EXHIBIT D.33
PORTFOLIO MANAGEMENT AGREEMENT
THIS PORTFOLIO MANAGEMENT AGREEMENT (the "Agreement") is dated and
effective as of December 31, 2002, among Xxxxxxxxx Xxxx Associates, Inc. a
Delaware corporation (the "Sub-Advisor"); Fremont Investment Advisors, Inc., a
Delaware corporation (the "Advisor"); and Fremont Mutual Funds, Inc., a Maryland
corporation (the "Fund").
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end, diversified management investment
company and is authorized to issue separate series (the "Series"), each of which
may offer a separate class of shares of beneficial interest, each Series having
its own investment objective, policies and limitations; and
WHEREAS, the Fund offers shares of a particular series named the Fremont
Global Fund (the "Global Series"); and
WHEREAS, the Fund has retained the Advisor to render investment management
and administrative services to the Global Series; and
WHEREAS, the Advisor and the Fund desire to retain the Sub-Advisor to
furnish portfolio management services to the Global Series in connection with
Advisor's investment management activities on behalf of the Series, and the
Sub-Advisor is willing to furnish such services to the Advisor and the Global
Series;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the Sub-Advisor, the Advisor and the Fund as
follows:
1. APPOINTMENT. The Advisor and the Fund hereby appoint Sub-Advisor to provide
portfolio management services to the Advisor and the Fund with respect to
certain assets of the Global Series for the periods and on the terms set forth
in this Agreement. The Sub-Advisor accepts such appointment and agrees to
furnish the services herein set forth, for the compensation herein provided.
2. SUB-ADVISOR DUTIES. Subject to the supervision of the Advisor, the
Sub-Advisor shall have full discretionary authority as agent and
attorney-in-fact with respect to the portion of assets of the Global Series'
portfolio assigned to the Sub-Advisor (the "Allocated Assets"), from time to
time by the Advisor or the Board of Directors, including authority to: (a) buy,
sell, exchange, convert or otherwise trade in any stocks and other marketable
securities, in accordance with the investment guidelines set forth in Appendix A
and (b) place orders for the execution of such securities transactions with or
through such brokers, dealers, or issuers as Sub-Advisor may select. The
Sub-Advisor
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will provide the services under this Agreement in accordance with the Global
Series' registration statement filed with the Securities and Exchange Commission
("SEC"), as that registration statement is amended and supplemented from time to
time. The Advisor will provide the Sub-Advisor with a copy of each registration
statement, amendment and supplement promptly after it has been filed with the
SEC. The parties acknowledge that the Sub-Advisor's performance objective of the
Allocated Assets is as set forth in Appendix A (as such may be revised from time
to time at the discretion of the Advisor); however, failure to satisfy such
objective shall not constitute a breach of this Agreement. The Sub-Advisor
further agrees that:
(a) The Sub-Advisor will conform with all applicable rules and regulations
of the SEC and of all other federal and state regulatory agencies having
jurisdiction over the Sub-Advisor in performance of its duties under this
Agreement. As reasonably requested by the Advisor or the Fund, the Sub-Advisor
will provide information requested by the Advisor or the Fund to comply with the
Xxxxxxxx-Xxxxx Act and the rules and regulations promulgated by the SEC
thereunder.
(b) The Sub-Advisor will select broker-dealers or trading systems to
execute portfolio transactions for the Global Series and select the markets on
or in which the transactions will be executed. In providing the Global Series
with investment advisory services, it is recognized that the Sub-Advisor will
give primary consideration to securing the most favorable price and efficient
execution of orders so that the Fund's total cost or proceeds in each
transactions will be the most favorable under the circumstances. Within the
framework of this policy, the Sub-Advisor may consider the financial condition
of the broker-dealer or trading system, the investment information, brokerage,
research, analyses, trading services and other products provided by the
broker-dealer or trading system who may effect or be a party to any such
transaction or other transactions to which the Sub-Advisor's other clients may
be a party.
