Pursuant to Rule 483(d)(2) under the Securities Act of 1933, the following form
of Sub-Advisory Agreement is being filed. This form of Agreement will be the
basis for Sub-Advisory Agreements among the Registrant, Xxxxxx/Xxxxxxx Fund
Advisors, LLC and the following sub-advisers:
Xxxxx Selected Advisers, L.P., 000 Xxxx Xxxxx Xxxxxx, Xxxxx Xx, XX
00000
Southeastern Asset Management, Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxx, XX
00000
Xxxxxxxx Associates Capital Corp., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX
00000
Xxxxxx and Associates, 0000 Xxxxxx Xxxx, Xxxxxxxxxx, XX 00000
Strong Capital Management, Inc., 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxx, XX
00000
Societe Generale Asset Management, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, XX 00000
MASTERS SELECT EQUITY FUND
MASTERS SELECT INVESTMENT TRUST
INVESTMENT MANAGEMENT AGREEMENT
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THIS INVESTMENT MANAGEMENT AGREEMENT is made as of the ___ day
of ___________, 199__, by and between XXXXXX/XXXXXXX FUND ADVISORS, LLC
(hereinafter called the "Advisor") and [INVESTMENT MANAGER] (hereinafter called
"Manager").
WITNESSETH:
WHEREAS, the Advisor has been retained as the investment
adviser to Masters Select Equity Fund (the "Fund"), a series of Masters Select
Investment Trust (the "Trust"), an open-end management investment company,
registered as such under the Investment Company Act of 1940 (the "Investment
Company Act"); and
WHEREAS, the Advisor has been authorized by the Trust to
retain one of more investment advisers (each an "investment manager") to serve
as portfolio managers for a specified portion of the Fund's assets (the
"Allocated Portion"); and
WHEREAS, Manager is registered as an investment adviser under
the Investment Advisers Act of 1940 (the "Advisers Act") and is engaged in the
business of supplying investment management services as an independent
contractor; and
WHEREAS, the Fund and the Advisor desire to retain Manager as
an investment manager to render portfolio advice and services to the Fund
pursuant to the terms and provisions of this Agreement, and Manager desires to
xxxxxxx said advice and services; and
WHEREAS, the Trust and the Fund are third party beneficiaries
of such arrangements;
NOW, THEREFORE, in consideration of the covenants and the
mutual promises hereinafter set forth, the parties to this Agreement, which
shall include the Trust and the Fund for purposes of the indemnification
provisions of Section 11 hereto, intending to be legally bound hereby, mutually
agree as follows:
1. Appointment of Manager.
(a) The Advisor xxxxxx employs Manager, and Manager
hereby accepts such employment, to render investment advice and related services
with respect to an Allocated Portion of the assets of the Fund for the period
and on the terms set forth in this Agreement, subject to the supervision and
direction of the Advisor and the Trust's Board of Trustees.
(b) Manager's employment shall be solely with respect
to an Allocated Portion of the Fund's assets, such Allocated Portion to be
specified by the Advisor and subject to periodic increases or decreases at the
Advisor's discretion.
2. Duties of Manager.
(a) General Duties. Manager shall act as one of
several investment managers to the Fund and shall invest Manager's Allocated
Portion of the assets of the Fund in accordance with the investment objectives,
policies and restrictions of the Fund as set forth in the Fund's and Trust's
governing documents, including, without limitation, the Trust's Agreement and
Declaration of Trust and By-Laws; the Fund's prospectus, statement of additional
information and undertakings; and such other limitations, policies and
procedures as the Advisor or the Trustees of the Trust may impose from time to
time in writing to Manager. In providing such services, Manager shall at all
times adhere to the provisions and restrictions contained in the federal
securities laws, applicable state securities laws, the Internal Revenue Code,
and other applicable law.
Without limiting the generality of the foregoing, Manager
shall: (i) furnish the Fund with advice and recommendations with respect to the
investment of the Manager's Allocated Portion of the Fund's assets, (ii) effect
the purchase and sale of portfolio securities for Manager's Portfolio
Allocation; (iii) manage and oversee the investments of the Manager's Portfolio
Allocation, subject to the ultimate supervision and direction of the Trust's
Board of Trustees; (iv) vote proxies, file required ownership reports, and take
other actions with respect to the securities in Manager's Portfolio Allocation;
(v) maintain the books and records required to be maintained with respect to the
securities in Manager's Portfolio Allocation; (vi) furnish reports, statements
and other data on securities, economic conditions and other matters related to
the investment of the Fund's assets which the Advisor, Trustees or the officers
of the Trust may reasonably request; and (vi) render to the Trust's Board of
Trustees such periodic and special reports with respect to Manager's Portfolio
Allocation as the Board may reasonably request.
