INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated as of December 28, 2004, by and between AXA Equitable Life
Insurance Company (formerly, The Equitable Life Assurance Society of the United
States), a New York stock life insurance company ("Equitable" or the "Manager"),
and X.X. Xxxxxx Investment Management Inc., a Delaware corporation (the
"Adviser").
WHEREAS, The Enterprise Group of Funds II, Inc. (the "Fund") is registered
as an investment company under the Investment Company Act of 1940, as amended
(the "Investment Company Act");
WHEREAS, the Fund 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, Equitable is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act") and is the
investment manager to the Fund;
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 (the "Agreement");
WHEREAS, the Board of Directors of the Fund and Equitable desire to retain
the Adviser to render investment advisory services to the portfolio specified in
Schedule A hereto ("Portfolio") in the manner and on the terms hereinafter set
forth; and
WHEREAS, the Adviser is willing to furnish such services to the Manager and
the Portfolio;
NOW, THEREFORE, Equitable and Adviser agree as follows:
1. APPOINTMENT OF ADVISER
The Manager hereby appoints the Adviser to act as investment adviser for
the Portfolio and to manage the investment and reinvestment of the assets of the
Portfolio, subject to the supervision of the Directors of the Fund and 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 Fund or Manager in any
way or otherwise be deemed an agent of the Fund or Manager except as expressly
authorized in this Agreement or another writing by the Fund, Manager and the
Adviser.
2. SERVICES TO BE RENDERED BY THE ADVISER TO THE FUND
A. The Adviser will manage the investment and reinvestment of the assets of
the Portfolio and determine the composition of the assets of the Portfolio,
subject always to the direction and control of the Directors of the Fund and the
Manager and in accordance with the provisions of the Fund's registration
statement, as amended from time to time. In fulfilling its obligations to manage
the investment and reinvestment of the assets of the Portfolio, 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
Portfolio or are under consideration for inclusion in the Portfolio;
(ii) formulate and implement a continuous investment program for the
Portfolio (a) consistent with the investment objectives, policies and
restrictions of the Portfolio as stated in the Fund's Articles of
Incorporation, By-Laws, and such Portfolio's currently effective Prospectus
and Statement of Additional Information ("SAI") as amended from time to
time, and (b) in compliance with the requirements applicable to regulated
investment companies under Subchapter M of the Internal Revenue Code of
1986, as amended;
(iii) take whatever steps are necessary to implement the investment
program for the Portfolio by the purchase and sale of securities and other
investments authorized under the Fund's Articles of Incorporation, By-Laws,
and such Portfolio's currently effective Prospectus and SAI, including the
placing of orders for such purchases and sales;
(iv) regularly report to the Directors of the Fund and the Manager
with respect to the implementation of the investment program and, in
addition, provide such statistical information and special reports
concerning the Portfolio and/or important developments materially affecting
the investments held, or contemplated to be purchased, by the Portfolio, as
may reasonably be requested by the Manager or the Directors of the Fund,
including attendance at Board of Directors Meetings, as reasonably
requested, to present such information and reports to the Board;
(v) as requested, assist the Manager or the Board of Directors of the
Fund in their determination of the fair value of certain portfolio
securities when market quotations are not readily available for the purpose
of calculating the Portfolio's net asset value in accordance with
procedures and methods established by the Directors of the Fund;
(vi) provide composite private account performance information for
accounts the Adviser manages that have investment objectives, policies, and
strategies substantially similar to those employed by the Adviser in
managing the Portfolio and such supporting documentation as may be
reasonably necessary, under applicable laws, to allow the Portfolio or its
agent to present information concerning the Adviser's prior performance in
the Prospectus and the SAI of the Portfolio and any sales materials
prepared by the Portfolio or its agent, as permitted under any applicable
law and approved by the Adviser; and
(vii) establish appropriate interfaces with the Fund's administrator
and Manager in order to provide such administrator and Manager with all
necessary information requested by the administrator and Manager.