It is understood that it is desirable for the Fund that the Sub-Advisor and
the Advisor have access to research, analyses and trading services provided by
broker-dealers and trading systems that may execute brokerage transactions at a
higher cost to the Global Series than might result from the allocation of
brokerage to other broker-dealers or trading systems that do not provide such
services. Therefore, in compliance with Section 28(e) of the Securities Exchange
Act of 1934 (the "1934 Act"), the Sub-Advisor is authorized to place orders for
the purchase and sale of securities for the Global Series with broker-dealers or
trading systems that provide research, analyses and trading services and may
charge an amount of commission for effecting securities transactions in excess
of the amount of commission another broker-dealer or trading system would have
charged for effecting that transaction, provided the Sub-Advisor (or in the case
of research, analyses and trading services provided to the Advisor, that the
Advisor) determines in good faith that such amount of commission was reasonable
in relation to the value of the research, analyses and trading services provided
by such broker-dealers or trading systems viewed in terms of either that
particular transaction or the overall
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responsibilities of the Sub-Advisor or the Advisor for this or other advisory
accounts, subject to review by the Fund's Board of Directors from time to time
with respect to the extent and continuation of this practice to determine
whether the Fund benefits, directly or indirectly, from such practice.
It is understood that the research, analyses and trading services provided
by such broker-dealers or trading systems may be useful to the Sub-Advisor or
the Advisor in connection with the other clients of the Sub-Advisor or the
Advisor. On occasions when the Sub-Advisor deems the purchase or sale of a
security to be in the best interest of the Global Series as well as other
clients of the Sub-Advisor or the Advisor, the Sub-Advisor, 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 of lower brokerage commissions and efficient
execution. In such event, allocation of the securities so purchased or sold, as
well as the expenses incurred in the transaction, shall be made by the
Sub-Advisor in the manner the Sub-Advisor considers to be the most equitable and
consistent with its fiduciary obligations to the Global Series and to such other
clients.
The Sub-Advisor agrees to use its best efforts to direct brokerage to
certain broker-dealers or trading systems as may be requested from time to time
by the Advisor; however, such directed brokerage decisions shall be made in the
discretion of the Sub-Advisor and shall be consistent with the Sub-Advisor's
obligation to use its best efforts to obtain best execution as required by the
policy discussed above in this section. Such directed brokerage may be used to
obtain research used by the Advisor or for other purposes determined by the
Advisor, such as offsetting the operating expenses of the Fund. The Sub-Advisor,
at the request of the Advisor, shall render reports to the Advisor in such form
and at such times as may be reasonably required, setting forth the amount of
total brokerage business which has been placed by it and the allocation thereof
among broker-dealers and trading systems and specifically indicating those
broker-dealers and trading systems which provided research, analyses and trading
services.
(c) The Sub-Advisor will make available to the Advisor and the Fund's Board
of Directors promptly upon their request copies of all its investment records
and ledgers relating to the Global Series to assist the Advisor and the Fund in
their compliance with respect to the Global Series' securities transactions as
required by the 1940 Act and the Investment Advisers Act of 1940 (the "Advisers
Act"), as well as other applicable laws. The Sub-Advisor will furnish the Fund's
Board of Directors with respect to the Global Series such periodic and special
reports as the Advisor and the Directors may reasonably request in writing.
(d) The Sub-Advisor will maintain detailed records of the Allocated Assets
as well as all investments, receipts, disbursements and other transactions made
with such assets. Such records shall be open to inspection and audit during
Sub-Advisor's normal business hours upon reasonable notice by any person
designated by the Advisor or the
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Fund. The Sub-Advisor shall provide to the Advisor or the Fund and any other
party designated by either the Advisor or the Fund: (i) monthly statements of
the activities with regard to the Allocated Assets during the month and a list
of such assets showing each asset at its cost and, for each security listed on
any national securities exchange, its value at the last quoted sale price
reported on the composite tape on the valuation date or, in the cases of
securities not so reported, by the principal exchange on which the security
traded or, if no trade was made on the valuation date or if such security is not
listed on any exchange, its value as determined by a nationally recognized
pricing service used by the Sub-Advisor specified by such pricing service on the
valuation date, and for any other security or asset in a manner determined in
good faith by the Sub-Advisor to reflect its then fair market value; (ii)
statements evidencing any purchases and sales as soon as practicable after such
transaction has taken place, and (iii) a quarterly review of the Allocated
Assets.
