, the latter shall control.
20. INTERPRETATION
Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Investment Company Act shall be resolved by reference to such term or
provision of the Investment Company Act and to interpretations thereof, if any,
by the United States courts or, in the absence of any controlling decision of
any such court, by rules, regulations or orders of the SEC validly issued
pursuant to the Investment Company Act. Specifically, the terms "vote of a
majority of
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the outstanding voting securities," "interested persons," "assignment," and
"affiliated persons," as used herein shall have the meanings assigned to them by
Section 2(a) of the Investment Company Act. In addition, where the effect of a
requirement of the Investment Company Act reflected in any provision of this
Agreement is relaxed by a rule, regulation or order of the SEC, whether of
special or of general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first mentioned above.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED
STATES PROVIDENT INVESTMENT COUNSEL
By: By:
-------------------------
Xxxxx X. O'Xxxx Xxxxx X.X. Xxxxxxx, Xx.
Executive Vice President Senior Vice President and Chief
Operating Officer
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APPENDIX A
TO
INVESTMENT ADVISORY AGREEMENT
WITH
PROVIDENT INVESTMENT COUNSEL
Portfolio Annual Advisory Fee
EQ/Aggressive Stock Portfolio* .22 of the Provident Portion's average daily
net assets
* Fee to be paid with respect to this Portfolio shall be based only on the
portion of the Portfolio's average daily net assets advised by the Adviser,
which may be referred to as the "Provident Allocated Portion."
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