EXHIBIT C
SUB-ADVISORY AGREEMENT
This Sub-Advisory Agreement is made and entered into on this ___ day of
______________, 1997, by and among Xxxxxxxxx, Xxxxxxxx & Company Investment
Management, L.P., a California limited partnership (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 in the investment of the Trust's assets
in accordance with the Trust's current Prospectus and Statement of Additional
Information (collectively the "Prospectus"); and
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement dated ______________, 1997 ("Investment Advisory
Agreement"); and
WHEREAS, under the terms of the Investment 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:
I. The Adviser hereby appoints Sub-Adviser to act as the investment advisor
with respect to one or more portfolios as identified in "Exhibit 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
herein provided.
II. Subject to the supervision of the Trustees of 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
and Trust'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 terms of the Declaration
of Trust, Bylaws and the Prospectus of the Trust, and any amendments thereto,
each of which shall be promptly furnished to the Sub-Adviser by the Trust, and
with the instructions and directions of the Trustees of the Trust and the
Board of Directors and officers of the Adviser, and will conform to and
comply with the
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requirements of the Investment Company Act of 1940 (the "1940 Act"), and all
other applicable federal and state laws and regulations;
(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;
(d) The Sub-Adviser shall maintain 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 provide the Trust's Custodian with all
requested information relating to all transactions concerning the assets of
the Portfolio; and
(f) The Sub-Adviser shall not render similar services involving the
Portfolio with respect to any other variable annuity contracts without prior
notice to the Adviser or the Trust.
(g) The Sub-Adviser shall provide such additional services 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 services shall include, but not necessarily be
limited to, presentations by representatives of the Sub-Adviser at investment
seminars, conferences and other industry meetings. No parties to the
Agreement will use any materials describing any other party without the prior
written approval of the party being described. Any materials utilized by the
Adviser which contain any information relating to the Sub-Adviser and/or its
affiliates shall be submitted to the Sub-Adviser for written approval prior to
use, not less than three (3) business days before such approval is requested
by the Adviser. Such materials shall be deemed approved if not otherwise
objected to prior to the approval date requested 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 insurance contracts)
or the Trust shall be submitted to the Adviser for written approval prior to
use, not less than three (3) business days before such approval is requested
by the Sub-Adviser. Such materials shall be deemed approved if not otherwise
objected to prior to the approval date requested by the Sub-Adviser.
(h) 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 (i) 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, (ii) such payment is made in compliance with Section 28(e) of the
Securities Exchange Act of 1934, as amended,
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and any other applicable laws and regulations, and (iii) in the opinion of the
Sub-Adviser, the total commissions paid by the Portfolio will be reasonable in
relation to the benefits to the Portfolio over the long term. 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 the Sub-Adviser deems the purchase or sale of a security to be
in the best interests of the Portfolio as well as other clients of the Sub-
Adviser, the Sub-Adviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be sold or purchased in order to obtain the most favorable price
or lower brokerage commissions and efficient execution. In such event,
allocation of securities so sold or purchased, as well as the expenses
incurred in the transaction, will be made by the Sub-Adviser in the manner the
Sub-Adviser considers to be the most equitable and consistent with its
fiduciary obligations to the Portfolio and to such other clients;
(i) The Adviser and the Trust consent and agree that Sub-Adviser may
aggregate securities sale and purchase orders for the Portfolio with similar
orders being made contemporaneously for other accounts managed by Sub-Adviser
or with accounts of affiliates of Sub-Adviser if, in Sub-Adviser's reasonable
judgment, such aggregation is reasonably likely to result in an overall
economic benefit to the Portfolio, based on an evaluation that the Portfolio
is benefitted by relatively better purchase or sale prices, lower commission
expenses or beneficial timing of transactions, or a combination of these and
other factors. In many instances, the purchase or sale of securities for the
Portfolio will be affected substantially simultaneously with the purchase or
sale of like securities for the accounts of other clients of Sub-Adviser and
its affiliates. Such transactions may be made at slightly different prices,
due to the volume of securities purchased or sold. In such event, the average
price of all securities purchased or sold in such transactions may be
determined, and the Portfolio may be charged or credited, as the case may be,
the average transaction price.
(j) Xxxxxxxxx, Xxxxxxxx & Company LLC ("RS & Co."), an affiliate of Sub-
Adviser, may execute agency (but not principal) transactions on behalf of the
Portfolio. Sub-Adviser has a conflict of interest in recommending RS & Co. to
execute such transactions and RS & Co. will receive commissions in connection
therewith.
(k) The Adviser and the Trust agree that RS & Co. may act as broker for
both the Portfolio and for another person on the other side of any transaction
involving funds or securities in the Portfolio ("Agency Cross Transactions").
