EXHIBIT 5(a)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, dated as of April 14, 1997, between the EQ Advisors Trust,
a Delaware business trust (the "Trust"), and EQ Financial Consultants, Inc., a
Delaware corporation ("EQ Financial" or the "Manager").
WHEREAS, the Trust is registered as an investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act");
WHEREAS, EQ Financial is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act");
WHEREAS, the Trust's shareholders are and will be separate accounts
maintained by insurance companies for variable life insurance policies and
variable annuity contracts (the "Policies") under which income, gains, and
losses, whether or not realized, from assets allocated to such accounts are,
in accordance with the Policies, credited to or charged against such accounts
without regard to other income, gains, or losses of such insurance companies;
WHEREAS, the Trust is and will continue to be a series fund having
two or more investment portfolios, each with its own investment objectives,
investment policies and restrictions;
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"); and
WHEREAS, the Board of Trustees of the Trust wishes to appoint EQ
Financial as the investment manager of the Trust;
NOW, THEREFORE, the Trust and EQ Financial agree as follows:
1. APPOINTMENT OF MANAGER
The Trust hereby appoints EQ Financial as the investment manager for
each of the portfolios of the Trust specified in Appendix A to this Agreement,
as such Appendix A may be amended by the Manager and the Trust from time to
time (the "Portfolios"), subject to the supervision of the Trustees of the
Trust and in the manner and under the terms and conditions set forth in this
Agreement. The Manager accepts such appointment and agrees to render the
services and to assume the obligations set forth in this Agreement commencing
on its effective date. The Manager will be an independent contractor and will
have no authority to act for or represent the Trust in any way or otherwise be
deemed an agent unless expressly authorized in this Agreement or another
writing by the Trust and Manager.
2. DUTIES OF THE MANAGER
A. Subject to the general supervision of the Trustees of the Trust
and under the terms and conditions set forth in this Agreement, the Trust
acknowledges and agrees that it is contemplated that the Manager will, at its
own expense, select and contract with investment advisers ("Advisers") to
manage the investment operations and composition of each and every
Portfolio of the Trust, including the purchase, retention, and disposition of
the investments, securities and cash contained in each Portfolio, in
accordance with each Portfolio's investment objectives, policies and
restrictions as stated in the Trust's Amended and Restated Agreement and
Declaration of Trust, By-Laws, and such Portfolio's Prospectus and Statement
of Additional Information ("SAI"), as is from time to time in effect;
provided, that any contract with an Adviser (an "Advisory Agreement") shall be
in compliance with and approved as required by the Investment Company Act or
in accordance with exemptive relief granted by the Securities and Exchange
Commission ("SEC") under the Investment Company Act.
B. Subject always to the direction and control of the Trustees of the
Trust, the Manager will have (i) overall supervisory responsibility for the
general management and investment of each Portfolio's assets, and (ii) full
investment discretion to make all determinations with respect to the
investment of a Portfolio's assets not then managed by an Adviser. In
connection with its responsibilities set forth under (i) above, the Trust
acknowledges and agrees that the Manager will select a person to act as
Adviser to render investment advice to each of the Portfolios. In addition,
the Manager will monitor compliance of each Adviser with the investment
objectives, policies and restrictions of any Portfolio or Portfolios under the
management of such Adviser, and review and report to the Trustees of the Trust
on the performance of such Adviser. The Manager will furnish, or cause the
appropriate Adviser(s) to furnish, to the Trust such statistical information,
with respect to the investments that a Portfolio may hold or contemplate
purchasing, as the Trust may reasonably request. On the Manager's own
initiative, the Manager will apprise, or cause the appropriate Adviser(s) to
apprise, the Trust of important developments materially affecting each
Portfolio and will furnish the Trust, from time to time, with such information
as may be appropriate for this purpose. Further, the Manager agrees to
furnish, or cause the appropriate Adviser(s) to furnish, to the Trustees of
the Trust such periodic and special reports as the Trustees of the Trust may
reasonably request. In addition, the Manager agrees to cause the appropriate
Adviser(s) to furnish to third-party data reporting services all currently
available standardized performance information and other customary data.
