Exhibit 23(d)(iii)
SUBADVISORY AGREEMENT
HERITAGE GROWTH AND INCOME TRUST
This Subadvisory Agreement is made as of July 2, 2001, between Heritage
Asset Management, Inc., a Florida corporation (the "Manager"), and Xxxxxxxxx
Investment Management, Inc., a Delaware company (the "Subadviser").
WHEREAS, the Manager has by separate contract agreed to serve as the
investment adviser to the Heritage Growth and Income Trust (the "Fund"), the
single investment portfolio of Heritage Growth and Income Trust, a Massachusetts
business trust registered under the Investment Company Act of 1940, as amended
("1940 Act"), as an open-end diversified management investment company
consisting of one or more investment series of shares, each having its own
assets and investment policies;
WHEREAS, the Manager's contract with the Fund allows it to delegate
certain investment advisory services to other parties; and
WHEREAS, the Manager desires to retain the Subadviser to perform
certain investment subadvisory services for the Fund, and the Subadviser is
willing to perform such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE FUND.
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(a) INVESTMENT PROGRAM. Subject to the control and supervision
of the Board of Trustees of the Fund and the Manager, the Subadviser
shall, at its expense, continuously furnish to the Fund an investment
program for such portion, if any, of Fund assets that is allocated to
it by the Manager from time to time. With respect to such assets, the
Subadviser will make investment decisions and will place all brokerage
orders for the purchase and sale of portfolio securities. In the
performance of its duties, the Subadviser will act in the best
interests of the Fund and will comply with (i) applicable laws and
regulations, including, but not limited to, the 1940 Act, (ii) the
terms of this Agreement, (iii) the stated investment objective,
policies and restrictions of the Fund, as stated in the then-current
Registration Statement of the Fund, and (iv) such other guidelines as
the Trustees or Manager may establish. The Manager shall be
responsible for providing the Subadviser with the Fund's Declaration
of Trust, as filed with the Secretary of State of Massachusetts on
July 25, 1986, and all amendments thereto or restatements thereof, the
Fund's By-Laws and amendments thereto, resolutions of the Fund's Board
of Trustees authorizing the appointment of Subadviser and approving
this Agreement and current copies of the materials specified in
Subsections (a)(iii) and (iv) of this Section 1. At such times as may
be reasonably requested by the Board or the Manager, the Subadviser
will provide them with economic and investment analysis and reports,
and make available to the Board any economical, statistical, or
investment services normally available to similar investment company
clients of the Subadviser.
(b) AVAILABILITY OF PERSONNEL. The Subadviser, at its expense,
will make available to the Trustees and the Manager at reasonable
times its portfolio managers and other appropriate personnel in order
to review investment policies of the Fund and to consult with the
Trustees and the Manager regarding the investment affairs of the Fund,
including economic, statistical and investment matters relevant to the
Subadviser's duties hereunder, and will provide periodic reports to
the Manager relating to the portfolio strategies it employs.
(c) SALARIES AND FACILITIES. The Subadviser, at its expense,
will pay for all salaries of personnel and facilities required for it
to execute its duties under this Agreement.
(d) COMPLIANCE REPORTS. The Subadviser, at its expense, will
provide the Manager with such compliance reports relating to its
duties under this Agreement as may be agreed upon by such parties from
time to time.
(e) VALUATION. With respect to securities traded on a national
securities exchange or The Nasdaq Stock Market, the Manager will value
all such securities for which market quotes are readily available on
each day the New York Stock Exchange is open for business. For those
securities for which market quotes are not readily available, the
Subadviser, at its expense, will provide the Manager with market price
information relating these assets of the Fund at such times as the
parties hereto may agree upon from time to time.
(f) EXECUTING PORTFOLIO TRANSACTIONS. The Subadviser will
place all orders pursuant to its investment determinations for the
Fund either directly with the issuer or through broker-dealers
selected by Subadviser. In the selection of broker-dealers and the
placement of orders for the purchase and sale of portfolio investments
for the Fund, the Subadviser shall use its best efforts to obtain for
the Fund the most favorable price and execution available, except to
the extent it may be permitted to pay higher brokerage commissions for
brokerage and research services as described below. In using its best
efforts to obtain the most favorable price and execution available,
the Subadviser, bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant, including by way
of illustration, price, the size of the transaction, the nature of the
market for the security, the amount of the commission and dealer's
spread or xxxx-up, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial
stability of the broker-dealer involved, the general execution and
operational facilities of the broker-dealer and the quality of service
rendered by the broker-dealer in other transactions. Subject to such
policies as the Board of Trustees may determine, the Subadviser shall
not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker-dealer that provides brokerage and
research services to the Subadviser an amount of commission for
effecting a portfolio investment transaction in excess of the amount
of commission another broker-dealer offering equally good execution
capability in the portfolio investment would have charged for
effecting that transaction if the Subadviser determines in good faith
that such amount of commission was reasonable in relation to the value
of the brokerage and research services provided by such broker-dealer,
viewed in terms of either that particular transaction or the
Subadviser's overall responsibilities with respect to the Fund and to
other clients of the Subadviser as to which the Subadviser exercises
investment discretion. The Fund agrees that any entity or person
associated with the Manager or the Subadviser that is a member of a
national securities exchange is authorized to effect any transaction
on such exchange for the account of the Fund that is permitted by
Section 11(a) of the Securities Exchange Act of 1934, as amended, and
the Fund consents to the retention of compensation for such
transactions.
