AMENDED AND RESTATED SUBADVISORY AGREEMENT
AMENDED AND RESTATED SUBADVISORY AGREEMENT
THIS AMENDED AND RESTATED SUBADVISORY AGREEMENT (the “Agreement”) is made as of November 1, 2024 by and between XXXXXX INVESTMENT MANAGEMENT, LLC, a limited liability company organized and existing under the laws of the State of Delaware (hereinafter called “PIM”), and THE XXXXXX ADVISORY COMPANY, LLC, a Delaware limited liability company (hereinafter called “PAC”).
WHEREAS, XXX and PAC are each registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and engaged in the business of supplying investment management services as an independent contractor; and
WHEREAS, PAC is an investment adviser authorized to provide discretionary investment advice and management in Singapore; and
WHEREAS, XXX has been retained to render investment advisory services to each of the funds listed on Schedule A hereto (together the “Funds” and each, a “Fund”), including the funds that are series of an investment management company registered with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to the Investment Company Act of 1940, as amended (the “1940 Act”) as shown on Schedule A; and
WHEREAS, XXX currently engages PAC from time to time to provide discretionary investment management services from PAC’s office in Singapore; and
WHEREAS, PAC previously provided sub-advisory services with respect to the Funds pursuant to a Sub-Advisory Contract (the “Prior Contract”) dated as of January 1, 2024 among PAC, Xxxxxx Investment Management, LLC (“PIM”) and Xxxxxx Investments Limited (“PIL”);
WHEREAS, XXX has terminated its role as a party to the Prior Contract, effective as of the date hereof, and other parties wish to enter into this Agreement to provide for the continuation of services by PAC;
WHEREAS, the PIM desires to appoint PAC as investment sub-adviser to provide certain investment advisory and related services to the Funds, and PAC is willing to serve in such capacity.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and each of the parties hereto intending to be legally bound, it is agreed as follows:
1. PIM hereby retains PAC and PAC hereby accepts such engagement, to furnish certain investment advisory and related services with respect to certain assets of the Fund, as more fully set forth herein.
(a) Subject to the overall policies, direction and review of the Fund’s Board of Trustees (the “Board”) and to the instructions and supervision of XXX, PAC will provide certain investment advisory and related services for a portion of the Fund as agreed upon from time to time by XXX and PAC, including:
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| (i) | managing the investment and reinvestment of that portion of the Fund’s portfolio allocated for investment to it by PIM, if any, from time to time with PAC determining what securities and other property will be purchased, retained or sold with respect to such portion, and placing all purchase and sale orders with respect to such portion; |
| (ii) | providing assistance with purchasing and selling securities and other property for the Fund, including the placement of orders with broker-dealers selected by PAC, even if XXX has not delegated investment discretion with respect to such assets; and |
| (iii) | performing research and obtaining and evaluating pertinent economic, statistical, and financial data relevant to the investment strategies and policies of the Fund, as set forth in the Fund’s prospectus and statement of additional information, and sharing such research and data with PIM upon request. |
The assets with respect to which PAC provides the services set forth above are referred to as the “Sub-Advised Portion.”
(b) In performing these services, PAC shall adhere to the Fund’s investment goal(s), policies and restrictions as contained in the Fund’s current prospectus and statement of additional information, and in the Agreement and Declaration of Trust and Bylaws of the Fund and to the investment guidelines most recently established by PIM (all as may be amended from time to time) and shall comply with the provisions of the 1940 Act and the rules and regulations of the SEC thereunder in all material respects and with the provisions of the United States Internal Revenue Code of 1986, as amended, which are applicable to regulated investment companies.
(c) Unless otherwise instructed by PIM or the Board, and subject to the provisions of this Agreement and to any guidelines or limitations specified from time to time by PIM or by the Board, PAC shall report daily all transactions effected by PAC on behalf of the Fund to PIM and to other entities as reasonably directed by XXX or the Board.
(d) PAC shall provide the Board at least quarterly, in advance of the regular meetings of the Board, a report of its activities hereunder on behalf of the Fund, in such form and detail as requested by the Board. PAC shall also make one or more of its personnel available to attend such meetings of the Board as the Board may reasonably request.