(b) Brokerage. With respect to Manager's Allocated
Portion, Manager shall be responsible for broker-dealer selection and for
negotiation of brokerage commission rates, provided that Manager shall not
direct orders to an affiliated person of the Manager [or any other investment
manager] without general prior authorization to use such affiliated broker or
dealer by the Trust's Board of Trustees. Manager's primary consideration in
effecting a securities transaction will be execution at the most favorable
price. In selecting a broker-dealer to execute each particular transaction,
Manager may take the following into consideration: the best net price available;
the reliability, integrity and financial condition of the broker-dealer; the
size of and difficulty in executing the order; and
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the value of the expected contribution of the broker-dealer to the investment
performance of the Fund on a continuing basis. The price to the Fund in any
transaction may be less favorable than that available from another broker-dealer
if the difference is reasonably justified by other aspects of the portfolio
execution services offered.
Subject to such policies as the Advisor and the Board of
Trustees of the Trust may determine, Manager 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 or dealer that
provides (directly or indirectly) brokerage or research services to the Advisor
an amount of commission for effecting a portfolio transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if Manager 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 or dealer, viewed in terms of either that
particular transaction or Manager's or Advisor's overall responsibilities with
respect to the Fund. Manager is further authorized to allocate the orders placed
by it on behalf of the Fund to such brokers or dealers who also provide research
or statistical material, or other services, to the Trust, the Advisor, or any
affiliate of either. Such allocation shall be in such amounts and proportions as
Manager shall determine, and Manager shall report on such allocations regularly
to the Advisor and the Trust, indicating the broker-dealers to whom such
allocations have been made and the basis therefor. Manager is also authorized to
consider sales of shares of the Fund as a factor in the selection of brokers or
dealers to execute portfolio transactions, subject to the requirements of best
execution, i.e., that such brokers or dealers are able to execute the order
promptly and at the best obtainable securities price.
On occasions when Manager deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients of
Manager, Manager, to the extent permitted by applicable laws and regulations,
may aggregate the securities to be so purchased or sold in order to obtain the
most favorable price or lower brokerage commissions and the most efficient
execution. In such event, allocation of the securities so purchased or sold, as
well as the expenses incurred in the transaction, will be made by Manager in the
manner it considers to be the most equitable and consistent with its fiduciary
obligations to the Funds and to such other clients.
3. Representations of Manager.
(a) Manager shall use its best judgment and efforts
in rendering the advice and services to the Funds as contemplated by this
Agreement.
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(b) Manager shall maintain all licenses and
registrations necessary to perform its duties hereunder in good order.
(c) Manager shall conduct its operations at all times
in conformance with the Advisers Act, the Investment Company Act, and any other
applicable state and/or self-regulatory organization regulations.
(d) Manager shall maintain errors and omissions
insurance in an amount at least equal to $_____________, with a deductible not
to exceed $___________, throughout the term of this Agreement.
4. Independent Contractor. Manager shall, for all
purposes herein, be deemed to be an independent contractor, and shall, unless
otherwise expressly provided and authorized to do so, have no authority to act
for or represent the Trust, the Fund, or the Advisor in any way, or in any way
be deemed an agent for the Trust, the Fund or the Advisor. It is expressly
understood and agreed that the services to be rendered by Manager to the Fund
under the provisions of this Agreement are not to be deemed exclusive, and
Manager shall be free to render similar or different services to others so long
as its ability to render the services provided for in this Agreement shall not
be impaired thereby.
5. Manager's Personnel. Manager shall, at its own
expense, maintain such staff and employ or retain such personnel and consult
with such other persons as it shall from time to time determine to be necessary
to the performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of Manager shall be deemed
to include persons employed or retained by Manager to furnish statistical
information, research, and other factual information, advice regarding economic
factors and trends, information with respect to technical and scientific
developments, and such other information, advice and assistance as Manager, the
Advisor or the Trust's Board of Trustees may desire and reasonably request.
6. Expenses.
(a) Manager shall be responsible for (i) providing
the personnel, office space and equipment reasonably necessary to fulfill its
obligations under this Agreement, and (ii) the costs of any special meetings of
the Fund's shareholders or the Trust's Board of Trustees convened for the
primary benefit of Manager.