B. The Adviser, at its expense, will furnish: (i) all necessary investment
and management facilities and investment personnel, including salaries, expenses
and fees of any personnel required for it to faithfully perform its duties under
this Agreement; and (ii) administrative facilities, including bookkeeping,
clerical personnel and equipment necessary for the efficient conduct of the
investment affairs of the Portfolio (excluding that necessary for the
determination of net asset value and shareholder accounting services).
C. The Adviser will select brokers and dealers to effect all portfolio
transactions subject to the conditions set forth herein. The Adviser will place
all orders with brokers, dealers, or issuers, and will
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negotiate brokerage commissions if applicable. Subject at all times to the
requirements of the following sentence, the Adviser is directed to seek to
execute brokerage transactions for the Portfolio in accordance with such
policies or practices as may be established by the Board of Directors and
described in the Fund's currently effective Prospectus and SAI, as amended from
time to time. In placing orders for the purchase or sale of investments for the
Portfolio, in the name of the Portfolio or its nominees, the Adviser shall use
its best efforts to obtain for the Portfolio the best execution available,
considering all of the circumstances, and shall maintain records adequate to
demonstrate compliance with this requirement.
Subject to the appropriate policies and procedures approved by the Board of
Directors, the Adviser, in assessing the best execution available for any
transaction, will consider factors it deems relevant, including without
limitation, the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer and the reasonableness of the commission, if any, for the specific
transaction and on a continuing basis. In selecting brokers or dealers to
execute a particular transaction, and in evaluating the best execution
available, the Adviser is authorized to consider the brokerage and research
services (within the meaning of Section 28(e) of the Securities Exchange Act of
1934, as amended) provided to the Portfolio and/or other accounts over which the
Adviser or its affiliates exercise investment discretion. Moreover, the Adviser
may, to the extent authorized by Section 28(e) of the Securities and Exchange
Act of 1934, as amended, cause the Portfolio to pay a broker or dealer that
provides brokerage or research services to the Manager, the Adviser, and the
Portfolio 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 provided the Adviser determines, in good faith,
that such amount of commission is reasonable in relationship to the value of
such brokerage or research services viewed in terms of that particular
transaction or the Adviser's overall responsibilities to the Portfolio or its,
or its affiliates', other advisory clients. To the extent authorized by said
Section 28(e) and the Fund's Board of Directors, 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.
D. On occasions when the Adviser deems the purchase or sale of a security
to be in the best interest of the Portfolio 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. 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 the Adviser considers to be the most equitable and
consistent with its fiduciary obligations to the Portfolio and to its other
clients. The Manager recognizes that, in some cases, this procedure may limit
the size of the position that may be acquired or sold for the Portfolio.
E. The Adviser will maintain all accounts, books and records with respect
to the Portfolio 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.
F. The Adviser will, unless and until otherwise directed by the Manager or
the Board of Directors, exercise all rights of security holders with respect to
securities held by the Portfolio, including, but not limited to: voting proxies;
converting, tendering, exchanging or redeeming securities; acting as a claimant
in class action litigation (including litigation with respect to securities
previously held); and exercising rights in the context of a bankruptcy or other
reorganization.
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3. COMPENSATION OF ADVISER
The Manager will pay the Adviser, with respect to the Portfolio, the
compensation specified in Appendix A to this Agreement. Payments shall be made
to the Adviser on the first day of each month; however, this advisory fee will
be calculated on the daily average value of the Portfolio's assets and accrued
on a daily basis.
