<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as Permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or 240.14a-12
EQUI-SELECT SERIES TRUST
------------------------
(Name of Registrant as Specified In Its Charter)
EQUI-SELECT SERIES TRUST
------------------------
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:________________________________
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.__________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:_____________________________________________
(2) Form, Schedule or Registration Statement No.:_______________________
(3) Filing Party:_______________________________________________________
(4) Date Filed:_________________________________________________________
<PAGE>
EQUI-SELECT
SERIES TRUST
909 Locust Street
September 11, 1997 Des Moines, Iowa 50309
Dear Shareholder of Equi-Select Series Trust:
I am writing to tell you about some very exciting changes
concerning Equi-Select Series Trust (the "Trust"), and to
send you proxy materials for an upcoming special meeting of
shareholders of the Trust that will be held on October 9,
1997. The Trust contains the investment portfolios that
serve as the investment vehicles for your variable annuity
or variable life insurance contracts.
The Trustees of the Trust have approved the proposals in
the proxy materials and recommend that you vote "FOR" the
proposals on the enclosed proxy card. I urge you to review
the attached proxy statement, to cast your vote, and to
return promptly the enclosed proxy card in the envelope
provided.
AGREEMENT AND PLAN OF MERGER AMONG EQUITABLE OF IOWA
COMPANIES, ING GROEP N.V. AND PFHI HOLDINGS, INC.
Equitable of Iowa Companies ("Equitable of Iowa"), the
parent company of Equitable Investment Services, Inc.
("EISI"), the Trust's Investment Adviser, has entered into
an Agreement and Plan of Merger with ING Groep N.V. ("ING")
and PFHI Holdings, Inc. ("PFHI") pursuant to which Equitable
of Iowa and PFHI have agreed to merge. This Agreement is
subject to several conditions, including approval of the
shareholders of Equitable of Iowa, certain state insurance
authorities, and the shareholders of each series of the
Trust of certain agreements, as described in the attached
proxy materials. Upon consummation of the Transaction,
Equitable of Iowa will become a wholly owned subsidiary of
ING. ING operates in 58 countries worldwide and is one of
the world's largest integrated financial service providers,
offering a comprehensive range of life and non-life
insurance, commercial and investment banking, asset
management and related products and services.
AGREEMENT AND PLAN OF MERGER BETWEEN ROBERTSON, STEPHENS &
COMPANY, LLC AND BANKAMERICA CORPORATION
Robertson, Stephens & Company, LLC, an affiliate of
Robertson, Stephens & Company Investment Management, L.P.,
the sub-adviser to the Growth & Income Series and Value +
Growth Series of the Trust, has entered into an Agreement
and Plan of Merger by which it will be merged into a
subsidiary of BankAmerica Corporation. BankAmerica is a
global financial intermediary, providing capital-raising
services, trade finance, cash management, investment
banking, capital markets and credit products, and financial
advisory services to large public and private-sector
institutions.
SPECIAL SHAREHOLDERS MEETING TO APPROVE CHANGES
A special meeting of shareholders of the Trust has been
called for purposes related to the mergers described above.
Upon consummation of the Equitable of Iowa merger, the
existing Investment Advisory Agreement by which EISI serves
as the Investment Advisor to the Trust will terminate.
Similarly, the Sub-Advisory Agreements with the Sub-Advisers
of the Trust will also terminate. Additionally, upon
consummation of the BankAmerica Merger, the Sub-Advisory
Agreement for Growth & Income Series and Value + Growth
Series of the Trust will terminate.
Accordingly, shareholders of the Trust will be asked to
vote for the following:
o Approval of a new Investment Advisory Agreement
between the Trust and EISI
o Approval of new Sub-Advisory Agreements among
the Trust, EISI and each of the Sub-Advisers
of the Trust's series
The terms of the new Investment Advisory Agreement and
Sub-Advisory Agreements are identical in all material
respects to the terms of the Agreements they would replace.
The proposals in this proxy statement are intended to keep
in place the current management of the Trust after the
consummation of the merger transaction.
TRUSTEES RECOMMEND APPROVAL
The Trustees of the Trust have approved the proposals in
the proxy materials and recommend that you vote "FOR" the
proposals on the enclosed proxy. We urge you to review the
attached proxy statement, to cast your vote, and to return
promptly the enclosed proxy in the envelope provided.
Sincerely,
Paul R. Schlaack
President, Equi-Select Series Trust
<PAGE>
EQUI-SELECT SERIES TRUST
909 LOCUST STREET
DES MOINES, IA 50309
(800-344-6864)
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 9, 1997
TO THE SHAREHOLDERS OF EQUI-SELECT SERIES TRUST:
Notice is hereby given to the holders of shares of
beneficial interest (the "Shares") of Equi-Select Series
Trust (the "Trust"), a Massachusetts business trust, that a
Special Meeting of the Shareholders of the Trust (the
"Meeting") will be held at 909 Locust Street, Des Moines,
Iowa, 50309 on October 9, 1997, at 10:00 a.m., local time,
for the following purposes:
1. To approve a new Investment Advisory Agreement (the
"New Investment Advisory Agreement") between the Trust and
Equitable Investment Services, Inc. ("EISI") to be effective
upon the merger of Equitable of Iowa Companies ("Equitable
of Iowa") with PFHI Holdings, Inc. ("PFHI"), which new
Investment Advisory Agreement would be substantively
identical to the Investment Advisory Agreement that
currently is in effect.
2. To approve the following new Sub-Advisory Agreements
among the Trust, EISI and the respective sub-advisers listed
below to be effective upon the merger of Equitable of Iowa
with PFHI, which new Sub-Advisory Agreements will be
substantively identical to the Sub-Advisory Agreements that
currently are in effect:
(A) A new Sub-Advisory Agreement with respect to the OTC
Series, Research Series, and Total Return Series among the
Trust, EISI and Massachusetts Financial Services Company.
(B) A new Sub-Advisory Agreement with respect to the
International Fixed Income Series among the Trust, EISI and
Credit Suisse Asset Management Limited.
(C) A new Sub-Advisory Agreement with respect to the
Growth & Income Series and the Value + Growth Series among
the Trust, EISI and Robertson, Stephens & Company Investment
Management, L.P. ("Robertson, Stephens").
3. To approve a new Sub-Advisory Agreement with respect to
the Growth & Income Series and the Value + Growth Series
among the Trust, EISI and Robertson, Stephens to be
effective upon the merger of Robertson, Stephens with
BankAmerica Corporation, which new Sub-Advisory Agreement
will be substantively identical to the current Sub-Advisory
Agreement.
4. To transact such other business as may properly come
before the Meeting or any adjournment thereof.
The Board of Trustees has fixed the close of business on
August 29, 1997, as the record date for the determination of
shareholders entitled to notice of and to vote at the
Meeting or any adjournment thereof.
By Order of the
Board of Trustees
/s/ John A. Merriman
John A. Merriman,
Secretary
September 11, 1997.
MANAGEMENT OF THE TRUST RECOMMENDS THAT YOU CAST YOUR VOTE
FOR THE APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT
AND NEW SUB-ADVISORY AGREEMENTS.
YOUR VOTE IS IMPORTANT! PLEASE INDICATE YOUR VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY, DATE AND SIGN IT, AND
RETURN IT IN THE ACCOMPANYING POSTAGE PREPAID ENVELOPE.
IF YOU SIGN, DATE AND RETURN THE PROXY BUT GIVE NO VOTING
INSTRUCTIONS, YOUR SHARES WILL BE VOTED IN FAVOR OF ALL
PROPOSALS NOTICED ABOVE.
<PAGE>
EQUI-SELECT SERIES TRUST
909 LOCUST STREET
DES MOINES, IA 50309
(800-344-6864)
____________________________
PROXY STATEMENT
____________________________
SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 9, 1997
This Proxy Statement is furnished in connection with the
solicitation by the Board of Trustees (the "Board" or
"Trustees") of Equi-Select Series Trust (the "Trust"), a
Massachusetts business trust, of proxies to be voted at a
Special Meeting of the Shareholders of the Trust, and at any
and all adjournments thereof (the "Meeting"), to be held at
909 Locust Street, Des Moines, Iowa, 50309, on October 9,
1997, at 10:00 a.m. local time. The approximate mailing date
of this Proxy Statement and accompanying form of proxy is
September 12, 1997.
The Board has fixed the close of business on August 29,
1997, as the record date (the "Record Date") for the
determination of holders of shares of beneficial interest
("Shares") of the Trust entitled to vote at the Meeting.
Shareholders on the Record Date will be entitled to one vote
for each full Share held and a fractional vote for each
fractional Share.
The Board is soliciting shareholder votes on proposals
affecting more than one Series. The following tables
summarize the proposals and indicate which shareholders are
being requested to vote on each proposal:
SERIES
----------------------------------------
ADVAN GROWTH INTERNATIONAL MONEY
TAGE & FIXED MARKET
INCOME INCOME
------ ------- ------------- ------
Proposal 1 -- Approval of new X X X X
Investment Advisory Agreement
Proposal 2 -- Approval of new X X
Sub-Advisory Agreement 2(C) 2(B)
Proposal 2 -- Approval of new X
Sub-Advisory Agreement
MORTGAGE-
BACKED TOTAL VALUE +
SECURITIES OTC RESEARCH RETURN GROWTH
---------- --- -------- ------ -------
Proposal 1 -- Approval of New X X X X X
Investment Advisory Agreement
Proposal 2 -- Approval of new X X X X
Sub-Advisory Agreement 2(A) 2(A) 2(A) 2(B)
Proposal 2 -- Approval of new X
Sub-Advisory Agreement
The Trust is comprised of 9 operational portfolios or
"Series." Shares of each Series currently are offered to
insurance company separate accounts to serve as an
investment medium for variable annuity contracts ("Variable
Contracts") issued by insurance companies. These separate
accounts are registered with the Securities and Exchange
Commission as investment companies. In accordance with
interpretations of the Investment Company Act of 1940, as
amended (the "1940 Act"), each insurance company
("Participating Insurance Company") issuing a
1
<PAGE>
Variable
Contract funded by a registered separate account for which
the Trust serves as an investment medium is required to
request voting instructions from the owners of the Variable
Contracts ("Variable Contract Owners") and to furnish a copy
of this Proxy Statement to Variable Contract Owners.
Further, each such Participating Insurance Company will vote
Shares or other voting interests in the separate accounts in
proportion to the instructions received from Variable
Contract Owners. The Participating Insurance Company is also
required to vote Shares of the Series held in each
registered separate account for which it has not received
signed instructions in the same proportion as it votes
Shares held by that separate account for which it has
received instructions. Shares held by a Participating
Insurance Company in its general account, if any, must be
voted in the same proportion as the votes cast with respect
to Shares held in all of the insurer's registered separate
accounts, in the aggregate. Variable Contract Owners
permitted to give instructions for the Series and the number
of shares for which such instructions may be given for
purposes of voting at the Meeting, and at any adjournment
thereof, will be determined as of the Record Date for the
Meeting. In connection with the solicitation of such
instructions from Variable Contract Owners, it is expected
that Participating Insurance Companies will furnish a copy
of this Proxy Statement to Variable Contract Owners. The
Participating Insurance Companies have fixed the close of
business on October 8, 1997, as the last day on which voting
instructions will be accepted. A proxy may be revoked at any
time before it is voted by the furnishing of a written
revocation, properly executed, to the Trust's Secretary
before the Meeting or by attending the Meeting. In addition
to the solicitation of proxies by mail, proxies may be
solicited by officers and employees of the Trust or
Participating Insurance Companies or their agents or
affiliates personally or by telephone. All expenses in
connection with the solicitation of the proxies will be
borne by Equitable of Iowa Companies ("Equitable of Iowa").
VOTING.
Shares which represent interests in a particular Series
of the Trust vote separately on those matters which pertain
only to that Series. These matters are Proposals 1, 2, 3
and, as appropriate, any other business which may properly
come before the Meeting. With respect to such matters, a
vote of all Shareholders of the Trust may not be binding on
a Series whose Shareholders have not approved such matter.
The voting requirement for approval of each proposal
requires a vote of the "majority of the outstanding voting
securities" of a Series, which means the lesser of: (i) 67%
or more of the voting Shares of each Series present at the
Meeting, if the holders of more than 50% of the outstanding
voting Shares of the Series are present or represented by
proxy; or (ii) more than 50% of the outstanding voting
Shares of the Series.
A Sub-Advisory Agreement must be approved separately by
each Series to which the Sub-Advisory Agreement pertains.
Approval of each Sub-Advisory Agreement is contingent upon
approval of the New Investment Advisory Agreement (as
defined below) by the shareholders of the pertinent Series.
If the New Investment Advisory Agreement is approved and the
New Sub-Advisory Agreements are each approved by a majority
vote of the outstanding Shares of the applicable Series, the
New Sub-Advisory Agreements will take effect concurrently
with the New Investment Advisory Agreement. If the
shareholders of a Series should fail to approve either the
New Investment Advisory Agreement or the New Sub-Advisory
Agreement, the Board shall meet to consider appropriate
action. If the shareholders of a Series should fail to
approve a New Sub-Advisory Agreement that pertains to more
than one Series, the Sub-Adviser may serve under the Sub-
Advisory Agreement with respect to any Series whose
shareholders have approved the Sub-Advisory Agreement. In
such event, the Board shall meet to consider appropriate
action.
In the event that a quorum is present at the Meeting but
sufficient votes to approve any of the proposals are not
received, the persons named as proxies may propose one or
more adjournments of such Meeting to permit further
solicitation of proxies provided they determine that such an
adjournment and additional solicitation is reasonable and in
the interest of the shareholders based on a consideration of
all relevant factors including the nature of the relevant
proposal, the percentage of votes then cast, the percentage
of negative votes then cast, the nature of the proposed
solicitation activities and the nature of the reasons for
such solicitation. A vote may be taken on a proposal in this
Proxy Statement for the Trust prior to any adjournment if
sufficient votes have been received for approval of that
proposal.
The presence in person or by proxy of the holders of a
majority of the outstanding Shares is required to constitute
a quorum at the Meeting. As of the Record Date, the sole
shareholders of the Series were Participating Insurance
Companies. Since Participating Insurance Companies are the
legal owners of the Shares, attendance by the Participating
Insurance Companies at the meeting will constitute a quorum
under the Trust's Declaration of
2
<PAGE>
Trust. Shares beneficially
held by Variable Contract Owners present in person or
represented by proxy at the Meeting will be counted for the
purpose of calculating the votes cast on the issues before
the Meeting.
The Trust knows of no items of business other than those
mentioned in Proposals 1, 2 and 3 of the Notice which will
be presented for consideration at the Meeting. If any other
matters are properly presented, it is the intention of the
persons named as proxies to vote proxies in accordance with
their best judgment.
BACKGROUND INFORMATION.
Equitable Investment Services, Inc. ("EISI"), 909 Locust
Street, Des Moines, Iowa 50309, is the Trust's Investment
Adviser. See Attachment B for a list of the directors and
principal executive officer of EISI. EISI is a wholly owned
subsidiary of Equitable of Iowa. Equitable of Iowa is a
holding company for the following companies: Equitable Life
Insurance Company of Iowa ("Equitable Life"), Golden
American Life Insurance Company ("Golden American"), First
Golden American Life Insurance Company of New York ("First
Golden"), Equitable American Insurance Company ("Equitable
American"), USG Annuity & Life Company ("USG"), Locust
Street Securities, Inc. ("Locust Street"), and Directed
Services, Inc. ("DSI"). Equitable of Iowa's principal
executive offices are located at 909 Locust Street,
Des Moines, Iowa 50306.
EISI is also a Portfolio Manager of three Series of The
GCG Trust. The GCG Trust is the investment medium for
variable annuity contracts and variable life insurance
policies issued by Equitable Life, Golden American, First
Golden and other insurance companies. Additionally, EISI
serves as the investment adviser to Equitable Life, Golden
American and USG, and in such capacity EISI manages over
$9.9 billion of their general account assets, comprised
primarily of investment grade corporate bonds, mortgage
backed securities, non-investment grade corporate bonds, and
commercial mortgages.
On July 7, 1997, Equitable of Iowa entered into an
Agreement and Plan of Merger with ING Groep N.V. ("ING") and
PFHI Holdings, Inc. ("PFHI") pursuant to which Equitable of
Iowa and PFHI have agreed to merge, subject to certain
conditions and regulatory approvals (the "Transaction").
