EX-99.B5(c)
INVESTMENT SUB-ADVISORY AGREEMENT
THIS AGREEMENT, made this ____th day of _____, 1997, by and between
NORTHWESTERN MUTUAL INVESTMENT SERVICES, INC., a Wisconsin corporation
registered as an Investment Adviser under the Investment Advisers Act of 1940
(the "Adviser") and XXXXXXXXX INVESTMENT COUNSEL, INC., a Florida corporation
registered as an Investment Adviser under the Investment Advisers Act of 1940
(the "Sub-Adviser").
WHEREAS, the Adviser is the Investment Adviser to the International Equity
Fund (the "Fund") of Xxxxx Street Funds, Inc. ("MSF"), an open-end diversified
management investment company of the series type, registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund is represented by a separate class of capital stock of
MSF; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish it with
portfolio selection and related research and statistical services in connection
with the Adviser's investment advisory activities on behalf of the Fund, and the
Sub-Adviser desires to furnish such services to the Adviser;
NOW, THEREFORE, in consideration of the premises and the terms and
conditions hereinafter set forth, it is agreed as follows:
1. APPOINTMENT OF SUB-ADVISER
In accordance with and subject to the Investment Advisory Agreement (the
"Investment Advisory Agreement") between MSF and the Adviser dated _______ __,
1997, the Adviser hereby appoints the Sub-Adviser to perform portfolio selection
services described herein for investment and reinvestment of the Fund's
investment assets, subject to the control and direction of MSF's Board of
Directors, for the period and on the terms hereinafter set forth. The
Sub-Adviser accepts such appointment and agrees to furnish the services
hereinafter set forth for the compensation herein provided. The Sub-Adviser
shall for all purposes herein be deemed to be an independent contractor and
shall, except as expressly provided or authorized, have no authority to act for
or represent the Fund or the Adviser in any way or otherwise be deemed an agent
of the Fund or the Adviser.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY THE SUB-ADVISER
(a) The Sub-Adviser shall provide the following services and assume the
following obligations with respect to the Fund:
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(1) The investment of the assets of the Fund shall at all times be subject to
the applicable provisions of the Articles of Incorporation, the Bylaws, the
Registration Statement, the current Prospectus and the Statement of
Additional Information of MSF relating to the Fund and shall conform to the
investment objectives, policies and restrictions of the Fund as set forth
in such documents and as interpreted from time to time by the Board of
Directors of MSF and by the Adviser. Within the framework of the
investment objectives, policies and restrictions of the Fund, and subject
to the supervision of the Adviser, the Sub-Adviser shall have the sole and
exclusive responsibility for the making and execution of all investment
decisions for the Fund.
(2) In carrying out its obligations to manage the investments and
reinvestments of the assets of the Fund, the Sub-Adviser shall: (1) obtain
and evaluate pertinent economic, statistical, financial and other
information affecting the economy generally and individual companies or
industries the securities of which are included in the Fund's investment
portfolio or are under consideration for inclusion therein; (2) formulate
and implement a continuous investment program for the Fund consistent with
the investment objective and related investment policies for the Fund as
set forth in MSF's registration statement, as amended; and (3) take such
steps as are necessary to implement the aforementioned investment program
by purchase and sale of securities including the placing, or directing the
placement through an affiliate of the Sub-Adviser, of orders for such
purchases and sales.
(3) In connection with the purchase and sale of securities of the Fund, the
Sub-Adviser shall arrange for the transmission to the Adviser and the
Custodian for the Fund on a daily basis such confirmation, trade tickets
and other documents as may be necessary to enable them to perform their
administrative responsibilities with respect to the Fund's investment
portfolio. With respect to portfolio securities to be purchased or sold
through the Depository Trust Company, the Sub-Adviser shall arrange for the
automatic transmission of the I.D. confirmation of the trade to the
Custodian of the Fund. The Sub-Adviser shall render such reports to the
Adviser and/or to MSF's Board of Directors concerning the investment
activity and portfolio composition of the Fund in such form and at such
intervals as the Adviser or the Board may from time to time require.