(e) The Sub-Advisor shall use its best judgment and efforts in rendering
the advice and services to the Advisor as contemplated by this Agreement.
(f) PROXY VOTING. The Advisor hereby delegates to the Sub-Advisor, the
Advisor's discretionary authority to exercise voting rights with respect to the
securities and other investments in the Allocated Assets. The Sub-Advisor's
proxy voting policies shall comply with any rules or regulations promulgated by
the SEC. The Sub-Advisor shall maintain and preserve a record, in an
easily-accessible place for a period of not less than three (3) years (or
longer, if required by law), of the Sub-Advisor's voting procedures, of the
Sub-Advisor's actual votes, and such other information required for the Fund to
comply with any rules or regulations promulgated by the SEC. The Sub-Advisor
shall,upon request, supply updates of this record to the Advisor or any
authorized representative of the Advisor, or to the Fund on a quarterly basis
(or more frequently, if required by law). The Sub-Advisor shall provide the
Advisor and the Fund with information regarding the policies and procedures that
the Sub-Advisor uses to determine how to vote proxies relating to the Allocated
Assets. The Fund may request that the Sub-Advisor vote proxies for the Allocated
Assets in accordance with the Fund's proxy voting policies.
(g) CODE OF ETHICS. The Sub-Advisor (i) has adopted a written code of
ethics pursuant to Rule 17j-1 under the 1940 Act; (ii) has provided the Advisor
with a copy of evidence of the adoption of the code of ethics by the
Sub-Advisor; and (iii) will make such reports to the Advisor and the Fund as are
required by Rule 17j-1 under the 1940 Act. The Sub-Advisor agrees to provide the
Advisor and the Fund with any information required to satisfy the code of ethics
reporting or disclosure requirements of the Xxxxxxxx-Xxxxx Act and any rules or
regulations promulgated by the SEC thereunder. To the extent the Sub-Advisor has
adopted a separate code of ethics or has amended its code of ethics to comply
with such rules or regulations, the Sub-Advisor shall provide the Advisor with a
copy of such code of ethics and any amendments thereto.
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3. INDEPENDENT CONTRACTOR.
The Sub-Advisor shall, for all purposes herein, be deemed to be an
independent contractor, and shall, unless otherwise expressly provided and
authorized to do so, have no authority to act for or represent the Company or
the Advisor in any way, or in any way be deemed an agent for the Advisor or the
Company.
4. EXPENSES AND COMPENSATION.
(a) During the term of this Agreement, the Sub-Advisor will pay all
expenses incurred by it, its staff and their activities, in connection with its
portfolio management activities under this Agreement (except that brokerage
costs shall be paid by the Fund). The Sub-Advisor shall not be responsible for
any expense incurred by the Advisor or the Fund, except as provided in Section 6
below.
(b) For the services provided to the Global Series, the Advisor will pay
the Sub-Advisor the fees as set forth in Appendix B hereto at the times set
forth in Appendix B hereto.
(c) If in the future the Sub-Advisor agrees to a fee schedule with a new
comparable client that would result in a lower effective fee rate than is paid
by the Advisor, the Sub-Advisor will notify the Advisor within thirty (30) days.
A client account will be considered comparable in terms of investment objective
and strategy, asset size, degree of discretion given to the Sub-Advisor (with
respect to brokerage and other matters), and demands for servicing. In
determining whether a fee schedule with another client is lower, adjustments
should be made by mutual agreement of the parties to take into account
differences in reporting, compliance, servicing, marketing, and similar factors.
