INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made as of the 1st day of October, 1994 between Equi-Select Series
Trust, an unincorporated business trust organized under the laws of the
Commonwealth of Massachusetts (the "Trust"), and Equitable Investment
Services, Inc., an Iowa corporation (the "Adviser").
W I T N E S S E T H :
WHEREAS, the Trust is engaged in business as an open-end management investment
company and is registered as such under the Investment Company Act of 1940, as
amended (the "Act");
WHEREAS, the Trust is authorized to issue separate series, each of which
offers a separate class of shares of common stock, each having its own
investment objective or objectives, policies and limitations;
WHEREAS, the Trust currently offers shares in ten series, designated as the
Advantage Portfolio, OTC Portfolio, Government Securities Portfolio,
International Fixed Income Portfolio, International Stock Portfolio, Money
Market Portfolio, Mortgage-Backed Securities Portfolio, Research Portfolio,
Short-Term Bond Portfolio and Total Return Portfolio ("Current Series"), and
the Trust may offer shares of one or more additional series in the future;
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940; and
WHEREAS, the Trust desires to retain the Adviser to render investment
management and administrative services to the Trust with respect to each
Current Series as indicated on the signature page in the manner and on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1. SERVICES OF THE ADVISER.
1.1 INVESTMENT MANAGEMENT SERVICES. The Adviser shall act as the
investment adviser to the Trust and, as such, shall (i) obtain and evaluate
such information relating to the economy, industries, business, securities
markets and securities as it may deem necessary or useful in discharging its
responsibilities hereunder, (ii) formulate a continuing program for the
investment of the assets of the Trust in a manner consistent with its
investment objectives, policies and restrictions, and (iii) determine from
time to time securities to be purchased, sold, retained or lent by the Trust,
and implement those decisions, including the selection of entities with or
through which such purchases, sales or loans are to be effected; provided,
that the Adviser will place orders pursuant to its investment determinations
either directly with the issuer or with a broker or dealer, and if with a
broker or dealer, (a) will attempt to obtain the best net price and most
favorable execution of its orders, and (b) may nevertheless in its discretion
purchase and sell portfolio securities from and to brokers and dealers who
provide the Adviser with research, analysis, advice and similar services and
pay such brokers and dealers in return a higher commission or spread than may
be charged by other brokers or dealers.
The Trust hereby authorizes any entity or person associated with the Adviser
or any Sub-Adviser retained by Adviser pursuant to Section 7 of this
Agreement, which is a member of a national securities exchange, to effect any
transaction on the exchange for the account of the Trust which is permitted by
Section 11(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T)
thereunder, and the Trust hereby consents to the retention of compensation for
such transactions in accordance with Rule 11a2-2(T)(a)(iv).
The Adviser shall carry out its duties with respect to the Trust's investments
in accordance with applicable law and the investment objectives, policies and
restrictions set forth in the Trust's then-current Prospectus and Statement of
Additional Information, and subject to such further limitations as the Trust
may from time to time impose by written notice to the Adviser.
1.2 ADMINISTRATIVE SERVICES. The Adviser shall manage the Trust's
business and affairs and shall provide such services required for effective
administration of the Trust as are not provided by employees or other agents
engaged by the Trust; provided, that the Adviser shall not have any obligation
to provide under this Agreement any direct or indirect services to Trust
shareholders, any services related to the distribution of Trust shares, or any
other services which are the subject of a separate agreement or arrangement
between the Trust and the Adviser. Subject to the foregoing, in providing
administrative services hereunder, the Adviser shall:
1.2.1 OFFICE SPACE, EQUIPMENT AND FACILITIES. Furnish without cost to
the Trust, or pay the cost of, such office space, office equipment and office
facilities as are adequate for the Trust's needs.