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(g) EXPENSES. The Subadviser shall not be obligated to pay any
expenses of or for the Fund not expressly assumed by the Subadviser
pursuant to this Agreement.
2. BOOKS AND RECORDS. Pursuant to Rule 31a-3 under the 1940 Act, the
Subadviser agrees that: (a) all records it maintains for the Fund are the
property of the Fund; (b) it will surrender promptly to the Fund or the Manager
any such records (or copies of such records) upon the Fund's or Manager's
request; (c) it will maintain for the Fund the records that the Fund is required
to maintain pursuant to Rule 31a-1 insofar as such records relate to the
investment affairs of the Fund; and (d) it will preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records it maintains for the
Fund. Notwithstanding subsection (b) above, the Subadvisor may maintain copies
of such records to comply with its recordkeeping obligations.
3. OTHER AGREEMENTS. The Subadviser and persons controlled by or under
common control with the Subadviser have and may have advisory, management
service or other agreements with other organizations and persons, and may have
other interests and businesses. Nothing in this Agreement is intended to
preclude such other business relationships.
4. COMPENSATION. The Manager will pay to the Subadviser as compensation
for the Subadviser's services rendered pursuant to this Agreement a subadvisory
fee as set forth in Schedule A, which schedule can be modified from time to
time, subject to the appropriate approvals required by the 1940 Act. Such fees
shall be paid by the Manager (and not by the Fund). Such fees shall be payable
for each month within 15 business days after the end of such month. If the
Subadviser shall serve for less than the whole of a month, the compensation as
specified shall be prorated.
5. AMENDMENT OF AGREEMENT. This Agreement shall not be materially
amended unless such amendment is approved by the vote, cast in person at a
meeting called for the purpose of voting on such approval, of a majority of the
members of the Board of Trustees who are not interested persons of the Fund, the
Manager or the Subadviser (the "Independent Trustees") and, to the extent
required by the 1940 Act, by the affirmative vote of a majority of the
outstanding shares of the Fund. The Subadviser agrees to notify the Manager of
any anticipated change in control of the Subadviser as soon as such change is
reasonably anticipated and, in any event, prior to such change.
6. DURATION AND TERMINATION OF THE AGREEMENT. This Agreement shall
become effective upon its execution; provided, however, that this Agreement
shall not become effective unless it has first been approved (a) by a vote of
the Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by an affirmative vote of a majority of the
outstanding voting shares of the Fund. This Agreement shall remain in full force
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and effect continuously thereafter, except as follows:
(a) By vote of a majority of the (i) Independent Trustees, or
(ii) outstanding voting shares of the Fund, the Fund may at any time
terminate this Agreement, without the payment of any penalty, by
providing not more than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager and the Subadviser.
(b) This Agreement will terminate automatically, without the
payment of any penalty, unless within two years after its initial
effectiveness and at least annually thereafter, the continuance of the
Agreement is specifically approved by (i) the Board of Trustees or the
shareholders of the Fund by the affirmative vote of a majority of the
outstanding shares of the Fund, and (ii) a majority of the Independent
Trustees, by vote cast in person at a meeting called for the purpose of
voting on such approval. If the continuance of this Agreement is
submitted to the shareholders of the Fund for their approval and such
shareholders fail to approve such continuance as provided herein, the
Subadviser may continue to serve hereunder in a manner consistent with
the 1940 Act and the rules thereunder.
(c) The Manager may at any time terminate this Agreement,
without the payment of any penalty, by not less than 60 days' written
notice delivered or mailed by registered mail, postage prepaid, to the
Subadviser, and the Subadviser may at any time, without the payment of
any penalty, terminate this Agreement by not less than 90 days' written
notice delivered or mailed by registered mail, postage prepaid, to the
Manager.
(d) This Agreement automatically and immediately shall
terminate, without the payment of any penalty, in the event of its
assignment or if the Investment Advisory Agreement between the Manager
and the Fund shall terminate for any reason.