If the comparable client rate is determined to be lower than the Fremont rate,
the Sub-Advisor will offer the Advisor the opportunity to revise this Agreement
and adjust the Fremont rate so that it is equivalent to the comparable client
rate when it was first implemented for the comparable client. No adjustment will
be required if the Advisor continues a fee schedule with a lower effective fee
rate with a pre-existing client, if the lower fee schedule with a pre-existing
client is applied to one or more enlarged portfolios or to one or more new
similar portfolios with that client, or if a permitted lower fee schedule is
increased. The Sub-Advisor shall provide to the Advisor, upon request, a list of
all client accounts with a lower effective fee rate that have an investment
strategy substantially similar to the Fund but which the Sub-Advisor has
concluded are not comparable clients.
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5. REPRESENTATIONS AND WARRANTIES.
(a) ADVISOR AND FUND. The Advisor and the Fund each represents and warrants
to the Sub-Advisor that (i) the retention of the Sub-Advisor as contemplated by
this Agreement is authorized by the respective governing documents of the Fund
and the Advisor; (ii) the execution, delivery and performance of each of this
Agreement and the Advisory Agreement does not violate any obligation by which
the Fund or the Advisor or their respective property is bound, whether arising
by contract, operation of law or otherwise; and (iii) each of this Agreement and
the Advisory Agreement has been duly authorized by appropriate action of the
Fund and the Advisor and when executed and delivered by the Advisor will be the
legal, valid and binding obligation of the Fund and the Advisor, enforceable
against the Fund and Advisor in accordance with its terms hereof subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles (regardless of
whether enforcement is sought in a proceeding in equity or law).
(b) SUB-ADVISOR. The Sub-Advisor represents and warrants to the Advisor and
the Fund that (i) the retention of the Sub-Advisor as contemplated by this
Agreement is authorized by the Sub-Advisor's governing documents; (ii) the
execution, delivery and performance of this Agreement does not violate any
obligation by which the Sub-Advisor or its property is bound, whether arising by
contract, operation of law or otherwise; and (iii) this Agreement has been duly
authorized by appropriate action of the Sub-Advisor and when executed and
delivered by the Sub-Advisor will be the legal, valid and binding obligation of
the Sub-Advisor, enforceable against the Sub-Advisor in accordance with its
terms hereof, subject, as to enforcement, to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or law).
6. BOOKS AND RECORDS; CUSTODY.
(a) In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Advisor hereby agrees that all records which it maintains for the Global
Series are the property of the Fund and further agrees to surrender promptly to
the Fund copies of any of such records upon the Fund's request. The Sub-Advisor
further agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act
with respect to the Global Series and to preserve the records required by Rule
204-2 under the Advisers Act with respect to the Global Series for the period
specified in the Rule.
(b) Title to all investments shall be made in the name of the Fund,
provided that for convenience in buying, selling, and exchanging securities
(stocks, bonds, commercial paper, etc.), title to such securities may be held in
the name of the Fund's custodian bank, or its nominee or as otherwise provided
in the Fund's custody agreement. The Fund shall notify the Sub-Advisor of the
identity of its custodian bank and shall give the Sub-Advisor fifteen (15) days'
written notice of any changes in such custody arrangements.
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Neither the Sub-Advisor, nor any parent, subsidiary or related firm, shall
take possession of or handle any cash or securities, mortgages or deeds of
trust, or other indicia of ownership of the Fund's investments, or otherwise act
as custodian of such investments. All cash and the indicia of ownership of all
other investments shall be held by the Fund's custodian bank.
The Fund shall instruct its custodian bank to (a) carry out all investment
instructions as may be directed by the Sub-Advisor with respect thereto (which
may be orally given if confirmed in writing); and (b) provide the Sub-Advisor
with all operational information necessary for the Sub-Advisor to trade on
behalf of the Fund.