1.2.2 PERSONNEL. Provide, without remuneration from or other cost to
the Trust, the services of individuals competent to perform all of the Trust's
executive, administrative and clerical functions which are not performed by
employees or other agents engaged by the Trust or by the Adviser acting in
some other capacity pursuant to a separate agreement or arrangement with the
Trust.
1.2.3 AGENTS. Assist the Trust in selecting and coordinating the
activities of the other agents engaged by the Trust, including the Trust's
shareholder servicing agent, custodian, independent auditors and legal
counsel.
1.2.4 TRUSTEES AND OFFICERS. Authorize and permit the Advisers,
directors, officers and employees who may be elected or appointed as Trustees
or officers of the Trust to serve in such capacities, without remuneration
from or other cost to the Trust.
1.2.5 BOOKS AND RECORDS. Assure that all financial, accounting and
other records required to be maintained and preserved by the Trust are
maintained and preserved by it or on its behalf in accordance with applicable
laws and regulations.
1.2.6 REPORTS AND FILINGS. Assist in the preparation of (but not pay
for) all periodic reports by the Trust to its shareholders and all reports and
filings required to maintain the registration and qualification of the Trust
and Trust shares, or to meet other regulatory or tax requirements applicable
to the Trust, under federal and state securities and tax laws.
1.3 ADDITIONAL SERIES. In the event that the Trust from time to time
designates one or more series in addition to the Current Series ("Additional
Series"), it shall notify the Adviser in writing. If the Adviser is willing to
perform services hereunder to the Additional Series, it shall so notify the
Trust in writing. Thereupon, the Trust and the Adviser shall enter into an
Addendum to this Agreement for the Additional Series and the Additional Series
shall be subject to this Agreement.
2. EXPENSES OF THE TRUST.
2.1 EXPENSES TO BE PAID BY ADVISER. The Adviser shall pay all salaries,
expenses and fees of the officers, Trustees and employees of the Trust who are
officers, directors or employees of the Adviser.
In the event that the Adviser pays or assumes any expenses of the Trust not
required to be paid or assumed by the Adviser under this Agreement, the
Adviser shall not be obligated hereby to pay or assume the same or any similar
expense in the future; provided, that nothing herein contained shall be deemed
to relieve the Adviser of any obligation to the Trust under any separate
agreement or arrangement between the parties.
2.2 EXPENSES TO BE PAID BY THE TRUST. The Trust shall bear all expenses
of its operation, except those specifically allocated to the Adviser under
this Agreement or under any separate agreement between the Trust and the
Adviser. Subject to any separate agreement or arrangement between the Trust
and the Adviser, the expenses hereby allocated to the Trust, and not to the
Adviser, include, but are not limited to:
2.2.1 CUSTODY. All charges of depositories, custodians, and other
agents for the transfer, receipt, safekeeping, and servicing of its cash,
securities, and other property.
2.2.2 SHAREHOLDER SERVICING. All expenses of maintaining and servicing
shareholder accounts, including but not limited to the charges of any
shareholder servicing agent, dividend disbursing agent or other agent engaged
by the Trust to service shareholder accounts.
2.2.3 SHAREHOLDER REPORTS. All expenses of preparing, setting in type,
printing and distributing reports and other communications to shareholders.
2.2.4 PROSPECTUSES. All expenses of preparing, setting in type,
printing and mailing annual or more frequent revisions of the Trust's
Prospectus and Statement of Additional Information and any supplements thereto
and of supplying them to shareholders.
2.2.5 PRICING AND PORTFOLIO VALUATION. All expenses of computing the
Trust's net asset value per share, including any equipment or services
obtained for the purpose of pricing shares or valuing the Trust's investment
portfolio.
2.2.6 COMMUNICATIONS. All charges for equipment or services used for
communications between the Adviser or the Trust and any custodian, shareholder
servicing agent, portfolio accounting services agent, or other agent engaged
by the Trust.
2.2.7 LEGAL AND ACCOUNTING FEES. All charges for services and expenses
of the Trust's legal counsel and independent auditors.
