EXHIBIT B
SUB-ADVISORY AGREEMENT
This Sub-Advisory Agreement is made and entered into on this ___ day of
__________, 1997, by and among Credit Suisse Asset Management Limited, a
company incorporated in England (the "Sub-Adviser"), Equitable Investment
Services, Inc., an Iowa corporation (the "Adviser"), and Equi-Select Series
Trust, a Massachusetts business trust (the "Trust").
WITNESSETH:
WHEREAS, the Adviser is engaged pursuant to an Investment Advisory
Agreement (the "Advisory Agreement") with the Trust in the investment of the
Trust's assets in accordance with the Trust's Prospectus and Statement of
Additional Information (collectively the "Prospectus"); and
WHEREAS, pursuant to the Advisory Agreement the Adviser may delegate its
responsibilities for the management of the investment of the assets of one or
more portfolios of the Trust to one or more sub-advisers; and
WHEREAS, Adviser desires to so delegate responsibility for management of
the investments of one or more portfolios to Sub-Adviser, and Sub-Adviser
agrees to manage the investment of one or more portfolios in accordance with
this Sub-Advisory Agreement and the Prospectus;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser hereby appoints Sub-Adviser to act as the investment advisor
to Adviser with respect to one or more portfolios as identified in "Schedule
A", which is attached hereto and by this reference is incorporated herein,
(singly or collectively the "Portfolio"). Sub-Adviser hereby accepts such
appointment and agrees to render the services herein set forth, for the
compensation set forth on Schedule B, which is attached hereto and by this
reference is incorporated herein. Adviser represents to Sub-Adviser that it
is authorized pursuant to the Advisory Agreement to delegate to the Sub-
Adviser all of the services to be performed by the Sub-Adviser pursuant
hereto.
2. Subject to the supervision of the Trustees of the Trust and the Adviser,
Sub-Adviser will manage the securities and investments (including cash) of the
Portfolio, including the purchase, retention and disposition thereof, and the
execution of agreements relating thereto in accordance with the Portfolio's
investment objectives, policies and restrictions as those are stated in the
Prospectus and further subject to the following understandings:
(a) The Sub-Adviser shall furnish a continuous investment program for
the Portfolio and in so doing shall determine from time to time what
investments or securities will be purchased, retained or sold by the
Portfolio, and what portion of the assets will be invested or held uninvested
as cash;
(b) The Sub-Adviser in the performance of its duties and obligations
under this Agreement shall act in conformity with the Declaration of Trust,
Bylaws and the Prospectus of the Trust, and with the instructions and
directions of the Trustees of the Trust and, to the extent consistent
therewith and herewith, of the Adviser, and will conform to and comply with
the requirements of the Investment Company Act of 1940 (the "1940 Act"), and
all other applicable federal and state laws and regulations;
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(c) The Sub-Adviser shall determine the securities to be purchased or
sold by the Portfolio and, as agent for the Portfolio, will effect
transactions pursuant to its determinations either directly with the issuer or
with any broker and/or dealer in such securities. The Sub-Adviser shall also
determine whether or not the Portfolio shall enter into repurchase or reverse
repurchase agreements or engage in any other investment transactions or
techniques that are consistent with subsection (b) above;
(d) The Sub-Adviser shall maintain all books and records with respect to
the securities transactions of the Portfolio and shall render to the Adviser
or Adviser's designees, such periodic and special reports as the Adviser may
reasonably request;
(e) The Sub-Adviser shall, to the extent the information is within its
control, provide or cause to be provided to the Trust's Custodian all
requested information relating to all transactions concerning the assets of
the Portfolio (other than share transactions of the Portfolio);
(f) The investment advisory services of Sub-Adviser to the Portfolio
under this Sub-Advisory Agreement are not to be deemed exclusive, and the Sub-
Adviser shall be free to render similar service to others;
(g) The Sub-Adviser is authorized, subject to the supervision of the
Adviser and the Trustees of the Trust, to place orders for the purchase and
sale of the Portfolio's investments with or through such persons, brokers or
dealers, including the Sub-Adviser or affiliates thereof, and to negotiate
commissions to be paid on such transactions in accordance with the Portfolio's
policy with respect to brokerage as set forth in the Prospectus. The Sub-
Adviser may, on behalf of the Portfolio, pay brokerage commissions to a broker
which provides brokerage and research services to the Sub-Adviser in excess of
the amount another broker would have charged for effecting the transaction,
provided the Sub-Adviser determines in good faith that the amount is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker in terms of the particular transaction or in
terms of the Sub-Adviser's overall responsibilities with respect to the
Portfolio and the accounts as to which the Sub-Adviser exercises investment
discretion. It is recognized that the services provided by such brokers may
be useful to the Sub-Adviser in connection with the Sub-Adviser's service to
other clients. On occasions when Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other
customers, the Sub-Adviser may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to be so
sold or purchased in order to obtain the best execution and lower brokerage
commissions, if any. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will be made by
Sub-Adviser in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the Portfolio and, if applicable, to such
other customers. The Trust and the Adviser acknowledge that in order to
comply with Federal Securities laws and related regulatory requirements, there
may be periods when the Sub-Adviser will not be permitted to initiate or
recommend certain types of transactions in the securities of issuers for which
affiliates of the Sub-Adviser are performing investment banking services, and
neither the Trust nor the Adviser will be advised of that fact. For example,
during certain periods when affiliates of the Sub-Adviser are engaged in an
underwriting or other distribution of a company's securities, the Sub-Adviser
may be prohibited from purchasing or recommending the purchase of certain
securities of that company for its clients. Similarly, the Sub-Adviser may on
occasion be prohibited from selling or recommending the sale of securities of
a company for which affiliates are providing investment banking services.
