INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT ("AGREEMENT"), dated as of May 1, 2001,
between the Equitable Trust, a Delaware business trust ("Trust"), and The
Equitable Life Assurance Society of the United States, a New York Stock life
insurance company ("Equitable" or "Manager").
WHEREAS, the Trust is registered as an investment company under the
Investment Company Act of 1940, as amended ("Investment Company Act");
WHEREAS, Equitable is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act");
WHEREAS, the Trust is and will continue to be a series fund having one 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; and
WHEREAS, the Board of Trustees of the Trust wishes to appoint Equitable as
the investment manager of the Trust;
NOW, THEREFORE, the Trust and Equitable hereby agree as follows:
1. APPOINTMENT OF MANAGER
The Trust hereby appoints Equitable as the investment manager for each of
the Funds of the Trust specified in Appendix A to this Agreement ("Funds"), as
such Appendix A may be amended by Manager and the Trust from time to time,
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. 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. 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 and control 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 Manager will, at its own
expense, select and contract with one or more investment advisers ("Advisers")
to manage the investment operations and composition of each and every Fund of
the Trust and render investment advice for each Fund, including the purchase,
retention, and disposition of the investments, securities and cash contained in
each Fund, in accordance with each Fund's investment objectives, policies and
restrictions as stated in the Trust's Agreement and Declaration of Trust,
By-Laws, and such Fund's Prospectus, Statement of Additional Information ("SAI")
and Compliance Manual, 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, Manager will have (i) overall supervisory responsibility for the general
management and investment of each Fund's assets; (ii)
full discretion to select new or additional Advisers for each Fund; (iii) full
discretion to enter into and materially modify existing Advisory Agreements with
Advisors; (iv) full discretion to terminate and replace any Adviser; and (v)
full investment discretion to make all determinations with respect to the
investment of a Fund's assets not then managed by an Adviser. In connection with
Manager's responsibilities herein, Manager will assess each Fund's investment
focus and will seek to implement decisions with respect to the allocation and
reallocation of each Fund's assets among one or more current or additional
Advisers from time to time, as the Manager deems appropriate, to enable each
Fund to achieve its investment goals. In addition, Manager will monitor
compliance of each Adviser with the investment objectives, policies and
restrictions of any Fund or Funds (or portions of any Fund) under the management
of such Adviser, and review and report to the Trustees of the Trust on the
performance of each Adviser. Manager will furnish, or cause the appropriate
Adviser(s) to furnish, to the Trust such statistical information, with respect
to the investments that a Fund (or portions of any Fund) may hold or contemplate
purchasing, as the Trust may reasonably request. On Manager's own initiative,
Manager will apprise, or cause the appropriate Adviser(s) to apprise, the Trust
of important developments materially affecting each Fund (or any portion of a
Fund that they advise) and will furnish the Trust, from time to time, with such
information as may be appropriate for this purpose. Further, 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, 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. 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. Manager will provide office space in the offices of
the Manager or in such other place as may be reasonably agreed upon by the
parties hereto from time to time, and all necessary office facilities and
equipment;
(ii) Personnel. 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 any entity, including Manager or its
affiliates, selected to perform such services under such contracts; and (b)
related to the services to be provided by any Adviser pursuant to an
Advisory Agreement; and
(iii) Preparation of Prospectus and Other Documents. Manager will
provide other information and services, other than services of outside
counsel or independent accountants or services to be provided by any
Adviser under any 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. Manager will exercise its best judgment in
rendering its services to the Trust, and the Trust agrees, as an inducement to
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 or reckless disregard
of its duties or obligations in rendering its services to the Trust as specified
in this Agreement. Any person, even though an officer, director, employee or
agent of 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
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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 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 Manager that is a member
of a national securities exchange is authorized to effect any transaction on
such exchange for the account of a Fund to the extent and as permitted by
Section 11(a)(1)(H) of the Securities Exchange Act of 1934, as amended ("1934
Act").
F. Section 28(e) of the 1934 Act. Subject to the appropriate policies and
procedures approved by the Board of Trustees, the Manager may, to the extent
authorized by Section 28(e) of the 1934 Act, cause a Fund to pay a broker or
dealer that provides brokerage or research services to the Manager, the Adviser,
the Trust and the Fund an amount of commission for effecting a Fund transaction
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Manager determines, in good faith,
that such amount of commission is reasonable in relationship to the value of
such brokerage or research services provided in terms of that particular
transaction or the Manager's overall responsibilities to the Fund, the Trust or
its other investment advisory clients. To the extent authorized by said Section
28(e) and the Board of Trustees, the Manager 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 best execution
and in compliance with the Conduct Rules of the National Association of
Securities Dealers, Inc., the Manager may also consider sales of shares of the
Trust as a factor in the selection of brokers and dealers.