(4) The Sub-Adviser shall, in the name of the Fund, place or direct the
placement of orders for the execution of portfolio transactions in
accordance with the policies with respect thereto, as set forth in MSF's
Registration Statement, as amended from time to time, and under the
Securities Act of 1933 and the 1940 Act. In connection with the
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placement of orders for the execution of the Fund's portfolio
transactions, the Sub-Adviser 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 MSF and shall be available for inspection and use by the Securities
and Exchange Commission, MSF or any person retained by MSF. Where
applicable, such records shall be maintained by the Sub-Adviser for
the period and in the place required by Rule 3la-2 under the 1940 Act.
(5) In placing orders or directing the placement of orders for the
execution of portfolio transactions, the Sub-Adviser shall select
brokers and dealers for the execution of the Fund's transactions. In
selecting brokers or dealers to execute such orders, the Sub-Adviser
is expressly authorized to consider the fact that a broker or dealer
has furnished statistical, research or other information or services
which enhance the Sub-Adviser's investment research and portfolio
management capability generally. It is further understood in
accordance with Section 28(e) of the Securities Exchange Act of 1934,
as amended, that the Sub-Adviser 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 the
Sub-Adviser 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 the Sub-Adviser's
overall responsibilities to the Sub-Adviser's discretionary accounts.
(b) The Sub-Adviser shall use the same skill and care in providing
services to the Fund as it uses in providing services to fiduciary accounts for
which it has investment responsibility. The Sub-Adviser will conform with all
applicable rules and regulations of the Securities and Exchange Commission.
3. EXPENSES
During the term of this Agreement, the Sub-Adviser will pay all expenses
incurred by it in connection with its activities under this Agreement.
4. COMPENSATION
In payment for the investment sub-advisory services to be rendered by the
Sub-Adviser in respect of the Fund hereunder, the Adviser shall pay to the
Sub-Adviser as full compensation for all services hereunder a fee computed at an
annual rate which shall be a percentage of the average daily value of the net
assets of the Fund. The fee shall be accrued daily and shall be based on the
net asset values of all of the issued and outstanding shares of
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the Fund as determined as of the close of each business day pursuant to the
Articles of Incorporation, Bylaws and currently effective Prospectus and
Statement of Additional Information of MSF as they relate to the Fund. The fee
shall be payable in arrears on the last day of each calendar month.
The amount of such annual fee, as applied to the average daily value of the
net assets of the Fund shall be as described in the schedule below:
Assets Fee
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On the first $100 million in assets .50%
On the assets in excess of $100 million .40%
For the purpose of determining the applicable fee percentage rate (.50% or
.40%) in the above table, the value of the assets of the Fund shall be combined
with the value of the assets of the International Equity Portfolio of
Northwestern Mutual Series Fund, Inc.
5. RENEWAL AND TERMINATION
This Agreement shall continue in effect for a period more than two years
from the date of this Agreement, only so long as such continuance is
specifically approved at least annually by a vote of the holders of the majority
of the outstanding voting securities of the Fund, or by a vote of the majority
of MSF's Board of Directors. And further provided that such continuance is also
approved annually by a vote of the majority of MSF's Board of Directors who are
not parties to this Agreement or interested persons of parties hereto, cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement may be terminated at any time without payment of penalty: (i) by MSF's
Board of Directors or by a vote of a majority of the outstanding voting
securities of the Fund on sixty days' prior written notice, or (ii) by either
party hereto upon sixty days' prior written notice to the other. This Agreement
will terminate automatically upon any termination of the Investment Advisory
Agreement or in the event of its assignment. The terms "interested person,"
"assignment" and "vote of a majority of the outstanding voting securities" shall
have the meanings set forth in the 1940 Act.