7. INDEMNIFICATION. The Sub-Advisor agrees to indemnify and hold harmless the
Advisor, the Fund, any affiliated person within the meaning of Section 2(a)(3)
of the 1940 Act ("affiliated person") of the Advisor or the Fund (other than the
Sub-Advisor) and each person, if any, who, within the meaning of Section 15 of
the Securities Act of 1933 (the "1933 Act"), controls ("controlling person") the
Advisor or the Fund against any and all losses, claims, damages, liabilities or
litigation (including reasonable legal and other expenses) to which the Advisor,
the Fund or such affiliated person or controlling person may become subject
under the 1933 Act, 1940 Act, the Advisers Act, or under any other statute, at
common law or otherwise, which (1) may be based upon any wrongful act or
omission by the Sub-Advisor, any of its employees or representatives or any
affiliate of or any person acting on behalf of the Sub-Advisor or (2) may be
based upon any untrue statement or alleged untrue statement of a material fact
contained in a registration statement or prospectus covering the shares of the
Fund or any amendment thereof or any supplement thereto or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, if such a statement
or omission was made in reliance upon and accurately and completely reflects
information furnished to the Fund or any affiliated person of the Fund by the
Sub-Advisor or any affiliated person of the Sub-Advisor; provided, however, that
in no case is the Sub-Advisor's indemnity in favor of the Advisor or the Fund or
any affiliated person or controlling person of the Advisor or the Fund deemed to
protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith or negligence
in the performance of such person's duties or by reason of such person's
reckless disregard of the obligations and duties under this Agreement or by
reason of such person's violation of applicable law or regulations.
The Fund and the Advisor each agrees not to hold the Sub-Advisor or any of
its officers or employees liable for, and to indemnify and hold harmless, the
Sub-Advisor and its directors, officers, employees, affiliated persons and
controlling persons (the "Indemnified Parties"), any act or omission of any
other Sub-Advisor providing investment management services to the Fund, and
against any costs and liabilities the Indemnified Parties may incur as a result
of a claim against the Indemnified Parties regarding actions taken in good faith
exercise of their powers and responsibilities
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hereunder excepting matters as to which the Indemnified Parties have been
grossly negligent, engaged in willful misfeasance, bad faith, reckless disregard
of the obligations and duties under this Agreement or have been in violation of
applicable law or regulations.
8. OTHER INVESTMENT ACTIVITIES OF SUB-ADVISOR. The Fund and Advisor acknowledge
that the Sub-Advisor, [may have/has] investment responsibilities [or may
render/and renders] investment advice to, [or may perform]/and performs] other
investment advisory services for, other individuals or entities ("Affiliated
Accounts"). Subject to the provisions of Section 2 hereof, the Fund agrees that
the Sub-Advisor may give advice or exercise investment responsibility and take
other action with respect to [other/the] Affiliated Accounts which may differ
from advice given or the timing or nature of action taken with respect to the
Global Series; provided that the Sub-Advisor acts in good faith, and provided
further that it is the Sub-Advisor's policy to allocate, within its reasonable
discretion, investment opportunities to the Global Series over a period of time
on a fair and equitable basis relative to the Affiliated Accounts, taking into
account the investment objectives and policies of the Global Series and any
specific investment restrictions applicable thereto. The Fund acknowledges that
one or more of the Affiliated Accounts may at any time hold, acquire, increase,
decrease, dispose of or otherwise deal with positions in investments in which
the Global Series may have an interest from time to time, whether in
transactions which may involve the Global Series or otherwise. The Sub-Advisor
shall have no obligation to acquire for the Global Series a position in any
investment which any Affiliated Account may acquire, and the Fund shall have no
first refusal, co-investment or other rights in respect of any such investment
either for the Global Series or otherwise.
9. (a) TERM. This Agreement shall become effective on the date hereof. Unless
terminated as herein provided, this Agreement shall remain in full force and
effective for a period of one year from the date of this Agreement, and shall
continue in full force and effect for periods of one year thereafter so long as
such continuance is approved at least annually (i) by either the Board of
Directors of the Fund or by a vote of a majority (as defined in the 0000 Xxx) of
the outstanding voting securities of the Global Series, and (ii) by the Advisor,
and (iii) by the vote of a majority of the Board of Directors of the Fund who
are not parties to this Agreement or "interested persons" (as defined in the
0000 Xxx) of any such party, cast in person at a meeting called for the purpose
of voting on such approval.
