INVESTMENT ADVISORY AGREEMENT
Investment Advisory Agreement executed as of July 22,
1993, between THE EQUITABLE FUNDS, a Massachusetts business trust
(the "Trust"), on behalf of each of its portfolio series listed on
Exhibit A hereto (each a "Fund") and ALLIANCE CAPITAL MANAGEMENT
L.P., a Delaware limited partnership ("Manager").
Witnesseth:
That in consideration of the mutual covenants herein
contained, it is agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO THE TRUST AND
FUNDS.
(a) Subject always to the control of the Trustees of the
Trust, the Manager will, at its expense, furnish continuously an
investment program for each Fund, will make investment decisions
on behalf of each Fund and will, subject to the provisions of
paragraph(c), place all orders for the purchase and sale of each
Fund's portfolio securities. Subject always to the control of the
Trustees of the Trust, the Manager will also manage, supervise and
conduct the other affairs and business of the Trust and the Funds,
and matters incidental thereto. In the performance of its duties,
the Manager will comply with the provisions of the Agreement and
Declaration of Trust and By-laws of the Trust and each Fund's
stated investment objectives, policies and restrictions and will
use its best efforts to safeguard and promote the welfare of the
Trust and the Funds and to comply with other policies which the
Trustees may from time to time determine.
(b) The Manager, at its expense, will furnish all
necessary office space and equipment, bookkeeping and clerical
services required for it to perform it duties hereunder and will
pay all salaries, fees and expenses of officers and Trustees of
the Trust who are affiliated with the Manager.
(c) In the selection of brokers, dealers, or futures
commissions merchants (collectively "brokers") and the placing of
orders for the purchase and sale of portfolio investments for each
Fund, the Manager shall seek to obtain the most favorable price
and execution available, except to the extent it may be permitted
to pay higher brokerage commissions for brokerage and research
services as described below. In using its best efforts to obtain
for each Fund the most favorable price and execution available,
the Manager, bearing in mind each Fund's best interest at all
times, shall consider all factors it deems relevant, including, by
way of illustration, price, the size of the transaction, the
nature of the market for the security, the amount of the
commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial
stability of the broker involved and the quality of service
rendered by the broker in other transactions. Subject to such
policies as the Trustees may determine, the Manager shall not be
deemed to have acted unlawfully or to have breached any duty
created by this Contract or otherwise solely by reason of its
having caused any Fund to pay a broker that provides brokerage and
research services to the Manager an amount of commission for
effecting a portfolio investment transaction in excess of the
amount of commission another broker would have charged for
effecting that transaction, if the Manager determines in good
faith that such amount of commission was reasonable in relation to
the value of the brokerage and research services provided by such
broker, viewed in terms of either that particular transaction or
the Manager's overall responsibilities with respect to such Fund
and to other clients of the Manager as to which the Manager
exercises investment discretion. The Trust hereby agrees with the
Manager and with any Sub-Adviser selected by the Manager as
provided in Section 1(d) that any entity or person associated with
the Manager or such Sub-Adviser which is a member of a national
securities exchange is authorized to effect any transaction on
such exchange for the account of a Fund 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)(2)(iv).
(d) Subject to the provisions of the Agreement and
Declaration of Trust of the Trust and the Investment Company Act
of 1940, the Manager, at its expense may select and contract with
one or more investment advisers (the "Sub-Adviser") for any Fund
to perform some or all of the services for which it is responsible
pursuant to paragraph (a) of this Section 1 (and any related
facilities or services for which it is responsible under
paragraph (b) of this Section 1). The Manager will compensate any
Sub-Adviser of such Fund for its services to such Fund. The
Manager may terminate the services of any Sub-Adviser at any time
in its sole discretion, and shall at such time assume the
responsibilities of such Sub-Adviser unless and until a successor
Sub-Adviser is selected.