4. LIABILITY OF ADVISER
Neither the Adviser nor any of its directors, officers, or employees shall
be liable to the Manager for any loss suffered by the Manager resulting from the
Adviser's acts or omissions as Adviser to the Portfolio, except for losses to
the Manager or the Fund resulting from willful misconduct, bad faith, or gross
negligence in the performance of, or from reckless disregard of, the duties of
the Adviser or any of its directors, officers or employees. The Adviser, its
directors, officers or employees shall not be liable to the Manager or the Fund
for any loss suffered as a consequence of any action or inaction of other
service providers to the Fund in failing to observe the instructions of the
Adviser, provided such action or inaction of such other service providers to the
Fund is not a result of the willful misconduct, bad faith or gross negligence in
the performance of, or from reckless disregard of, the duties of the Adviser
under this Agreement.
5. INDEMNIFICATIONS
A. The Manager shall indemnify the Adviser and it controlling persons,
officers, directors, employees, agents, legal representatives and persons
controlled by it (which shall not include the Fund or any Portfolio)
(collectively, "Adviser Related Persons") to the fullest extent permitted by law
against any and all loss, damage, judgments, fines, and reasonable expenses,
including attorneys' fees (collectively "Losses"), incurred by the Adviser or
Adviser Related Persons arising from or in connection with this Agreement or the
performance by the Adviser or Adviser Related Persons of its or their duties
hereunder so long as such Losses arise out of the Manager's gross negligence,
willful misconduct or bad faith, in performing its responsibilities hereunder or
under its agreement with the Fund or the gross negligence, willful misconduct or
bad faith of any companies affiliated with the Manager that provide services to
the Fund, including, without limitation, such Losses that may be based upon any
untrue statement of material fact contained in the Fund's Registration
Statement, or any amendment thereof or any supplement thereto, proxy materials,
reports, advertisements, sales literature, or other materials pertaining to the
Portfolio or the omission to state therein a material fact known or which should
have been known and was required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reasonable reliance upon written information furnished to the Manager or the
Fund by the Adviser or an Adviser Related Person specifically for inclusion
therein, except to the extent any such Losses referred to in this paragraph
(i.e. paragraph A.) result from willful misfeasance, bad faith, gross negligence
or reckless disregard on the part of the Adviser or an Adviser Related Person in
the performance of any of its duties under, or in connection with, this
Agreement.
B. The Adviser shall indemnify the Manager and it controlling persons,
officers, directors, employees, agents, legal representatives and persons
controlled by it (which shall not include the Fund or any Portfolio)
(collectively, "Manager Related Persons") to the fullest extent permitted by law
against any and all losses, incurred by the Manager or Manager Related Persons
arising from or in connection with this Agreement or the performance by the
Manager or Manager Related Persons of its or their duties hereunder so long as
such Losses arise out of the Adviser's gross negligence, willful misconduct or
bad faith, in performing it responsibilities hereunder, including, without
limitation, such Losses that may be based upon
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any untrue statement of a material fact contained in the Fund's Registration
Statement, or any amendment thereof or any supplement thereto, proxy materials,
reports, advertisements, sales literature, or other materials pertaining to the
Portfolio or the omission to state therein a material fact known or which should
have been known and was required to be stated therein or necessary to make the
statements therein not misleading, in any case only to the extent that such
statement or omission was made in reasonable reliance upon written information
furnished by the Adviser or Adviser Related Person to the Manager or the Fund
specifically for inclusion therein, except to the extent any such Losses
referred to in this paragraph (i.e. paragraph B.) result from willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
the Manager or Manager Related Person in the performance of any of its duties
under, or in connection with, this Agreement.
C. The indemnifications provided in this Section 5 shall survive the
termination of this Agreement.
6. NON-EXCLUSIVITY
The services of the Adviser to the Portfolio and the Fund 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.
7. SUPPLEMENTAL ARRANGEMENTS
The Adviser may enter into arrangements with other persons affiliated with
the Adviser for the provision of certain personnel and facilities to the Adviser
to better enable it to fulfill its duties and obligations under this Agreement.
8. 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.
