EXHIBIT NO. EX-99.d.2
SUB-ADVISORY AGREEMENT
This Agreement is made between, Xxxxx & Xxxxxx, Inc., a Missouri corporation
having its principal place of business in Kansas City, Missouri (hereinafter
referred to as the "Advisor"), Denver Investment Advisors LLC, a Colorado
corporation, having its principal place of business in Denver, Colorado
(hereinafter referred to as the "Sub-Advisor") and J&B Funds, a Delaware
business trust (hereinafter referred to as the "Company").
WHEREAS, the Company, an open-end diversified management investment company,
as that term is defined in the Investment Company Act of 1940, as amended
(the "Act"), that is registered as such with the Securities and Exchange
Commission, has appointed Advisor as investment advisor for and to the J&B
Small Cap International Fund, a series of the Company (hereinafter referred
to as the "Fund"), pursuant to the terms of an investment advisory agreement
dated as of October 24, 2000 between the Company and Advisor ("Investment
Advisory Agreement");
WHEREAS, Sub-Advisor is engaged in the business of rendering investment
management services; and
WHEREAS, Advisor desires to retain Sub-Advisor to provide certain investment
management services for the Fund as more fully described below;
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Retention of Sub-Advisor.
a. Advisor hereby retains Sub-Advisor to assist Advisor in its capacity as
investment advisor for the Fund. Subject to the oversight and review
of Advisor and the Board of Directors of the Company, Sub-Advisor shall
manage the investment and reinvestment of the assets of the Fund.
Sub-Advisor will determine in its discretion, subject to the oversight
and review of Advisor, the investments to be purchased or sold, will
provide Advisor with records concerning its activities which Advisor or
the Company is required to maintain and will render regular reports to
Advisor and to officers and Directors of the Company concerning its
discharge of the foregoing responsibilities.
b. Sub-Advisor, in its supervision of the investments of the Fund, will be
guided by the Fund's investment objectives and policies and the
provisions and restrictions contained in the Declaration of Trust and
Bylaws of the Company and as set forth in the Registration Statement
and exhibits as may be on file with the Securities and Exchange
Commission, all as communicated by Advisor to Sub-Advisor. Advisor
hereby undertakes to provide Sub-Advisor with copies of such
Declaration of Trust and Bylaws and Registration Statement and exhibits
as well as any amendments as the same become available from time to
time.
c. Sub-Advisor shall be deemed to be an independent contractor under this
Agreement and, unless otherwise expressly provided or authorized, shall
have no authority to act for or represent the Company or any Fund in
any way or otherwise be deemed an agent of the Company or any Fund.
d. The services furnished by Sub-Advisor hereunder are deemed not to be
exclusive, and nothing in this Agreement shall: (a) prevent Sub-Advisor
or any affiliated person (as defined in the Act) of Sub-Advisor from
acting as investment advisor or manager for any other person or
persons, including other management investment companies with
investment objectives and policies the same as or similar to those of
the Fund, or (b) limit or restrict Sub-Advisor or any such affiliated
person from buying, selling or trading any securities or other
investments (including any securities
or other investments which the Fund is eligible to buy) for its or
their own accounts or for the
accounts of others for whom it or they may be acting; provided,
however, that Sub-Advisor agrees that it will not undertake any
activities which, in its reasonable judgment, will adversely affect the
performance of its obligations to the Fund under this Agreement and
provided that all such activities are in conformity with all applicable
provisions of the Company's Registration Statement.
2. Fee. Advisor shall pay to Sub-Advisor, for all services rendered to
the Fund by Sub-Advisor hereunder, the sub-advisory fees set forth in
Exhibit A attached hereto. During the term of this Agreement, Sub-Advisor
will bear all expenses incurred by it in the performance of its duties
hereunder, other than the cost of securities, commodities and other
investments (including brokerage fees, transfer fees, custodian fees,
underwriting commissions, interest and other charges, if any) purchased or
sold for the Fund.