(e) Any notice of termination served on the Subadviser by the
Manager shall be without prejudice to the obligation of the Subadviser
to complete transactions already initiated or acted upon with respect
to the Fund. Upon termination without reasonable notice by the Manager,
the Subadviser will be paid certain previously agreed upon expenses the
Subadviser necessarily incurs in terminating the Agreement.
Upon termination of this Agreement, the duties of the Manager delegated
to the Subadviser under this Agreement automatically shall revert to the
Manager.
7. NOTIFICATION OF THE MANAGER. The Subadviser promptly shall notify
the Manager in writing of the occurrence of any of the following events:
(a) the Subadviser shall fail to be registered as an
investment adviser under the Investment Advisers Act of 1940, as
amended,;
(b) the Subadviser shall have been served or otherwise have
notice of any action, suit, proceeding, inquiry or investigation, at
law or in equity, before or by any court, public board or body,
involving the affairs of the Fund; or
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(c) any other occurrence that reasonably could have a material
adverse impact on the ability of the Subadviser to provide the services
provided for under this Agreement.
8. DEFINITIONS. For the purposes of this Agreement, the terms "vote of
a majority of the outstanding shares," "affiliated person," "control,"
"interested person" and "assignment" shall have their respective meanings as
defined in the 1940 Act and the rules thereunder subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission ("SEC")
under said Act; and references to annual approvals by the Board of Trustees
shall be construed in a manner consistent with the 1940 Act and the rules
thereunder.
9. LIABILITY OF THE SUBADVISER. In the absence of its bad faith,
negligence or disregard of its obligations and duties hereunder, the Subadviser
shall not be subject to any liability to the Manager, the Fund or their
directors, Trustees, officers or shareholders, for any act or omission in the
course of, or connected with, rendering services hereunder. However, the
Subadviser shall indemnify and hold harmless such parties from any and all
claims, losses, expenses, obligations and liabilities (including reasonable
attorneys fees) which arise or result from the Subadviser's bad faith,
negligence or disregard of its duties hereunder.
10. LIABILITY OF TRUSTEES AND SHAREHOLDERS. Any obligations of the Fund
under this Agreement are not binding upon the Trustees or the Shareholders
individually but are binding only upon the assets and property of the Fund.
11. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Florida, without giving effect to the conflicts of laws
principles thereof, and in accordance with the 1940 Act. To the extent that the
applicable laws of the State of Florida conflict with the applicable provisions
of the 1940 Act, the latter shall control.
12. SEVERABILITY. 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. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
13. PRIVACY POLICY. The Subadviser acknowledges that nonpublic customer
information (as defined in Regulation S-P, including any amendments thereto) of
customers of the Fund received from the Manager is subject to the limitations on
redisclosure and reuse set forth in Section 248.11 of such Regulation, and
agrees such information (i) shall not be disclosed to any third party for any
purpose without the written consent of the Manager unless permitted by
exceptions set forth in Sections 248.14 or 248.15 of such Regulation and (ii)
shall be safeguarded pursuant to procedures adopted under Section 248.30 of such
Regulation if so required.
14. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is made less restrictive by a rule, or order of the SEC, whether of
special or general application, such provision shall be deemed to incorporate
the effect of such rule, or order.
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IN WITNESS WHEREOF, Heritage Asset Management, Inc. and Xxxxxxxxx
Investment Management, Inc. have each caused this instrument to be signed in
duplicate on its behalf by its duly authorized representative, all as of the day
and year first above written.
Attest: HERITAGE ASSET MANAGEMENT, INC.
By:/s/ Xxxxxx X. Xxxxxxxx By:/s/ X.X. Xxxxx
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Xxxxxx X. Xxxxxxxx Name: X.X. Xxxxx
Title: Executive Vice President
Attest: XXXXXXXXX INVESTMENT
MANAGEMENT, INC.
By:/s/ Xxxxxx Xxxxxxxx By:/s/ Xxxxx XxXxxxx
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Xxxxxx Xxxxxxxx Name: Xxxxx XxXxxxx
Title: President
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SCHEDULE A
TO THE
HERITAGE GROWTH AND INCOME TRUST
SUBADVISORY AGREEMENT
BETWEEN
HERITAGE ASSET MANAGEMENT, INC.
AND
XXXXXXXXX INVESTMENT MANAGEMENT, INC.
As compensation pursuant to section 4 of the Subadvisory Agreement
between Heritage Asset Management, Inc. (the "Manager") and Xxxxxxxxx Investment
Management, Inc. (the "Subadviser"), the Manager shall pay the Subadviser a
subadvisory fee, computed and paid monthly, at the following percentage rate of
the average daily net assets under management by the Subadviser:
For the Heritage Growth and Income Trust: 50% of the advisory fees payable to the
Manager
Dated: July 2, 2001