(b) TERMINATION. This Agreement may be terminated at any time, without
payment of any penalty, by the Board of Directors of the Fund or by the vote of
a majority (as defined in the 0000 Xxx) of the outstanding voting securities of
the Global Series, or by the Advisor, on thirty (30) days' written notice to the
Sub-Advisor and the payment of the pro-rated management fee earned to the date
of termination, or by the Sub-Advisor on like notice to the Board of Directors
of the Fund and to the Advisor.
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Payment of fees earned through the date of termination shall not be construed as
a penalty.
(c) AUTOMATIC TERMINATION. This Agreement shall automatically and
immediately terminate in the event of its transfer or assignment (within the
meaning of the 1940 Act).
10. AMENDMENTS. No provision of this agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought and no amendment of this Agreement shall be effective
until approved by a vote of a majority of the outstanding voting securities of
the Global Series, if such approval is required by applicable law.
11. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, provided that nothing
herein shall be construed in a manner inconsistent with the 1940 Act, the
Advisers Act, and any rules, regulations, and orders promulgated thereunder.
(b) CAPTIONS. The captions of this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
(c) SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, or rule or shall be otherwise rendered
invalid, the remainder of this Agreement shall not be affected thereby and, to
this extent, the provisions of this Agreement shall be deemed to be severable.
(d) AGENCY. Nothing herein shall be construed as constituting the
Sub-Advisor as an agent of the Fund or the Advisor.
(e) PRIOR AGREEMENT. This Agreement supersedes any prior agreement relating
to the subject matter hereof between the parties.
(f) COUNTERPARTS. This Agreement may be executed in counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered, shall be deemed an original and all of which
counterparts shall constitute but one and the same agreement.
12. NOTICE OF ARTICLES OF INCORPORATION. The Sub-Advisor acknowledges that it
has received notice of and accepts the limitations of the Company's liability as
set forth in its Articles of Incorporation. The Sub-Advisor agrees that the
Company's obligations under this Agreement shall be limited to Global Series and
to its assets, and that the Sub-
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Advisor shall not seek satisfaction of any such obligation from the shareholders
of the Global Series nor from any director, officer, employee or agent of the
Fund.
13. USE OF NAME. It is understood that the name "Xxxxxxxxx Xxxx Associates,
Inc." or the name of any of its affiliates, or any derivative associated with
those names, are the valuable property of the Sub-Advisor and its affiliates and
that the Fund, the Advisor and the Fund's distributor have the right to use such
name(s) or derivative(s) in offering materials and sales literature of the Fund
[and/or the Advisor,] so long as this Agreement is in effect. Upon termination
of the Agreement the Fund and the Advisor shall forthwith cease to use such
name(s) or derivative(s). Other than as permitted above in this section, neither
the Fund nor the Advisor shall, without the prior written consent of the
Sub-Advisor, make any representations regarding or reference to the Sub-Advisor
or any affiliates in any disclosure document, advertisement, sales literature or
other promotional materials.
It is understood that the names of the Fund and the Advisor or the name of
any of their affiliates, or any derivative associated with those names, are the
valuable property of the Fund and the Advisor, respectively. The Sub-Advisor has
the right to use such name(s) or derivative(s) in offering materials and sales
literature of the Sub-Advisor so long as this Agreement is in effect. Upon
termination of the Agreement the Fund and the Advisor shall forthwith cease to
use such name(s) or derivative(s). Other than as permitted above in this
section, the Sub-Advisor shall not, without the prior written consent of the
Sub-Advisor, make any representations regarding or reference to the Fund, the
Advisor or any of their affiliates in any disclosure document, advertisement,
sales literature or other promotional materials.
14. RECEIPT OF BROCHURE. The Advisor and the Fund have received from Xxxxxxxxx
Xxxx Associates, Inc. the disclosure statement or "brochure" required to be
delivered pursuant to Rule 204-3 of the Advisers Act, which disclosure statement
or brochure was received by the Advisor and the Fund more than 48 hours prior to
entering into this Agreement.