Consummation of the Transaction is anticipated to occur in
the fourth quarter of 1997 and may constitute an
"assignment" (as defined in the 1940 Act) of the current
Investment Advisory Agreement between the Trust and EISI
("Current Investment Advisory Agreement"). Additionally,
consummation of the Transaction may constitute an assignment
of the current Sub-Advisory Agreements between the Trust,
EISI and the respective Sub-Advisers of the Series of the
Trust identified below. None of the affiliates of Equitable
of Iowa is currently affiliated with ING or with any of the
current Sub-Advisers of the Trust.
ING operates in 58 countries worldwide and is one of the
world's largest integrated financial service providers,
offering a comprehensive range of life and non-life
insurance, commercial and investment banking, asset
management and related products and services. ING has
extensive operations in Europe, North America, South
America, Africa, Asia and Australia. In 1996, ING had gross
written premiums of NLG 24,332 million, making it the
largest insurer in the Netherlands. Management believes that
at December 31, 1995, ING was the 11th largest insurer in
Europe and the 32nd largest insurer in the world, based on
gross written premiums. At the end of 1996, ING Bank was the
third largest bank in the Netherlands. Management believes
that at December 31, 1995, ING Bank had total assets of NLG
311.4 billion, making it the 32nd largest bank in Europe and
the 51st largest bank in the world based on total assets.
Management also believes that, based on consolidated total
assets at December 31, 1995, ING was the 33rd largest
financial institution in the world. ING's products and
services are marketed under a variety of well recognized and
strong brand names, including Nationale-Nederlanden, ING
Bank and ING Barings worldwide; Postbank in the Netherlands;
Mercantile Mutual in Australia; NN Financial, Commerce
Group, Belair, Halifax and Western Union in Canada; and Life
of Georgia, Southland Life Insurance Company, Security Life
of Denver, Indiana Insurance, Peerless Insurance, and
Excelsior Insurance in the United States. For the year ended
December 31, 1996 ING's total income was NLG 47,551 million
( $24,220 million) and its net profit was NLG 3,321 million
($1,691.80 million). ING had consolidated total assets of
NLG 483.9 billion ($246.51 billion) at the end of 1996. The
translations of Dutch guilders ("NLG") into U.S. dollars
have been made at the rate of NLG 1.9630 to $1.00, the noon
buying rate in New York City for cable transfers in guilders
as certified for customs purposes by the Federal Reserve
Bank of New York on June 30, 1997. ING's principal executive
offices are located at Strawinskylaan 2631, 1077 ZZ
Amsterdam, P.O. Box 810, 1000 AV Amsterdam, the Netherlands.
3
<PAGE>
PFHI is a Delaware corporation and a wholly owned
subsidiary of ING. Equitable of Iowa will be merged with and
into PFHI, with PFHI as the surviving entity. PFHI will
succeed to the business of Equitable of Iowa upon the
consummation of the Transaction. PFHI's principal executive
offices are located at 5780 Powers Ferry Road, Atlanta,
Georgia 30327.
Section 15(f) of the 1940 Act permits the sale of
controlling interests in an investment adviser to an
investment company to occur, including receipt by the
investment adviser or any of its affiliated persons of an
amount or benefit in connection with such sale, as long as
two conditions are satisfied. First, an "unfair burden" must
not be imposed on the investment company for which the
investment adviser acts in such capacity as a result of the
sale of such interests, or any express or implied terms,
conditions or understandings applicable thereto. The term
"unfair burden," as defined in the 1940 Act, includes any
arrangement during the two-year period after any such
transaction whereby the investment adviser (or predecessor
or successor adviser) or any interested person of any such
adviser, receives or is entitled to receive any
compensation, directly or indirectly, from the investment
company or its security holders (other than fees for bona
fide investment advisory and any other services) or from any
person in connection with the purchase or sale of securities
or other property to, from or on behalf of the investment
company (other than ordinary fees for bona fide principal
underwriting services). Management of the Trust is aware of
no circumstances arising from the Transaction that might
result in the imposition of an "unfair burden" on the Trust.
The second condition of Section 15(f) is that during the
three-year period immediately following consummation of a
transaction to which Section 15(f) is applicable, at least
75% of the investment company's board of trustees must not
be "interested person" (as defined in the 1940 Act) of such
investment company's investment adviser or predecessor
adviser. The Board of Trustees currently consists of four
Trustees, one of whom, is an interested person of the Trust
and EISI.
It is anticipated that in the near future a process will
be undertaken by the Participating Insurance Companies to
substitute the Shares of each of the Series of the Trust
with shares of various series of The GCG Trust which have
similar or identical investment objectives, investment
policies and fee structure. This process will be subject to
the review and approval of the Securities and Exchange
Commission. The purpose for undertaking this process is
primarily to provide increased efficiencies which will
indirectly be beneficial to the Variable Contract Owners.
The process is not effected by the Transaction, and none of
the Proposals to be considered at the Meeting pertain to
this process.
PROPOSAL 1
APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT
BETWEEN THE TRUST AND EQUITABLE INVESTMENT SERVICES, INC.
As stated above, consummation of the Transaction may
constitute an "assignment" of the Current Investment
Advisory Agreement. As required by the 1940 Act, the Current
Investment Advisory Agreement provides for its automatic
termination in the event of an assignment. In anticipation
of the consummation of the Transaction, and in order for
EISI to continue to serve as investment adviser to the Trust
afterwards, a new Investment Advisory Agreement between EISI
and the Trust ("New Investment Advisory Agreement") must be
approved (i) by a majority vote of the Board, including a
majority of the non-interested Trustees, and (ii) as to each
Series, by holders of a majority of the outstanding voting
securities of each such Series of the Trust. The New
Investment Advisory Agreement is included as Attachment A.
At the Board meeting held on August 19, 1997, the
Trustees, including all of the non-interested Trustees,
concluded that, if the Transaction occurs, entry by the
Trust into the New Investment Advisory Agreement would be in
the best interests of the Trust and the Trust's
shareholders. The Board unanimously approved the New
Investment Advisory Agreement and recommended such New
Investment Advisory Agreement for approval by the
shareholders of the Trust at the Meeting. The New Investment
Advisory Agreement would take effect upon the later to occur
of (i) the obtaining of shareholder approval, or (ii) the
closing of the Transaction. The New Investment Advisory
Agreement, if approved by shareholders, will continue in
effect until two years after its effective date and
thereafter for successive annual periods as long as such
continuance is approved in accordance with the 1940 Act.
4
<PAGE>
In the event that shareholders of the Trust do not
approve the New Investment Advisory Agreement, ING and PFHI
have reserved the right to determine whether or not to
consummate the Transaction. If the Transaction is not
consummated, EISI would continue to serve as investment
adviser of all Series of the Trust under the Current
Investment Advisory Agreement.
The Current Investment Advisory Agreement, dated
October 1, 1994, and amended on April 1, 1996, provides,
among other things, that EISI will provide advisory,
management, administrative, and other services with respect
to each Series of the Trust. Further, EISI in fulfilling its
obligations has agreed to provide general, overall advice
and guidance with respect to each Series and provide advice
and guidance to the Trustees, and oversee the management of
the investments of each Series and the composition of each
Series' portfolio of securities and investments, including
cash, and the purchase, retention and disposition of such
securities and cash, all in accordance with each Series'
investment objectives and policies as stated in the Trust's
current registration statement. Additionally, EISI has
agreed to select and recommend for consideration by the
Board investment advisory firms to provide investment advice
to one or more of the Series, and, at the expense of EISI,
to engage such investment advisory firms ("the Sub-
Advisers") to render investment advice and management of the
investments of such series. Under the New Investment
Advisory Agreement, all services provided by EISI would
continue.
Pursuant to the Current Investment Advisory Agreement,
neither EISI nor its officers, directors, or employees shall
be subject to any liability for, or any damages, expenses,
or losses incurred in connection with any act or omission
connected with or arising out of any services rendered under
the Current Investment Advisory Agreement, except by reason
of willful misfeasance, bad faith, or gross negligence in
the performance of EISI's duties, or by reason of reckless
disregard of EISI's obligations and duties under the Current
Investment Advisory Agreement. Under the New Investment
Advisory Agreement, the same standards will be imposed on
EISI.
The Current Investment Advisory Agreement was renewed by
the Board at a meeting held on August 19, 1997 and was
approved by the sole shareholder of the Trust on October 1,
1994. The Current Investment Advisory Agreement provides
that it may be terminated at any time without payment of any
penalty, by EISI or the Board of Trustees, or by a vote of a
majority of the outstanding voting shares of each Series.
Additionally, the Current Investment Advisory Agreement
automatically and immediately terminates in the event of its
assignment.
As compensation for the actions of EISI, under the
Current Investment Advisory Agreement, the Trust pays EISI
the following fee at an annual rate equal to a percentage of
the average daily net assets of each Series, which fee is
computed and accrued daily and paid monthly:
SERIES RATE
------ ----
Advantage .50% of first $100 million;
.35% of average net assets
over and above $100 million
Growth & Income .95% of first $200 million;
.75% of average net assets
over and above $200 million
International Fixed Income .85% of first $200 million
.75% of next $300 million
.60% of next $500 million
.55% of next $1 billion
.40% of average net assets
over and above $2 billion
Money Market .375% of first $50 million;
.35% of average net assets
over and above $50 million
Mortgage-Backed Securities .75% of first $200 million
.65% of next $300 million
.55% of next $500 million
.50% of next $1 billion
.40% of average net assets
over and above $2 billion
OTC .80% of first $300 million;
.55% of average net assets
over and above $300 million
5
<PAGE>
SERIES (CONTINUED) RATE
------------------ ----
Research .80% of first $300 million
.55% of average net assets
over and above $300 million
Total Return .80% of first $300 million
.55% of average net assets
over and above $300 million
Value + Growth .95% of first $500 million
.75% of average net assets
over and above $500 million
Under the New Investment Advisory Agreement, the schedule
of compensation payable to the Adviser will not change.
During 1996, the Trust paid EISI pursuant to the scheduled
compensation described above the following fee amounts:
SERIES AGGREGATE FEE
------ -------------
Advantage $ 47,012
Growth & Income $ 127,300
International Fixed Income $ 84,700
Money Market $ 48,489
Mortgage-Backed Securities $ 79,625
OTC $ 185,005
Research $ 325,527
Total Return $ 270,373
Value + Growth $ 80,234
There were no other material payments made by any Series
to EISI, or any affiliated person of EISI, during 1996.
EISI has undertaken to reimburse each Series for all
operating expenses, excluding management fees, that exceed
.30% of the average daily net assets of the Money Market and
Advantage Series, .40% of the average daily net assets of
the OTC, Total Return, Research, Growth & Income and Value +
Growth Series, .50% of the average daily net assets of the
Mortgage-Backed Securities Series, and .75% of the average
daily net assets of the International Fixed Income Series.
This undertaking is subject to termination at any time
without notice to shareholders. For the year ended
December 31, 1996, EISI reimbursed the Trust $222,949 for
expenses in excess of the voluntary expense limitations.
BOARD OF TRUSTEES' EVALUATION. The Board, including the
non-interested Trustees, has determined that, by approving
the New Investment Advisory Agreement on behalf of the
Trust, the Trust can best assure itself that the services
currently provided by EISI will continue after the
Transaction without interruption. The Board has determined
that, as with the current Investment Advisory Agreement, the
New Investment Advisory Agreement will enable the Trust to
obtain services of high quality at costs deemed appropriate,
reasonable and in the best interests of the Trust and its
Shareholders.
IN EVALUATING THE NEW INVESTMENT ADVISORY AGREEMENT, THE
BOARD TOOK INTO ACCOUNT THAT, EXCEPT FOR THE DATES OF
EXECUTION, EFFECTIVENESS AND TERMINATION, THERE ARE NO
DIFFERENCES BETWEEN THE TERMS AND CONDITIONS OF THE TRUST'S
CURRENT INVESTMENT ADVISORY AGREEMENT AND THE NEW INVESTMENT
ADVISORY AGREEMENT, INCLUDING THE TERMS RELATING TO THE
SERVICES TO BE PROVIDED THEREUNDER BY EISI AND THE FEES AND
EXPENSES PAYABLE BY THE TRUST.
The Board also considered the terms of the New Investment
Advisory Agreement, and the possible effects of the
Transaction upon the Trust and EISI's organization, and upon
the ability of EISI to provide advisory and other services
to the Trust. The Board also considered the qualifications
of EISI to provide an appropriate range of management and
administrative services, the performance record of EISI, the
financial condition of EISI, and the anticipated working
relationship between EISI and ING. In light of the
circumstances, the Trustees concluded that the terms of the
New Investment Advisory Agreement are fair and reasonable.
6
<PAGE>
ACCORDINGLY, THE BOARD OF TRUSTEES, INCLUDING THE
TRUSTEES WHO ARE NOT INTERESTED PERSONS OF ANY PARTY TO THE
NEW INVESTMENT ADVISORY AGREEMENT, RECOMMENDS APPROVAL OF
THE NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE TRUST AND
EISI.
PROPOSALS 2(A)-2(C) AND 3
APPROVAL OF NEW SUB-ADVISORY AGREEMENTS FOR THE OTC SERIES,
RESEARCH SERIES, TOTAL RETURN SERIES, INTERNATIONAL FIXED INCOME
SERIES, GROWTH & INCOME SERIES, AND VALUE + GROWTH SERIES.
As stated above, the Transaction will result in a change
of control of EISI and may operate to terminate
automatically the Sub-Advisory Agreements currently
applicable (collectively, the "Current Sub-Advisory
Agreements"). In order for the management of each Series to
continue uninterrupted after the Transaction, shareholder
approval of "New Sub-Advisory Agreements" is being sought.
Each of the Current Sub-Advisory Agreements requires the
Sub-Adviser to provide, subject to supervision of the Board
and EISI, a continuous investment program for the Series'
portfolio and to determine the composition of the assets of
the Series' portfolio, including determination of the
purchase, retention, or sale of the securities, cash, and
other investments contained in the portfolio. Generally, the
Current Sub-Advisory Agreements state that the Sub-Adviser
will provide investment research and conduct a continuous
program of evaluation, investment, sales, and reinvestment
of the Series' assets by determining the securities and
other investments that shall be purchased, sold, closed or
exchanged for the Series, when these transactions should be
executed, and what portion of the assets of the Series
should be held in the various securities and other
investments in which it may invest, all in accordance with
the Series' investment objectives and policies. Under the
New Sub-Advisory Agreements, all services and
responsibilities of the Sub-Advisers would continue.
Pursuant to each of the Current Sub-Advisory Agreements,
a Sub-Adviser is not subject to liability for, or subject to
any damages, expenses, or losses in connection with, any
error of judgment or mistake of law, or for any loss
suffered by the Trust, except for a loss from willful
misfeasance, bad faith, or gross negligence in the
performance of its duties, or by reason of reckless
disregard of its obligations and duties under the agreement.
Under the New Sub-Advisory Agreements, the same
responsibilities will be imposed on the Sub-Advisers.
Each of the Current Sub-Advisory Agreements provides that
it will terminate automatically in the event of its
"assignment," as that term is defined in the 1940 Act. In
addition, each Current Sub-Advisory Agreement may be
terminated by EISI or by the Sub-Adviser upon 60 days'
written notice to the other parties, and by the Trust upon
the vote of a majority of the Board or a majority of the
outstanding shares of the applicable Series, upon 60 days'
written notice to EISI and the Sub-Adviser.
For the services provided by the Sub-Advisers pursuant to
each of the Current Sub-Advisory Agreements, EISI, and not
the Trust, pays a monthly fee at the following annual rates,
which are expressed as percentages of the value of the
average daily net assets of each Series:
<TABLE>
<CAPTION>
SUB-ADVISOR SERIES RATE
- ----------- ------ ----
<S> <C> <C>
Massachusetts Financial OTC .40% of first $300 million
Services Company ("MFS") .25% of over and above $300 million
Research .40% of first $300 million
.25% of over and above $300 million
Total Return .40% of first $300 million
.25% of over and above $300 million
Credit Suisse Asset Management International Fixed .45% of first $200 million
Limited ("Credit Suisse") Income .40% of next $300 million
.30% of next $500 million
.25% of next $1 billion
.10% of over and above $2 billion
7
<PAGE>
<CAPTION>
SUB-ADVISOR (CONTINUED) SERIES RATE
- ----------------------- ------ ----
<S> <C> <C>
Robertson, Stephens & Company Growth & Income .55% of first $200 million
Investment Management, L.P. .45% of over and above $200 million
("Robertson, Stephens")
Value + Growth .55% of first $500 million
.45% of over and above $500 million
Under the New Sub-Advisory Agreements, the schedule of
compensation payable to the Sub-Advisers will not change.