C. The Manager will also furnish to the Trust, at its own expense and
without renumeration from or other cost to the Trust, the following:
(i) Office Space. The Manager will provide office space in
the offices of the Manager or in such other place as may be agreed
upon by the parties hereto from time to time, and all necessary
office facilities and equipment;
(ii) Personnel. The Manager will provide necessary executive
and other personnel, including personnel for the performance of
clerical and other office functions, exclusive of those functions:
(a) related to and to be performed under the Trust's contract or
contracts for administration, custodial, accounting, bookkeeping,
transfer, and dividend disbursing agency or similar services by the
entity selected to perform such services; and (b) related to the
investment advisory services to be provided by any Adviser pursuant
to an Advisory Agreement; and
(iii) Preparation of Prospectus and Other Documents. The
Manager will provide other information and services, other than
services of outside counsel or independent accountants or investment
advisory services to be provided by any Adviser under an
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Advisory Agreement, required in connection with the preparation of
all registration statements and Prospectuses, Prospectus supplements,
SAIs, all annual, semiannual, and periodic reports to shareholders of
the Trust, regulatory authorities, or others, and all notices and
proxy solicitation materials, furnished to shareholders of the Trust
or regulatory authorities, and all tax returns.
D. Limitations on Liability. The Manager will exercise its best
judgment in rendering its services to the Trust, and the Trust agrees, as an
inducement to the Manager's undertaking to do so, that the Manager will 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 Agreement relates, but
will be liable only for willful misconduct, bad faith, gross negligence,
reckless disregard of its duties or its failure to exercise due care in
rendering its services to the Trust specified in this Agreement. Any person,
even though an officer, director, employee or agent of the Manager, who may be
or become an officer, Trustee, employee or agent of the Trust, shall be
deemed, when rendering services to the Trust or when acting on any business of
the Trust, to be rendering such services to or to be acting solely for the
Trust and not as an officer, director, employee or agent, or one under the
control or direction of the Manager, even though paid by it.
E. Section 11 of the Securities Exchange Act of 1934, as amended. The
Trust hereby agrees that any entity or person associated with the Manager that
is a member of a national securities exchange is authorized to effect any
transaction on such exchange for the account of a Portfolio to the extent and
as permitted by Section 11(a)(1)(H) of the Securities Exchange Act of 1934, as
amended.
3. ALLOCATION OF EXPENSES
A. Expenses Paid by the Manager:
(i) Salaries, Expenses and Fees of Certain Persons. The
Manager (or its affiliates) shall pay all salaries, expenses, and
fees of the Trustees and officers of the Trust who are affiliated
with the Manager or its affiliates; and
(ii) Assumption of Trust Expenses. The payment or assumption
by the Manager of any expense of the Trust that the Manager is not
required by this Agreement to pay or assume shall not obligate the
Manager to pay or assume the same or any similar expense of the Trust
on any subsequent occasion.
B. Expenses Paid by the Trust: The Trust will pay all expenses of its
organization, operations, and business not specifically assumed or agreed to
be paid by the Manager, as provided in this Agreement, or by an Adviser, as
provided in an Advisory Agreement. Without limiting the generality of the
foregoing, the Trust shall pay or arrange for the payment of the following:
(i) Preparing, Printing and Mailing of Certain Documents.
The costs of preparing, setting in type, printing and mailing of
Prospectuses, Prospectus supplements, SAIs, annual, semiannual and
periodic reports, and notices and proxy solicitation materials
required to be furnished to shareholders of the Trust or regulatory
authorities, and all tax
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returns;
(ii) Officers and Trustees. Compensation of the officers and
Trustees of the Trust who are not affiliated with the Manager or its
affiliates;
(iii) Registration Fees and Expenses. All legal and other
fees and expenses incurred in connection with the affairs of the
Trust, including those incurred with respect to registering its
shares with regulatory authorities and all fees and expenses incurred
in connection with the preparation, setting in type, printing, and
filing with necessary regulatory authorities of any registration
statement and Prospectus, and any amendments or supplements that may
be made from time to time, including registration, filing and other
fees in connection with requirements of regulatory authorities;
(iv) Custodian and Accounting Services. All expenses of the
transfer, receipt, safekeeping, servicing and accounting for the
Trust's cash, securities, and other property, including all charges
of depositories, custodians, and other agents, if any;
(v) Independent Legal and Accounting Fees and Expenses. The
charges for the services and expenses of the independent accountants
and legal counsel retained by the Trust;
(vi) Transfer Agent. The charges and expenses of maintaining
shareholder accounts, including all charges of transfer, bookkeeping,
and dividend disbursing agents appointed by the Trust;
(vii) Brokerage Commissions. All brokers' commissions and
issue and transfer taxes chargeable to the Trust in connection with
securities transactions to which the Trust is a party;
(viii) Taxes. All taxes and corporate fees payable by or
with respect to the Trust to federal, state, or other governmental
agencies;
(ix) Trade Association Fees. Any membership fees, dues or
expenses incurred in connection with the Trust's membership in any
trade association or similar organizations;
(x) Bonding and Insurance. All insurance premiums for
fidelity and other coverage;
(xi) Shareholder and Board Meetings. All expenses incidental
to holding shareholders and Trustees meetings, including the printing
of notices and proxy materials and proxy solicitation fees and
expenses;
(xii) Pricing. All expenses of pricing of the net asset
value per share of each Portfolio, including the cost of any
equipment or services to obtain price quotations; and
(xiii) Nonrecurring and Extraordinary Expenses. Such
extraordinary expenses, such as indemnification payments or damages
awarded in litigation or settlements made.