15. NOTICES. Any notice under this Agreement shall be given in writing and shall
be deemed to have been duly given when delivered by hand, on the date indicated
as the date of receipt on a return receipt, or at the time of receipt if sent to
the other party at the principal office of such party by regular mail,
commercial courier service, telex, facsimile or telecopier.
16. NONPUBLIC PERSONAL INFORMATION. Notwithstanding any provision herein to the
contrary, the Sub-Advisor hereto agrees on behalf of itself and its directors,
trustees, shareholders, officers, and employees (1) to treat confidentially and
as proprietary information of the Advisor (on behalf of itself and the Fund) (a)
all records and other information relative to the Fund's prior, present, or
potential shareholders (and clients of said shareholders) and (b) any Nonpublic
Personal Information, as defined under Section 248.3(t) of Regulation S-P
("Regulation S-P"), promulgated under the Xxxxx-Xxxxx-
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Bliley Act (the "Privacy Act"), and (2) except after prior notification to and
approval in writing by the Advisor, not to use such records and information for
any purpose other than the performance of its responsibilities and duties
hereunder, or as otherwise permitted by Regulation S-P or the Privacy Act, and
if in compliance therewith, the privacy policies adopted by the Advisor and the
Fund and communicated in writing to the Sub-Advisor. Such written approval shall
not be unreasonably withheld by the Advisor and may not be withheld where the
Sub-Advisor may be exposed to civil or criminal contempt or other proceedings
for failure to comply after being requested to divulge such information by duly
constituted authorities.
17. ANTI-MONEY LAUNDERING COMPLIANCE. The Sub-Advisor acknowledges that, in
compliance with the Bank Secrecy Act, as amended, and implementing regulations
("BSA"), the Fund has adopted an Anti-Money Laundering Policy. The Sub-Advisor
agrees to comply with the Fund's Anti-Money Laundering Policy and the BSA, as
the same may apply to the Sub-Advisor, now or in the future. The Sub-Advisor
further agrees to provide to the Fund and/or the Advisor such reports,
certifications and contractual assurances as may be requested by the Fund or the
Advisor. The Advisor may disclose information respecting the Sub-Advisor to
governmental and/or regulatory or self-regulatory authorities to the extent
required by applicable law or regulation and may file reports with such
authorities as may be required by applicable law or regulation.
18. CONFIDENTIALITY. Each party to this Agreement shall not, directly or
indirectly, permit its affiliates, directors, trustees, officers, members,
employees, or agents to, in any form or by any means, use, disclose, or furnish
to any person or entity, records or information concerning the business of any
of the other parties except as necessary for the performance of duties under
this Agreement or as required by law, without prior written notice to and
approval of the relevant other parties, which approval shall not be unreasonably
withheld by such other parties.
19. ARBITRATION. Should any controversies arise out of this Agreement, the
Sub-Advisor, the Advisor and the Fund shall first attempt to make a good faith
effort to resolve them through direct discussion in a spirit of mutual
cooperation. If the parties' attempt to resolve their disagreements through
negotiations fail, the parties agree that all controversies between the
Sub-Advisor, the Advisor and the Fund or its principals or agents, arising out
of or concerning the Fund, the Global Series or the Allocated Assets, or the
construction, performance, or breach of this Agreement, shall be determined by
arbitration before the American Arbitration Association (AAA) in the State of
California or an office of AAA within a reasonable distance from San Francisco,
California. Any arbitration proceeding between the Sub-Advisor, the Advisor and
the Fund shall be heard and decided by a panel of not fewer than three
arbitrators. The laws of the State of California will apply in all respects,
including but not limited to determination of applicable statutes of limitation
and available remedies. The award of the arbitrators or a majority of them shall
be final
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and judgment on the award may be entered in any state or federal court having
jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
XXXXXXXXX XXXX ASSOCIATES, INC.
By: _________________________________
Title: ______________________________
FREMONT INVESTMENT ADVISORS, INC.
By: _________________________________
Title: ______________________________
FREMONT MUTUAL FUNDS, INC.