(b) Manager may voluntarily absorb certain Fund
expenses or waive some or all of Manager's own fee.
(c) To the extent Manager incurs any costs by
assuming expenses which are an obligation of the Advisor or the Fund, the
Advisor or the Fund shall promptly reimburse the
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Manager for such costs and expenses. To the extent Manager performs services for
which the Fund or the Advisor is obligated to pay, Manager shall be entitled to
reimbursement to the extent of Manager's actual costs for providing such
services. In determining Manager's actual costs, Manager may take into account
an allocated portion of the salaries and overhead of personnel performing such
services.
7. Investment Management Fee.
(a) The Advisor shall pay to Manager, and Manager
agrees to accept, as full compensation for all investment management and
advisory services furnished or provided to the Fund pursuant to this Agreement,
an annual management fee based on Manager's Allocated Portion, as such Allocated
Portion may be adjusted from time to time. Such fee shall be equal to [ ]% of
the average daily net assets of the Fund attributable to the Manager's Allocated
Portion, computed on the value of such net assets as of the close of business
each day.
(b) The management fee shall be paid by the Advisor
to Manager monthly in arrears on the tenth business day of each month.
(c) The initial fee under this Agreement shall be
payable on the tenth business day of the first month following the effective
date of this Agreement and shall be prorated as set forth below. If this
Agreement is terminated prior to the end of any month, the fee to Manager 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
number of calendar days in the month, and shall be payable within ten (10) days
after the date of termination.
(d) The fee payable to Manager under this Agreement
will be reduced to the extent of any receivable owed by Manager to the Advisor
or the Fund.
(e) Manager voluntarily may reduce any portion of the
compensation or reimbursement of expenses due to it pursuant to this Agreement
and may agree to make payments to limit the expenses which are the
responsibility of the Advisor of the Fund under this Agreement. Any such
reduction or payment shall be applicable only to such specific reduction or
payment and shall not constitute an agreement to reduce any future compensation
or reimbursement due to Manager hereunder or to continue future payments. Any
such reduction will be agreed to prior to accrual of the related expense or fee
and will be estimated daily and reconciled and paid on a monthly basis.
(f) Manager may agree not to require payment of any
portion of the compensation or reimbursement of expenses otherwise due to it
pursuant to this Agreement. Any such
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agreement shall be applicable only with respect to the specific items covered
thereby and shall not constitute an agreement not to require payment of any
future compensation or reimbursement due to Manager hereunder.
8. No Shorting; No Borrowing. Manager agrees that
neither it nor any of its officers or employees shall take any short position in
the shares of the Funds. This prohibition shall not prevent the purchase of such
shares by any of the officers or employees of Manager or any trust, pension,
profit-sharing or other benefit plan for such persons or affiliates thereof, at
a price not less than the net asset value thereof at the time of purchase, as
allowed pursuant to rules promulgated under the Investment Company Act. Manager
agrees that neither it nor any of its officers or employees shall borrow from
the Fund or pledge or use the Fund's assets in connection with any borrowing not
directly for the Fund's benefit.
9. Conflicts with Trust's Governing Documents and
Applicable Laws. Nothing herein contained shall be deemed to require the Trust
or the Fund to take any action contrary to the Trust's Agreement and Declaration
of Trust, By-Laws, or any applicable statute or regulation, or to relieve or
deprive the Board of Trustees of the Trust of its responsibility for and control
of the conduct of the affairs of the Trust and Funds. In this connection,
Manager acknowledges that the Advisor and the Trust's Board of Trustees retain
ultimate plenary authority over the Fund, including the Allocated Portion
[Portfolio Allocation?], and may take any and all actions necessary and
reasonable to protect the interests of shareholders.
10. Reports and Access. Manager agrees to supply such
information to the Advisor and to permit such compliance inspections by the
Advisor or the Fund as shall be reasonably necessary to permit the administrator
to satisfy its obligations and respond to the reasonable requests of the
Trustees.
11. Standard of Care, Liability and Indemnification.
(a) Manager shall exercise reasonable care and
prudence in fulfilling its obligations under this Agreement.
(b) The Advisor shall have responsibility for the
accuracy and completeness (and liability for the lack thereof) of the statements
in the Fund's offering materials (including the prospectus, the statement of
additional information, advertising and sales materials) that pertain to Manager
and the investment of Manager's Allocated Portion of the Fund. Manager shall
have no responsibility or liability with respect to other disclosures.
