REPUBLIC PORTFOLIOS
INTERNATIONAL EQUITY PORTFOLIO
SUBADVISORY AGREEMENT
AGREEMENT, effective commencing on November 21, 1994, between Capital
Guardian Trust Company (the "Subadviser") and Republic National Bank of New York
(the "Adviser").
WHEREAS, the Adviser serves as investment adviser to the Republic
Portfolios, a New York master trust fund (the "Portfolio Trust"), which is
registered as an open-end diversified investment management company under the
Investment Company Act of 1940, as amended (the "1940 Act") and consists of one
or more series, one of which is International Equity Portfolio (the "Portfolio
Series");
WHEREAS, the Adviser wishes to appoint the Subadviser to perform
advisory services to the Portfolio Series and the Portfolio Trust's Board of
Trustees (the "Trustees"), including a majority of the Trustees who are not
"interested persons" (as defined in the 0000 Xxx) of the Portfolio Trust and the
Portfolio Series' investors have approved the appointment of the Subadviser to
perform certain investment advisory services for the Portfolio Series pursuant
to this Subadvisory Agreement and the Subadviser is willing to perform such
services for the Portfolio Series;
WHEREAS, the Subadviser is registered or exempt from registration as an
investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Adviser and the Subadviser as
follows:
1. APPOINTMENT. The Adviser hereby appoints the Subadviser to perform
advisory services to the Portfolio Series for the periods and on the terms set
forth in this Subadvisory Agreement. The Subadviser accepts such appointment and
agrees to furnish the services herein set forth, for the compensation herein
provided.
2. INVESTMENT ADVISORY DUTIES. Subject to the supervision of the
Trustees of the Portfolio Trust and the Adviser, the Subadviser will (a) provide
a program of continuous investment management for the Portfolio Series in
accordance with the Portfolio Series's investment objectives, policies and
limitations as stated in the Portfolio Trust's registration statement on Form
N-1A as filed with the Securities and Exchange Commission ("SEC"), as it may be
amended from time to time (the "Registration Statement"), copies of which shall
be provided to the Subadviser by the Portfolio Trust; (b) make investment
decisions for the Portfolio Series; and (c) place orders to purchase and sell
securities for the Portfolio Series. In particular, the Subadviser will be
responsible for the market timing of purchases and sales and for all yield
enhancement strategies used in managing the Portfolio Series's investment
portfolio.
In performing its investment management services to the Portfolio
Series hereunder, the Subadviser will provide the Portfolio Series with ongoing
investment guidance and policy direction, including oral and written research,
analysis, advice, statistical and economic data and judgments regarding
individual investments, general economic conditions and trends and long-range
investment policy. The Subadviser will determine the securities, instruments,
repurchase agreements, options and other investments and techniques that the
Portfolio Series will purchase, sell, enter into or use, and will provide an
ongoing evaluation of the Portfolio Series's portfolio. The Subadviser will
determine what portion of the Portfolio Series's portfolio shall be invested in
securities and other assets.
The Subadviser further agrees that, in performing its duties hereunder,
it will:
(a) comply with the 1940 Act and all rules and regulations thereunder,
the Advisers Act, the Internal Revenue Code of 1986, as amended (the "Code"),
and all other applicable federal and state laws and regulations, and with any
applicable procedures adopted by the Trustees;
(b) in accordance with such procedures and instructions as the
Portfolio Trust and Subadviser determine appropriate, manage the Portfolio
Series so that it will qualify, and continue to qualify (except where
extraordinary circumstances dictate otherwise), as a regulated investment
company under Subchapter M of the Code and regulations issued thereunder, and
conduct periodically Subchapter M compliance reviews in accordance with such
procedures as the Portfolio Trust and Subadviser determine appropriate, provided
that the Portfolio Trust shall be responsible for assuring that the
distributions to Portfolio Series shareholders determined by the Subadviser to
be necessary to comply with Subchapter M are made;
(c) place orders pursuant to its investment determinations for the
Portfolio Series directly with the issuer, or with any broker or dealer, in
accordance with applicable policies expressed in the Portfolio Series's
Registration Statement and in accordance with applicable legal requirements;
(d) furnish to the Portfolio Trust or to the Adviser whatever
statistical information the Portfolio Trust or the Adviser may reasonably
request with respect to the Portfolio Series's assets or contemplated
investments, provided that the Subadviser's responsibilities to provide
performance-related information shall not include providing or calculating yield