9. RECORDS
The records relating to the services provided under this Agreement shall be
the property of the Fund and shall be under its control; however, the Fund shall
furnish to the Adviser such records and permit it to retain such records (either
in original or in duplicate form) as it shall reasonably require in order to
carry out its duties. In the event of the termination of this Agreement, such
records shall promptly be returned to the Fund by the Adviser free from any
claim or retention of rights therein. The Adviser shall keep confidential any
information obtained in connection with its duties hereunder and disclose such
information only if the Fund has authorized such disclosure, or if such
disclosure is expressly required or requested by applicable federal or state
regulatory authorities, or if such disclosure is made to a third party service
provider with a duty of confidentiality to the Adviser.
10. DURATION OF AGREEMENT
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This Agreement shall become effective with respect to the Portfolio on the
date of its execution. 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 either by the Board of Directors or
by a majority of the outstanding voting securities of the Portfolio, provided
that in either event such continuance will also be approved by the vote of a
majority of the Directors who are not "interested persons" (as defined in the
Investment Company Act) ("Independent Directors") of any party to this Agreement
cast in person at a meeting called for the purpose of voting on such approval.
The required shareholder approval of the Agreement or of any continuance of the
Agreement shall be effective with respect to the Portfolio if a majority of the
outstanding voting securities of the series (as defined in Rule 18f-2(h) under
the Investment Company Act) of shares of the Portfolio votes to approve the
Agreement or its continuance, notwithstanding that the Agreement or its
continuance may not have been approved by a majority of the outstanding voting
securities of (a) any other portfolio affected by the Agreement or (b) all the
portfolios of the Fund.
If the shareholders of the Portfolio fail to approve the Agreement or any
continuance of the Agreement, the Adviser will continue to act as investment
adviser with respect to the Portfolio pending the required approval of the
Agreement or its continuance or of any contract with the Adviser or a different
adviser or subadviser or other definitive action; provided, that the
compensation received by the Adviser in respect of the Portfolio during the
period will be in compliance with Rule 15a-4 under the Investment Company Act.
11. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time, without the payment of any
penalty, by the Board of Directors, including a majority of the Independent
Directors, by the vote of a majority of the outstanding voting securities of the
Portfolio, on sixty (60) days' written notice to the Manager and the Adviser, or
by the Manager or Adviser on sixty (60) days' written notice to the Fund and the
other party. This Agreement will automatically terminate, without the payment of
any penalty, in the event of its assignment (as defined in the Investment
Company Act) or in the event the Investment Management Agreement between the
Manager and the Fund 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.
12. 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 Fund; and/or
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C. the chief executive officer or controlling stockholder of the Adviser or
the portfolio manager of the Portfolio changes or there is otherwise an actual
change in control or management of the Adviser.
13. USE OF ADVISER'S NAME
The Manager will not use the Adviser's name (or that of any affiliate) in
Fund advertisements, sales literature or promotional materials without prior
review and approval by the Adviser, which may not be unreasonably withheld or
delayed. The Manager will be permitted to use the Adviser's name (or that of any
affiliate) in required regulatory filings or in updates of its Prospectus or
SAI.
14. AMENDMENTS TO THE AGREEMENT
Except to the extent permitted by the Investment Company Act or the rules
or regulations thereunder or pursuant to any exemptive relief granted by the
Securities and Exchange Commission ("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) and by the vote of a majority of the
Independent Directors 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 Fund.
15. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties with respect to the Portfolio listed in Appendix A.
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
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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 Maryland, or any of the provisions in this Agreement, conflict with
applicable provisions of the Investment Company Act, the latter shall control.
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 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 under seal by their duly authorized officers as of the date first
mentioned above.
AXA EQUITABLE LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
X.X. XXXXXX INVESTMENT MANAGEMENT INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
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APPENDIX A
The Manager shall pay the Adviser, at the end of each calendar month,
compensation computed daily at an annual rate equal to the following:
Portfolio Advisory Fee
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Money Market Fund 0.045% of the Portfolio's average daily net assets up to and
including $1 billion; and 0.0425% of the Portfolio's average
daily net assets in excess of $1 billion.
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