(e) The Manager shall not be obligated to pay any
expenses of or for the Trust or any Fund not expressly assumed by
the Manager pursuant to this Section 1 other than as provided in
Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees,
officers and employees of the Trust may be a shareholder,
director, officer or employee of, or be otherwise interested in,
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the Manager, and in any person controlling, controlled by or under
common control with the Manager, and that the Manager and any
person controlling, controlled by or under common control with the
Manager may have an interest in the Trust or in any Fund. It is
also understood that the Manager and persons controlling,
controlled by or under common control with the Manager have and
may have advisory, management service, distribution or other
contracts with other organizations and persons, and may have other
interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO
THE MANAGER.
The Trust, on behalf of the Funds, will pay to the
Manager as compensation for the Manager's services rendered, for
the facilities furnished and for the expenses borne by the Manager
pursuant to Section 1, a fee, computed and paid monthly at the
following annual rates applicable to the average daily net asset
value of each Fund:*
Annual
Percentage
Fund Rate
The Equitable Balanced Fund,
The Equitable Growth Fund,
The Equitable Conservative
Investors Fund and The Equitable
Growth Investors Fund 0.75%
The Equitable Short-Term
U.S. Government Fund 0.55%
Such fee computed with respect to the net asset value of a Fund
shall be paid from the assets of such Fund. Such average daily
net asset value of each Fund shall be determined by taking an
average of all of the determinations of such net asset value
during such month at the close of business on each business day
during such month while this Contract is in effect. Such fee
shall be payable for each month within five (5) business days
after the end of such month.
In the event that expenses of any Fund for any fiscal
year (not including any distribution expenses paid by such Fund
____________________
* The names of the other Funds (and their annual percentage
rates) included in the form of current Investment Advisory
Agreement relating to the Growth Fund and the Balanced Fund
are not shown.
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pursuant to any distribution plan) should exceed the expense
limitation on investment company expenses enforced by any statute
or regulatory authority of any jurisdiction in which shares of
such Fund are qualified for offer and sale, the compensation due
the Manager for such fiscal year shall be reduced by the amount of
such excess by a reduction or refund thereof. In the event that
the expenses of any Fund exceed any expense limitation which the
Manager may, by written notice to the Trust, voluntarily declare
to be effective with respect to such Fund, subject to such terms
and conditions as the Manager may prescribe in such notice, the
compensation due the Manager shall be reduced, and, if necessary,
the Manager shall bear the expenses of such Fund to the extent
required by such expense limitation.
If the Manager shall serve for less than the whole of a
month, the foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS
OF THIS CONTRACT.
This Contract shall automatically terminate, without the
payment of any penalty, in the event of its assignment; and this
Contract shall not be amended as to any Fund unless such amendment
is approved at a meeting by the affirmative vote of a majority of
the outstanding shares of such Fund, and 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
interested persons of the Trust or of the Manager or of any Sub-
Adviser of the Trust. Shareholders of a Fund not affected by any
such amendment shall have no right to vote with respect to such
amendment.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution,
and shall remain in full force and effect as to a particular Fund
continuously thereafter (unless terminated automatically as set
forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract as to any Fund by not more than sixty days' written
notice delivered or mailed by registered mail, postage prepaid, to
the other party, or
(b) If (i) the Trustees of the Trust or the shareholders
by the affirmative vote of a majority of the outstanding shares of
such Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager, by vote
cast in person at a meeting called for the purpose of voting on
such approval, do not specifically approve at least annually the
continuance of this Contract, then this Contract shall
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automatically terminate with respect to such Fund at the close of
business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of
such Fund for their approval and such shareholders fail to approve
such continuance of this Contract as provided herein, the Manager
may continue to serve hereunder in a manner consistent with the
Investment Company Act of 1940 and the rules and regulations
thereunder.
Action by the Trust under (a) above may be taken either
(i) by vote of a majority of its Trustees or (ii) by the
affirmative vote of a majority of the outstanding shares of the
relevant Fund affected.
Termination of this Contract pursuant to this Section 5
shall be without the payment of any penalty.
6. CERTAIN INFORMATION.
(b) the Manager shall fail to be registered as an
investment adviser under the Investment Advisers Act of 1940, as
amended from time to time, and under the laws of any jurisdiction
in which the Manager is required to be registered as an investment
adviser in order to perform its obligations under this Agreement,
(b) the Manager shall have been served or otherwise have 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 or a Fund and (c) there shall be any
change in the "control" (as defined in the Investment Company Act
of 1940) of the Manager.