information. In addition, the Subadviser will keep the Portfolio Trust, the
Trustees and the Adviser informed of developments materially affecting the
Portfolio Series's portfolio and shall, on the Subadviser's own initiative,
furnish to the Portfolio Trust and the Adviser from time to time whatever
information the Subadviser believes appropriate for this purpose;
(e) make available to the Portfolio Trust, promptly upon request, such
copies of its investment records and ledgers with respect to the Portfolio
Series as may be required to assist the Portfolio Trust in its compliance with
applicable laws and regulations. The Subadviser will furnish the Trustees with
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such periodic and special reports regarding the Portfolio Series as they may
reasonably request;
(f) immediately notify the Portfolio Trust and the Adviser in the event
that the Subadviser or any of its affiliates: (1) becomes aware that it is
subject to a statutory disqualification that prevents the Subadviser from
serving as an investment adviser pursuant to this Subadvisory Agreement; or (2)
becomes aware that it is the subject of an administrative proceeding or
enforcement action by the SEC or other regulatory authority. Although not
responsible for preparation of the Registration Statement with respect to the
Portfolio Series, the Subadviser further agrees to notify the Portfolio Trust
and the Adviser immediately of any material fact known to the Subadviser
respecting or relating to the Subadviser that is not contained in the
Registration Statement, or any amendment or supplement thereto, with respect to
the Portfolio Series but that is known to Subadviser to be required to be
disclosed therein, and of any statement contained therein that becomes untrue in
any material respect.
3. ALLOCATION OF CHARGES AND EXPENSES. Except as otherwise specifically
provided in this Section 3, the Subadviser shall pay the compensation and
expenses of all its directors, officers and employees (if any) who serve as
officers and executive employees of the Portfolio Trust (including the Portfolio
Series's share of payroll taxes), and the Subadviser shall make available,
without expense to the Portfolio Series, the service of its directors, officers
and employees (if any) who may be duly elected officers of the Portfolio Trust,
subject to their individual consent to serve and to any limitations imposed by
law.
The Subadviser shall not be required to pay any expenses of the
Portfolio Series other than those specifically allocated to the Subadviser in
this Section 3. In particular, but without limiting the generality of the
foregoing, the Subadviser shall not be responsible, except to the extent of the
reasonable compensation of such of the Portfolio Trust's employees (if any) as
are officers or employees of the Subadviser whose services may be involved, for
the following expenses of the Portfolio Series: organization and certain
offering expenses of the Portfolio Series (including out-of-pocket expenses);
fees payable to the Subadviser and to any other Portfolio Trust advisers or
consultants; legal expenses; auditing and accounting expenses; interest
expenses; telephone, telex, facsimile, postage and other communications
expenses; taxes and governmental fees; dues and expenses incurred by or with
respect to the Portfolio Trust in connection with membership in investment
company trade organizations; cost of insurance relating to fidelity coverage for
the Portfolio Trust's officers and employees; fees and expenses of any
custodian, subcustodian, transfer agent, registrar, or disbursing agent of the
Portfolio Series; payments for maintaining the Portfolio Series's financial
books and records and calculating the daily net asset value of the Portfolio
Series; other payments for portfolio pricing or valuation services to pricing
agents, accountants, bankers and other specialists, if any; expenses relating to
investor and public relations; freight, insurance and other charges in
connection with the shipment of the portfolio securities of the Portfolio
Series; brokerage commissions or other costs of acquiring or disposing of any
portfolio securities or other assets of the Portfolio Series, or of entering
into other transactions or engaging in any investment practices with respect to
the Portfolio Series; expenses of preparing and filing
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Registration Statements, reports and notices to investors; costs of stationery;
litigation expenses; costs of investors' and other meetings; the compensation
and all expenses (specifically including travel expenses relating to the
Portfolio Series's business) of officers, trustees and employees of the
Portfolio Trust who are not "interested persons" (as defined in the 0000 Xxx) of
the Subadviser; and travel expenses (or an appropriate portion thereof) of
officers or trustees of the Portfolio Trust (if any) who are officers, directors
or employees of the Subadviser to the extent that such expenses relate to
attendance at meetings of the Trustees of the Portfolio Trust or any committees
thereof or advisers thereto.