3. Term. The term of this Agreement shall begin on the date of its
execution and shall remain in effect for two years from that date and from
year to year thereafter, subject to the provisions for termination and all
of the other terms and conditions hereof, if such continuation is
specifically approved at least annually in the manner required by the
Act. This Agreement shall be submitted to the shareholders of the Company
and each Fund for approval and shall automatically terminate if not
approved by a majority of the shares of the Fund.
4. Termination.
a. This Agreement may be terminated at any time without the payment of any
penalty:
i. by the Advisor on sixty (60) days written notice to the Sub-Advisor;
ii. by the Company either by a vote of a majority of the Board of Directors
of the Company or by a vote of the majority of the outstanding
shares of beneficial interest of the Fund; or
iii. by the Sub-Advisor on sixty (60) days written notice to the Advisor.
b. This Agreement will terminate automatically in the event of:
i. the termination of the Investment Advisory Agreement; or
ii. its assignment.
c. The Sub-Advisor may employ or contract with any other person, persons,
corporation, or corporations at its own cost and expense as it shall
determine in order to assist it in carrying out its obligations and
duties under this Agreement.
5. Standard of Care and Indemnification.
a. In the performance of its duties, the Sub Advisor will comply with the
stated investment objectives, policies and restrictions of the Fund as
set forth in the Prospectus and Statement of Additional Information and
will in all material respects act in accordance with any applicable
regulations of any governmental authority pertaining to its activities
hereunder. The Sub-Advisor shall exercise its best judgment and shall
act in good faith in rendering its services pursuant to this
Agreement. The Sub-Advisor shall not be liable for any error of
judgment or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, provided that nothing
in this
Agreement shall be deemed to protect or purport to protect the
Sub-Advisor against any liability to the Advisor, the Company or to the
shareholders of the Fund to which the Sub-Advisor 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
Sub-Advisor's reckless disregard of its obligations and duties under
this Agreement.
b. The Advisor shall indemnify and hold harmless the Sub-Advisor, its
officers and directors and each person, if any, who controls the
Sub-Advisor within the meaning of Section 15 of the Securities Act of
1933 ("1933 Act") (any and all such persons shall be referred to as an
"Indemnified Party"), against loss, liability, claim, damage or expense
(including the reasonable cost of investigating or defending any
alleged loss, liability, claim, damages or expense and reasonable
counsel fees incurred in connection therewith), arising by reason of
any matter to which this Agreement relates.
c. The Sub-Advisor shall indemnify and hold harmless the Advisor and each
of its directors and officer and each person if any who controls the
Advisor within the meaning of Section 15 of the 1933 Act, against any
loss, liability, claim, damage or expense described in the foregoing
indemnity, but only with respect to the Sub-Advisor's willful
misfeasance, bad faith or gross negligence in the performance of its
duties under the Sub-Advisory Agreement.
d. However, in no case: (i) are these indemnifications deemed to protect
any particular Indemnified Party against any liability to which such
Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties
under this Agreement; (ii) is the Advisor or Sub-Advisor to be liable
under this indemnity with respect to any claim made against any
particular Indemnified Party unless such Indemnified Party shall have
notified the Advisor or Sub-Advisor in writing within a reasonable time
after the summons or other first legal process giving information of
the nature of the claim shall have been served upon the Advisor or
Sub-Advisor or their controlling persons; or, (ii) will either party be
obligated to pay any amount in settlement unless that party shall have
consented to such settlement, which consent shall not be unreasonably
withheld.
6. Portfolio Transactions.
a. Advisor has engaged a custodian ("Custodian") to take and maintain
possession of all the assets in the Fund. Neither Sub-Advisor nor any
"person associated with" Sub-Advisor (as defined in Section 202(a)(17)
of the Act) will be the Custodian. Sub-Advisor will have no liability
with respect to custody arrangements or the acts, conduct, or omissions
of Custodian.
b. Advisor may issue such instructions to Custodian as may be appropriate
concerning the settlement of transactions initiated by Sub-Advisor
pursuant to this Agreement. Sub-Advisor will be under no duty to
supervise or direct the investment of any assets that are not in the
Account in the custody of the Custodian.
