EXHIBIT d(x)
RS INVESTMENT TRUST
SUB-ADVISORY AGREEMENT
February 26, 1999
Eastbourne Management, L.L.C.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx XX 00000
Dear Sirs:
Under an Investment Advisory Agreement (the "Investment Advisory
Agreement") between RS Investment Trust, a Massachusetts business trust (the
"Trust"), and RS Investment Management, L.P., a California limited
partnership (the "Adviser"), the Adviser serves as investment adviser to
The Contrarian Fund-TM- ,a series of shares of the Trust (the "Fund").
The Adviser hereby confirms its agreement with Eastbourne Management,
L.L.C. (the "Sub-Adviser") and the Trust with respect to the Sub-Adviser's
serving as the sub-adviser of the Fund as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Adviser, with the approval of the Trust, hereby appoints the
Sub-Adviser to act as investment adviser to the Fund for the periods and on
the terms set forth in this Agreement, and with respect to the assets of
the Fund designated by the Adviser to the Sub-Adviser from time to time
(the "Designated Assets"). The Sub-Adviser accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
2. PORTFOLIO MANAGEMENT DUTIES
a. Subject to the supervision of the Adviser and the Trust's Board of
Trustees, the Sub-Adviser will (i) manage the Designated Assets in
accordance with the Fund's investment objective, policies, and
limitations as stated in the Trust's Prospectus and Statement of
Additional Information, as in effect from time to time, and with any
additional policies or guidelines established from time to time by the
Adviser or by the Board of Trustees of the Trust; (ii) make investment
decisions for the Fund in respect of the Designated Assets; and (iii)
place orders to purchase and sell securities and other investments for
the Fund in respect of the Designated Assets.
b. The Sub-Adviser will keep the Trust and the Adviser informed of
developments materially affecting the Fund and shall, on the
Sub-Adviser's own initiative and as reasonably requested by the
Adviser or the Trust, furnish to the Trust and the Adviser from time
to time whatever information the Adviser or the Board of Trustees
reasonably believes appropriate for this purpose.
c. The Sub-Adviser agrees that, in the performance of the duties required
of it by this Agreement, it will comply with the Investment Company
Act of 1940, as amended (the "Act"), and all rules and regulations
thereunder, all applicable federal and state laws and regulations, and
any applicable procedures adopted by the Trust's Board of Trustees or
the Adviser and identified in writing to the Sub-Adviser.
3. BROKERAGE
The Sub-Adviser shall determine the securities to be purchased or sold by
the Fund in respect of the Designated Assets and will place orders pursuant
to its determinations with or through such persons, brokers, or dealers in
conformity with such policies with respect to brokerage as are set forth in
the Trust's Prospectus and Statement of Additional Information as in effect
from time to time or as the Board of Trustees may direct from time to time.
4. INFORMATION PROVIDED TO THE ADVISER AND THE TRUST
a. The Sub-Adviser shall furnish to the Adviser and to the Board of
Trustees of the Trust monthly, quarterly, and annual reports
concerning the portfolio transactions and performance of the Fund in
such form as may reasonably be requested by the Adviser or the Board
of Trustees. The Sub-Adviser shall permit all books and records with
respect to the Fund to be inspected and audited by the Adviser and the
Trust at all reasonable times during normal business hours, upon
reasonable notice.
b. The Sub-Adviser agrees that it will make available to the Adviser and
the Trust promptly upon their request copies of all of its records
with respect to the Fund to assist the Adviser and the Trust in
monitoring compliance with the Act and the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as well as other applicable
laws. The Sub-Adviser will furnish the Trust's Board of Trustees with
respect to the Fund such periodic and special reports as the Adviser
or the Board of Trustees may reasonably request.
c. The Sub-Adviser agrees that it will immediately notify the Adviser and
the Trust in the event that the Sub-Adviser or any of its affiliates:
(i) becomes subject to a statutory disqualification that prevents the
Sub-Adviser from serving as investment advisor pursuant to this
Agreement; or (ii) is or expects to become the subject of an
administrative proceeding or enforcement action by the SEC or other
regulatory authority. The Sub-Adviser agrees to notify the Adviser
immediately of (x) any material fact known to the Sub-Adviser
respecting or relating to the Sub-Adviser that is not contained in the
Prospectus or Statement of Additional Information of the Trust, or any
amendment or supplement thereto, if the omission of such might make
such document misleading, or (y) any statement contained therein
relating to the Sub-Adviser that becomes untrue in any material
respect.
