EXHIBIT (5)(L)
FORM OF
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated as of December __, 1998, by and between EQ
Financial Consultants, Inc., a Delaware corporation ("EQ Financial" or the
"Manager"), and Evergreen Asset Management Corp., a New York 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 Directors of the Trust and EQ Financial
desire to retain the Adviser to render investment advisory services to the
portfolios to be known as Evergreen Foundation Portfolio and Evergreen
Portfolio (each a "Portfolio" and collectively, the "Portfolios") in the manner
and on the terms hereinafter set forth, which Portfolios are more particularly
described in Post-Effective Amendment No. 7 to the Registration Statement on
Form N-1A for the Trust filed with the Securities and Exchange Commission on
October __, 1998;
NOW, THEREFORE, EQ Financial and the 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. In fulfilling its
obligations to manage the investment and reinvestment of the assets of each
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 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 (b) in
compliance with the requirements applicable to both regulated
investment companies and segregated asset accounts under
Subchapters M and L 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 Trust's Agreement and
Declaration of Trust, 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 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;
(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;
(vi) provide any and all information, records and supporting
documentation about accounts the Adviser manages that have
investment objectives, policies, and strategies substantially
similar to those employed by the Adviser in managing the Portfolio
which may be reasonably necessary, under applicable laws, to allow
the Portfolio or its agent to present information concerning the
Adviser's prior performance in
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the Prospectus and the SAI of the Portfolio and any permissible
reports and materials prepared by the Portfolio or its agent; and
(vii) 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 for the efficient
conduct of the investment affairs of each 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 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. In placing orders for the purchase or sale of investments
for each Portfolio, in the name of the Portfolio or its nominees, the Adviser
shall use its best efforts to obtain for the 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 the appropriate policies and procedures approved by the
Board of Trustees, the Adviser may, to the extent authorized by Section 28(e)
of the Securities Exchange Act of 1934, cause each 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 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 Adviser may
also consider sales of shares of the Trust as a factor in the selection of
brokers and dealers.
D. On occasions when the Adviser deems the purchase or sale of a security to be
in the best interest of the Portfolios 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
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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
the Portfolios 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 for any loss suffered by the Manager
resulting from its acts or omissions as Adviser to the Portfolios, except for
losses to the Manager 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 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.
5. NON-EXCLUSIVITY
The services of the Adviser to the Portfolios 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. 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
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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. In the event of the termination of
this Agreement, such records 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 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 of its execution or the date of the
commencement of the 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 such Portfolio, on sixty (60) day's written notice to the Manager
and the Adviser, or by the Manager or Adviser on sixty (60) day's 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:
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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 any Portfolio changes or there is otherwise an actual
change in control or management of the Adviser.
12. USE OF ADVISER'S NAME
The Manager will not use the Adviser's name (or that of any
affiliate) in Trust literature without prior review and approval by the
Adviser, which may not be unreasonably withheld or delayed.
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 affected
Portfolio or Portfolios (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 Portfolios.
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
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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.
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 FINANCIAL CONSULTANTS, INC. EVERGREEN ASSET MANAGEMENT CORP.
By: By:
--------------------------------- -------------------------------
Name: Name:
Title: Title:
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APPENDIX A
TO
ADVISORY AGREEMENT
WITH
EVERGREEN ASSET MANAGEMENT CORP.
Portfolio Advisory Fee
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Evergreen Foundation Portfolio .425% of the Portfolio's average daily
net assets
Evergreen Portfolio .55% of the Portfolio's average daily net
assets