2.2.8 TRUSTEES' FEES AND EXPENSES. All compensation of Trustees other
than those affiliated with the Adviser, all expenses incurred in connection
with such unaffiliated Trustees' services as Trustees, and all other expenses
of meetings of the Trustees and committees of the Trustees.
2.2.9 SHAREHOLDER MEETINGS. All expenses incidental to holding meetings
of shareholders, including the printing of notices and proxy materials, and
proxy solicitation therefor.
2.2.10 FEDERAL REGISTRATION FEES. All fees and expenses of registering
and maintaining the registration of the Trust under the Act and the
registration of the Trust's shares under the Securities Act of 1933 (the "1933
Act"), including all fees and expenses incurred in connection with the
preparation, setting in type, printing, and filing of any Registration
Statement, Prospectus and Statement of Additional Information under the 1933
Act or the Act, and any amendments or supplements that may be made from time
to time.
2.2.11 STATE REGISTRATION FEES. All fees and expenses of qualifying and
maintaining the qualification of the Trust and of the Trust's shares for sale
under securities laws of various states or jurisdictions, and of registration
and qualification of the Trust under all other laws applicable to the Trust or
its business activities (including registering the Trust as a broker-dealer,
or any officer of the Trust or any person as agent or salesman of the Trust in
any state).
2.2.12 SHARE CERTIFICATES. All expenses of preparing and transmitting
the Trust's share certificates.
2.2.13 CONFIRMATIONS. All expenses incurred in connection with the
issue and transfer of Trust shares, including the expenses of confirming all
share transactions.
2.2.14 BONDING AND INSURANCE. All expenses of bond, liability, and
other insurance coverage required by law or regulation or deemed advisable by
the Trustees of the Trust, including, without limitation, such bond, liability
and other insurance expenses that may from time to time be allocated to the
Trust in a manner approved by its Trustees.
2.2.15 BROKERAGE COMMISSIONS. All brokers' commissions and other
charges incident to the purchase, sale or lending of the Trust's portfolio
securities.
2.2.16 TAXES. All taxes or governmental fees payable by or with respect
to the Trust to federal, state or other governmental agencies, domestic or
foreign, including stamp or other transfer taxes.
2.2.17 TRADE ASSOCIATION FEES. All fees, dues and other expenses
incurred in connection with the Trust's membership in any trade association or
other investment organization.
2.2.18 NONRECURRING AND EXTRAORDINARY EXPENSES. Such nonrecurring and
extraordinary expenses as may arise including the costs of actions, suits, or
proceedings to which the Trust is a party and the expenses the Trust may incur
as a result of its legal obligation to provide indemnification to its
officers, Trustees and agents.
3. ADVISORY FEE.
3.1 FEE. As compensation for all services rendered facilities provided
and expenses paid or assumed by the Adviser under this Agreement, the Trust
shall pay the Adviser on the last day of each month, or as promptly as
possible thereafter, a fee calculated at the annual rate of the average daily
net assets during such month of each series of the Trust as set forth below:
3.1.1 ADVANTAGE PORTFOLIO. 0.50% of the first $100 million of average
net assets and 0.35% of average net assets over and above $100 million.
3.1.2 OTC PORTFOLIO. 0.80% of the first $300 million of average net
assets and 0.55% of average net assets over and above $300 million.
3.1.3 GOVERNMENT SECURITIES PORTFOLIO. 0.75% of the first $200 million
of average net assets, 0.55% of average net assets over and above $200
million.
3.1.4 INTERNATIONAL FIXED INCOME PORTFOLIO. 0.85% of the first $200
million of average net assets, 0.75% of next $300 million, 0.60% of average
net asset of next $500 million, 0.55% of average net assets of next $1 billion
and 0.40% of average net assets over and above $2 billion.
3.1.5 INTERNATIONAL STOCK PORTFOLIO. 0.80 % of the first $300 million
of average net assets and 0.55% of average net assets over and above $300
million.