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d. The Sub-Adviser represents that it is an investment adviser registered
under the Advisers Act and other applicable laws and that the
statements contained in the Sub-Adviser's registration under the
Advisers Act on Form ADV, as of the date hereof, are true and correct
and do not omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. The Sub-Adviser agrees to maintain the completeness and
accuracy of its registration on Form ADV in accordance with all legal
requirements relating to that Form. The Sub-Adviser acknowledges that
it is an "investment adviser" to the Fund within the meaning of the
Act and the Advisers Act.
5. BOOKS AND RECORDS
The Sub-Adviser agrees that all records that it maintains in respect of the
Trust are the property of the Trust and further agrees to surrender
promptly to the Trust copies of any such records upon the Trust's request.
The Sub-Adviser agrees to maintain and preserve for such periods as are
required by applicable law, including without limitation Sections 31 and 32
of the Act and any rule adopted thereunder and Rule 204-2 under the
Advisers Act, any and all records relating to the Sub-Adviser's duties
hereunder.
6. COMPENSATION
The Adviser will pay the Sub-Adviser, and the Sub-Adviser agrees to accept,
as full compensation for all services furnished or provided to the
Fund hereunder and as full reimbursement for all expenses incurred or borne
by the Sub-Adviser, a fee for any period equal to 0.40 (40%) of any fees
paid by the Fund to the Adviser under the Investment Advisory Agreement in
respect of the Designated Assets of the Fund during that period (the
"Sub-Advisory Fee"). From time to time the Sub-Adviser may agree to
reimburse the Fund additional expenses or waive a portion or all of its
fee, in the sole discretion of the Sub-Adviser.
7. COSTS AND EXPENSES
During the term of this Agreement, the Sub-Adviser will pay all expenses
incurred by it and its staff in connection with the performance of its
services under this Agreement, including the payment of salaries of all
officers and employees who are employed by it, but not including expenses
to be paid by the Fund or the Adviser such as brokerage fees and
commissions and custodian charges. The Trust, on behalf of the Fund, shall
assume and pay any expenses for services rendered by a custodian for the
safekeeping of the Fund's securities or other property on behalf of the
Fund, for keeping its books of account, for any other charges of the
custodian, and for calculating the net asset values of the Fund as provided
in the Prospectus and Statement of Additional Information as in effect from
time to time. The Sub-Adviser shall not be required to pay and the Trust
(or the Adviser), on behalf of the Fund, shall assume and pay the charges
and expenses of the Fund's operations, including compensation of the
Trustees, charges and expenses of independent auditors, of legal counsel,
of any transfer or dividend disbursing agent, and of any registrar of the
Trust, costs of acquiring and disposing of portfolio securities, interest,
if any, on obligations incurred by the Fund, costs of share certificates,
membership dues in the Investment Company Institute or any similar
organization, costs of reports and notices to shareholders, other like
miscellaneous expenses, and all taxes and fees payable to federal, state,
or other governmental agencies on account of the registration of securities
issued by the Fund, filing of trust documents, or otherwise.
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8. STANDARD OF CARE
Except as may otherwise be provided by the Act or other applicable law,
neither the Sub-Adviser nor any of its officers, directors, employees, or
agents shall be subject to any liability to the Trust, the Fund, or the
Adviser for any error of judgment, any mistake of law, or any loss arising
out of any investment or other act or omission in the course of, connected
with, or arising out of any service to be rendered under this Agreement,
except by reason of willful misfeasance, bad faith, or gross negligence in
the performance of the Sub-Adviser's duties or by reason of reckless
disregard by the Sub-Adviser of its obligations or duties hereunder.
