EXHIBIT 5(d)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated as of April __, 1997 by and between EQ Financial
Consultants, Inc., a Delaware corporation ("EQ Financial" or the "Manager"),
and Xxxxxx Investment Management, Inc., a Massachusetts corporation (the
"Adviser").
WHEREAS, EQ Advisors Trust (the "Trust") is registered as an
investment company under the Investment Company Act of 1940, as amended (the
"Investment Company 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,
policies and restrictions;
WHEREAS, EQ Financial is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended ("Advisers Act") and is the
investment manager to the Trust;
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"); and
WHEREAS, the Board of Trustees of the Trust and EQ Financial desire
to retain the Adviser to render investment advisory services to the portfolios
specified in Appendix A hereto (each a "Portfolio" and collectively, the
"Portfolios") in the manner and on the terms hereinafter set forth.
NOW, THEREFORE, EQ Financial and Adviser agree as follows:
1. APPOINTMENT OF ADVISER
The Manager hereby appoints the Adviser to act as investment adviser
for each Portfolio and to manage the investment and reinvestment of the assets
of each Portfolio, subject to the supervision of the Trustees of the Trust 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 Trust or
Manager in any way or otherwise be deemed an agent of the Trust or Manager
except as expressly authorized in this Agreement or another writing by the
Trust, Manager and the Adviser.
2. SERVICES TO BE RENDERED BY THE ADVISER TO THE TRUST
A. The Adviser will manage the investment and reinvestment of the
assets of each Portfolio and determine the composition of the assets of each
Portfolio, subject always to the direction and control of the Trustees of the
Trust and the Manager and in accordance with the provisions of the Trust's
registration statement, as amended from time to time, and delivered to the
Adviser. In fulfilling its obligations to manage the investment and
reinvestment of the assets of each Portfolio, the Adviser will:
(i) obtain and evaluate such 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, as the Adviser deems advisable;
(ii) formulate and implement a continuous investment program
for the Portfolio consistent with the investment objectives, policies
and restrictions of the Portfolio as stated in the Trust's Agreement
and Declaration of Trust, By-Laws, and such Portfolio's currently
effective Prospectus and Statement of Additional Information ("SAI")
as amended from time to time and such documents are delivered to the
Adviser, and use its best efforts to manage the Portfolio in
compliance with the requirements applicable to registered investment
companies under applicable laws and those requirements applicable to
both regulated investment companies and segregated asset accounts
under Subchapters L and M of the Internal Revenue Code of 1986, as
amended. The Manager acknowledges and agrees that the Adviser's
compliance with its obligations under this Agreement will be based,
in part, on information reasonably requested by the Adviser to be
provided by the Manager or the Trust's administrator as to each
Portfolio, including but not limited to, portfolio security lot level
realized and unrealized gain/loss allocation. The Manager agrees to
provide or to cause to be provided to the Adviser all such
information on a timely basis.
(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 Trust's
Agreement and Declaration of Trust, By-Laws, and such Portfolio's
currently effective Prospectus and SAI (as such documents are
delivered to the Adviser), including the placing of orders for such
purchases and sales;
(iv) regularly report to the Trustees of the Trust 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 Trustees of the Trust, including attendance at Board
of Trustees Meetings, as reasonably requested, to present such
information and reports to the Board;
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(v) provide determinations 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 Trustees of
the Trust; and
(vi) establish appropriate interfaces with the Trust'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 and
customary for the management of each Portfolio's portfolio securities. The
Adviser shall otherwise not have any responsibility for the administrative
affairs of each Portfolio, including any responsibility 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 necessary orders with brokers, dealers, or issuers, and will
negotiate brokerage commissions if applicable. The Adviser is directed at all
times to seek to execute brokerage transactions for each Portfolio in
accordance with such policies or practices as may be established by the Board
of Trustees and described in the Trust's currently effective Prospectus and
SAI, as amended from time to time and as delivered to the Adviser. In placing
orders for the purchase or sale of investments for each Portfolio, in the name
of such Portfolio or its nominees, the Adviser shall use its best efforts to
obtain for such Portfolio the most favorable price and best execution
available, considering all of the circumstances, and shall maintain records
adequate to demonstrate compliance with this requirement.
Subject to any appropriate policies and procedures of the Board of
Trustees brought to the attention of the Adviser, the Adviser may, to the
extent authorized by Section 28(e) of the Securities 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 each 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 if the Adviser determines, in good faith, that such amount of
commission is reasonable in relationship to the value of such brokerage or
research services provided viewed in terms of that particular transaction or
the Adviser's overall responsibilities to each Portfolio or its other advisory
clients. To the extent authorized by said Section 28(e) and the Trust's Board
of Trustees, 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. In addition, subject to seeking the most favorable price and
best execution available, the Manager may instruct the Adviser from time to
time to select particular brokers or dealers to effect portfolio transactions
in consideration of the sale of shares of the Trust by such brokers or
dealers.
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D. On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of a 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 to attempt to obtain a more favorable price
or lower brokerage commissions and efficient execution. 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 each Portfolio and to its other clients.
E. The Adviser will maintain all accounts, books and records with
respect to each 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.
3. COMPENSATION OF ADVISER
The Manager will pay the Adviser, with respect to each 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 each 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, the Portfolios or the Trust for any loss
suffered by the Manager, the Portfolios or the Trust resulting from its acts
or omissions as Adviser to the Portfolios, except for losses to the Manager,
the Portfolios or the Trust 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, the Portfolios or the Trust for any loss suffered as a consequence of
any action or inaction of other service providers to the Trust in failing to
observe the instructions of the Adviser, provided such action or inaction of
such other service providers to the Trust 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.