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4. COMPENSATION OF MANAGER
For its services performed hereunder, the Trust will pay the Manager
with respect to each Portfolio the compensation specified in Appendix B to
this Agreement. Such compensation shall be paid to the Manager by the Trust on
the first day of each month; however, the Trust will calculate this charge on
the daily average value of the Trust's assets and accrue it on a daily basis.
5. NON-EXCLUSIVITY
The services of the Manager to the Trust are not to be deemed to be
exclusive, and the Manager shall be free to render investment management,
advisory or other services to others (including other investment companies)
and to engage in other activities so long as the services provided hereunder
by the Manager are not impaired. It is understood and agreed that the
directors, officers and employees of the Manager 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.
6. SUPPLEMENTAL ARRANGEMENTS
The Manager may enter into arrangements with its parent or other
persons affiliated or unaffiliated with the Manager for the provision of
certain personnel and facilities to the Manager to enable the Manager to
fulfill its duties and obligations under this Agreement.
7. REGULATION
The Manager 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.
8. RECORDS
The records relating to the services provided under this Agreement
shall be the property of the Trust and shall be under its control; however,
the Trust shall furnish to the Manager 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 Trust by the
Manager free from any claim or retention of rights therein. The Manager shall
keep confidential any information obtained in connection with its duties
hereunder and disclose such information only if the Trust has authorized such
disclosure or if such disclosure is expressly required or requested by
applicable
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federal or state regulatory authorities.
9. DURATION OF AGREEMENT
This Agreement shall become effective on the later of the date of its
execution by all parties and the date of the meeting of the shareholders of
the Trust, which may for these purposes be the sole initial shareholder of the
Trust, at which meeting this Agreement is approved by the vote of a majority
of the outstanding voting securities (as defined in the Investment Company
Act) of the Portfolios. The Agreement will continue in effect for a period
more than one year from the date of its execution only so long as such
continuance is specifically approved at least annually either by the Trustees
of the Trust or by the vote of a majority of the outstanding voting securities
of the Trust, provided that in either event such continuance shall also be
approved by the vote of a majority of the Trustees of the Trust who are not
"interested persons" ("Independent Trustees") 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 any 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 that 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 Trust.
If the shareholders of any Portfolio fail to approve the Agreement or
any continuance of the Agreement, the Manager will continue to act as
investment manager with respect to such Portfolio pending the required
approval of the Agreement or its continuance or of a new contract with the
Manager or a different investment manager or other definitive action;
provided, that the compensation received by the Manager in respect of such
Portfolio during such period will be no more than its actual costs incurred in
furnishing investment advisory and management services to such Portfolio or
the amount it would have received under the Agreement in respect of such
Portfolio, whichever is less.
10. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees, including a majority of the Independent Trustees
of the Trust, by the vote of a majority of the outstanding voting securities
of the Trust, or with respect to any Portfolio by the vote of a majority of
the outstanding voting securities of such Portfolio, on sixty (60) days'
written notice to the Manager, or by the Manager on sixty (60) days' written
notice to the Trust. This Agreement will automatically terminate, without
payment of any penalty, in the event if its assignment.