By __________________________________
Title: ______________________________
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APPENDIX A
TO PORTFOLIO MANAGEMENT AGREEMENT
XXXXXXXXX XXXX ASSOCIATES, INC.
Sub-Advisor to the Fremont Global Fund
INVESTMENT OBJECTIVES AND GUIDELINES
Overall Investment Objective:
-----------------------------
The objective of the Fremont Global Fund is to seek to maximize total
return while reducing risk by investing in U.S. and international stocks, bonds,
and short-term securities (cash).
Policy and Guidelines Specific to Sub-Advisor:
----------------------------------------------
I. Overall Investment Objective
----------------------------
The objective of the Xxxxxxxxx Xxxx Large Cap Value portfolio is to provide
returns primarily through capital appreciation.
II. General Policy and Guidelines for the Sub-Advisor
-------------------------------------------------
The Sub-Advisor will manage a portfolio consisting primarily of large-cap
domestic value stocks. The portfolio will generally be comprised of stocks
that have market capitalizations greater than $2.5 billion and that
Xxxxxxxxx Xxxx deems to be selling at a discount of 30% or more to
intrinsic value.
III. Specific Policy and Guidelines for the Sub-Advisor
--------------------------------------------------
A. The following investments will not be used:
o Securities purchased on margin.
o Short sales.
o Puts and calls.
o Letter stock/private placements.
o Securities of the sponsor organization, or its subsidiaries or
affiliates.
B. No more than 5 percent at cost, or 8 percent at market, shall be
invested in equity securities of any one issuer.
C. Investments shall not exceed 5 percent of the market capitalization of
any one issuer.
D. There shall be no restrictions regarding:
o Portfolio asset turnover.
o Realization of gains or losses.
o Dividends or earnings on the stock of companies held in the
portfolio.
E. The Sub-Advisor will not hold more than 10% of the portfolio in cash,
cash equivalents, or short-term assets. Short-term assets will be
diversified by issuer, above average in quality, and have a maturity
of no more than one year.
IV. Performance Objectives for the Sub-Advisor
------------------------------------------
The Sub-Advisor is expected to achieve a competitive rate of return over a
trailing 3-year time period relative to the Xxxxxxx 1000 Value Index and to
the Xxxxxx Large Cap Value Style peer universe. The Xxxxxxx 1000 Value
Index measures the performance of those Xxxxxxx 1000 companies with lower
price-to-book ratios and lower forecasted growth values.
The Sub-Advisor will also adhere to the Investment Objective and to
policies in the Fremont Global Fund prospectus and Statement of Additional
Information.
--------------------------------------------------------------------------------
Notwithstanding anything to the contrary in this Agreement, in the event of
a conflict between this Appendix A and the Global Series' registration statement
filed with the SEC, as that registration statement is amended and supplemented
from time to time (collectively, the "Prospectus"), the term of the Prospectus
shall govern.
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APPENDIX B
TO PORTFOLIO MANAGEMENT AGREEMENT
XXXXXXXXX XXXX ASSOCIATES, INC.
Sub-Advisor to the Fremont Global Fund
SCHEDULE OF FEES
----------------
Fremont Investment Advisors, Inc. will pay to Xxxxxxxxx Xxxx Associates,
Inc., on an aggregate basis, an annual fee computed as a percentage of the
average daily assets of the Global Fund under management by Xxxxxxxxx Xxxx
Associates, Inc. The management fees specified below shall be the fees charged.
The annual rate is determined as follows:
0.75% on the first $25 million
0.50% on the next $50 million
0.40% on the next $50 million
0.30% on the amount in excess of $125 million.
Fees will be billed after the end of each calendar month. Fees will be prorated
for any period less than one month and shall be due and payable within thirty
(30) days after an invoice has been delivered to the Advisor.
The Portfolio Management Agreement with the Sub-Advisor may be terminated by the
Advisor or the Investment Company upon 30 days' written notice. The Advisor has
day-to-day authority to increase or decrease the amount of the Fund's assets
under management by the Sub-Advisor.
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