4. COMPENSATION. As compensation for the services provided and expenses
assumed by the Subadviser under this Agreement, the Portfolio Trust will pay the
Subadviser within 21 calendar days after the end of each calendar quarter an
advisory fee computed daily on the basis of the Portfolio Series's average daily
net assets, in accordance with the following schedule of annual rates.
NET ASSETS FEE RATE
Up to $25 million 0.70%
$25,000,001 - $50 million 0.55%
$50,000,001 - $250 million 0.425%
Over $250 million 0.375%
The "average daily net assets" of the Portfolio Series shall mean the average of
the values placed on the Portfolio Series's net assets as of 4:00 p.m. (New York
time) on each day on which the net asset value of the Portfolio Series is
determined consistent with the provisions of Rule 22c-1 under the 1940 Act or,
if the Portfolio Series lawfully determines the value of its net assets as of
some other time on each business day, as of such other time. The value of net
assets of the Portfolio Series shall always be determined pursuant to the
applicable provisions of the Portfolio Trust's Declaration of Trust and
Registration Statement. If, pursuant to such provisions, the determination of
net asset value is suspended for any particular business day, then for the
purposes of this Section 4, the value of the net assets of the Portfolio Series
as last determined shall be deemed to be the value of its net assets as of the
close of regular trading on the New York Stock Exchange, or as of such other
time as the value of the net assets of the Portfolio Series's portfolio may
lawfully be determined, on that day. If the determination of the net asset value
of the interests of the Portfolio Series has been so suspended for a period
including any quarter end when the Subadviser's compensation is payable pursuant
to this Section, then the Subadviser's compensation payable at the end of such
month shall be computed on the basis of the value of the net assets of the
Portfolio Series as last determined (whether during or prior to such quarter).
If the Portfolio Series determines the value of the net assets of its portfolio
more than once on any day, then the last such determination thereof on that day
shall be deemed to be the sole determination thereof on that day for the
purposes of this Section 4. In the event that this Agreement is terminated
pursuant to Section 10 hereof, the Subadviser shall be entitled to a PRO RATA
portion of the fee under this Section 4 through and including the date upon
which the Agreement is terminated and the Subadviser ceases to provide
investment advisory services to the Portfolio Series hereunder.
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5. BOOKS AND RECORDS. The Subadviser agrees to maintain such books and
records with respect to its services to the Portfolio Series as are required by
Section 31 under the 1940 Act, and rules adopted thereunder, and by other
applicable legal provisions, and to preserve such records for the periods and in
the manner required by that Section, and those rules and legal provisions. The
Subadviser also agrees that records it maintains and preserves pursuant to Rules
31a-1 and Rule 31a-2 under the 1940 Act and otherwise in connection with its
services hereunder are the property of the Portfolio Trust and will be
surrendered promptly to the Portfolio Trust upon its request. The Subadviser
further agrees that it will furnish to regulatory authorities having the
requisite authority any information or reports in connection with its services
hereunder which may be requested in order to determine whether the operations of
the Portfolio Series are being conducted in accordance with applicable laws and
regulations.
6. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Subadviser shall
exercise its best judgment in rendering the services provided by it under this
Subadvisory Agreement. The Subadviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Portfolio Series or
the holders of the Portfolio Series's interests in connection with the matters
to which this Subadvisory Agreement relate, provided that nothing in this
Subadvisory Agreement shall be deemed to protect or purport to protect the
Subadviser against any liability to the Portfolio Series or to holders of the
Portfolio Series's interests to which the Subadviser would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or by reason of the Subadviser's reckless
disregard of its obligations and duties under this Subadvisory Agreement. As
used in this Section 6, the term "Subadviser" shall include any officers,
directors, employees or other affiliates of the Subadviser performing services
for the Portfolio Series.