3.1.6 MONEY MARKET PORTFOLIO. 0.375% of the first $50 million of
average net assets and 0.35 % of average net assets over and above $50
million.
3.1.7 MORTGAGE-BACKED SECURITIES PORTFOLIO. 0.75% of the first $200
million of average net assets, 0.65% of average net assets of next $300
million, 0.55% of average net assets of next $500 million, 0.50% of average
net assets of next $1 billion and 0.40% of average net assets over and above
$2 billion.
3.1.8 RESEARCH PORTFOLIO. 0.80% of the first $300 million of average
net assets and 0.55% of average net assets over and above $300 million.
3.1.9 SHORT-TERM BOND PORTFOLIO. 0.65% of the first $100 million of
average net assets, 0.50% of average net assets of next $100 million, 0.45% of
average net assets of next $300 million and 0.40% of average net assets over
and above $500 million.
3.1.10 TOTAL RETURN PORTFOLIO. 0.80% of the first $300 million of
average net assets and 0.55% of average net assets over and above $300
million.
4. RECORDS.
4.1 TAX TREATMENT. The Adviser shall maintain the books and records of
the Trust in such a manner that treats each series as a separate entity for
federal income tax purposes.
4.2 OWNERSHIP. All records required to be maintained and preserved by
the Trust pursuant to the provisions or rules or regulations of the Securities
and Exchange Commission under Section 31(a) of the Act and maintained and
preserved by the Adviser on behalf of the Trust are the property of the Trust
and shall be surrendered by the Adviser promptly on request by the Trust;
provided, that the Adviser may at its own expense make and retain copies of
any such records.
5. REPORTS TO ADVISER.
The Trust shall furnish or otherwise make available to the Adviser such copies
of the Trust's Prospectus, Statement of Additional Information, financial
statements, proxy statements, reports, and other information relating to its
business and affairs as the Adviser may, at any time or from time to time,
reasonably require in order to discharge its obligations under this Agreement.
6. REPORTS TO THE TRUST.
The Adviser shall prepare and furnish to the Trust such reports, statistical
data and other information in such form and at such intervals as the Trust may
reasonably request.
7. RETENTION OF SUB-ADVISER.
Subject to the Trust's obtaining the initial and periodic approvals required
under Section 15 of the Act, the Adviser may retain one or more sub-advisers,
at the Adviser's own cost and expense, for the purpose of managing the
investments of the assets of one or more Series of the Trust. Retention of
one or more sub-advisers shall in no way reduce the responsibilities or
obligations of the Adviser under this Agreement and the Adviser shall be
responsible to the Trust for all acts or omissions of any sub-adviser in
connection with the performance of the Adviser's duties hereunder.
8. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Adviser or any
affiliated person of the Adviser to render investment management and
administrative services to other investment companies, to act as investment
adviser or investment counselor to other persons, firms or corporations, or to
engage in other business activities.
9. LIMITATION OF LIABILITY OF ADVISER AND ITS PERSONNEL.
Neither the Adviser nor any director, officer or employee of the Adviser
performing services for the Trust at the direction or request of the Adviser
in connection with the Adviser's discharge of its obligations hereunder shall
be liable for any error of judgment or mistake of law or for any loss suffered
by the Trust in connection with any matter to which this Agreement relates,
and the Adviser shall not be responsible for any action of the Trustees of the
Trust in following or declining to follow any advice or recommendation of the
Adviser; provided, that nothing herein contained shall be construed (i) to
protect the Adviser against any liability to the Trust or its shareholders to
which the Adviser would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of the Adviser's duties, or
by reason of the Adviser's reckless disregard of its obligations and duties
under this Agreement, or (ii) to protect any director, officer or employee of
the Adviser who is or was a Trustee or officer of the Trust against any
liability of the Trust or its shareholders to which such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
person's office with the Trust.