The Adviser and the Trust recognize that Sub-Adviser or its affiliates may
receive commissions, and have a potentially conflicting division of loyalties
and responsibilities regarding, both parties to such Agency Cross
Transactions. If Sub-Adviser engages in an Agency Cross Transaction, Sub-
Adviser will send to the Adviser and the Trust a written confirmation at or
before the completion of each such Agency Cross Transaction, which
confirmation will include (a) a statement of the nature of such Agency Cross
Transaction, (b) the date such Agency Cross Transaction shall have taken
place, (c) an offer to furnish, on request, the time when such Agency Cross
Transaction shall have taken place, and (d) the source and amount of any other
remuneration received or to be received by Sub-Adviser on any of its
affiliates in connection with such Agency Cross Transaction. Sub-Adviser
shall also send to the Adviser and the Trust, at least annually, a written
statement identifying the total amount of such Agency Cross Transactions
during the period included in the statement, and the total commissions or
other remuneration received or to be received by Sub-Adviser or any of its
affiliates
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in connection with such Agency Cross Transactions included in the statement.
The consent to Agency Cross Transactions set forth in this paragraph may be
revoked by the Adviser or the Trust at any time by notifying Sub-Adviser in
writing.
III. The Sub-Adviser agrees that all records which it maintains for the
Portfolio pursuant to Paragraph 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.
IV. The Adviser shall pay the Sub-Adviser pursuant to the Fee Schedule
contained in "Exhibit B", which is attached hereto and by this reference is
incorporated herein. The fee prescribed in Exhibit C shall be calculated
daily and payable monthly in arrears at an annual rate per Exhibit C of the
Portfolio's average daily net assets.
V. The Sub-Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust in connection with the matters to
which this Sub-Advisory Agreement relates, except 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.
VI. The Adviser and the Trust acknowledge and understand that Sub-Adviser
engages in an investment advisory business apart from managing the Portfolio.
This will create conflicts of interest with the Portfolio over Sub-Adviser's
time devoted to managing the Portfolio and the allocation of investment
opportunities among accounts (including the Portfolio) managed by Sub-Adviser.
Sub-Adviser will attempt to resolve all such conflicts in a manner that is
generally fair to all of its clients. The Adviser and the Trust confirm that
Sub-Adviser may give advice and take action with respect to any of its other
clients that may differ from advice given or the timing or nature of action
taken with respect to the Portfolio so long as it is Sub-Adviser's policy, to
the extent practicable, to allocate investment opportunities to the Portfolio
over a period of time on a fair and equitable basis relative to other clients.
Nothing in this Agreement shall be deemed to obligate Sub-Adviser to acquire
for the Portfolio any security that Sub-Adviser or its officers or employees
may acquire for its or their own accounts or for the account of any other
client if, in the absolute discretion of Sub-Adviser, it is not practical or
desirable to acquire a position in such security for the Portfolio.
VII. 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 voting on such approval, of a majority of the Trustees of the Trust
who are not parties to this Sub-Advisory 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
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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).
VIII. 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 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.
IX. This Sub-Advisory Agreement is entered into by the Trust on behalf of
one or more Portfolios identified in Exhibit B 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 such Portfolios of the Trust.
X. This Sub-Advisory Agreement may be amended only in accordance with the
1940 Act.
XI. The Adviser and the Trust acknowledge that the Adviser and the Trust
have received Sub-Adviser's brochure required to be delivered under the
Investment Adviser's Act of 1940 (including the information in Part II of Sub-
Adviser's Form ADV). If the Adviser or the Trust received such information
less than forty-eight hours prior to signing this Agreement, this Agreement
may be terminated by the Adviser or the Trust without penalty within five
business days from the date of this Agreement. Upon written request by the
Adviser or the Trust, Sub-Adviser agrees to deliver annually, without charge,
Sub-Adviser's brochure required by the Investment Advisers Act of 1940.
XII. 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
acknowledgement 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:
Xxxxxxxxx, Xxxxxxxx & Company Investment Management, L.P.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
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(b) If to the Manager:
Equitable Investment Services, Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
(c) If to the Trust:
Equi-Select Series Trust
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
XIII. This Sub-Advisory Agreement shall be governed and construed in
accordance with the laws of The Commonwealth of Massachusetts.
XIV. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original.
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:______________________________
XXXX X. XXXXXXXX XXXX X. XXXXXXXX
ITS PRESIDENT ITS PRESIDENT
SUB-ADVISER:
XXXXXXXXX, XXXXXXXX & COMPANY
INVESTMENT MANAGEMENT, L.P.
BY:_______________________________
ITS____________________
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SUB-ADVISORY AGREEMENT
EXHIBIT A
PORTFOLIO LISTING
GROWTH & INCOME PORTFOLIO
VALUE + GROWTH PORTFOLIO
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SUB-ADVISORY AGREEMENT
EXHIBIT B
FEE SCHEDULE
Growth & Income Portfolio 0.55% of first $200 million
0.45% of average net assets over and above $200
million.
Value + Growth Portfolio 0.55% of first $500 million;
0.45% of average net assets over and above $500
million.
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