7. INDEMNIFICATION.
(a) The Subadviser agrees to indemnify and hold harmless, the Portfolio
Trust, the Adviser, any affiliated person within the meaning of Section 2(a)(3)
of the 1940 Act ("affiliated person") of the Portfolio Trust or the Adviser and
each person, if any, who within the meaning of Section 15 of the Securities Act
of 1933 (the "1933 Act") controls the Portfolio Trust ("controlling person") or
the Adviser against any and all losses, claims, damages, liabilities or
litigation (including legal and other expenses), to which the Portfolio Trust,
the Adviser or such affiliated person or controlling person may become subject
under the 1933 Act, 1940 Act, the Advisers Act, under any other statute, at
common law or otherwise, arising out of the Subadviser's responsibilities as
subadviser of the Portfolio Series which (1) may be based upon any wrongful act
or omission by the Subadviser, any of its employees or representatives or any
affiliate of or any person acting on behalf of the Subadviser, 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
Portfolio Series 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 written information
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furnished to the Portfolio Trust, the Portfolio Series, the Adviser, or any
affiliated person of the Portfolio Trust, the Portfolio Series or the Adviser by
the Subadviser or any affiliated person of the Subadviser; provided, however,
that in no case is the Subadviser's indemnity in favor of the Portfolio Trust,
the Adviser or any affiliated person or controlling person of the Portfolio
Trust or the Adviser 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 gross negligence in the performance of his duties or
by reason of his reckless disregard of his obligations and duties under this
Agreement.
(b) The Adviser agrees to indemnify and hold harmless the Subadviser,
any affiliated person of the Subadviser and each controlling person of the
Subadviser against any and all losses, claims, damages, liabilities or
litigation (including legal and other expenses) to which the Subadviser or such
affiliated person or controlling person may become subject under the 1933 Act,
the 1940 Act, the Advisers Act, under any other statute, at common law or
otherwise, arising out of the Subadviser's responsibilities as investment
manager of the Portfolio Series which (1) may be based upon any wrongful act or
omission by the Adviser, any of its employees or representatives or any
affiliate of or any person acting on behalf of the Adviser 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 shares of the
Portfolio Series or any Series 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 unless such statement or omission was made in reliance upon written
information furnished to the Adviser or any affiliated person of the Adviser by
the Subadviser or any affiliated person of the Subadviser; provided, however,
that in no case is the indemnity of the Adviser in favor of the Subadviser, or
any affiliated person or controlling person of the Subadviser 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 gross negligence in the
performance of his duties or by reason of his reckless disregard of obligations
and duties under this Agreement.
(c) If any party seeks indemnification under this Agreement (an
"indemnified party"), it shall notify the other party (the "indemnifying party")
in writing of the assertion of any third party claim or action and shall deliver
all copies of materials received in connection with the matter to the
indemnifying party. The indemnifying party shall have the right to participate
at its own expense in the defense of any such claim or action with counsel of
its own choosing satisfactory to the indemnified party, and the indemnified
party shall cooperate fully with the indemnifying party in the defense or
settlement of any matter that is covered by paragraphs (a) or (b) above, subject
to reimbursement by the indemnifying party for expenses incurred by the
indemnified party in connection with the indemnifying party's participation in
the defense.
8. SERVICES NOT EXCLUSIVE. It is understood that the services of the
Subadviser are not exclusive, and that nothing in this Subadvisory Agreement
shall prevent the Subadviser from providing similar services to other investment
companies (whether or not their investment objectives and policies are similar
to those of the Portfolio Series) or from engaging in other activities, provided
such other services and activities do not, during the term of this Subadvisory
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Agreement, interfere in a material manner with the Subadviser's ability to meet
its obligations to the Adviser, the Portfolio Trust and the Portfolio Series
hereunder. When the Subadviser recommends the purchase or sale of a security for
other investment companies and other clients, and at the same time the
Subadviser recommends the purchase or sale of the same security for the
Portfolio Series, the Subadviser may, but shall be under no obligation to,
aggregate the orders for securities to be purchased or sold. It is understood
that in light of its fiduciary duty to the Portfolio Series, such transactions
will be executed on a basis that is fair and equitable to the Portfolio Series.
In connection with purchases or sales of portfolio securities for the account of
the Portfolio Series, neither the Subadviser nor any of its directors, officers
or employees shall act as a principal or agent or receive any commission.
9. DOCUMENTATION. The Portfolio Series shall provide the Subadviser
with the following documents, as requested by the Subadviser:
(a) the Registration Statement and any amendments thereto;
(b) the Declaration of Trust and By-laws (and any amendments thereto)
of the Portfolio Trust;
(c) resolutions of the Trustees authorizing the appointment of the
Subadviser to serve as Subadviser and approving this Subadvisory Agreement; and
(d) the Portfolio Trust's Notification of Registration on Form N-8A.