7. CERTAIN DEFINITIONS.
(b) of the holders of 67% or more of the shares of such
Fund present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares
of the Fund entitled to vote at such meeting are present in person
or by proxy, or (b) of the holders of more than 50% of the
outstanding shares of the Fund entitled to vote at such meeting,
whichever is less.
For the purposes of this Contract, the terms "affiliated
person," "control," "interested person" and "assignment" shall
have their respective meanings defined in the Investment Company
Act of 1940 and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities
and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940 and the rules
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and regulations thereunder; and the term "brokerage and research
services" shall have the meaning given in the Securities Exchange
Act of 1934 and the rules and regulations thereunder.
8. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Manager, or reckless disregard of
its obligations and duties hereunder, the Manager shall not be
subject to any liability to the Trust, to any Fund or to any
shareholder of any Fund, for any act or omission in the course of,
or connected with, rendering services hereunder.
9. USE OF NAME.
(i) this Agreement shall remain in full force, (ii) the
Trust or any Fund, as the case may be, shall fully perform,
fulfill and comply with all provisions of this Agreement expressed
herein to be performed, fulfilled or complied with by it, and
(iii) Alliance Capital Management L.P. is the Manager of any Fund.
No such name shall be used by the Trust at any time or in any
place or for any purposes or under any conditions except as in
this section provided. The foregoing authorization by the Manager
to the Trust to use the name "Alliance" as part of a business or
name is not exclusive of the right of the Manager itself to use,
or to authorize others to use, the same; the Trust acknowledges
and agrees that as between the Manager and the Trust, the Manager
has the exclusive right so to use, or authorize others to use,
said name, and the Trust agrees to take such action as may
reasonably be requested by the Manager to give full effect to the
provisions of this section (including, without limitation,
consenting to such use of said name). Without limiting the
generality of the foregoing, the Trust agrees that, upon (i) any
termination of this Agreement by either party or (ii) the
violation of any of its provisions by the Trust or any Fund, as
the case may be, the Trust will, at the request of the Manager
made within six months after such termination or violation, use
its best efforts to change the name of the Trust and each Fund so
as to eliminate all reference, if any, to the name "Alliance" and
will not thereafter transact any business in a name containing the
name "Alliance" in any form or combination whatsoever, or
designate itself as the same entity as or successor to an entity
of such name, or otherwise use the name "Alliance" or any other
reference to the Manager. Such covenants on the part of the Trust
shall be binding upon it, its Trustees, officers, stockholders,
creditors and all other persons claiming under or through it.
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10. LIMITATION OF LIABILITY OF THE TRUSTEES
AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the
Trust is on file with the Secretary of State of The Commonwealth
of Massachusetts, and notice is hereby given that this instrument
is executed on behalf of the Trustees of the Trust as Trustees and
not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of each of the
respective Funds.
11. SEPARATE CONTRACTS.
The Trust, on behalf of each Fund, shall be deemed to
have entered into a wholly separate Contract relating exclusively
to each such Fund. Any amendment to or termination of this
Contract explicitly relating to one or more Funds shall have no
affect on, and shall not be considered to amend or terminate this
Contract with respect to, any other Fund.
IN WITNESS WHEREOF, THE EQUITABLE FUNDS and ALLIANCE
CAPITAL MANAGEMENT L.P. have each caused this instrument to be
signed in duplicate on its behalf by its duly authorized
representative, all as of the day and year first above written.
THE EQUITABLE FUNDS
/s/ Xxxxxxx X. Xxxxxxxx
By: _____________________________
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management
Corporation, its general partner
/s/ Xxxxxx X. Xxxxxx
By: _____________________________
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Exhibit A**
The Equitable Growth Fund
The Equitable Balanced Fund
The Equitable Conservative Investors Fund
The Equitable Growth Investors Fund
The Equitable Short-Term U.S. Government Fund
____________________
** The names of the other Funds included in the form of
current Investment Advisory Agreement relating to the
Growth Fund and the Balanced Fund are not shown.
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00250184.AT2