11. PROVISION OF CERTAIN INFORMATION BY MANAGER
The Manager will promptly notify the Trust in writing of the
occurrence of any of the following events:
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A. the Manager fails to be registered as an investment adviser under
the Advisers Act or 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 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 Trust; and/or
C. the chief executive officer or controlling stockholder of the
Manager or the portfolio manager of any Portfolio changes or there is
otherwise an actual change in control or management of the Manager.
12. 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 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 each of the Portfolios affected by the
amendment (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 Trustees of the Trust 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 any Portfolio if a
majority of the outstanding voting securities of the series of shares of that
Portfolio vote to approve the amendment, notwithstanding that the amendment
may not have been approved by a majority of the outstanding voting securities
of (a) any other Portfolio affected by the amendment or (b) all the Portfolios
of the Trust.
13. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties.
14. HEADINGS
The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
15. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or Manager
in person or by registered mail or a private mail or delivery service
providing the sender with notice of receipt. Notice shall be deemed given on
the date delivered or mailed in accordance with this section.
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16. FORCE MAJEURE
The Manager shall not be liable for delays or errors occurring by
reason of circumstances beyond its control, including but not limited to acts
of civil or military authority, national emergencies, work stoppages, fire,
flood, catastrophe, acts of God, insurrection, war, riot, or failure of
communication or power supply. In the event of equipment breakdowns beyond its
control, the Manager shall take reasonable steps to minimize service
interruptions but shall have no liability with respect thereto.
17. 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.
18. INTERPRETATION
Nothing herein contained shall be deemed to require the Trust to take
any action contrary to its Agreement and Declaration of Trust or By-Laws, or
any applicable statutory or regulatory requirements to which it is subject or
by which it is bound, or to relieve or deprive the Trustees of their
responsibility for and control of the conduct of the affairs of the Trust.
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19. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted
in accordance with the laws of the State of Delaware, or any of the applicable
provisions of the Investment Company Act. To the extent that the laws of the
State of Delaware, 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 by their duly authorized officers as of the date first mentioned
above.
EQ ADVISORS TRUST
By: /s/
--------------------------------------
Xxxxx X. Xxxxx
President and Trustee
EQ FINANCIAL CONSULTANTS, INC.
By: /s/
--------------------------------------
Xxxxx X. Xxxxx
Executive Vice President
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APPENDIX A
Portfolios
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X. Xxxx Price International Stock Portfolio
X. Xxxx Price Equity Income Portfolio
EQ/Xxxxxx Growth & Income Value Portfolio
EQ/Xxxxxx International Equity Portfolio
EQ/Xxxxxx Investors Growth Portfolio
EQ/Xxxxxx Balanced Portfolio
MFS Research Portfolio
MFS Emerging Growth Companies Portfolio
Xxxxxx Xxxxxxx Emerging Markets Equity Portfolio
Warburg Pincus Small Company Value Portfolio
Xxxxxxx Xxxxx World Strategy Portfolio
Xxxxxxx Xxxxx Basic Value Equity Portfolio
Date: April 14, 1997
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APPENDIX B
The Trust shall pay the Manager, at the end of each calendar month,
compensation computed daily at an annual rate equal to the following:
Portfolio Management Fee
--------- --------------
X. Xxxx Price International Stock Portfolio .75% of the Portfolio's average daily net
assets.
X. Xxxx Price Equity Income Portfolio .55% of the Portfolio's average daily net
assets.
EQ/Xxxxxx Growth & Income Value Portfolio .55% of the Portfolio's average daily net
assets.
EQ/Xxxxxx International Equity Portfolio .70% of the Portfolio's average daily net
assets.
EQ/Xxxxxx Investors Growth Portfolio .55% of the Portfolio's average daily net
assets.
EQ/Xxxxxx Balanced Portfolio .55% of the Portfolio's average daily net
assets.
MFS Research Portfolio .55% of the Portfolio's average daily net
assets.
MFS Emerging Growth Companies Portfolio .55% of the Portfolio's average daily net
assets.
Xxxxxx Xxxxxxx Emerging Markets Equity 1.15% of the Portfolio's average daily
Portfolio net assets.
Warburg Pincus Small Company Value .65% of the Portfolio's average daily net
Portfolio assets.
Xxxxxxx Xxxxx World Strategy Portfolio .70% of the Portfolio's average daily net
assets.
Xxxxxxx Xxxxx Basic Value Equity Portfolio .55% of the Portfolio's average daily net
assets.
Date: April 14, 1997
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