10. DURATION AND TERMINATION. This Subadvisory Agreement shall continue
until November 21, 1996 unless sooner terminated as provided herein.
Notwithstanding the foregoing, this Subadvisory Agreement may be terminated: (a)
at any time without penalty upon thirty (30) days' written notice to the
Subadviser by the Portfolio Series upon the vote of a majority of the Trustees
or upon the vote of a majority of the Portfolio Series's outstanding voting
securities, (b) at any time without penalty upon thirty (30) days' written
notice to the Subadviser by the Adviser; or (c) by the Subadviser upon thirty
(30) days' written notice to the Portfolio Series and the Adviser, provided that
the Subadviser shall continue to be responsible for managing the assets of the
Portfolio Series for sixty (60) business days after the end of the notice period
unless the Portfolio Series shall agree in writing to shorten the period.
Anything to the contrary herein notwithstanding, any termination carried out
pursuant to this Section 10(c) shall be without penalty and, further, the
compensation schedule set forth in Section 4 hereof shall apply to the service
of the Subadviser beyond the end of the notice period provided in this Section
10(c). This Subadvisory Agreement will also terminate automatically in the event
of its "assignment" (as defined in the 0000 Xxx) or the assignment or
termination of the Management Agreement.
11. USE OF NAMES. It is understood that the names Republic Funds and
Republic International Equity Fund or any derivative thereof or logo associated
therewith are the valuable property of Portfolio Trust and its affiliates. The
Subadviser agrees that it shall not use any such names (or derivative or logo)
without the prior consent of the Portfolio Trust, which shall not be
unreasonably withheld.
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It is understood that the names Capital and Capital Guardian Trust
Company or any derivative thereof or logo associated therewith are the valuable
property of Subadviser and its affiliates. The Portfolio Trust and the Portfolio
Series have the right to use any such name (or derivative or logo) in offering
materials of the Portfolio Series with the approval of the Subadviser and for so
long as the Subadviser is subadviser to the Portfolio Series. Upon termination
of this Agreement, the Portfolio Series shall forthwith cease to use any such
names (or derivative or logo). Subadviser agrees that it shall not (and shall
not permit the Portfolio Series to) publish any advertisement, sales literature,
notice, circular, report or other document making reference to Subadviser or any
of its officers, directors, affiliates or employees without the consent of
Subadviser, which shall not be unreasonably withheld.
12. AMENDMENTS. No provision of this Subadvisory 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 Subadvisory
Agreement shall be effective until approved by an affirmative vote of (i) a
"majority of the outstanding voting securities" (as defined in the 0000 Xxx) of
the Portfolio Series, and (ii) a majority of the Trustees, including a majority
of the Trustees who are not "interested persons" (as defined in the 0000 Xxx) of
any party to this Subadvisory Agreement, cast in person at a meeting called for
the purpose of voting on such approval, if such approval is required by
applicable law.
13. NOTICES. Any notice or other communication required or permitted to
be given hereunder shall be given in writing and mailed, faxed or delivered to
the other party at its address as follows:
IF TO THE ADVISER:
Republic National Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
IF TO THE SUBADVISER:
Capital Guardian Trust Company
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Any party may specify a different or additional address for notice by
sending a written notice to the other at the address above, or at that or those
last given hereunder.
14. MISCELLANEOUS.
(a) This Subadvisory Agreement shall be governed by the laws of the
State of New York, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC
thereunder. Exclusive original jurisdiction to any claim, action or dispute
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between the parties arising out of this Agreement shall be solely in state or
federal district courts sitting in the State of New York.
(b) The captions of this Subadvisory 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 Subadvisory Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Subadvisory Agreement shall not be affected hereby and, to this extent, the
provisions of this Subadvisory Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting the Subadviser,
or any of its directors, officers or employees, an agent of the Adviser, the
Portfolio Trust or the Portfolio Series, nor the Adviser, or any of its
directors, officers or employees, an agent of the Subadviser.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of November 21, 1994.
CAPITAL GUARDIAN TRUST COMPANY
By ______________________________
Name:
Title:
REPUBLIC NATIONAL BANK OF NEW YORK
By ______________________________
Name:
Title:
FT4205D
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