Fees paid by EISI to the Sub-Advisers for their services
under the Current Sub-Advisory Agreements for the year ended
December 31, 1996, were as follows: MFS $92,983 for the OTC
Series, $163,740 for the Research Series, and $135,835 for
the Total Return Series; Credit Suisse $44,894 for the
International Fixed Income Series; and Robertson, Stephens
$74,537 for the Growth & Income Series and $46,724 for the
Value + Growth Series.
THE NEW SUB-ADVISORY AGREEMENTS. The New Sub-Advisory
Agreements will be among the Trust, EISI and each of the
following:
SUB-ADVISER SERIES
----------- ------
MFS OTC
Research
Total Return
Credit Suisse International Fixed Income
Robertson, Stephens Growth & Income
Value + Growth
At the August 19, 1997 meeting of the Board of Trustees,
each of the New Sub-Advisory Agreements was approved by the
Board of Trustees, including a majority of the Trustees who
are not interested parties to the New Sub-Advisory
Agreements or interested persons of such parties. The New
Sub-Advisory Agreements with MFS, Credit Suisse, and
Robertson, Stephens are included as Exhibits A, B, and C,
respectively.
The New Sub-Advisory Agreement for each Series as
approved by the Board is submitted for approval by the
shareholders of the Series to which the New Sub-Advisory
Agreement applies. The New Sub-Advisory Agreements must be
voted upon separately by the Series to which a New Sub-
Advisory Agreement pertains. If the New Sub-Advisory
Agreement is approved by the vote of a majority of the
outstanding shares of the applicable Series, it will take
effect upon the closing of the Transaction and will continue
in effect for two years and thereafter for successive annual
periods as long as such continuance is approved in
accordance with the 1940 Act. For this purpose, the vote of
the holders of a majority of the Series' outstanding shares
means the lesser of: (i) 67% or more of the voting shares of
each Series present at the Meeting, if the holders of more
than 50% of the outstanding voting shares of the Series are
present or represented by proxy; or (ii) more than 50% of
the outstanding voting shares of the Series. If the
shareholders of a Series should fail to approve the New Sub-
Advisory Agreement that pertains to that Series, the Sub-
Adviser may continue to serve in that capacity with respect
to any other Series whose shareholders approve the New Sub-
Advisory Agreement. In such an event, the Board shall meet
to consider appropriate action. If the Shareholders of any
Series should fail to approve the New Sub-Advisory
Agreements, ING and PFHI have reserved the right to
determine whether or not to consummate the Transaction. If
the Transaction is not consummated the Sub-Advisers will
continue to service all Series of the Trust under the
Current Sub-Advisory Agreements.
THE TERMS OF EACH OF THE NEW SUB-ADVISORY AGREEMENTS ARE
IDENTICAL IN ALL MATERIAL RESPECTS, INCLUDING THE FEES
PAYABLE TO THE SUB-ADVISERS, TO THE TERMS OF THE CURRENT SUB-
ADVISORY AGREEMENTS.
8
<PAGE>
PROPOSAL 2(A)
APPROVAL OF SUB-ADVISORY AGREEMENT WITH MFS
FOR THE OTC SERIES, RESEARCH SERIES, AND TOTAL RETURN SERIES
INFORMATION ABOUT MFS
MFS, with offices at 500 Boylston Street, Boston,
Massachusetts, 02116, and its predecessor organizations have
a history of money management dating from 1924. Net assets
under the management of the MFS organization were
approximately $64.3 billion on behalf of approximately 2.6
million investor accounts as of July 31, 1997. As of such
date, the MFS organization managed approximately $40.6
billion of assets in equity securities and $20.3 billion of
assets in fixed income securities. Approximately $4.1
billion of assets managed by MFS are invested in securities
of foreign issuers and non-U.S. dollar denominated
securities of U.S. issuers. MFS is a subsidiary of Sun Life
Assurance Company of Canada (U.S.), which in turn is a
wholly owned subsidiary of Sun Life of Canada (U.S.)
Holdings, Inc., which in turn is a wholly owned subsidiary
of Sun Life Assurance Company of Canada ("Sun Life"). Sun
Life, a mutual life insurance company, is one of the largest
international life insurance companies and has been
operating in the U.S. since 1895, establishing a
headquarters office in the U.S. in 1973. The executive
officers of MFS report to the Chairman of Sun Life.
MFS manages the assets of the OTC Series, Research Series
and Total Return Series pursuant to a Sub-Advisory Agreement
dated October 1, 1994 among the Trust, EISI, and MFS. The
Current Sub-Advisory Agreement was approved by the Board of
Trustees on August 19, 1997 and was approved by the sole
shareholder of each of the OTC Series, Research Series and
Total Return Series of the Trust on October 1, 1994 at the
commencement of operations of the Trust.
The New Sub-Advisory Agreement is included as Exhibit A.
See Exhibit D for a list of the directors and the principal
executive officer of MFS and a table setting forth the other
investment companies with similar investment objectives to
those of the OTC Series, Research Series and Total Return
Series, including the fees payable by such investment
companies and their approximate net assets.
THE TRUSTEES' RECOMMENDATION - PROPOSAL 2(A).
In determining whether to approve the New Sub-Advisory
Agreement for the OTC Series, Research Series and Total
Return Series and to recommend approval to shareholders, the
Board, including the Trustees who are not interested persons
of EISI or MFS, considered various matters and materials
provided by EISI and MFS. Information considered by the
Trustees included, among other things, the following: (1)
the compensation to be received by MFS for its sub-advisory
services and the fairness and reasonableness of such
compensation, and that the fee under the New Sub-Advisory
Agreement is the same as that under the Current Sub-Advisory
Agreement; (2) the nature and the quality of the sub-
advisory services expected to be rendered under the New Sub-
Advisory Agreement; (3) the possible effects of the
Transaction on the services to be rendered under the New Sub-
Advisory Agreement; (4) the background and prior experience
of MFS; and (5) the financial condition of MFS.
ACCORDINGLY, THE BOARD OF TRUSTEES, INCLUDING THE
TRUSTEES WHO ARE NOT INTERESTED PERSONS OF ANY PARTY TO THE
NEW SUB-ADVISORY AGREEMENT, RECOMMENDS THE APPROVAL OF THE
NEW SUB-ADVISORY AGREEMENT AMONG THE TRUST, EISI, AND MFS.
PROPOSAL 2(B)
APPROVAL OF SUB-ADVISORY AGREEMENT WITH CREDIT SUISSE
FOR THE INTERNATIONAL FIXED INCOME SERIES
INFORMATION ABOUT CREDIT SUISSE
Credit Suisse (formerly, CS First Boston Investment
Management Ltd.), with offices at Beaufort House, London,
England, is a wholly owned indirect subsidiary of Credit
Suisse First Boston, a Swiss bank, which in turn is a
subsidiary of the Credit Suisse Group.
Credit Suisse manages the assets of the International
Fixed Income Series pursuant to a Sub-Advisory Agreement
dated October 1, 1994, among the Trust, EISI, and Credit
Suisse. The Current Sub-Advisory Agreement was approved by
the Board on August 19, 1997 and was approved by the sole
shareholder of the International Fixed Income Series of the
Trust on October 1, 1994 at the commencement of the
operations of the Trust.
9
<PAGE>
The New Sub-Advisory Agreement is included as Exhibit B.
See Exhibit E for a list of the directors and the principal
executive officer of Credit Suisse and a table setting forth
the other investment companies with similar investment
objectives to those of the International Fixed Income Series
for which Credit Suisse serves as investment adviser,
including the fees payable by such investment companies and
their approximate net assets.
THE TRUSTEES' RECOMMENDATION - PROPOSAL 2(B).
In determining whether to approve the New Sub-Advisory
Agreement for the International Fixed Income Series and to
recommend approval to shareholders, the Board, including the
Trustees who are not interested persons of EISI or Credit
Suisse, considered various matters and materials provided by
EISI and Credit Suisse. Information considered by the
Trustees included, among other things, the following: (1)
the compensation to be received by Credit Suisse for its sub-
advisory services and the fairness and reasonableness of
such compensation, and that the fee under the New Sub-
Advisory Agreement is the same as that under the Current Sub-
Advisory Agreement; (2) the nature and the quality of the
sub-advisory services expected to be rendered under the New
Sub-Advisory Agreement; (3) the possible effects of the
Transaction on the services to be rendered under the New Sub-
Advisory Agreement; (4) the background and prior experience
of Credit Suisse; and (5) the financial condition of Credit
Suisse.
ACCORDINGLY, THE BOARD OF TRUSTEES, INCLUDING THE
TRUSTEES WHO ARE NOT INTERESTED PERSONS OF ANY PARTY TO THE
NEW SUB-ADVISORY AGREEMENT, RECOMMENDS THE APPROVAL OF THE
NEW SUB-ADVISORY AGREEMENT AMONG THE TRUST, EISI, AND CREDIT
SUISSE.
PROPOSALS 2(C) AND 3
APPROVAL OF SUB-ADVISORY AGREEMENTS WITH ROBERTSON, STEPHENS
FOR THE GROWTH & INCOME SERIES AND VALUE + GROWTH SERIES.
INFORMATION ABOUT ROBERTSON, STEPHENS
Robertson, Stephens, with offices at 555 California
Street, San Francisco, California, 94104, is a California
limited partnership formed in 1993. The general partner of
Robertson, Stephens is Robertson, Stephens & Company, Inc.
Robertson, Stephens is affiliated with Robertson, Stephens &
Company, LLC, a major investment banking firm specializing
in emerging growth companies that has developed substantial
investment research, underwriting, and venture capital
expertise. Since 1978, Robertson, Stephens & Company, LLC
has managed underwritten public offerings for over $15
billion of securities of emerging growth companies.
Robertson, Stephens and its affiliates have in excess of
$3.5 billion under management in public and private
investment funds.
Robertson, Stephens manages the assets of the Growth &
Income Series and Value + Growth Series pursuant to a Sub-
Advisory Agreement dated April 1, 1996 among the Trust,
EISI, and Robertson, Stephens. The Current Sub-Advisory
Agreement was approved by the sole shareholder of each of
the Growth & Income Series and the Value + Growth Series of
the Trust on April 1, 1996 at the commencement of the
operations of these Series. The Current Sub-Advisory
Agreement among the Trust, EISI, and Robertson, Stephens
will terminate upon the change of control of EISI.
Additionally, On June 8, 1997, BankAmerica Corporation
("BankAmerica") entered into an Agreement and Plan of Merger
with Robertson, Stephens & Company Group, L.L.C. and
Robertson Stephens & Company, Inc., pursuant to which each
of those entities would be merged into a subsidiary of
BankAmerica (the "BankAmerica Merger"). Upon the
consummation of the BankAmerica Merger, BankAmerica will
become the owner of the entire beneficial interest in
Robertson, Stephens. Therefore, the BankAmerica Merger will
also result in a change of control of Robertson, Stephens,
and the Sub-Advisory Agreement among the Trust, EISI and
Robertson, Stephens by its terms will terminate.
As discussed above, Section 15(f) of the 1940 Act permits
the sale of controlling interests in an investment adviser
to an investment company to occur, including receipt by the
investment adviser or any of its affiliated persons of an
amount or benefit in connection with such sale, as long as,
among other things, no "unfair burden" is imposed on the
investment company for which the investment adviser acts in
such capacity as a result of the sale of such interests, or
any express or implied terms, conditions or understandings
applicable thereto. Management of the Trust is aware of no
circumstances arising from the BankAmerica Merger that might
result in the imposition of an "unfair burden" on the Trust.
Also, no Trustees of the Trust are interested persons of
Robertson, Stephens.
10
<PAGE>
Robertson, Stephens has advised the Board that the
BankAmerica Merger Agreement does not prescribe any changes
in the management or operations of Robertson, Stephens,
including any changes in the personnel managing the Growth &
Income Series or the Value + Growth Series, or other
services or business activities relating to the Growth &
Income Series or the Value + Growth Series. Robertson,
Stephens does not anticipate that the BankAmerica Merger
will cause any reduction in the quality of services now
provided to, or have any adverse effect on its ability to
fulfill its obligations to the Growth & Income Series or the
Value + Growth Series.
INFORMATION ABOUT BANKAMERICA.
BankAmerica is a bank holding company that was
incorporated on October 7, 1968 under the laws of the State
of Delaware, and is registered under the Bank Holding
Company Act of 1956, as amended. Through its network of
subsidiaries, BankAmerica provides banking and other
financial services throughout the United States and in
selected international markets to consumers and business
customers, including corporations, governments, and other
institutions. As a global financial intermediary,
BankAmerica provides capital-raising services, trade
finance, cash management, investment banking, capital
markets and credit products, and financial advisory services
to large public and private-sector institutions that are
part of the global economy. At December 31, 1996,
BankAmerica, together with its subsidiaries, was one of the
three largest bank holding companies in the United States,
with total assets of $250.8 billion.
Bank of America National Trust and Savings Association
(the "Bank") is the largest subsidiary of BankAmerica. The
Bank, which was organized in 1904, provides commercial and
retail banking and trust services through an extensive
system of branches across the western United States.
BankAmerica's principal banking subsidiaries operate
branches in eleven U.S. states as well as corporate banking
offices in major U.S. cities and branches, corporate offices
and representative offices in 37 other countries and
territories. The Bank and its affiliates act as investment
advisers for assets of over $50 billion, including over $14
billion in mutual funds.
It is currently anticipated that the BankAmerica Merger
will be consummated prior to the Transaction. In such an
event the Current Sub-Advisory Agreement will automatically
terminate upon the change of control of Robertson, Stephens
and it will be necessary for a New Sub-Advisory Agreement to
be entered into among the Trust, EISI, and Robertson,
Stephens. This New Sub-Advisory Agreement, which is
identical in all material respects to the Current Sub-
Advisory Agreement, will be applicable to the Growth &
Income Series and the Value + Growth Series for an interim
period when it will automatically terminate upon the change
of control of EISI and a New Sub-Advisory Agreement will
become effective. In the event that the Transaction is
consummated prior to the BankAmerica Merger, then the
Current Sub-Advisory Agreement will automatically terminate
upon the change of control of EISI and a New Sub-Advisory
Agreement among the Trust, EISI and Robertson, Stephens,
which is identical in all material respects to the Current
Sub-Advisory Agreement, will be applicable to the Growth &
Income Series and the Value + Growth Series for an interim
period when it will automatically terminate upon the change
of control of Robertson, Stephens and a New Sub-Advisory
Agreement will become effective. If only one of the
Transaction or BankAmerica Merger is consummated, then that
New Sub-Advisory Agreement which is identical in all
material respects to the Current Sub-Advisory Agreement
which becomes effective upon the change of control of EISI
or Robertson, Stephens, as applicable, will continue to be
applicable to the Growth & Income Series and the Value +
Growth Series. As both the Transaction and BankAmerica
Merger are subject to several conditions, and there is a
possibility that one or the other will not be consummated,
the shareholders of the Growth & Income Series and the Value
+ Growth Series are being requested in Proposals 2(C) and 3
to separately approve two New Sub-Advisory Agreements among
the Trust, EISI and Robertson, Stephens. In the event that
neither the Transaction nor the BankAmerica Merger is
consummated, the Current Sub-Advisory Agreement will
continue to be applicable to the Growth & Income Series and
the Value + Growth Series. The two New Sub-Advisory
Agreements and the Current Sub-Advisory Agreement are
identical in all material respects, including the fees
payable to Robertson, Stephens.
The form of the two New Sub-Advisory Agreements is
included in Exhibit C. See Exhibit F for a list of the
partners and the principal executive officer of Robertson,
Stephens and a table setting forth the other investment
companies with similar investment objectives to those of the
Growth & Income Series and Value + Growth Series, including
the fees payable by such investment companies and their
approximate net assets.
11
<PAGE>
THE TRUSTEES' RECOMMENDATION - PROPOSALS 2(C) AND 3.