9. SERVICES TO OTHER COMPANIES OR ACCOUNTS
a. Except as may otherwise be agreed between the Adviser and the
Sub-Adviser, it is understood that the services of the
Sub-Adviser are not exclusive, and nothing in this Agreement shall
prevent the Sub-Adviser from providing similar services to other
investment companies (whether or not their investment objectives and
policies are similar to those of the Fund) or from engaging in other
activities.
b. When the Sub-Adviser recommends the purchase or sale of a security for
other investment companies and other clients, and at the same time the
Sub-Adviser recommends the purchase or sale of the same security for
the Fund, it is understood that in light of its fiduciary duty to the
Fund, such transactions will be executed on a basis that it is fair
and equitable to the Fund.
10. DURATION AND TERMINATION
a. This Agreement shall become effective on the date hereof and shall
continue for two years from that date, and thereafter shall continue
automatically for successive annual periods, provided such continuance
is specifically approved at least annually by (i) the Trust's Board of
Trustees or (ii) a vote of a majority of the Fund's outstanding voting
securities (as defined in the Act), provided that the continuance is
also approved by a majority of the Trustees who are not "interested
persons" (as defined in the Act) of the Trust, by vote cast in person
at a meeting called for the purpose of voting on such approval.
b. Notwithstanding the foregoing, this Agreement may be terminated as to
the Fund (i) by the Adviser, at any time without penalty, upon 60 days
written notice to the Sub-Adviser and the Trust, (ii) at any time
without penalty by the Trust, upon the vote of a majority of the
Trust's Trustees or by vote of the majority of the outstanding voting
securities of the Fund, upon 60 days written notice to the Sub-Adviser
and the Adviser, or (iii) by the Sub-Adviser at any time without
penalty, upon 60 days written notice to the Adviser and the Trust.
c. This Agreement will terminate automatically in the event of its
assignment (as defined in the Act and in rules adopted under the Act).
11. 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 whom enforcement of the change, waiver,
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discharge, or termination is sought, and no amendment of this Agreement
shall be effective until approved in accordance with applicable law.
12. LIMITATIONS OF LIABILITY OF TRUSTEES, OFFICERS, EMPLOYEES, AGENTS, AND
SHAREHOLDERS OF THE TRUST
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this Agreement is executed on behalf of the
Trustees of the Trust as Trustees, and not individually, and that the
obligations arising out of this Agreement are not binding upon the Trustees
or holders of the Trust's shares individually but are binding only upon the
assets and property of the Fund. The Sub-Adviser acknowledges that it has
received notice of and accepts the limitations of liability as set forth in
the Agreement and Declaration of Trust of the Trust. The Sub-Adviser agrees
that the Trust's obligations hereunder shall be limited to the Fund and to
its assets, and that the Sub-Adviser or any affiliated or related party
shall not seek satisfaction of any such obligation from any shareholder of
the Fund nor from any Trustee, officer, employee, or agent of the Trust.
13. MISCELLANEOUS
a. This Agreement shall be governed by the laws of the State of
California, provided that nothing herein shall be construed in a
manner inconsistent with the Act, the Advisers Act, or rules or orders
of the SEC thereunder.
b. The captions of this Agreement are included for convenience only and
in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
c. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule, or otherwise, 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.
If the terms and conditions described above are in accordance with your
understanding, kindly indicate your acceptance of this Agreement by signing and
returning to us the enclosed copy of this Agreement.
RS INVESTMENT MANAGEMENT, L.P.
By RS Investment Management Co. LLC
By /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title:
RS INVESTMENT TRUST
By /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
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Accepted:
EASTBOURNE MANAGEMENT, L.L.C.
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title:
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