(h) The Sub-Adviser shall provide marketing support to the Adviser in
connection with the sale of Trust shares and/or Equitable Life Insurance
Company of Iowa variable insurance contracts, as reasonably requested by the
Adviser. Such support shall include, but not necessarily be limited to,
presentations by representatives of the Sub-Adviser at investment seminars,
conferences and other industry meetings. Any materials utilized by the
Adviser which contain any information relating to the Sub-Adviser shall be
submitted
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to the Sub-Adviser for approval prior to use, not less than five (5)
business days before such approval is needed by the Adviser. Any materials
utilized by the Sub-Adviser which contain any information relating to the
Adviser, Equitable Life Insurance Company of Iowa (including any information
relating to its separate accounts or variable annuity contracts) or the Trust
shall be submitted to the Adviser for approval prior to use, not less than
five (5) business days before such approval is needed by the Sub-Adviser,
which approval shall not be unreasonably withheld.
(i) The Trust represents that it has delivered true and correct copies
to the Sub-Adviser of, and agrees to promptly notify and deliver to the Sub-
Adviser all future amendments and supplements to, the Prospectus, the Trust's
Declaration of Trust, the Trust's Bylaws, resolutions or other instructions of
the Trustees relevant to the Sub-Adviser's performance of its duties under
this Agreement, the Advisory Agreement and the Trust's Registration Statement
on Form N-1A.
3. The Sub-Adviser agrees that all records which it maintains for the
Portfolio pursuant to 2(d) are the property of the Trust and will promptly
surrender any of such records to Adviser upon the Trustees' or Adviser's
request. The Sub-Adviser shall preserve for periods prescribed by Rule 31a-2
of the 1940 Act any such records as are required to be maintained by the Sub-
Adviser with respect to the Portfolio by Rule 31a-1 of the 1940 Act.
4. For performance of the services hereunder with respect to the Portfolios,
the Adviser shall pay the Sub-Adviser pursuant to the Fee Schedule contained
in Schedule B. The fee prescribed in Schedule B shall be calculated daily and
payable monthly in arrears at an annual rate per Schedule B of the Portfolio's
average daily net assets.
5. The Sub-Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust, Portfolio or the Adviser in
connection with the matters to which this Sub-Advisory Agreement relates,
except for a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Sub-Advisory
Agreement.
6. The term of this Sub-Advisory Agreement shall begin on the date first
above written, and unless sooner terminated as hereinafter provided, this Sub-
Advisory Agreement shall remain in effect for two (2) years from such date.
Thereafter, this Sub-Advisory Agreement shall continue in effect with respect
to the Portfolios from year to year, subject to the termination provisions and
all other terms and conditions hereof; PROVIDED, such continuance with respect
to the Portfolios is approved at least annually by vote of the holders of a
majority of the outstanding voting securities of the Portfolio or by the
Trustees of the Trust; PROVIDED, that in either event such continuance is also
approved annually by the vote, cast in person at a meeting called for the
purpose of vot-ing on such approval, of a majority of the Trustees of the
Trust who are not parties to this SubAdvisory Agreement or interested persons
of any party hereto; and PROVIDED FURTHER that the Sub-Adviser shall not have
notified the Trust in writing at least sixty (60) days prior to the end of the
initial two (2) year period, or at least sixty (60) days prior to the
anniversary date of the execution of this Sub-Advisory Agreement of any year
thereafter that it does
not desire such continuation. The Sub-Adviser shall furnish to the Trust,
promptly upon its request, such information as may reasonably be necessary to
evaluate the terms of this Sub-Advisory Agreement or any extension, renewal or
amendment thereof. This Sub-Advisory Agreement may be terminated at any time
by any party hereto, without the payment of any penalty, upon sixty (60) days'
prior written notice to the other parties; PROVIDED, that in the case of
termination by the Trust, such action shall have been authorized (i) by
resolution of the Trust's Board of Trustees, including the vote or written
consent of Trustees of the Trust who are not parties to this Sub-Advisory
Agreement or interested persons of any party hereto, or (ii) by vote of a
majority of the outstanding voting securities of the Portfolio. This
Agreement shall automatically terminate in the event of its "assignment" (as
defined in the 1940 Act).