In determining whether to approve the New Sub-Advisory
Agreements for the Growth & Income Series and Value + Growth
Series and to recommend approval to shareholders, the Board,
including the Trustees who are not interested persons of
EISI or Robertson, Stephens, considered various matters and
materials provided by EISI and Robertson, Stephens.
Information considered by the Trustees included, among other
things, the following: (1) the compensation to be received
by Robertson, Stephens for its sub-advisory services and the
fairness and reasonableness of such compensation, and that
the fee under the New Sub-Advisory Agreements is the same as
that under the Current Sub-Advisory Agreement; (2) the
nature and the quality of the sub-advisory services expected
to be rendered under the New Sub-Advisory Agreements; (3)
the possible effects of the Transaction on the services to
be rendered under the New Sub-Advisory Agreements; (4) the
background and prior experience of Robertson, Stephens; (5)
the financial condition of Robertson, Stephens; (6) the
possible effects of the BankAmerica Merger on the services
to be rendered under the New Sub-Advisory Agreements; and
(7) the anticipated working relationship among EISI,
Robertson, Stephens, and BankAmerica.
ACCORDINGLY, THE BOARD OF TRUSTEES, INCLUDING THE
TRUSTEES WHO ARE NOT INTERESTED PERSONS OF ANY PARTY TO THE
NEW SUB-ADVISORY AGREEMENTS, RECOMMENDS THE APPROVAL OF THE
NEW SUB-ADVISORY AGREEMENTS AMONG THE TRUST, EISI, AND
ROBERTSON, STEPHENS.
ADDITIONAL INFORMATION
OUTSTANDING SHARES.
As of the Record Date, there were the following number of
shares outstanding for each Series of the Trust:
SERIES SHARES OUTSTANDING
------ ------------------
Advantage 1,586,100
Growth & Income 6,205,434
International Fixed Income 1,074,849
Money Market 39,302,704
Mortgage-Backed Securities 1,323,158
OTC 5,407,403
Research 10,047,823
Total Return 8,499,887
Value + Growth 3,665,332
SHAREHOLDERS OF THE TRUST.
As of the Record Date, no persons are known to the Trust
to be the beneficial owner of more than 5% of the Shares of
the Trust.
OFFICERS OF THE TRUST.
The principal executive officers of the Trust and their
ages and principal occupations for the past five years,
unless otherwise noted, are set forth below. The executive
officers of the Trust are elected annually and serve until
their successors shall have been fully elected and
qualified.
Paul R. Schlaack, age 50, serves as President and
Principal Executive Officer of the Trust and Chairman of the
Board. Additionally, Mr. Schlaack serves as President, Chief
Executive Officer and is a Director of EISI.
Paul E. Larson, age 44, serves as Treasurer and Principal
Financial Officer of the Trust. Additionally, Mr. Larson
serves as Executive Vice President and Chief Financial
Officer of Equitable of Iowa, Equitable American Insurance
Company ("Equitable American") (since January, 1993),
Equitable Life, Golden American (since August, 1996), and
USG. Mr. Larson is a director of EISI.
John A. Merriman, age 55, serves as Secretary of the
Trust. Additionally, Mr. Merriman serves as Secretary and
General Counsel of Equitable American (since January, 1993),
Equitable of Iowa, Equitable Life and USG. Mr. Merriman is a
director of EISI.
12
<PAGE>
David A. Terwilliger, age 40, serves as Principal
Accounting Officer of the Trust. Additionally,
Mr. Terwilliger serves as Vice President, Treasurer and
Controller of Equitable of Iowa, Equitable American (since
January, 1993), EISI, Equitable Life, Golden American (since
August, 1996) and USG.
ADJOURNMENT.
In the event that sufficient votes in favor of any of the
proposals set forth in the Notice of the Meeting are not
received by the time scheduled for the Meeting, the persons
named as Proxies may propose one or more adjournments of the
Meeting after the date set for the original Meeting to
permit further solicitation of proxies with respect to any
such proposals. In addition, if, in the judgment of the
persons named as Proxies, it is advisable to defer action on
one or more proposals, the persons named as Proxies may
propose one or more adjournments of the Meeting for a
reasonable time. Any such adjournments will require the
affirmative vote of a majority of the votes cast on the
questions in person or by proxy at the session of the
Meeting to be adjourned. The persons named as Proxies will
vote in favor of such adjournment those Proxies which they
are entitled to vote in favor of such proposals. They will
vote against any such adjournment those Proxies required to
be voted against any of such proposals. Any proposals for
which sufficient favorable votes have been received by the
time of the Meeting will be acted upon and such action will
be final regardless of whether the Meeting is adjourned to
permit additional solicitation with respect to any other
proposal.
ANNUAL REPORT.
The Trust's 1996 Annual Report to Shareholders was mailed
to shareholders on or about February 28, 1997. IF YOU SHOULD
DESIRE AN ADDITIONAL COPY OF AN ANNUAL REPORT, IT CAN BE
OBTAINED, WITHOUT CHARGE, FROM EQUITABLE LIFE BY CALLING
(800) 344-6864.
COSTS OF SOLICITATION.
The costs associated with the Meeting will be paid by
Equitable of Iowa. Neither the Trust nor its shareholders
will bear any costs associated with the Meeting, any
additional proxy solicitation or any adjourned session.
OTHER BUSINESS AND SHAREHOLDER PROPOSALS.
The management of the Trust knows of no other business to
be presented at the Meeting other than the matters set forth
in this Statement. If any other business properly comes
before the meeting, the persons designated as Proxies will
exercise their best judgment in deciding how to vote on such
matters.
Pursuant to the applicable laws of the Commonwealth of
Massachusetts, the Declaration of Trust and the By-Laws of
the Trust, the Trust need not hold annual or regular
shareholder meetings, although special meetings may be
called for a specific Series, or for the Trust as a whole,
for purposes such as electing or removing Trustees, changing
fundamental policies or approving a contract for sub-
advisory services. Therefore, it is probable that no annual
meeting of shareholders will be held in 1998 or in
subsequent years unless so required by the 1940 Act or other
applicable laws. For those years in which annual shareholder
meetings are held, proposals which shareholders of the Trust
intend to present for inclusion in the proxy materials with
respect to the annual meeting of shareholders must be
received by the Trust within a reasonable period of time
before the solicitation is made.
Please complete the enclosed voting instruction
authorization and return it promptly in the enclosed self-
addressed postage-paid envelope. You may revoke your proxy
at any time prior to the meeting by written notice to the
Trust or by submitting an authorization card bearing a later
date.
By the Order of the Board
of Trustees
/s/ John A. Merriman
John A. Merriman
Secretary
September 11, 1997
Des Moines, Iowa
13
<PAGE>
ATTACHMENT AND EXHIBIT INDEX
ATTACHMENT ATTACHMENT DESCRIPTION
- ---------- ----------------------
A New Investment
Advisory Agreement between the Equi-
Select Series Trust and Equitable
Investment Services, Inc.
B Other Information
regarding Equitable Investment
Services, Inc.
EXHIBIT EXHIBIT DESCRIPTION
------- -------------------
A New Sub-Advisory
Agreement among the Equi-Select Series
Trust, Equitable Investment Services,
Inc. and Massachusetts Financial
Services Company.
B New Sub-Advisory
Agreement among the Equi-Select Series
Trust, Equitable Investment Services,
Inc. and Credit Suisse Asset Management
Limited.
C New Sub-Advisory
Agreement among the Equi-Select Series
Trust, Equitable Investment Services,
Inc. and Robertson, Stephens & Company
Investment Management, L.P.
D Other information
regarding Massachusetts Financial
Services Company.
E Other information
regarding Credit Suisse Asset
Management Limited.
F Other information
regarding Robertson, Stephens & Company
Investment Management, L.P.
14
<PAGE>
VOTING INSTRUCTION/PROXY
EQUI-SELECT SERIES TRUST
THIS VOTING INSTRUCTION IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OF THE EQUI-SELECT SERIES TRUST (THE "TRUST"). The Board of Trustees of the
Trust recommends that you vote FOR all of the following proposals. The costs
associated with the Meeting will be paid by Equitable of Iowa Companies.
Neither the Trust nor its Shareholders will bear any costs associated with
this Meeting.
[variable name] [variable contract]
[variable joint name] [variable units and shares]
[variable address line 1]
[variable address line 2] PLEASE VOTE BY MARKING ONE BOX
[variable address line 3] NEXT TO EACH PROPOSAL. SIGN BELOW
[variable city, state & zip] EXACTLY AS LISTED HERE AND DATE
THIS VOTING INSTRUCTION, THEN
RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
The Undersigned Contract Owner of a variable annuity contract or
variable life insurance policy (each referred to as "Contract") issued
by Equitable Life Insurance Company of Iowa ("Equitable Life") or
Golden American Life Insurance Company ("Golden American") and funded by a
separate account of Equitable Life or Golden American hereby instructs that the
shares of the named Series of the Trust attributable to his or her Contract be
voted at the Meeting of Shareholders of the Trust to be held on October 9,
1997, at 10:00 a.m., local time, at 909 Locust Street, Des Moines, Iowa, and
at any adjournment thereof, in the manner directed below with respect to the
matters referred to in the Proxy Statement for the Meeting, receipt of which
is hereby acknowledged, and in Equitable Life's or Golden American's
discretion, upon such other matters as may properly come before the Meeting
or any adjournment thereof.
All Agreements, if approved, would be substantively identical to
existing Agreements. All Agreements that are the subject of Proposals
1 and 2, if approved, will become effective upon the merger of Equitable
of Iowa Companies with PFHI Holdings, Inc., a subsidiary of ING Groep, N.V.
UNITS PROPOSAL FOR AGAINST ABSTAIN
aaaa 1. ALL SERIES [ ] [ ] [ ]
To approve a new Investment Advisory
Agreement between the Trust and Equitable
Investment Services, Inc. ("EISI").
2.(A)To approve a new Sub-Advisory Agreement
among the Trust, EISI and Massachusetts
Financial Services Company.
bbbb (i) OTC SERIES [ ] [ ] [ ]
cccc (ii) RESEARCH SERIES [ ] [ ] [ ]
dddd (iii) TOTAL RETURN SERIES [ ] [ ] [ ]
eeee (B)INTERNATIONAL FIXED INCOME SERIES [ ] [ ] [ ]
To approve a new Sub-Advisory Agreement
among the Trust, EISI and Credit
Suisse Management Limited.
(C)To approve a new Sub-Advisory Agreement
among the Trust, EISI and Robertson,
Stephens & Company Investment
Management, L.P. to be effective upon
the merger of Robertson, Stephens &
Company Group LLC with BankAmerica
Corporation.
ffff (i) GROWTH & INCOME SERIES [ ] [ ] [ ]
gggg (ii) VALUE + GROWTH SERIES [ ] [ ] [ ]
3. To approve a new Sub-Advisory Agreement
among the Trust, EISI and Robertson,
Stephens & Company Investment
Management, L.P. to be effective upon
the merger of Robertson, Stephens &
Company Group LLC with BankAmerica
Corporation.
hhhh (i) GROWTH & INCOME SERIES [ ] [ ] [ ]
iiii (ii) VALUE + GROWTH SERIES [ ] [ ] [ ]
This voting instruction will be voted as specified. If this voting
instruction is signed, but NO SPECIFICATION IS MADE, THIS VOTING INSTRUCTION
WILL BE VOTED FOR ALL PROPOSALS. If this voting instruction is not returned
properly executed, such votes will be cast by Equitable Life or Golden
American on behalf of the pertinent separate account in the same proportion
as it votes shares held by that separate account for which it has received
instructions from contract owners participating in the above-listed Series.
PLEASE VOTE BY MARKING ONE BOX NEXT TO EACH PROPOSAL. SIGN EXACTLY AS LISTED
ABOVE, AND DATE THIS VOTING INSTRUCTION, THEN RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
IMPORTANT: Joint Owners must EACH sign. Trustees and others signing in a
representative capacity should so indicate.
Date:__________, 1997 ________________________ ________________________
Contract Owner Joint Owner (If Any)
<PAGE>
</TABLE>
ATTACHMENT A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made as of the ___ day of ____________, 1997 between Equi-
Select Series Trust, an unincorporated business trust organized under the laws
of the Commonwealth of Massachusetts (the "Trust"), and Equitable Investment
Services, Inc., an Iowa corporation (the "Adviser").
W I T N E S S E T H :
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, the Trust is authorized to issue separate series, each of which
offers a separate class of shares of common stock, each having its own
investment objective or objectives, policies and limitations; and
WHEREAS, the Trust currently offers shares in nine series, designated as
the Advantage Portfolio, OTC Portfolio, International Fixed Income Portfolio,
Money Market Portfolio, Mortgage-Backed Securities Portfolio, Research
Portfolio, Total Return Portfolio, Growth & Income Portfolio and Value +
Growth Portfolio ("Current Series"), and the Trust may offer shares of one or
more additional series in the future; and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940; and
WHEREAS, the Trust desires to retain the Adviser to render investment
management and administrative services to the Trust with respect to each
Current Series as indicated on the signature page in the manner and on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. SERVICES OF THE ADVISER.
1.1 INVESTMENT MANAGEMENT SERVICES. The Adviser shall act as the
investment adviser to the Trust and, as such, shall (i) obtain and evaluate
such information relating to the economy, industries, business, securities
markets and securities as it may deem necessary or useful in discharging its
responsibilities hereunder, (ii) formulate a continuing program for the
investment of the assets of the Trust in a manner consistent with its
investment objectives, policies and restrictions, and (iii) determine from
time to time securities to be purchased, sold, retained or lent by the Trust,
and implement those decisions, including the selection of entities with or
through which such purchases, sales or loans are to be effected; provided,
that the Adviser will place orders pursuant to its investment determinations
either directly with the issuer or with a broker or dealer, and if with a
broker or dealer, (a) will attempt to obtain the best net price and most
favorable execution of its orders, and (b) may nevertheless in its discretion
purchase and sell portfolio securities from and to brokers and dealers who
provide the Adviser with research, analysis, advice and similar services and
pay such brokers and dealers in return a higher commission or spread than may
be charged by other brokers or dealers.
The Trust hereby authorizes any entity or person associated with the
Adviser or any sub-adviser retained by the Adviser pursuant to Section 7 of
this Agreement, which is a member of a national securities exchange, to effect
any transaction on the exchange for the account of the Trust which is
permitted by Section
Attachment A-1
<PAGE>
11(a) of the Securities Exchange Act of 1934 and Rule
11a2-2(T) thereunder, and the Trust hereby consents to the retention of
compensation for such transactions in accordance with Rule 11a2-2(T)(a)(iv).
The Adviser shall carry out its duties with respect to the Trust's
investments in accordance with applicable law and the investment objectives,
policies and restrictions set forth in the Trust's then-current Prospectus and
Statement of Additional Information, and subject to such further limitations
as the Trust may from time to time impose by written notice to the Adviser.
1.2 ADMINISTRATIVE SERVICES. The Adviser shall manage the Trust's
business and affairs and shall provide such services required for effective
administration of the Trust as are not provided by employees or other agents
engaged by the Trust; provided, that the Adviser shall not have any obligation
to provide under this Agreement any direct or indirect services to Trust
shareholders, any services related to the distribution of Trust shares, or any
other services which are the subject of a separate agreement or arrangement
between the Trust and the Adviser. Subject to the foregoing, in providing
administrative services hereunder, the Adviser shall:
1.2.1 OFFICE SPACE, EQUIPMENT AND FACILITIES. Furnish without cost to
the Trust, or pay the cost of, such office space, office equipment and office
facilities as are adequate for the Trust's needs.
1.2.2 PERSONNEL. Provide, without remuneration from or other cost to
the Trust, the services of individuals competent to perform all of the Trust's
executive, administrative and clerical functions which are not performed by
employees or other agents engaged by the Trust or by the Adviser acting in
some other capacity pursuant to a separate agreement or arrangement with the
Trust.
1.2.3 AGENTS. Assist the Trust in selecting and coordinating the
activities of the other agents engaged by the Trust, including the Trust's
shareholder servicing agent, custodian, independent auditors and legal
counsel.
1.2.4 TRUSTEES AND OFFICERS. Authorize and permit the Advisers,
directors, officers and employees who may be elected or appointed as Trustees
or officers of the Trust to serve in such capacities, without remuneration
from or other cost to the Trust.
1.2.5 BOOKS AND RECORDS. Assure that all financial, accounting and
other records required to be maintained and preserved by the Trust are
maintained and preserved by it or on its behalf in accordance with applicable
laws and regulations.