c. Investment decisions for the Fund shall be made by Sub-Advisor
independently from those for any other investment companies and
accounts advised or managed by Sub-Advisor. The Fund and such
investment companies and accounts may, however, invest in the same
securities. When a purchase or sale of the same security is made at
substantially the same time on behalf of the Fund and/or another
investment company or account, the transaction will be averaged as to
price, and available investments allocated as to amount, in a manner
which Sub-Advisor believes to be equitable to the Fund and such other
investment company or account. In some instances,
this investment
procedure may adversely affect the price paid or received by the Fund
or the size of the position obtained or sold by the Fund. To the
extent permitted by law, Sub-Advisor may aggregate the securities to be
sold or purchased for the Fund with those to be sold or purchased for
other investment companies or accounts in order to obtain best
execution.
d. Sub-Advisor shall place all orders for the purchase and sale of
portfolio securities for the account of the Fund with broker-dealers
selected by the Sub-Advisor. In executing portfolio transactions and
selecting broker-dealers, the Sub-Advisor will use its best efforts to
seek best execution on behalf of the Fund. In assessing the best
execution available for any transaction, the Sub-Advisor shall consider
all factors it deems relevant, including the breadth of the market in
the security, the price of the security, the financial condition and
execution capability of the broker-dealer, and the reasonableness of
the commission, if any (all for the specific transaction and on a
continuing basis). In evaluating the best execution available, and in
selecting the broker-dealer to execute a particular transaction, the
Sub-Advisor may also consider the brokerage and research services (as
those terms are used in Section 28(e) of the Securities Exchange Act of
1934, as amended) provided to the Fund and/or other accounts over which
the Sub-Advisor or an affiliate of the Sub-Advisor (to the extent
permitted by law) exercises investment discretion. The Sub-Advisor is
authorized to cause the Fund to pay a broker-dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission
another broker-dealer would have charged for effecting that transaction
if, but only if, the Sub-Advisor determines in good faith that such
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker-dealer viewed in terms of
that particular transaction or in terms of all of the accounts over
which investment discretion is so exercised.
7. Amendment. This Agreement may be amended at any time by agreement of
the parties, provided that the amendment shall be approved in the manner
required by the Act.
8. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Missouri.
9. Registration as an Investment Adviser. Advisor and Sub-Advisor each
hereby acknowledges that it is registered as an investment advisor under
the Investment Advisers Act of 1940, that it will use its reasonable best
efforts to maintain such registration, and that it will promptly notify
the other if it ceases to be so registered, if its registration is
suspended for any reason, or if it is notified by any regulatory
organization or court of competent jurisdiction that it should show cause
why its registration should not be suspended or terminated. Further,
Sub-Advisor will notify the Advisor if there is any significant change or
variation in its management structure or personnel that might, in its
reasonable judgement, affect its responsibilities and obligations under
this Agreement.
Witness the due execution hereof this 11th day of December, 2000.
Attest: Xxxxx & Xxxxxx, Inc.
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxx Xxxxxxx X. Xxxxx
Attest: Denver Investment Advisors LLC
/s/ Xxxx Xxxxxxx By: /s/ Xxxx X. Xxxxxx
Xxxx Xxxxxxx Xxxx X. Xxxxxx
Attest J&B Small-Cap International Fund
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxx Xxxxxxx X. Xxxxx
Exhibit A
Fees
Fund: J&B Small-Cap International Fund
Sub-Adviser: Denver Investment Advisors LLC
As compensation, XXXXX & XXXXXX, INC. will pay Sub-Advisor for its
services the following annual fee computed daily as determined by the Fund's
price make-up sheet and which shall be payable monthly or at such other
intervals as agreed by the parties.
a. Seven hundred seventy five one-thousandths of one
percent (775/1000 of 1%) of the average total net assets of the
Fund that do not exceed two hundred fifty million dollars
($250,000,000).
b. Seven hundred one-thousandths (700/1000 of 1%) of the
average total net assets of the Fund that exceed two hundred
fifty million dollars ($250,000,000).