(c) Manager shall be liable to the Fund for any loss
(including brokerage charges) incurred by the Fund as a result of any investment
made by Manager in violation of Section 2 hereof.
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(d) In the absence of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the obligations or duties hereunder
on the part of Manager, Manager shall not be subject to liability to the
Advisor, the Trust or the Fund or to any shareholder of the Fund for any 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 Funds.
(e) Each party to this Agreement, including the
Trust, shall indemnify and hold harmless the other party and the shareholders,
directors, officers and employees of the other party (any such person, an
"Indemnified Party") against any loss, liability, claim, damage or expense
(including the reasonable cost of investigating and defending any alleged loss,
liability, claim, damage or expenses and reasonable counsel fees incurred in
connection therewith) arising out of the Indemnified Party's performance or
non-performance of any duties under this Agreement provided, however, that
nothing herein shall be deemed to protect any Indemnified Party against any
liability to which such Indemnified Party would otherwise be subject by reason
of willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties under
this Agreement.
(f) No provision of this Agreement shall be construed
to protect any Trustee or officer of the Trust, or officer of the Advisor, from
liability in violation of Sections 17(h) and (i) of the Investment Company Act.
12. Non-Exclusivity; Trading for Manager's Own Account.
The Advisor's employment of Manager is not an exclusive arrangement. The Advisor
anticipates that it will employ other individuals or entities to furnish it with
the services provided for herein. Likewise, Manager may act as investment
adviser for any other person, and shall not in any way be limited or restricted
from buying, selling or trading any securities for its or their own accounts or
the accounts of others for whom it or they may be acting, provided, however,
that Manager expressly represents that it will undertake no activities which
will adversely affect the performance of its obligations to the Fund under this
Agreement; and provided further that the Advisor will adhere to a code of ethics
governing employee trading and trading for proprietary accounts that conforms to
the requirements of the Investment Company Act and the Advisers Act and has been
approved by the Board of Trustees of the Trust.
13. Term.
This Agreement shall become effective at the time the
Fund commences operations pursuant to an effective amendment to the Trust's
Registration Statement under the Securities Act of 1933 and shall remain in
effect for a period of two (2) years, unless sooner terminated as hereinafter
provided. This Agreement shall continue in effect thereafter for additional
periods not
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exceeding one (l) year so long as such continuation is approved for the Fund at
least annually by (i) the Board of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of each Fund and (ii) the vote of
a majority of the Trustees of the Trust who are not parties to this Agreement
nor interested persons thereof, cast in person at a meeting called for the
purpose of voting on such approval, and (iii) the Advisor. The terms "majority
of the outstanding voting securities" and "interested persons" shall have the
meanings as set forth in the Investment Company Act.
14. Termination; No Assignment.
(a) This Agreement may be terminated by the Advisor
or the Trust on behalf of the Fund at any time without payment of any penalty,
by the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of a Fund, upon sixty (60) days' written notice to
the Advisor, and by the Advisor upon sixty (60) days' written notice to a Fund.
In the event of a termination, Manager shall cooperate in the orderly transfer
of the Fund's affairs and, at the request of the Board of Trustees, transfer any
and all books and records of the Fund maintained by Manager on behalf of the
Fund.
(b) This Agreement shall terminate automatically in
the event of any transfer or assignment thereof, as defined in the Investment
Company Act.
15. Severability. If any provision of this Agreement
shall be held or made invalid by a court decision, statute or rule, or shall be
otherwise rendered invalid, the remainder of this Agreement shall not be
affected thereby.
16. Captions. The captions in this Agreement are included
for convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.
17. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of California without
giving effect to the conflict of laws principles thereof; provided that nothing
herein shall be construed to preempt, or to be inconsistent with, any federal
law, regulation or rule, including the Investment Company Act and the Advisers
Act and any rules and regulations promulgated thereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers, all on the day
and year first above written.
XXXXXX/GREGORY FUND [INVESTMENT MANAGER]
ADVISORS, LLC
By: ______________________________ By:______________________________
__________________________________ _________________________________
__________________________________ _________________________________
As a Third Party Beneficiary,
MASTERS SELECT INVESTMENT TRUST
on behalf of
MASTERS SELECT EQUITY FUND
By: _____________________________
_________________________________
_________________________________
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