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7. The Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor and shall not, unless otherwise expressly provided
herein or authorized by the Trustees of the Trust from time to time, have any
authority to act for or represent the Portfolio or Trust in any way or
otherwise be deemed to be an agent of the Portfolio or the Trust.
7. This Sub-Advisory Agreement is entered into by the Trust pursuant to
authority granted by the Trustees, and the obligations created hereby are not
binding on any of the Trustees or shareholders of the Trust individually, but
bind only the property of the Trust and the Portfolios.
9. This Sub-Advisory Agreement may be amended only in accordance with the
1940 Act.
10. Any notice that is required to be given by the parties to each other
under the terms of this Sub-Advisory Agreement shall be in writing, delivered,
or mailed postpaid to the other party, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Sub-Adviser:
Credit Suisse Asset Management Limited
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx
Attention: Xxxx X. Xxxxxx
(b) If to the Manager:
Equitable Investment Services, Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
(c) If to the Trust:
Equi-Select Series Trust
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
11. This Sub-Advisory Agreement shall be governed and construed in accordance
with the laws of The Commonwealth of Massachusetts.
12. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original.
13. Under the rules of the Investment Management Regulatory Organization
("IMRO"), clients must be placed in specific categories which are dictated by
different considerations including the nature and financial description of the
client, the experience of the client in certain investments and other factors.
On the basis of the information which the Adviser has given, it is a Non-
Private Customer in relation to the services to be provided in accordance with
this Agreement.
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14. The Sub-Adviser understands that the Adviser does not require transaction
confirmation notes from Sub-Adviser. The information which would have been
contained in the Adviser's confirmation notes will be included in the periodic
statements specified below. The Sub-Adviser will deliver or send to the
Adviser on a monthly basis and after the date of termination, a statement of
the contents and value of the Investment Portfolio and an assessment of its
performance.
Each statement will include:
a) the number of units of each asset comprising the Portfolio, the aggregate
of the initial value of each and the aggregate of their value at the time the
statement is made up; and
b) the basis on which such values have been calculated with a note of any
change in such basis from that used in the immediately preceding statement.
This basis shall be:
i) taken from mid-market price indications from a representative sample
of market makers, or
ii) where, in the opinion of the Sub-Adviser, the investment concerned
is not readily realizable then it shall be taken at such fair valuation as may
be determined on each occasion by the Sub-Adviser.
15. The Sub-Adviser may undertake transactions in options, future, or
contracts for differences ("Relevant Transactions") in accordance with the
Prospectus. The markets on which Relevant Transactions are executed can be
highly volatile. Such investments carry a high risk of loss and, in the case
of futures, contracts for differences and the grant of options, a relatively
small adverse market movement may result not only in the loss of the original
investment but also in unquantifiable further loss exceeding any margin
deposited. The Sub-Adviser may pay margin, or (subject to the rules of the
exchange concerned) deposit investments by way of margin or collateral, on any
Relevant Transaction out of the funds or investments in the Portfolio. The
Sub-Adviser may enter into Relevant Transactions under which the Trust may be
required to pay amounts, or deposit investments, in respect of margin or
collateral in excess of (as the case may be) the funds or the investments held
in the Portfolio. Subject to the limits specified in the Prospectus, the Sub-
Adviser may borrow on the Trust's behalf in order to meet any calls for margin
or collateral and the Sub-Adviser and the Trust acknowledge that the amounts
which may be so committed are unquantifiable, due to the nature of the
commitments. In connection with Relevant Transactions, the Sub-Adviser may,
without reference to the Adviser,
make contractual or other arrangements to settle or close out outstanding
obligations in circumstances required by any exchange or intermediate broker
with or through which the Sub-Adviser effects such transactions.
16. The Sub-Adviser, the Adviser and the Trust may record telephone
conversations with each other. Any recordings made by the Sub-Adviser shall
be the property of the Sub-Adviser.
17. The Sub-Adviser has in operation a written procedure in accordance with
the rules of IMRO for the effective consideration and proper handling of
complaints from clients. Any complaint by the Adviser and/or the Trust
hereunder should be sent in writing to the Compliance Officer of the Sub-
Adviser at the address specified in Section 10. The Adviser and/or the Trust
are also entitled to make any complaint about the Sub-Adviser to IMRO.
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IN WITNESS WHEREOF, the parties hereto have caused this Sub-Advisory
Agreement to be executed by their respective officers designated below as of
the day and year first above written.
ADVISER: TRUST:
EQUITABLE INVESTMENT EQUI-SELECT SERIES TRUST
SERVICES, INC.
By:__________________________ By:__________________________
Its President Its Trustee
SUB-ADVISER:
CREDIT SUISSE ASSET
MANAGEMENT LIMITED
By:__________________________
Its____________________
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SCHEDULE A
PORTFOLIO LISTING
INTERNATIONAL FIXED INCOME PORTFOLIO
SCHEDULE B
FEE SCHEDULE
International Fixed Income Portfolio .45% of first $200 million
.40% of next $300 million
.30% of next $500 million
.25% of next $1 billion
.10% of average net assets over and above
$2 billion
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