1.2.6 REPORTS AND FILINGS. Assist in the preparation of (but not pay
for) all periodic reports by the Trust to its shareholders and all reports and
filings required to maintain the registration and qualification of the Trust
and Trust shares, or to meet other regulatory or tax requirements applicable
to the Trust, under federal and state securities and tax laws.
1.3 ADDITIONAL SERIES. In the event that the Trust from time to time
designates one or more series in addition to the Current Series ("Additional
Series"), it shall notify the Adviser in writing. If the Adviser is willing to
perform services hereunder to the Additional Series, it shall so notify the
Trust in writing. Thereupon, the Trust and the Adviser shall enter into an
Addendum to this Agreement for the Additional Series and the Additional Series
shall be subject to this Agreement.
Attachment A-2
<PAGE>
2. EXPENSES OF THE TRUST.
2.1 EXPENSES TO BE PAID BY ADVISER. The Adviser shall pay all
salaries, expenses and fees of the officers, Trustees and employees of the
Trust who are officers, directors or employees of the Adviser.
In the event that the Adviser pays or assumes any expenses of the Trust
not required to be paid or assumed by the Adviser under this Agreement, the
Adviser shall not be obligated hereby to pay or assume the same or any similar
expense in the future; provided, that nothing herein contained shall be deemed
to relieve the Adviser of any obligation to the Trust under any separate
agreement or arrangement between the parties.
2.2 EXPENSES TO BE PAID BY THE TRUST. The Trust shall bear all
expenses of its operation, except those specifically allocated to the Adviser
under this Agreement or under any separate agreement between the Trust and the
Adviser. Subject to any separate agreement or arrangement between the Trust
and the Adviser, the expenses hereby allocated to the Trust, and not to the
Adviser, include, but are not limited to:
2.2.1 CUSTODY. All charges of depositories, custodians, and other
agents for the transfer, receipt, safekeeping, and servicing of its cash,
securities, and other property.
2.2.2 SHAREHOLDER SERVICING. All expenses of maintaining and servicing
shareholder accounts, including but not limited to the charges of any
shareholder servicing agent, dividend disbursing agent or other agent engaged
by the Trust to service shareholder accounts.
2.2.3 SHAREHOLDER REPORTS. All expenses of preparing, setting in type,
printing and distributing reports and other communications to shareholders.
2.2.4 PROSPECTUSES. All expenses of preparing, setting in type,
printing and mailing annual or more frequent revisions of the Trust's
Prospectus and Statement of Additional Information and any supplements thereto
and of supplying them to shareholders.
2.2.5 PRICING AND PORTFOLIO VALUATION. All expenses of computing the
Trust's net asset value per share, including any equipment or services
obtained for the purpose of pricing shares or valuing the Trust's investment
portfolio.
2.2.6 COMMUNICATIONS. All charges for equipment or services used for
communications between the Adviser or the Trust and any custodian, shareholder
servicing agent, portfolio accounting services agent, or other agent engaged
by the Trust.
2.2.7 LEGAL AND ACCOUNTING FEES. All charges for services and expenses
of the Trust's legal counsel and independent auditors.
2.2.8 TRUSTEES' FEES AND EXPENSES. All compensation of Trustees other
than those affiliated with the Adviser, all expenses incurred in connection
with such unaffiliated Trustees' services as Trustees, and all other expenses
of meetings of the Trustees and committees of the Trustees.
2.2.9 SHAREHOLDER MEETINGS. All expenses incidental to holding meetings
of shareholders, including the printing of notices and proxy materials, and
proxy solicitation therefor.
2.2.10 FEDERAL REGISTRATION FEES. All fees and expenses of registering
and maintaining the registration of the Trust under the Act and the
registration of the Trust's shares under the Securities Act of 1933 (the "1933
Act"), including all fees and expenses incurred in connection with the
preparation, setting in
Attachment A-3
<PAGE>
type, printing, and filing of any Registration
Statement, Prospectus and Statement of Additional Information under the 1933
Act or the Act, and any amendments or supplements that may be made from time
to time.
2.2.11 STATE REGISTRATION FEES. All fees and expenses of qualifying and
maintaining the qualification of the Trust and of the Trust's shares for sale
under securities laws of various states or jurisdictions, and of registration
and qualification of the Trust under all other laws applicable to the Trust or
its business activities (including registering the Trust as a broker-dealer,
or any officer of the Trust or any person as agent or salesman of the Trust in
any state).
2.2.12 SHARE CERTIFICATES. All expenses of preparing and transmitting
the Trust's share certificates.
2.2.13 CONFIRMATIONS. All expenses incurred in connection with the issue
and transfer of Trust shares, including the expenses of confirming all share
transactions.
2.2.14 BONDING AND INSURANCE. All expenses of bond, liability, and other
insurance coverage required by law or regulation or deemed advisable by the
Trustees of the Trust, including, without limitation, such bond, liability and
other insurance expenses that may from time to time be allocated to the Trust
in a manner approved by its Trustees.
2.2.15 BROKERAGE COMMISSIONS. All brokers' commissions and other charges
incident to the purchase, sale or lending of the Trust's portfolio securities.
2.2.16 TAXES. All taxes or governmental fees payable by or with respect
to the Trust to federal, state or other governmental agencies, domestic or
foreign, including stamp or other transfer taxes.
2.2.17 TRADE ASSOCIATION FEES. All fees, dues and other expenses
incurred in connection with the Trust's membership in any trade association or
other investment organization.
2.2.18 NONRECURRING AND EXTRAORDINARY EXPENSES. Such nonrecurring and
extraordinary expenses as may arise including the costs of actions, suits, or
proceedings to which the Trust is a party and the expenses the Trust may incur
as a result of its legal obligation to provide indemnification to its
officers, Trustees and agents.
3. ADVISORY FEE.
3.1 FEE. As compensation for all services rendered facilities
provided and expenses paid or assumed by the Adviser under this Agreement, the
Trust shall pay the Adviser on the last day of each month, or as promptly as
possible thereafter, a fee calculated at the annual rate of the average daily
net assets during such month of each series of the Trust as set forth below:
3.1.1 ADVANTAGE PORTFOLIO. 0.50% of the first $100 million of average
net assets and 0.35% of average net assets over and above $100 million.
3.1.2 OTC PORTFOLIO. 0.80% of the first $300 million of average net
assets and 0.55% of average net assets over and above $300 million.
3.1.3 INTERNATIONAL FIXED INCOME PORTFOLIO. 0.85% of the first $200
million of average net assets, 0.75% of next $300 million, 0.60% of average
net asset of next $500 million, 0.55% of average net assets of next $1 billion
and 0.40% of average net assets over and above $2 billion.
Attachment A-4
<PAGE>
3.1.4 MONEY MARKET PORTFOLIO. 0.375% of the first $50 million of
average net assets and 0.35 % of average net assets over and above $50
million.
3.1.5 MORTGAGE-BACKED SECURITIES PORTFOLIO. 0.75% of the first $200
million of average net assets, 0.65% of average net assets of next $300
million, 0.55% of average net assets of next $500 million, 0.50% of average
net assets of next $1 billion and 0.40% of average net assets over and above
$2 billion.
3.1.6 RESEARCH PORTFOLIO. 0.80% of the first $300 million of average
net assets and 0.55% of average net assets over and above $300 million.
3.1.7 TOTAL RETURN PORTFOLIO. 0.80% of the first $300 million of
average net assets and 0.55% of average net assets over and above $300
million.
3.1.8 GROWTH & INCOME PORTFOLIO. 0.95% of the first $200 million
average net assets and 0.75% of average net assets over and above $200
million.
3.1.9 VALUE + GROWTH PORTFOLIO. 0.95% of the first $500 million average
net assets and 0.75% of average net assets over and above $500 million.
4. RECORDS.
4.1 TAX TREATMENT. The Adviser shall maintain the books and records
of the Trust in such a manner that treats each series as a separate entity for
federal income tax purposes.
4.2 OWNERSHIP. All records required to be maintained and preserved by
the Trust pursuant to the provisions or rules or regulations of the Securities
and Exchange Commission under Section 31(a) of the Act and maintained and
preserved by the Adviser on behalf of the Trust are the property of the Trust
and shall be surrendered by the Adviser promptly on request by the Trust;
provided, that the Adviser may at its own expense make and retain copies of
any such records.
5. REPORTS TO ADVISER.
The Trust shall furnish or otherwise make available to the Adviser such
copies of the Trust's Prospectus, Statement of Additional Information,
financial statements, proxy statements, reports, and other information relating
to its business and affairs as the Adviser may, at any time or from time to
time, reasonably require in order to discharge its obligations under this
Agreement.
6. REPORTS TO THE TRUST.
The Adviser shall prepare and furnish to the Trust such reports,
statistical data and other information in such form and at such intervals as
the Trust may reasonably request.
7. RETENTION OF SUB-ADVISER.
Subject to the Trust's obtaining the initial and periodic approvals
required under Section 15 of the Act, the Adviser may retain one or more sub-
advisers, at the Adviser's own cost and expense, for the purpose of managing
the investments of the assets of one or more series of the Trust. Retention
of one or more sub-advisers shall in no way reduce the responsibilities or
obligations of the Adviser under this Agreement and the Adviser shall be
responsible to the Trust for all acts or omissions of any sub-adviser in
connection with the performance of the Adviser's duties hereunder.
Attachment A-5
<PAGE>
8. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Adviser or any
affiliated person of the Adviser to render investment management and
administrative services to other investment companies, to act as investment
adviser or investment counselor to other persons, firms or corporations, or to
engage in other business activities.
9. LIMITATION OF LIABILITY OF ADVISER AND ITS PERSONNEL.
Neither the Adviser nor any director, officer or employee of the Adviser
performing services for the Trust at the direction or request of the Adviser
in connection with the Adviser's discharge of its obligations hereunder shall
be liable for any error of judgment or mistake of law or for any loss suffered
by the Trust in connection with any matter to which this Agreement relates,
and the Adviser shall not be responsible for any action of the Trustees of the
Trust in following or declining to follow any advice or recommendation of the
Adviser; PROVIDED, that nothing herein contained shall be construed (i) to
protect the Adviser against any liability to the Trust or its shareholders to
which the Adviser would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of the Adviser's duties, or
by reason of the Adviser's reckless disregard of its obligations and duties
under this Agreement, or (ii) to protect any director, officer or employee of
the Adviser who is or was a Trustee or officer of the Trust against any
liability of the Trust or its shareholders to which such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
person's office with the Trust.
10. NO PERSONAL LIABILITY OF TRUSTEES OR SHAREHOLDERS.
This Agreement is made by the Trust on behalf of its various Current
Series pursuant to authority granted by the Trustees, and the obligations
created hereby are not binding on any of the Trustees or shareholders of the
Trust individually, but bind only the property of each Current Series of the
Trust.
11. EFFECT OF AGREEMENT.
Nothing herein contained shall be deemed to require the Trust to take any
action contrary to its Declaration of Trust or its By-Laws or any applicable
law, regulation or order to which it is subject or by which it is bound, or to
relieve or deprive the Trustees of the Trust of their responsibility for and
control of the conduct of the business and affairs of the Trust.
12. TERM OF AGREEMENT.
The term of this Agreement shall begin on the date first above written,
and unless sooner terminated as hereinafter provided, this Agreement shall
remain in effect for two (2) years from such date. Thereafter, this Agreement
shall continue in effect with respect to the Trust from year to year, subject
to the termination provisions and all other terms and conditions hereof;
PROVIDED, such continuance with respect to the Trust is approved at least
annually by vote of the holders of a majority of the outstanding voting
securities of the Trust or by the Trustees of the Trust; PROVIDED, that in
either event such continuance is also approved annually by the vote, cast in
person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not parties to this Agreement or
interested persons of either party hereto; and PROVIDED FURTHER that the
Adviser shall not have notified the Trust in writing at least sixty (60) days
prior to the end of the initial two (2) year period, or at least sixty (60)
days prior to the anniversary date of the execution of this Agreement of any
year thereafter that it does not desire such continuation. The Adviser shall
furnish to the
Attachment A-6
<PAGE>
Trust, promptly upon its request, such information as may
reasonably be necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment thereof.
13. AMENDMENT OR ASSIGNMENT OF AGREEMENT.
Any amendment to this Agreement shall be in writing signed by the parties
hereto; PROVIDED, that no such amendment shall be effective unless authorized
on behalf of the Trust (i) by resolution of the Trust's Trustees, including
the vote or written consent of a majority of the Trust's Trustees who are not
parties to this Agreement or interested persons of either party hereto, and
(ii) by vote of a majority of the outstanding voting securities of the Trust.
This Agreement shall terminate automatically and immediately in the event of
its assignment.
14. TERMINATION OF AGREEMENT.
This Agreement may be terminated at any time by either party hereto,
without the payment of any penalty, upon sixty (60) days' prior written notice
to the other party; PROVIDED, that in the case of termination by the Trust,
such action shall have been authorized (i) by resolution of the Trust's Board
of Trustees, including the vote or written consent of Trustees of the Trust
who are not parties to this Agreement or interested persons of either party
hereto, or (ii) by vote of a majority of the outstanding voting securities of
the Trust.
15. INTERPRETATION AND DEFINITION OF TERMS.
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
Act shall be resolved by reference to such term or provision of the Act and to
interpretation 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 Securities and Exchange Commission validly issued pursuant to
the Act. Specifically, the terms "vote of a majority of the outstanding
voting securities," "interested persons," "assignment" and "affiliated person,"
as used in this Agreement shall have the meanings assigned to them by Section
2(a) of the Act. In addition, when the effect of a requirement of the Act
reflected in any provision of this Agreement is modified, interpreted or
relaxed by a rule, regulation or order of the Securities and Exchange
Commission, whether of special or of general application, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
16. CAPTIONS.
The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
17. EXECUTION IN COUNTERPARTS.
This Agreement may be executed simultaneously in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Attachment A-7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective seals to be hereunto affixed, as of the date and year first above
written.
EQUI-SELECT SERIES TRUST for its Advantage Portfolio, OTC Portfolio,
International Fixed Income Portfolio, Money Market Portfolio, Mortgage-Backed
Securities Portfolio, Research Portfolio, Total Return Portfolio, Growth &
Income Portfolio and Value + Growth Portfolio
Attest:
___________________________ By:/s/______________________________________
Secretary Paul R. Schlaack, President
EQUITABLE INVESTMENT SERVICES, INC.
Attest:
___________________________ By:/s/______________________________________
Secretary Paul R. Schlaack, President
Attachment A-8
<PAGE>
<PAGE>
ATTACHMENT B
OTHER INFORMATION ABOUT
EQUITABLE INVESTMENT SERVICES, INC.
The directors and principal executive officer of
Equitable Investment Services, Inc. and their principal
occupations are listed below. Unless otherwise indicated
the business address of each such person is 909 Locust
Street, Des Moines, Iowa 50309.
NAME AND POSITION
WITH PORTFOLIO MANAGER PRINCIPAL OCCUPATION
- ---------------------- --------------------
Lawrence V. Durland, Jr. Senior Vice President of Equitable of Iowa
Director Companies and affiliates
Frederick S. Hubbell Chairman, President and Chief Executive Officer of
Director and Chairman of Equitable of Iowa Companies, Equitable Life
the Board of Directors Insurance Company of Iowa and USG Annuity & Life
Company and Chairman of Golden American Life
Insurance Company.
Terry Kendall President and Chief Executive Officer of Golden
Director American Life Insurance Company; Chairman, President
1001 Jefferson Street, and Chief Executive Officer of First Golden American
Suite 400 Life Insurance Company of New York; Executive Vice
Wilmington, DE 19801 President Equitable Life Insurance Company of Iowa
and USG Annuity & Life Company.
Paul E. Larson Executive Vice President, Chief Financial Officer of
Director Equitable of Iowa Companies and affiliates.
Thomas L. May Senior Vice President of Equitable Life Insurance
Director Company of Iowa and USG Annuity & Life Company.
John A. Merriman Secretary and General Counsel of Equitable of Iowa
Director Companies.
Beth B. Neppl Vice President--Human Resources of Equitable of Iowa
Director Companies and affiliates.
Paul R. Schlaack President and Chief Executive Officer of Equitable
President, Chief Executive Investment Services, Inc.