(e) In carrying out its duties hereunder, PAC shall comply with all reasonable instructions of the Fund, the Board or PIM in connection therewith.
2. (a) Where applicable based on the services it provides pursuant to Section 1 above, PAC shall, in the name of the Fund, place or direct the placement of orders for the execution of portfolio transactions in accordance with the Fund’s policies with respect thereto and as set forth in the Fund's Registration Statement, as amended from time to time, and under the Securities Act of 1933, as amended, Securities Exchange Act of 1934, as amended (the “1934 Act”), and the 1940 Act. In connection with the placement of orders for the execution of the Sub-Advised Portion's portfolio transactions, PAC shall create and maintain all necessary brokerage records of the Fund in accordance with all applicable laws, rules and regulations, including but not limited to, records required by Section 31(a) of the 1940 Act. All records shall be the property of the Fund and shall be available for inspection and use by the SEC, the Fund or any person retained by the Fund. Where applicable, such records shall be maintained by PAC for the period and in the place required by Rule 31a-2 under the 1940 Act.
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(b) Where applicable based on the services it provides pursuant to Section 1 above, PAC shall select brokers and dealers for the execution of the Fund's transactions with respect to the Sub-Advised Portion. In selecting brokers or dealers to execute such orders and subject to any policies and procedures adopted by the Trust’s Board, PAC is expressly authorized to consider the fact that a broker or dealer has furnished statistical, research or other information or services which may enhance PAC’s investment research and portfolio management capability generally. It is further understood in accordance with Section 28(e) of the 1934 Act that PAC may negotiate with and assign to a broker a commission which may exceed the commission which another broker would have charged for effecting the transaction if PAC determines in good faith that the amount of commission charged was reasonable in relation to the value of brokerage and/or research services (as defined in Section 28(e)) provided by such broker, viewed in terms either of the Fund or PAC’s overall responsibilities to PAC’s discretionary accounts.
3. It is understood that the services provided by PAC are not to be deemed exclusive. PIM acknowledges that PAC may have investment responsibilities, or render investment advice to, or perform other investment advisory services, for individuals or entities, including other investment companies registered pursuant to the 1940 Act (“Clients”), which may invest in the same type of securities as the Fund. XXX agrees that PAC may give advice or exercise investment responsibility and take such other action with respect to such Clients which may differ from advice given or the timing or nature of action taken with respect to the Fund.
4. PAC agrees to use its best efforts in performing the services to be provided by it pursuant to this Agreement.
5. PAC will treat confidentially and as proprietary information of the Fund all records and other information relative to the Fund and prior, present or potential shareholders, and will not use such records and information for any purpose other than performance of its responsibilities and duties hereunder, except after prior notification to and approval in writing by the Fund, which approval shall not be unreasonably withheld and may not be withheld where PAC may be exposed to civil or criminal contempt proceedings for failure to comply when requested to divulge such information by duly constituted authorities, or when so requested by the Fund.
6. (a) In payment for the investment advisory services to be rendered by PAC under Section 1(a)(i) hereunder with respect to Xxxxxx Global Technology Fund, where the Sub-Advised Portion is the full portfolio of such Fund, PIM shall pay a monthly fee in U.S. dollars to PAC equal to 50% of the net investment advisory fee payable by the Fund to PIM (the “Net Investment Advisory Fee”), calculated daily, as compensation for the services rendered and obligations assumed by PAC hereunder during the preceding month.
For purposes of this Agreement, the Net Investment Advisory Fee payable by the Fund to PIM shall equal (i) 96% of an amount equal to the total investment management fees payable to PIM, minus any Fund fees and/or expenses waived or reimbursed by PIM, minus (ii) any fees payable by PIM to Franklin Xxxxxxxxx Services, LLC for fund sub-administrative services.
In payment for the investment advisory services to be rendered by PAC under Section 1(a)(i)) hereunder with respect to the Sub-Advised Portion of one or more Funds from time to time, PIM shall pay a monthly fee in U.S. dollars to PAC calculated daily at the following annual rate for each applicable Fund: 0.25% of the average aggregate net asset value of the assets in the Sub-Advised Portion. For the purposes of calculating such fee, the net asset value of the Sub-
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Advised Portion and the value of the net assets of the Fund shall be determined in the same manner that the Fund uses to compute its net asset value for purposes of pricing purchases and redemptions of its shares, all as set forth more fully in the Fund’s then current prospectus and statement of additional information.