G. Directed Brokerage. Subject to the requirement to seek best execution,
and to the appropriate policies and procedures approved by the Board of
Trustees, the Trust reserves the right to direct the Manager to cause Advisers
to effect transactions in Fund securities through broker-dealers in a manner
that will help generate resources to: (i) pay the cost of certain expenses which
the Trust is required to pay or for which the Trust is required to arrange
payment pursuant to this Agreement; or (ii) finance activities that are
primarily intended to result in the sale of Trust shares. At the discretion of
the Board of Trustees, such resources may be used to pay or cause the payment of
Trust Expenses or may be used to finance activities that are primarily intended
to result in the sale of Trust shares.
3. ALLOCATION OF EXPENSES
A. Expenses Paid by the Manager:
(i) Salaries, Expenses and Fees of Certain Persons. Manager (or its
affiliates) shall pay all salaries, expenses, and fees of the Trustees and
officers of the Trust who are officers, directors/trustees, partners, or
employees of Manager or its affiliates; and
(ii) Assumption of Trust Expenses. The payment or assumption by Manager
of any expense of the Trust that Manager is not required by this Agreement
to pay or assume shall not obligate 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 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,
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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 returns;
(ii) Officers and Trustees. Compensation of the officers and Trustees
of the Trust who are not officers, directors/trustees, partners or
employees of 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, for itself or its Independent Trustees (as defined
herein);
(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, including
preparation of such documents as required by any governmental agency in
connection with such taxes;
(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 Fund, 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 Manager with
respect to each Fund the compensation specified in Appendix A to this Agreement.
Such compensation shall be paid to 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 assets of each Fund and accrue it on a daily basis.
5. NON-EXCLUSIVITY
The services of Manager to the Trust are not to be deemed to be exclusive,
and 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 Manager are not
impaired. It is understood and agreed that the directors, officers and employees
of 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
Manager may enter into arrangements with its parent or other persons
affiliated or unaffiliated with Manager for the provision of certain personnel
and facilities to Manager to enable Manager to fulfill its duties and
obligations under this Agreement.
7. REGULATION
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 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 Manager free
from any claim or retention of rights therein, provided that the Manager may
retain copies of any such records that are required by law. 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 lawfully requested by applicable
federal or state regulatory authorities.
9. DURATION OF AGREEMENT
This Agreement shall become effective upon the date first above written,
provided that this Agreement shall not take effect unless it has first been
approved: (i) by a vote of a majority of those trustees of the Trust who are
not "interested persons" (as defined in the Investment Company Act of 1940)
("Independent Trustees") of any party to the Agreement, cast in person at a
meeting called for he purpose of voting on such approval, (ii) by a vote of a
majority of the Trust's outstanding securities. 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
(i) the Trustees of the Trust or (ii) by the vote of either a majority of the
outstanding voting securities of the Trust or, as appropriate, a majority of the
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outstanding voting securities of any affected Fund. The required shareholder
approval of the Agreement or of any continuance of the Agreement shall be
effective with respect to any affected Fund if a "majority of the outstanding
voting securities" (as defined in Rule 18f-2(h) under the Investment Company
Act) of the affected Fund 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 Fund
affected by the Agreement or (b) all the Funds of the Trust.
If the shareholders of any Fund fail to approve the Agreement or any
continuance of the Agreement, Manager will continue to act as investment manager
with respect to such Fund pending the required approval of the Agreement or its
continuance or of a new contract with Manager or a different investment manager
or other definitive action; provided, that the compensation received by Manager
in respect of such Fund during such period will be no more than its actual costs
incurred in furnishing investment advisory and management services to such Fund
or the amount it would have received under the Agreement in respect of such
Fund, 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 affected Fund, by the vote of a majority of the
outstanding voting securities of such Fund, on sixty (60) days' written notice
to Manager, or by Manager on sixty (60) days' written notice to the Trust. This
Agreement will automatically terminate, without payment of any penalty, in the
event of its assignment.
11. PROVISION OF CERTAIN INFORMATION BY MANAGER
Manager will promptly notify the Trust in writing of the occurrence of any
of the following events:
A. Manager fails to be registered as an investment adviser under the
Advisers Act or under the laws of any jurisdiction in which Manager is required
to be registered as an investment adviser in order to perform its obligations
under this Agreement;
B. 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 Manager or the
Fund manager of any Fund changes or there is otherwise an actual change in
control or management of 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 Funds 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 Fund if a majority of the outstanding voting
securities of that Fund 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 Fund affected by the amendment or (b) all the Funds
of the Trust.
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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.
16. FORCE MAJEURE
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,
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 Amended and Restated 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.
19. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware (without giving effect to its
conflict of laws principles), 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 unless otherwise stated herein. In addition,
where the effect of a requirement of the Investment Company Act reflected in any
provision of this Agreement is relaxed by a
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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.
EQUITABLE TRUST
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Xxxxx X. Xxxxx
Chairman of the Board and Trustee
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By: /s/ Xxxxx X' Xxxx
---------------------------------
Xxxxx X'Xxxx
Executive Vice President
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APPENDIX A
TO THE
INVESTMENT MANAGEMENT AGREEMENT
Funds
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FUND MANAGEMENT FEE
Equitable Money Market Fund 0.50% of the Fund's average
daily net assets