Officer and Director
Jerome L. Sychowski Senior Vice President and Chief Information Officer
Director of Equitable of Iowa Companies and affiliates.
Attachment B-1
<PAGE>
Equitable Investment Services also acts as investment
adviser to the Limited Maturity Bond Series of The GCG Trust
which has investment objectives and policies similar to
those of the Advantage Series. Equitable Investment
Services, Inc. also acts as investment adviser to the Liquid
Asset Series of The GCG Trust which has investment
objectives and policies similar to those of the Money Market
Series. The following table sets forth the name of each
such investment company, its approximate net assets as of
December 31, 1996, and the annual advisory fee charged by
Equitable Investment Services, Inc. (as a percentage of
average daily net assets).
NAME OF INVESTMENT COMPANY NET ASSETS ADVISORY FEE
- -------------------------- ---------- ------------
THE GCG TRUST:
Limited Maturity Bond Series $81.3 Million .30% of first $25 million;
.25% of next $50 million;
.20% of the next $75 million;
.15% of amount over $150 million;
(subject to minimum annual fee
of $35,000)
Liquid Asset Series $39.1 Million .20% of first $25 million;
.15% of next $50 million;
.10% of amount over $75 million
(subject to minimum annual fee
of $35,000)
Attachment B-2
<PAGE>
<PAGE>
EXHIBIT A
SUB-ADVISORY AGREEMENT
This Sub-Advisory Agreement is made and entered into on this ___ day of
__________, 1997, by and among Massachusetts Financial Services Company, a
Delaware corporation (the "Sub-Adviser"), Equitable Investment Services, Inc.,
an Iowa corporation (the "Adviser"), and Equi-Select Series Trust, a
Massachusetts business trust (the "Trust").
WITNESSETH:
WHEREAS, the Adviser is engaged in the investment of the Trust's assets
in accordance with the Trust's current Prospectus and Statement of Additional
Information (collectively the "Prospectus"); and
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement dated ________________________, 1997 ("Investment Advisory
Agreement"); and
WHEREAS, under the terms of the Investment Advisory Agreement, the
Adviser may delegate its responsibilities for the management of the investment
of the assets of one or more portfolios of the Trust to one or more sub-
advisers; and
WHEREAS, Adviser desires to so delegate responsibility for management of
the investments of one or more portfolios to Sub-Adviser, and Sub-Adviser
agrees to manage the investment of one or more portfolios in accordance with
this Sub-Advisory Agreement and the Prospectus;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser hereby appoints Sub-Adviser to act as the investment advisor
with respect to one or more portfolios as identified in "Exhibit A", which is
attached hereto and by this reference is incorporated herein (singly or
collectively the "Portfolio"). Sub-Adviser hereby accepts such appointment
and agrees to render the services herein set forth, for the compensation
herein provided.
2. Subject to the supervision of the Trustees of Trust and the Adviser, Sub-
Adviser will manage the securities and investments (including cash) of the
Portfolio, including the purchase, retention and disposition thereof, and the
execution of agreements relating thereto in accordance with the Portfolio's
and Trust's investment objectives, policies and restrictions as those are
stated in the Prospectus and further subject to the following understandings:
(a) The Sub-Adviser shall furnish a continuous investment program for
the Portfolio and in so doing shall determine from time to time what
investments or securities will be purchased, retained or sold by the
Portfolio, and what portion of the assets will be invested or held uninvested
as cash;
(b) The Sub-Adviser in the performance of its duties and obligations
under this Agreement shall act in conformity with the terms of the Declaration
of Trust, Bylaws and the Prospectus of the Trust, and any amendments thereto,
each of which shall be promptly furnished to the Sub-Adviser by the Trust, and
with the instructions and directions of the Trustees of the Trust and the
Board of Directors and officers of the Adviser,
A-1
<PAGE>
and will conform to and comply
with the requirements of the Investment Company Act of 1940 (the "1940 Act"),
and all other applicable federal and state laws and regulations;
(c) The Sub-Adviser shall determine the securities to be purchased or
sold by the Portfolio and, as agent for the Portfolio, will effect
transactions pursuant to its determinations either directly with the issuer or
with any broker and/or dealer in such securities;
(d) The Sub-Adviser shall maintain books and records with respect to the
securities transactions of the Portfolio and shall render to the Adviser or
Adviser's designees, such periodic and special reports as the Adviser may
reasonably request;
(e) The Sub-Adviser shall provide the Trust's Custodian with all
requested information relating to all transactions concerning the assets of
the Portfolio; and
(f) The investment advisory services of Sub-Adviser to the Portfolio
under this Sub-Advisory Agreement are not to be deemed exclusive, and the Sub-
Adviser shall be free to render similar service to others so long as the
services required hereunder are not impaired thereby.
(g) The Sub-Adviser shall provide such additional services to the
Adviser in connection with the sale of Trust shares and/or Equitable Life
Insurance Company of Iowa variable insurance contracts, as reasonably
requested by the Adviser. Such services shall include, but not necessarily be
limited to, presentations by representatives of the Sub-Adviser at investment
seminars, conferences and other industry meetings. No parties to the
Agreement will use any materials describing any other party without the prior
written approval of the party being described. Any materials utilized by the
Adviser which contain any information relating to the Sub-Adviser and/or its
affiliates shall be submitted to the Sub-Adviser for written approval prior to
use, not less than five (5) business days before such approval is requested by
the Adviser. Any materials utilized by the Sub-Adviser which contain any
information relating to the Adviser, Equitable Life Insurance Company of Iowa
(including any information relating to its separate accounts or variable
insurance contracts) or the Trust shall be submitted to the Adviser for
written approval prior to use, not less than five (5) business days before
such approval is requested by the Sub-Adviser.
(h) The Sub-Adviser is authorized, subject to the supervision of the
Adviser and the Trustees of the Trust, to place orders for the purchase and
sale of the Portfolio's Investments with or through such persons, brokers or
dealers, including the Sub-Adviser or affiliates thereof, and to negotiate
commissions to be paid on such transactions in accordance with the Portfolio's
policy with respect to brokerage as set forth in the Prospectus. The Sub-
Adviser may, on behalf of the Portfolio, pay brokerage commissions to a broker
which provides brokerage and research services to the Sub-Adviser in excess of
the amount another broker would have charged for effecting the transaction,
provided (i) the Sub-Adviser determines in good faith that the amount is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker in terms of the particular transaction or in
terms of the Sub-Adviser's overall responsibilities with respect to the
Portfolio and the accounts as to which the Sub-Adviser exercises investment
discretion, (ii) such payment is made in compliance with Section 28(e) of the
Securities Exchange Act of 1934, as amended, and any other applicable laws and
regulations, and (iii) in the opinion of the Sub-Adviser, the total
commissions paid by the Portfolio will be reasonable in relation to the
benefits to the Portfolio over the long term. It is recognized that the
services provided by such brokers may be useful to the Sub-Adviser in
connection with the Sub-Adviser's service to other clients. On occasions
when the Sub-Adviser deems the purchase or sale of a security to be in the best
interests of the Portfolio as well as other clients of the Sub-Adviser, the
Sub-Adviser, to the extent permitted by applicable laws and regulations, may,
but shall be under no obligation to, aggregate the securities to be sold or
purchased in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of securities
so sold or purchased, as well as the expenses
A-2
<PAGE>
incurred in the transaction,
will be made by the Sub-Adviser in the manner the Sub-Adviser considers to be
the most equitable and consistent with its fiduciary obligations to the
Portfolio and to such other clients;
3. The Sub-Adviser agrees that all records which it maintains for the
Portfolio pursuant to Paragraph 2(d) are the property of the Trust and will
promptly surrender any of such records to Adviser upon the Trustees' or
Adviser's request. The Sub-Adviser shall preserve for periods prescribed by
Rule 31a-2 of the 1940 Act any such records as are required to be maintained
by the Sub-Adviser with respect to the Portfolio by Rule 31a-1 of the 1940
Act.
4. The Adviser shall pay the Sub-Adviser pursuant to the Fee Schedule
contained in "Exhibit B", which is attached hereto and by this reference is
incorporated herein. The fee prescribed in Exhibit C shall be calculated
daily and payable monthly in arrears at an annual rate per Exhibit C of the
Portfolio's average daily net assets.
5. The Sub-Adviser shall 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 Sub-Advisory Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Sub-Advisory Agreement.
6. The term of this Sub-Advisory Agreement shall begin on the date first
above written, and unless sooner terminated as hereinafter provided, this Sub-
Advisory Agreement shall remain in effect for two (2) years from such date.
Thereafter, this Sub-Advisory Agreement shall continue in effect with respect
to the Portfolios from year to year, subject to the termination provisions and
all other terms and conditions hereof; PROVIDED, such continuance with respect
to the Portfolios is approved at least annually by vote of the holders of a
majority of the outstanding voting securities of the Portfolio or by the
Trustees of the Trust; PROVIDED, that in either event such continuance is also
approved annually by the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trustees of the Trust
who are not parties to this Sub-Advisory Agreement or interested persons of
any party hereto; and PROVIDED FURTHER that the Sub-Adviser shall not have
notified the Trust in writing at least sixty (60) days prior to the end of the
initial two (2) year period, or at least sixty (60) days prior to the
anniversary date of the execution of this Sub-Advisory Agreement of any year
thereafter that it does not desire such continuation. The Sub-Adviser shall
furnish to the Trust, promptly upon its request, such information as may
reasonably be necessary to evaluate the terms of this Sub-Advisory Agreement
or any extension, renewal or amendment thereof. This Sub-Advisory Agreement
may be terminated at any time by any party hereto, without the payment of any
penalty, upon sixty (60) days' prior written notice to the other parties;
PROVIDED, that in the case of termination by the Trust, such action shall have
been authorized (i) by resolution of the Trust's Board of Trustees, including
the vote or written consent of Trustees of the Trust
who are not parties to this Sub-Advisory Agreement or interested persons of
any party hereto, or (ii) by vote of a majority of the outstanding voting
securities of the Portfolio. This Agreement shall automatically terminate in
the event of its "assignment" (as defined in the 1940 Act).
7. The Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor and shall not, unless otherwise expressly provided
herein or authorized by the Trustees of Trust from time to time, have any
authority to act for or represent the Portfolio or Trust in any way or
otherwise be deemed to be an agent of the Portfolio or the Trust.
8. This Sub-Advisory Agreement is entered into by the Trust on behalf of one
or more Portfolios identified in Exhibit B pursuant to authority granted by
the Trustees, and the obligations created hereby are not binding on any of the
Trustees or shareholders of the Trust individually, but bind only the property
of such Portfolios of the Trust.
A-3
<PAGE>
9. This Sub-Advisory Agreement may be amended only in accordance with the
1940 Act.
10. Any notice that is required to be given by the parties to each other
under the terms of this Sub-Advisory Agreement shall be in writing, delivered,
or mailed postpaid to the other party, or transmitted by facsimile with
acknowledgement of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Sub-Adviser:
Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116
Attention: Stephen E. Cavan
Facsimile: (617) 954-6624
(b) If to the Manager:
Equitable Investment Services, Inc.
909 Locust Street
Des Moines, IA 50309
Attention: Paul R. Schlaack
Facsimile: (515) 698-7538
(c) If to the Trust:
Equi-Select Series Trust
909 Locust Street
Des Moines, IA 50309
Attention: Paul R. Schlaack
Facsimile: (515) 698-7538
11. This Sub-Advisory Agreement shall be governed and construed in accordance
with the laws of The Commonwealth of Massachusetts.
12. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original.
A-4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Sub-Advisory
Agreement to be executed by their respective officers designated below as of
the day and year first above written.
ADVISER: TRUST:
EQUITABLE INVESTMENT EQUI-SELECT SERIES TRUST
SERVICES, INC.
By:_______________________________ By:______________________________
Its President Its Trustee
SUB-ADVISER:
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By:_______________________________
Its____________________
A-5
<PAGE>
SUB-ADVISORY AGREEMENT
EXHIBIT A
PORTFOLIO LISTING
OTC PORTFOLIO
RESEARCH PORTFOLIO
TOTAL RETURN PORTFOLIO
SUB-ADVISORY AGREEMENT
EXHIBIT B
FEE SCHEDULE
OTC Portfolio .40% of first $300 million
.25% of average net assets over
and above $300 million
Research Portfolio .40% of first $300 million
.25% of average net assets over
and above $300 million
Total Return Portfolio .40% of first $300 million
.25% of average net assets over
and above $300 million
A-6
<PAGE>
<PAGE>
EXHIBIT B
SUB-ADVISORY AGREEMENT
This Sub-Advisory Agreement is made and entered into on this ___ day of
__________, 1997, by and among Credit Suisse Asset Management Limited, a
company incorporated in England (the "Sub-Adviser"), Equitable Investment
Services, Inc., an Iowa corporation (the "Adviser"), and Equi-Select Series
Trust, a Massachusetts business trust (the "Trust").
WITNESSETH:
WHEREAS, the Adviser is engaged pursuant to an Investment Advisory
Agreement (the "Advisory Agreement") with the Trust in the investment of the
Trust's assets in accordance with the Trust's Prospectus and Statement of
Additional Information (collectively the "Prospectus"); and
WHEREAS, pursuant to the Advisory Agreement the Adviser may delegate its
responsibilities for the management of the investment of the assets of one or
more portfolios of the Trust to one or more sub-advisers; and
WHEREAS, Adviser desires to so delegate responsibility for management of
the investments of one or more portfolios to Sub-Adviser, and Sub-Adviser
agrees to manage the investment of one or more portfolios in accordance with
this Sub-Advisory Agreement and the Prospectus;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser hereby appoints Sub-Adviser to act as the investment advisor
to Adviser with respect to one or more portfolios as identified in "Schedule
A", which is attached hereto and by this reference is incorporated herein,
(singly or collectively the "Portfolio"). Sub-Adviser hereby accepts such
appointment and agrees to render the services herein set forth, for the
compensation set forth on Schedule B, which is attached hereto and by this
reference is incorporated herein. Adviser represents to Sub-Adviser that it
is authorized pursuant to the Advisory Agreement to delegate to the Sub-
Adviser all of the services to be performed by the Sub-Adviser pursuant
hereto.
2. Subject to the supervision of the Trustees of the Trust and the Adviser,
Sub-Adviser will manage the securities and investments (including cash) of the
Portfolio, including the purchase, retention and disposition thereof, and the
execution of agreements relating thereto in accordance with the Portfolio's
investment objectives, policies and restrictions as those are stated in the
Prospectus and further subject to the following understandings:
(a) The Sub-Adviser shall furnish a continuous investment program for
the Portfolio and in so doing shall determine from time to time what
investments or securities will be purchased, retained or sold by the
Portfolio, and what portion of the assets will be invested or held uninvested
as cash;
(b) The Sub-Adviser in the performance of its duties and obligations
under this Agreement shall act in conformity with the Declaration of Trust,
Bylaws and the Prospectus of the Trust, and with the instructions and
directions of the Trustees of the Trust and, to the extent consistent
therewith and herewith, of the Adviser, and will conform to and comply with
the requirements of the Investment Company Act of 1940 (the "1940 Act"), and
all other applicable federal and state laws and regulations;
B-1
<PAGE>
(c) The Sub-Adviser shall determine the securities to be purchased or
sold by the Portfolio and, as agent for the Portfolio, will effect
transactions pursuant to its determinations either directly with the issuer or
with any broker and/or dealer in such securities. The Sub-Adviser shall also
determine whether or not the Portfolio shall enter into repurchase or reverse
repurchase agreements or engage in any other investment transactions or
techniques that are consistent with subsection (b) above;
(d) The Sub-Adviser shall maintain all books and records with respect to
the securities transactions of the Portfolio and shall render to the Adviser
or Adviser's designees, such periodic and special reports as the Adviser may
reasonably request;
(e) The Sub-Adviser shall, to the extent the information is within its
control, provide or cause to be provided to the Trust's Custodian all
requested information relating to all transactions concerning the assets of
the Portfolio (other than share transactions of the Portfolio);
(f) The investment advisory services of Sub-Adviser to the Portfolio
under this Sub-Advisory Agreement are not to be deemed exclusive, and the Sub-
Adviser shall be free to render similar service to others;
(g) The Sub-Adviser is authorized, subject to the supervision of the
Adviser and the Trustees of the Trust, to place orders for the purchase and
sale of the Portfolio's investments with or through such persons, brokers or
dealers, including the Sub-Adviser or affiliates thereof, and to negotiate
commissions to be paid on such transactions in accordance with the Portfolio's
policy with respect to brokerage as set forth in the Prospectus. The Sub-
Adviser may, on behalf of the Portfolio, pay brokerage commissions to a broker
which provides brokerage and research services to the Sub-Adviser in excess of
the amount another broker would have charged for effecting the transaction,
provided the Sub-Adviser determines in good faith that the amount is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker in terms of the particular transaction or in
terms of the Sub-Adviser's overall responsibilities with respect to the
Portfolio and the accounts as to which the Sub-Adviser exercises investment
discretion. It is recognized that the services provided by such brokers may
be useful to the Sub-Adviser in connection with the Sub-Adviser's service to
other clients. On occasions when Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other
customers, the Sub-Adviser may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to be so
sold or purchased in order to obtain the best execution and lower brokerage
commissions, if any. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will be made by
Sub-Adviser in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the Portfolio and, if applicable, to such
other customers. The Trust and the Adviser acknowledge that in order to
comply with Federal Securities laws and related regulatory requirements, there
may be periods when the Sub-Adviser will not be permitted to initiate or
recommend certain types of transactions in the securities of issuers for which
affiliates of the Sub-Adviser are performing investment banking services, and
neither the Trust nor the Adviser will be advised of that fact. For example,
during certain periods when affiliates of the Sub-Adviser are engaged in an
underwriting or other distribution of a company's securities, the Sub-Adviser
may be prohibited from purchasing or recommending the purchase of certain
securities of that company for its clients. Similarly, the Sub-Adviser may on
occasion be prohibited from selling or recommending the sale of securities of
a company for which affiliates are providing investment banking services.