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5. NON-EXCLUSIVITY
The services of the Adviser to each Portfolio and the Trust 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 so long as the services provided
hereunder by the Adviser are not impaired. 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.
6. 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.
7. 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.
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 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. The Adviser may retain copies of all
such records. In the event of the termination of this Agreement, such records
(or copies thereof) shall promptly be returned to the Trust by the Adviser
free from any claim or retention of rights therein. The Adviser shall keep
confidential any information concerning the Manager, the Trust or other
service providers to the Trust 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 federal or state regulatory authorities.
9. DURATION OF AGREEMENT
This Agreement shall become effective with respect to each Portfolio on the
later of the date
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of its execution or the date of the commencement of operations of each
Portfolio. 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 by the Board of Trustees, provided
that in such event such continuance shall also be approved by the vote of a
majority of the Trustees who are not "interested persons" (as defined in the
Investment Company Act) ("Independent Trustees") of any party to this
Agreement cast in person at a meeting called for the purpose of voting on such
approval.
10. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Trustees, including a majority of the Independent
Trustees, by the vote of a majority of the outstanding voting securities of a
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 Trust
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 Trust 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.
11. 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 Trust; and/or
C. the chief executive officer or controlling stockholder of the
Adviser or the portfolio manager of a Portfolio changes or there is otherwise
an actual change in control or management of the Adviser.
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12. USE OF ADVISER'S NAME
The Manager covenants as follows:
A. It will (and will cause its affiliates to) use the name "Xxxxxx
Investment Management," "Xxxxxx Investments," "Xxxxxx" or any derivation
thereof only for so long as this Agreement remains in effect. At such times as
this Agreement is no longer in effect, the Manager will, and will cause the
Trust to, cease suing any such name or any other name indicating that the
Portfolio is advised by or otherwise connected to the Adviser. The Manager
acknowledges that the Trust has adopted the names "EQ Xxxxxx Growth & Income
Portfolio," "EQ Xxxxxx International Equity Portfolio," "EQ Xxxxxx Investors
Growth Portfolio" and "EQ Xxxxxx Balanced Portfolio" through permission of the
Adviser and agrees that the Adviser reserves the right to grant the
non-exclusive right to use the names set forth above in the first sentence of
this subsection 12.A. or any similar name to another corporation or other
entity, including but not limited to any investment company which the Adviser
or any subsidiary or affiliate therefor is the investment adviser or manager.
B. It will not, and will cause its affiliates to not, refer to the
Adviser or any affiliate in any prospectus, proxy statement or sales
literature except with the written permission of the Adviser.
C. It will not (and will cause its affiliates to not) engage in
marketing programs (written or otherwise) directed toward Xxxxxx Capital
Manager ("PCM") variable annuity contracts which solicit transfers from PCM to
the Manager's products or those of its affiliates. The Manager will not (and
will cause its affiliates to not) create or use marketing materials which
provide direct comparisons between PCM and the Manager's products or those of
any of its affiliates. The Manager will not (and will cause its affiliates to
not) reimburse voluntarily, or enter into any contracts or policy after the
date hereof providing for the reimbursement of, any deferred sales charges to
encourage the transfer of assets from PCM to the Manager's products or those
of any affiliate.
D. It will not permit the Portfolios to be used as a funding vehicle
for variable annuity or life insurance contracts other than those issued by
The Equitable Life Assurance Society of the United States or any affiliate
thereof ("Equitable") or, with the consent of the Adviser, variable annuity or
life insurance contracts utilized by officers, directors, or employees of
Equitable.
13. 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
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(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 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 a Portfolio if a majority of the outstanding voting securities
of such 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 Trust.
14. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties with respect to the Portfolio listed in Appendix A.
15. HEADINGS
The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
16. 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.
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. 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.
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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.
EQ FINANCIAL CONSULTANTS, INC.
By: /s/
---------------------------------
Xxxxx X. Xxxxx
Executive Vice President
XXXXXX INVESTMENT MANAGEMENT, INC.
By: /s/
---------------------------------
Name:
Title:
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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
--------- ------------
EQ/Xxxxxx Growth & Income Value Portfolio .50% of the Portfolio's average daily net assets
up to and including $150 million; .45% of the
Portfolio's average daily net assets over $150
million and up to and including $300 million;
and .35% of the Portfolio's average daily net
assets in excess of $300 million.
EQ/Xxxxxx International Equity Portfolio .65% of the Portfolio's average daily net assets
up to and including $150 million; .55% of the
Portfolio's average daily net assets over $150
million and up to and including $300 million;
and .45% of the Portfolio's average daily net
assets in excess of $300 million.
EQ/Xxxxxx Investors Growth Portfolio .50% of the Portfolio's average daily net assets
up to and including $150 million; .45% of the
Portfolio's average daily net assets over $150
million and up to and including $300 million;
and .35% of the Portfolio's average daily net
assets in excess of $300 million.
EQ/Xxxxxx Balanced Portfolio .50% of the Portfolio's average daily net assets
up to and including $150 million; .45% of the
Portfolio's average daily net assets over $150
million and up to and including $300 million;
and .35% of the Portfolio's average daily net
assets in excess of $300 million.
Dated: April __, 1997
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