10. NO PERSONAL LIABILITY OF TRUSTEES OR SHAREHOLDERS.
This Agreement is made by the Trust on behalf of its various Current Series
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 each Current Series of the Trust.
11. EFFECT OF AGREEMENT.
Nothing herein contained shall be deemed to require the Trust to take any
action contrary to its Declaration of Trust or its By-Laws or any applicable
law, regulation or order to which it is subject or by which it is bound, or to
relieve or deprive the Trustees of the Trust of their responsibility for and
control of the conduct of the business and affairs of the Trust.
12. TERM OF AGREEMENT.
The term of this Agreement shall begin on the date first above written, and
unless sooner terminated as hereinafter provided, this Agreement shall remain
in effect through October 1, 1996. Thereafter, this Agreement shall continue
in effect with respect to the Trust from year to year, subject to the
termination provisions and all other terms and conditions hereof; provided,
such continuance with respect to the Trust is approved at least annually by
vote of the holders of a majority of the outstanding voting securities of the
Trust 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 voting on such approval, of a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of either party hereto; and provided further that the Adviser shall
not have notified the Trust in writing at least sixty (60) days prior to
October 1, 1996, or at least sixty (60) days prior to October 1 of any year
thereafter that it does not desire such continuation. The Adviser shall
furnish to the Trust, promptly upon its request, such information as may
reasonably be necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment thereof.
13. AMENDMENT OR ASSIGNMENT OF AGREEMENT.
Any amendment to this Agreement shall be in writing signed by the parties
hereto; provided, that no such amendment shall be effective unless authorized
on behalf of the Trust (i) by resolution of the Trust's Trustees, including
the vote or written consent of a majority of the Trust's Trustees who are not
parties to this Agreement or interested persons of either party hereto, and
(ii) by vote of a majority of the outstanding voting securities of the Trust.
This Agreement shall terminate automatically and immediately in the event of
its assignment.
14. TERMINATION OF AGREEMENT.
This Agreement may be terminated at any time by either party hereto, without
the payment of any penalty, upon sixty (60) days' prior written notice to the
other party; 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 Agreement or interested persons of either party
hereto, or (ii) by vote of a majority of the outstanding voting securities of
the Trust.
15. INTERPRETATION AND DEFINITION OF TERMS.
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
Act shall be resolved by reference to such term or provision of the Act and to
interpretation 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 Securities and Exchange Commission validly issued pursuant to
the Act. Specifically, the terms "vote of a majority of the outstanding
voting securities," "interested persons," "assignment" and "affiliated
person," as used in this Agreement shall have the meanings assigned to them by
Section 2(a) of the Act. In addition, when the effect of a requirement of the
Act reflected in any provision of this Agreement is modified, interpreted or
relaxed by a rule, regulation or order of the Securities and Exchange
Commission, whether of special or of general application, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
16. CAPTIONS.
The captions in this Agreement are included for convenience of reference only
and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
17. EXECUTION IN COUNTERPARTS.
This Agreement may be executed simultaneously in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
seals to be hereunto affixed, as of the date and year first above written.
EQUI-SELECT SERIES TRUST for its
Advantage Portfolio, OTC Portfolio,
Government Securities Portfolio,
International Fixed Income Portfolio,
International Stock Portfolio, Money
Market Portfolio, Mortgage-Backed
Securities Portfolio, Research
Portfolio, Short-Term Bond Portfolio and
Total Return Portfolio
Attest:
/s/ Xxxx X. Xxxxxxxx By:/s/ Xxxx X. Xxxxxxxx
-------------------- ----------------------------------------
Secretary Xxxx X. Xxxxxxxx,
President
EQUITABLE INVESTMENT SERVICES, INC.
Attest:
/s/ Xxxxx X. Xxxx By:/s/ Xxxx X. Xxxxxxxx
-------------------- ----------------------------------------
Secretary Xxxx X. Xxxxxxxx,
President