(h) The Sub-Adviser shall provide marketing support to the Adviser in
connection with the sale of Trust shares and/or Equitable Life Insurance
Company of Iowa variable insurance contracts, as reasonably requested by the
Adviser. Such support shall include, but not necessarily be limited to,
presentations by representatives of the Sub-Adviser at investment seminars,
conferences and other industry meetings. Any materials utilized by the
Adviser which contain any information relating to the Sub-Adviser shall be
submitted
B-2
<PAGE>
to the Sub-Adviser for approval prior to use, not less than five (5)
business days before such approval is needed by the Adviser. Any materials
utilized by the Sub-Adviser which contain any information relating to the
Adviser, Equitable Life Insurance Company of Iowa (including any information
relating to its separate accounts or variable annuity contracts) or the Trust
shall be submitted to the Adviser for approval prior to use, not less than
five (5) business days before such approval is needed by the Sub-Adviser,
which approval shall not be unreasonably withheld.
(i) The Trust represents that it has delivered true and correct copies
to the Sub-Adviser of, and agrees to promptly notify and deliver to the Sub-
Adviser all future amendments and supplements to, the Prospectus, the Trust's
Declaration of Trust, the Trust's Bylaws, resolutions or other instructions of
the Trustees relevant to the Sub-Adviser's performance of its duties under
this Agreement, the Advisory Agreement and the Trust's Registration Statement
on Form N-1A.
3. The Sub-Adviser agrees that all records which it maintains for the
Portfolio pursuant to 2(d) are the property of the Trust and will promptly
surrender any of such records to Adviser upon the Trustees' or Adviser's
request. The Sub-Adviser shall preserve for periods prescribed by Rule 31a-2
of the 1940 Act any such records as are required to be maintained by the Sub-
Adviser with respect to the Portfolio by Rule 31a-1 of the 1940 Act.
4. For performance of the services hereunder with respect to the Portfolios,
the Adviser shall pay the Sub-Adviser pursuant to the Fee Schedule contained
in Schedule B. The fee prescribed in Schedule B shall be calculated daily and
payable monthly in arrears at an annual rate per Schedule B of the Portfolio's
average daily net assets.
5. The Sub-Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust, Portfolio or the Adviser in
connection with the matters to which this Sub-Advisory Agreement relates,
except for a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Sub-Advisory
Agreement.
6. The term of this Sub-Advisory Agreement shall begin on the date first
above written, and unless sooner terminated as hereinafter provided, this Sub-
Advisory Agreement shall remain in effect for two (2) years from such date.
Thereafter, this Sub-Advisory Agreement shall continue in effect with respect
to the Portfolios from year to year, subject to the termination provisions and
all other terms and conditions hereof; PROVIDED, such continuance with respect
to the Portfolios is approved at least annually by vote of the holders of a
majority of the outstanding voting securities of the Portfolio or by the
Trustees of the Trust; PROVIDED, that in either event such continuance is also
approved annually by the vote, cast in person at a meeting called for the
purpose of vot-ing on such approval, of a majority of the Trustees of the
Trust who are not parties to this SubAdvisory Agreement or interested persons
of any party hereto; and PROVIDED FURTHER that the Sub-Adviser shall not have
notified the Trust in writing at least sixty (60) days prior to the end of the
initial two (2) year period, or at least sixty (60) days prior to the
anniversary date of the execution of this Sub-Advisory Agreement of any year
thereafter that it does
not desire such continuation. The Sub-Adviser shall furnish to the Trust,
promptly upon its request, such information as may reasonably be necessary to
evaluate the terms of this Sub-Advisory Agreement or any extension, renewal or
amendment thereof. This Sub-Advisory Agreement may be terminated at any time
by any party hereto, without the payment of any penalty, upon sixty (60) days'
prior written notice to the other parties; PROVIDED, that in the case of
termination by the Trust, such action shall have been authorized (i) by
resolution of the Trust's Board of Trustees, including the vote or written
consent of Trustees of the Trust who are not parties to this Sub-Advisory
Agreement or interested persons of any party hereto, or (ii) by vote of a
majority of the outstanding voting securities of the Portfolio. This
Agreement shall automatically terminate in the event of its "assignment" (as
defined in the 1940 Act).
B-3
<PAGE>
7. The Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor and shall not, unless otherwise expressly provided
herein or authorized by the Trustees of the Trust from time to time, have any
authority to act for or represent the Portfolio or Trust in any way or
otherwise be deemed to be an agent of the Portfolio or the Trust.
7. This Sub-Advisory Agreement is entered into by the Trust pursuant to
authority granted by the Trustees, and the obligations created hereby are not
binding on any of the Trustees or shareholders of the Trust individually, but
bind only the property of the Trust and the Portfolios.
9. This Sub-Advisory Agreement may be amended only in accordance with the
1940 Act.
10. Any notice that is required to be given by the parties to each other
under the terms of this Sub-Advisory Agreement shall be in writing, delivered,
or mailed postpaid to the other party, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Sub-Adviser:
Credit Suisse Asset Management Limited
Beaufort House
London, England
Attention: Mark J. Morris
(b) If to the Manager:
Equitable Investment Services, Inc.
909 Locust Street
Des Moines, Iowa 50309
Attention: Paul R. Schlaack
Facsimile: (515) 698-7538
(c) If to the Trust:
Equi-Select Series Trust
909 Locust Street
Des Moines, Iowa 50309
Attention: Paul R. Schlaack
Facsimile: (515) 698-7538
11. This Sub-Advisory Agreement shall be governed and construed in accordance
with the laws of The Commonwealth of Massachusetts.
12. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original.
13. Under the rules of the Investment Management Regulatory Organization
("IMRO"), clients must be placed in specific categories which are dictated by
different considerations including the nature and financial description of the
client, the experience of the client in certain investments and other factors.
On the basis of the information which the Adviser has given, it is a Non-
Private Customer in relation to the services to be provided in accordance with
this Agreement.
B-4
<PAGE>
14. The Sub-Adviser understands that the Adviser does not require transaction
confirmation notes from Sub-Adviser. The information which would have been
contained in the Adviser's confirmation notes will be included in the periodic
statements specified below. The Sub-Adviser will deliver or send to the
Adviser on a monthly basis and after the date of termination, a statement of
the contents and value of the Investment Portfolio and an assessment of its
performance.
Each statement will include:
a) the number of units of each asset comprising the Portfolio, the aggregate
of the initial value of each and the aggregate of their value at the time the
statement is made up; and
b) the basis on which such values have been calculated with a note of any
change in such basis from that used in the immediately preceding statement.
This basis shall be:
i) taken from mid-market price indications from a representative sample
of market makers, or
ii) where, in the opinion of the Sub-Adviser, the investment concerned
is not readily realizable then it shall be taken at such fair valuation as may
be determined on each occasion by the Sub-Adviser.
15. The Sub-Adviser may undertake transactions in options, future, or
contracts for differences ("Relevant Transactions") in accordance with the
Prospectus. The markets on which Relevant Transactions are executed can be
highly volatile. Such investments carry a high risk of loss and, in the case
of futures, contracts for differences and the grant of options, a relatively
small adverse market movement may result not only in the loss of the original
investment but also in unquantifiable further loss exceeding any margin
deposited. The Sub-Adviser may pay margin, or (subject to the rules of the
exchange concerned) deposit investments by way of margin or collateral, on any
Relevant Transaction out of the funds or investments in the Portfolio. The
Sub-Adviser may enter into Relevant Transactions under which the Trust may be
required to pay amounts, or deposit investments, in respect of margin or
collateral in excess of (as the case may be) the funds or the investments held
in the Portfolio. Subject to the limits specified in the Prospectus, the Sub-
Adviser may borrow on the Trust's behalf in order to meet any calls for margin
or collateral and the Sub-Adviser and the Trust acknowledge that the amounts
which may be so committed are unquantifiable, due to the nature of the
commitments. In connection with Relevant Transactions, the Sub-Adviser may,
without reference to the Adviser,
make contractual or other arrangements to settle or close out outstanding
obligations in circumstances required by any exchange or intermediate broker
with or through which the Sub-Adviser effects such transactions.
16. The Sub-Adviser, the Adviser and the Trust may record telephone
conversations with each other. Any recordings made by the Sub-Adviser shall
be the property of the Sub-Adviser.
17. The Sub-Adviser has in operation a written procedure in accordance with
the rules of IMRO for the effective consideration and proper handling of
complaints from clients. Any complaint by the Adviser and/or the Trust
hereunder should be sent in writing to the Compliance Officer of the Sub-
Adviser at the address specified in Section 10. The Adviser and/or the Trust
are also entitled to make any complaint about the Sub-Adviser to IMRO.
B-5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Sub-Advisory
Agreement to be executed by their respective officers designated below as of
the day and year first above written.
ADVISER: TRUST:
EQUITABLE INVESTMENT EQUI-SELECT SERIES TRUST
SERVICES, INC.
By:__________________________ By:__________________________
Its President Its Trustee
SUB-ADVISER:
CREDIT SUISSE ASSET
MANAGEMENT LIMITED
By:__________________________
Its____________________
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SCHEDULE A
PORTFOLIO LISTING
INTERNATIONAL FIXED INCOME PORTFOLIO
SCHEDULE B
FEE SCHEDULE
International Fixed Income Portfolio .45% of first $200 million
.40% of next $300 million
.30% of next $500 million
.25% of next $1 billion
.10% of average net assets over and above
$2 billion
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EXHIBIT C
SUB-ADVISORY AGREEMENT
This Sub-Advisory Agreement is made and entered into on this ___ day of
______________, 1997, by and among Robertson, Stephens & Company Investment
Management, L.P., a California limited partnership (the "Sub-Adviser"),
Equitable Investment Services, Inc., an Iowa corporation (the "Adviser"), and
Equi-Select Series Trust, a Massachusetts business trust (the "Trust").
WITNESSETH:
WHEREAS, the Adviser is engaged in the investment of the Trust's assets
in accordance with the Trust's current Prospectus and Statement of Additional
Information (collectively the "Prospectus"); and
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement dated ______________, 1997 ("Investment Advisory
Agreement"); and
WHEREAS, under the terms of the Investment Advisory Agreement, the
Adviser may delegate its responsibilities for the management of the investment
of the assets of one or more portfolios of the Trust to one or more sub-
advisers; and
WHEREAS, Adviser desires to so delegate responsibility for management of
the investments of one or more portfolios to Sub-Adviser, and Sub-Adviser
agrees to manage the investment of one or more portfolios in accordance with
this Sub-Advisory Agreement and the Prospectus;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Adviser hereby appoints Sub-Adviser to act as the investment advisor
with respect to one or more portfolios as identified in "Exhibit A", which is
attached hereto and by this reference is incorporated herein (singly or
collectively the "Portfolio"). Sub-Adviser hereby accepts such appointment
and agrees to render the services herein set forth, for the compensation
herein provided.
2. Subject to the supervision of the Trustees of Trust and the Adviser, Sub-
Adviser will manage the securities and investments (including cash) of the
Portfolio, including the purchase, retention and disposition thereof, and the
execution of agreements relating thereto in accordance with the Portfolio's
and Trust's investment objectives, policies and restrictions as those are
stated in the Prospectus and further subject to the following understandings:
(a) The Sub-Adviser shall furnish a continuous investment program for
the Portfolio and in so doing shall determine from time to time what
investments or securities will be purchased, retained or sold by the
Portfolio, and what portion of the assets will be invested or held uninvested
as cash;
(b) The Sub-Adviser in the performance of its duties and obligations
under this Agreement shall act in conformity with the terms of the Declaration
of Trust, Bylaws and the Prospectus of the Trust, and any amendments thereto,
each of which shall be promptly furnished to the Sub-Adviser by the Trust, and
with the instructions and directions of the Trustees of the Trust and the
Board of Directors and officers of the Adviser,
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and will conform to and comply with the
requirements of the Investment Company Act of 1940 (the "1940 Act"), and all
other applicable federal and state laws and regulations;
(c) The Sub-Adviser shall determine the securities to be purchased or
sold by the Portfolio and, as agent for the Portfolio, will effect
transactions pursuant to its determinations either directly with the issuer or
with any broker and/or dealer in such securities;
(d) The Sub-Adviser shall maintain books and records with respect to the
securities transactions of the Portfolio and shall render to the Adviser or
Adviser's designees, such periodic and special reports as the Adviser may
reasonably request;
(e) The Sub-Adviser shall provide the Trust's Custodian with all
requested information relating to all transactions concerning the assets of
the Portfolio; and
(f) The Sub-Adviser shall not render similar services involving the
Portfolio with respect to any other variable annuity contracts without prior
notice to the Adviser or the Trust.
(g) The Sub-Adviser shall provide such additional services to the
Adviser in connection with the sale of Trust shares and/or Equitable Life
Insurance Company of Iowa variable insurance contracts, as reasonably
requested by the Adviser. Such services shall include, but not necessarily be
limited to, presentations by representatives of the Sub-Adviser at investment
seminars, conferences and other industry meetings. No parties to the
Agreement will use any materials describing any other party without the prior
written approval of the party being described. Any materials utilized by the
Adviser which contain any information relating to the Sub-Adviser and/or its
affiliates shall be submitted to the Sub-Adviser for written approval prior to
use, not less than three (3) business days before such approval is requested
by the Adviser. Such materials shall be deemed approved if not otherwise
objected to prior to the approval date requested by the Adviser. Any
materials utilized by the Sub-Adviser which contain any information relating
to the Adviser, Equitable Life Insurance Company of Iowa (including any
information relating to its separate accounts or variable insurance contracts)
or the Trust shall be submitted to the Adviser for written approval prior to
use, not less than three (3) business days before such approval is requested
by the Sub-Adviser. Such materials shall be deemed approved if not otherwise
objected to prior to the approval date requested by the Sub-Adviser.