(b) The sub-advisory fee under this Agreement shall be payable on the first business day of the first month following the effective day of this Agreement and shall be reduced by the amount of any advance payments made by PIM relating to the previous month. If this Agreement is terminated prior to the end of any month, the monthly fee shall be prorated for the portion of any month in which this Agreement is in effect which is not a complete month according to the proportion which the number of calendar days in the month during which the Agreement is in effect bears to the total number of calendar days in the month, and shall be payable within 10 days after the date of termination.
7. In the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of its obligations or duties hereunder on the part of PAC, neither PAC nor any of its directors, officers, employees or affiliates shall be subject to liability to PIM or the Fund or to any shareholder of the Fund for any error of judgment or mistake of law or any other act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security by the Fund.
8. During the term of this Agreement, PAC will pay all expenses incurred by it in connection with its activities under this Agreement other than the cost of securities (including brokerage commissions, if any) purchased for the Fund. The Fund and PIM will be responsible for all of their respective expenses and liabilities.
9. This Agreement shall be effective as of the date given above and shall continue in effect until June 30, 2025. It is renewable annually thereafter so long as such continuance is specifically approved at least annually (i) by a vote of the Board or by the vote of a majority of the outstanding voting securities of the Fund, and (ii) by the vote of a majority of the Trustees of the Trust who are not parties to this Agreement or interested persons thereof, cast in person at a meeting called for the purpose of voting on such approval.
10. This Agreement may be terminated at any time, without payment of any penalty, by the Board or by vote of a majority of the outstanding voting securities of the Fund, upon not more than sixty (60) days’ written notice to PIM and PAC, and by XXX or PAC upon not more than sixty (60) days’ written notice to the other party.
11. This Agreement shall terminate automatically in the event of any assignment thereof, as defined in the 1940 Act, and upon any termination of the Management Contract between PIM and the Fund.
12. This Agreement shall not be amended with respect to any Fund unless such amendment be approved at a meeting by the vote, cast at a meeting called for the purpose of voting on such approval, of a majority of the Trustees of the related Fund who are not interested persons of such Fund or of PIM and PAC.
13. In compliance with the requirements of Rule 31a-3 under the 1940 Act, PAC hereby agrees that all records which it maintains for the Fund are the property of the Fund and further agrees to surrender promptly to the Fund, or to any third party at the Fund’s direction, any of such
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records upon the Fund’s request. XXX 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.
14. 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.
15. The terms “majority of the outstanding voting securities” of the Fund and "interested persons" shall have the meanings as set forth in the 1940 Act.
16. This Agreement shall be interpreted in accordance with and governed by the laws of the State of Delaware of the United States of America.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested by their duly authorized officers.
XXXXXX INVESTMENT MANAGEMENT, LLC
By: /s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Title: Secretary
THE XXXXXX ADVISORY COMPANY, LLC
By: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
Title: Chief Compliance Officer
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Schedule A*
Xxxxxx Emerging Markets Equity Fund
Xxxxxx Focused Equity Fund
Xxxxxx Focused International Equity Fund
Xxxxxx Global Health Care Fund
Xxxxxx Global Technology Fund
Xxxxxx International Capital Opportunities Fund
Xxxxxx International Equity Fund
Xxxxxx International Value Fund
Xxxxxx Research Fund
Xxxxxx VT Emerging Markets Equity Fund
Xxxxxx VT Focused International Equity Fund
Xxxxxx VT Global Health Care Fund
Xxxxxx VT International Equity Fund
Xxxxxx VT International Value Fund
Xxxxxx VT Research Fund
*PAC is authorized to act as sub-adviser for each Fund listed in this Schedule A, but a Sub-Advised Portion may not be assigned to PAC by PIM pursuant to Section 1(a)(i) with respect to a particular Fund at any given time. Sub-Advised Portions will be determined, and compensation under this Agreement will be paid, based on the corporate accounting records of the parties’ parent company with respect to portfolio management duty assignments.
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