(h) The Sub-Adviser is authorized, subject to the supervision of the
Adviser and the Trustees of the Trust, to place orders for the purchase and
sale of the Portfolio's Investments with or through such persons, brokers or
dealers, including the Sub-Adviser or affiliates thereof, and to negotiate
commissions to be paid on such transactions in accordance with the Portfolio's
policy with respect to brokerage as set forth in the Prospectus. The Sub-
Adviser may, on behalf of the Portfolio, pay brokerage commissions to a broker
which provides brokerage and research services to the Sub-Adviser in excess of
the amount another broker would have charged for effecting the transaction,
provided (i) the Sub-Adviser determines in good faith that the amount is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker in terms of the particular transaction or in
terms of the Sub-Adviser's overall responsibilities with respect to the
Portfolio and the accounts as to which the Sub-Adviser exercises investment
discretion, (ii) such payment is made in compliance with Section 28(e) of the
Securities Exchange Act of 1934, as amended,
and any other applicable laws and regulations, and (iii) in the opinion of the
Sub-Adviser, the total commissions paid by the Portfolio will be reasonable in
relation to the benefits to the Portfolio over the long term. It is
recognized that the services provided by such brokers may be useful to the Sub-
Adviser in connection with the Sub-Adviser's service to other clients. On
occasions when the Sub-Adviser deems the purchase or sale of a security to be
in the best interests of the Portfolio as well as other clients of the Sub-
Adviser, the Sub-Adviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be sold or purchased in order to obtain the most favorable price
or lower brokerage commissions and
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efficient execution. In such event,
allocation of securities so sold or purchased, as well as the expenses
incurred in the transaction, will be made by the Sub-Adviser in the manner the
Sub-Adviser considers to be the most equitable and consistent with its
fiduciary obligations to the Portfolio and to such other clients;
(i) The Adviser and the Trust consent and agree that Sub-Adviser may
aggregate securities sale and purchase orders for the Portfolio with similar
orders being made contemporaneously for other accounts managed by Sub-Adviser
or with accounts of affiliates of Sub-Adviser if, in Sub-Adviser's reasonable
judgment, such aggregation is reasonably likely to result in an overall
economic benefit to the Portfolio, based on an evaluation that the Portfolio
is benefitted by relatively better purchase or sale prices, lower commission
expenses or beneficial timing of transactions, or a combination of these and
other factors. In many instances, the purchase or sale of securities for the
Portfolio will be affected substantially simultaneously with the purchase or
sale of like securities for the accounts of other clients of Sub-Adviser and
its affiliates. Such transactions may be made at slightly different prices,
due to the volume of securities purchased or sold. In such event, the average
price of all securities purchased or sold in such transactions may be
determined, and the Portfolio may be charged or credited, as the case may be,
the average transaction price.
(j) Robertson, Stephens & Company LLC ("RS & Co."), an affiliate of Sub-
Adviser, may execute agency (but not principal) transactions on behalf of the
Portfolio. Sub-Adviser has a conflict of interest in recommending RS & Co. to
execute such transactions and RS & Co. will receive commissions in connection
therewith.
(k) The Adviser and the Trust agree that RS & Co. may act as broker for
both the Portfolio and for another person on the other side of any transaction
involving funds or securities in the Portfolio ("Agency Cross Transactions").
The Adviser and the Trust recognize that Sub-Adviser or its affiliates may
receive commissions, and have a potentially conflicting division of loyalties
and responsibilities regarding, both parties to such Agency Cross
Transactions. If Sub-Adviser engages in an Agency Cross Transaction, Sub-
Adviser will send to the Adviser and the Trust a written confirmation at or
before the completion of each such Agency Cross Transaction, which
confirmation will include (a) a statement of the nature of such Agency Cross
Transaction, (b) the date such Agency Cross Transaction shall have taken
place, (c) an offer to furnish, on request, the time when such Agency Cross
Transaction shall have taken place, and (d) the source and amount of any other
remuneration received or to be received by Sub-Adviser on any of its
affiliates in connection with such Agency Cross Transaction. Sub-Adviser
shall also send to the Adviser and the Trust, at least annually, a written
statement identifying the total amount of such Agency Cross Transactions
during the period included in the statement, and the total commissions or
other remuneration received or to be received by Sub-Adviser or any of its
affiliates
in connection with such Agency Cross Transactions included in the statement.
The consent to Agency Cross Transactions set forth in this paragraph may be
revoked by the Adviser or the Trust at any time by notifying Sub-Adviser in
writing.
3. The Sub-Adviser agrees that all records which it maintains for the
Portfolio pursuant to Paragraph 2(d) are the property of the Trust and will
promptly surrender any of such records to Adviser upon the Trustees' or
Adviser's request. The Sub-Adviser shall preserve for periods prescribed by
Rule 31a-2 of the 1940 Act any such records as are required to be maintained
by the Sub-Adviser with respect to the Portfolio by Rule 31a-1 of the 1940
Act.
4. The Adviser shall pay the Sub-Adviser pursuant to the Fee Schedule
contained in "Exhibit B", which is attached hereto and by this reference is
incorporated herein. The fee prescribed in Exhibit C shall be calculated
daily and payable monthly in arrears at an annual rate per Exhibit C of the
Portfolio's average daily net assets.
5. The Sub-Adviser shall 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 Sub-Advisory Agreement relates, except a loss resulting
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from willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Sub-Advisory Agreement.
6. The Adviser and the Trust acknowledge and understand that Sub-Adviser
engages in an investment advisory business apart from managing the Portfolio.
This will create conflicts of interest with the Portfolio over Sub-Adviser's
time devoted to managing the Portfolio and the allocation of investment
opportunities among accounts (including the Portfolio) managed by Sub-Adviser.
Sub-Adviser will attempt to resolve all such conflicts in a manner that is
generally fair to all of its clients. The Adviser and the Trust confirm that
Sub-Adviser may give advice and take action with respect to any of its other
clients that may differ from advice given or the timing or nature of action
taken with respect to the Portfolio so long as it is Sub-Adviser's policy, to
the extent practicable, to allocate investment opportunities to the Portfolio
over a period of time on a fair and equitable basis relative to other clients.
Nothing in this Agreement shall be deemed to obligate Sub-Adviser to acquire
for the Portfolio any security that Sub-Adviser or its officers or employees
may acquire for its or their own accounts or for the account of any other
client if, in the absolute discretion of Sub-Adviser, it is not practical or
desirable to acquire a position in such security for the Portfolio.
7. The term of this Sub-Advisory Agreement shall begin on the date first
above written, and unless sooner terminated as hereinafter provided, this Sub-
Advisory Agreement shall remain in effect for two (2) years from such date.
Thereafter, this Sub-Advisory Agreement shall continue in effect with respect
to the Portfolios from year to year, subject to the termination provisions and
all other terms and conditions hereof; PROVIDED, such continuance with respect
to the Portfolios is approved at least annually by vote of the holders of a
majority of the outstanding voting securities of the Portfolio or by the
Trustees of the Trust; PROVIDED, that in either event such continuance is also
approved annually by the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trustees of the Trust
who are not parties to this Sub-Advisory Agreement or interested persons of
any party hereto; and PROVIDED FURTHER that the Sub-Adviser shall not have
notified the Trust in writing at least sixty (60) days prior to the end of the
initial two (2) year period, or at least sixty (60) days prior to the
anniversary date of the
execution of this Sub-Advisory Agreement of any year thereafter that it does
not desire such continuation. The Sub-Adviser shall furnish to the Trust,
promptly upon its request, such information as may reasonably be necessary to
evaluate the terms of this Sub-Advisory Agreement or any extension, renewal or
amendment thereof. This Sub-Advisory Agreement may be terminated at any time
by any party hereto, without the payment of any penalty, upon sixty (60) days'
prior written notice to the other parties; PROVIDED, that in the case of
termination by the Trust, such action shall have been authorized (i) by
resolution of the Trust's Board of Trustees, including the vote or written
consent of Trustees of the Trust who are not parties to this Sub-Advisory
Agreement or interested persons of any party hereto, or (ii) by vote of a
majority of the outstanding voting securities of the Portfolio. This
Agreement shall automatically terminate in the event of its "assignment" (as
defined in the 1940 Act).
8. The Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor and shall not, unless otherwise expressly provided
herein or authorized by the Trustees of Trust from time to time, have any
authority to act for or represent the Portfolio or Trust in any way or
otherwise be deemed to be an agent of the Portfolio or the Trust.
9. This Sub-Advisory Agreement is entered into by the Trust on behalf of
one or more Portfolios identified in Exhibit B pursuant to authority granted
by the Trustees, and the obligations created hereby are not binding on any of
the Trustees or shareholders of the Trust individually, but bind only the
property of such Portfolios of the Trust.
10. This Sub-Advisory Agreement may be amended only in accordance with the
1940 Act.
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11. The Adviser and the Trust acknowledge that the Adviser and the Trust
have received Sub-Adviser's brochure required to be delivered under the
Investment Adviser's Act of 1940 (including the information in Part II of Sub-
Adviser's Form ADV). If the Adviser or the Trust received such information
less than forty-eight hours prior to signing this Agreement, this Agreement
may be terminated by the Adviser or the Trust without penalty within five
business days from the date of this Agreement. Upon written request by the
Adviser or the Trust, Sub-Adviser agrees to deliver annually, without charge,
Sub-Adviser's brochure required by the Investment Advisers Act of 1940.
12. Any notice that is required to be given by the parties to each other
under the terms of this Sub-Advisory Agreement shall be in writing, delivered,
or mailed postpaid to the other party, or transmitted by facsimile with
acknowledgement of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Sub-Adviser:
Robertson, Stephens & Company Investment Management, L.P.
555 California Street
San Francisco, CA 94104
Attention: Ms. Dana Welch, Esq.
Facsimile: (415) 693-3302
(b) If to the Manager:
Equitable Investment Services, Inc.
909 Locust Street
Des Moines, IA 50309
Attention: Paul R. Schlaack
Facsimile: (515) 698-7538
(c) If to the Trust:
Equi-Select Series Trust
909 Locust Street
Des Moines, IA 50309
Attention: Paul R. Schlaack
Facsimile: (515) 698-7538
13. This Sub-Advisory Agreement shall be governed and construed in
accordance with the laws of The Commonwealth of Massachusetts.
14. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original.
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IN WITNESS WHEREOF, the parties hereto have caused this Sub-Advisory
Agreement to be executed by their respective officers designated below as of
the day and year first above written.
ADVISER: TRUST:
EQUITABLE INVESTMENT EQUI-SELECT SERIES TRUST
SERVICES, INC.
BY:_______________________________ BY:______________________________
PAUL R. SCHLAACK PAUL R. SCHLAACK
ITS PRESIDENT ITS PRESIDENT
SUB-ADVISER:
ROBERTSON, STEPHENS & COMPANY
INVESTMENT MANAGEMENT, L.P.
BY:_______________________________
ITS____________________
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SUB-ADVISORY AGREEMENT
EXHIBIT A
PORTFOLIO LISTING
GROWTH & INCOME PORTFOLIO
VALUE + GROWTH PORTFOLIO
SUB-ADVISORY AGREEMENT
EXHIBIT B
FEE SCHEDULE
Growth & Income Portfolio 0.55% of first $200 million
0.45% of average net assets over and above $200
million.
Value + Growth Portfolio 0.55% of first $500 million;
0.45% of average net assets over and above $500
million.
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EXHIBIT D
OTHER INFORMATION REGARDING
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
The principal executive officer and the directors of
Massachusetts Financial Services Company and their principal
occupations are listed below. The business address of each
such person, unless otherwise indicated, is 500 Boylston
Street, Boston, Massachusetts 02116.
NAME AND POSITION WITH
SUB-ADVISER PRINCIPAL OCCUPATION
- ---------------------- --------------------
Alan Keith Bodkin Chairman of Massachusetts Financial Services
Chairman and Director Company
Jeffrey Lee Shames President of Massachusetts Financial Services
President and Director Company
Arnold Duaune Scott Senior Executive Vice President of Massachusetts
Director Financial Services Company
John Robert McNeil Chairman and Chief Executive Officer of Sun Life
Director Assurance Company of Canada
Donald Alexander Steward President of Sun Life Assurance
Director Company of Canada
Massachusetts Financial Services Company also serves as
adviser or sub-adviser to other investment companies. The
following table lists the other investment companies for
which Massachusetts Financial Services Company serves as
adviser or sub-adviser, the approximate net assets of each
investment company as of May 1, 1997, and the annual
advisory fee received by Massachusetts Financial Services
Company (as a percentage of average daily net assets).
NET ASSETS CONTRACTUAL MANAGEMENT FEE
---------- --------------------------
OTC PORTFOLIO:
MFS OTC Fund A* $99.2 million 0.75%
TOTAL RETURN PORTFOLIO:
MFS Total Return Fund A* $4.7 billion 0.250% of first $200 million
0.212% in excess of $200 million
MFS Total Return Series $43.0 million 0.75%
(MFS Variable Insurance
Trust)*
Total Return Series $1.5 billion 0.750% of first $300 million
(MFS/Sun Life Series 0.675% in excess of $300 million
Trust)* 0.600% in excess of $1 billion
Compass Total Return $303.0 million 0.750% of first $300 million
Variable Account* 0.675% in excess of $300 million
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NET ASSETS CONTRACTUAL MANAGEMENT FEE
---------- --------------------------
OTC PORTFOLIO (CONTINUED):
MFS OTC Fund A* $99.2 million 0.75%
TOTAL RETURN PORTFOLIO:
Smith Barney/MFS Total $215.4 million 0.375%
Return Portfolio
London Pacific Total $2.3 million 0.50% of first $200 million
Return Portfolio 0.45% of next $1.1 billion
0.40% in excess of $1.3 billion
RESEARCH PORTFOLIO:
MFS Research Fund A* $3.7 billion 0.40% of first $100 million
0.32% of next $400 million
0.288% in excess of $500 million
Research Series (MFS/Sun $500 million 0.750% of first $300 million
Life Series Trust)* 0.675% in excess of $300 million
MFS Research Series $194 million 0.750%
(MFS Variable Insurance
Trust)*
Equitable of New York $15.8 million 0.40% of first $150 million
Research Portfolio 0.375% of next $150 million
0.350% in excess of $300 million
*Please note that MFS acts as administrator to these funds
and therefore the fees may be higher than accounts where MFS
serves solely as a sub-investment adviser.
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EXHIBIT E
OTHER INFORMATION REGARDING
CREDIT SUISSE ASSET MANAGEMENT LIMITED
The directors and principal executive officer of Credit
Suisse Asset Management Limited and their principal
occupations are listed below. The business address of each
such person is Beaufort House, London, England.
NAME AND POSITION WITH PRINCIPAL OCCUPATION
SUB-ADVISER
- ---------------------- --------------------
Lord Moore Chairman of Credit Suisse Asset
Management Limited, London
Robert Parker Chief Executive Officer of
Credit Suisse Asset Management
Limited, London
Robert Jenkins Chief Operations Officer of
Credit Suisse Asset
Management Limited, London
Glenn Wellman Managing Director - Head of
Equities of Credit Suisse Asset
Management Limited, London
Dilip Rasgotra Managing Director - Head of
Fixed Income of Credit Suisse
Asset Management Limited, London
William Priest Chief Executive Officer of BEA
(Non-Executive Director) Associates, New York
Timothy Taussig Head of Marketing of BEA Associates,
(Non-Executive Director) New York/Joint Head of Marketing - CSAM
Group
William Sterling Chief Investment Officer of BEA
(Non-Executive Director) Associates, New York
Heinz Hofmann Chief Executive Officer of Credit
(Non-Executive Director) Suisse Asset Management International
Fund Holding, Zurich
Heinrich Wegmann Chief Executive Officer of Credit
(Non-Executive Director) Suisse Asset Management, Zurich
Credit Suisse Asset Management Limited does not act as
investment adviser to any other U.S. registered investment
companies with investment objectives and policies similar to
those of the International Fixed Income Portfolio.
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EXHIBIT F
OTHER INFORMATION REGARDING
ROBERTSON, STEPHENS & COMPANY INVESTMENT MANAGEMENT, L.P.
Robertson, Stephens & Company, Inc. is the general
partner of Robertson, Stephens & Company Investment
Management, L.P.
G. Randall Hecht is the President and principal
executive officer of Robertson, Stephens & Company
Investment Management, L.P. His business address is 555
California Street, San Francisco, California, 94104.
Robertson, Stephens & Company Investment Management,
L.P. also acts as investment adviser to the following
registered investment companies having similar investment
objectives and policies to those of the Growth & Income
Portfolio and Value + Growth Portfolio. The following table
lists the name of each such investment company, its
approximate net assets as of June 30, 1997, and the annual
advisory fee received by Robertson, Stephens & Company
Investment Management, L.P. (as a percentage of average
daily net assets).
FUND NET ASSETS FEE SCHEDULE
---- ---------- ------------
GROWTH & INCOME PORTFOLIO
Robertson, Stephens
Value + Growth Fund $856 Million 1.00% per year
American Skandic
Value + Growth Fund $51 Million 0.60% per year
Portfolio
GROWTH & INCOME PORTFOLIO
Robertson, Stephens
Growth & Income Fund $289 Million 1.00% per year
Ohio National
Growth & Income Portfolio $8.5 Million 0.60% per year
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