6. GENERAL PROVISIONS
(a) The Sub-Adviser may rely on information reasonably believed by it to
be accurate and reliable. Except as may otherwise be provided by the 1940 Act,
neither the Sub-Adviser nor its officers, directors, employees or agents shall
be subject to any liability for any error of judgment or mistake of law or for
any loss arising out of any investment or other act or omission in the
performance by the Sub-Adviser of its duties under this Agreement or for any
loss or damage resulting from the imposition by any government or exchange
control restrictions which might affect the liquidity of the Fund's assets, or
from acts or omissions of custodians or securities depositories, or from any war
or political act of any foreign government to which such assets might be
exposed, provided that nothing herein shall be
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deemed to protect, or purport to protect, the Sub-Adviser against any liability
to MSF or to its shareholders to which the Sub-Adviser would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of the Sub-Adviser's reckless
disregard of its obligations and duties hereunder.
(b) The Adviser and MSF's Board of Directors understand that the value of
investments made for the Fund may go up as well as down, is not guaranteed and
that investment decisions will not always be profitable. The Adviser has not
made and is not making any guarantees, including any guarantee as to any
specific level of performance of the Fund. The Adviser and MSF's Board of
Directors acknowledge that the Fund is designed for investors seeking
international diversification and is not intended as a complete investment
program. They also understand that investment decisions made on behalf of the
Fund by the Sub-Adviser are subject to various market and business risks, and
that investing in securities of companies in emerging countries involves special
risks which are not typically associated with investing in U.S. companies.
Risks include but are not limited to, foreign currency fluctuations, investment
and repatriation restrictions, and political and social instability. Although
the Sub-Adviser intends to invest in companies located in countries which the
Sub-Adviser considers to have relatively stable and friendly governments, MSF's
Board of Directors accepts the possibility that countries in which the
Sub-Adviser invests may expropriate or nationalize properties of foreigners, may
impose confiscatory taxation or exchange controls, including suspending currency
transfers from a given country, or may be subject to political or diplomatic
developments that could affect investments in those countries.
(c) This Agreement shall not be or become effective unless and until it is
or has been approved by the Board of Directors of MSF, including a majority of
the Directors who are not "interested persons" to parties to this Agreement, by
a vote cast in person at a meeting called for the purpose of voting upon such
approval.
(d) The Adviser understands that the Sub-Adviser now acts, will continue
to act, or may act in the future, as investment adviser to fiduciary and other
managed accounts, including other investment companies, and the Adviser has no
objection to the Sub-Adviser so acting, provided that the Sub-Adviser duly
performs all obligations under this Agreement. The Adviser also understands
that the Sub-Adviser may give advice and take action with respect to any of its
other clients or for its own account which may differ from the timing or nature
of action taken by the Sub-Adviser with respect to the Fund. Nothing in this
Agreement shall impose upon the Sub-Adviser any obligation to purchase or sell
or to recommend for purchase or sale, with respect to the Fund, any security
which the Sub-Adviser or its shareholders, directors, officers, employees or
affiliates may purchase or sell for its or their own account(s) or for the
account of any other client.
(e) Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the right of the
Sub-Adviser, or the right of any of its officers, directors or employees who may
also be an officer, director or employee of MSF, or person otherwise affiliated
with MSF (within the meaning of the 0000 Xxx) to engage in any other business or
to devote time and attention to the management or other aspects of any other
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business, whether of a similar or dissimilar nature, or to render services of
any kind to any other trust, corporation, firm, individual or association.
(f) Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes hereof. This
Agreement shall be construed and enforced in accordance with and governed by the
laws of the State of Wisconsin. The captions in this Agreement are included
for convenience only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(g) Any notice under this Agreement shall be in writing, addressed and
delivered or mailed postage pre-paid to the appropriate party at the following
address: The Adviser, MSF and the Fund at 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000, and the Sub-Adviser at 000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000,
Xxxx Xxxxxxxxxx, Xxxxxxx 00000.
(h) Sub-Adviser agrees to notify Adviser of any change in Sub-Adviser's
officers and directors within a reasonable time after such change.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
NORTHWESTERN MUTUAL INVESTMENT SERVICES,
INC.
By:
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, President
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XXXXXXXXX INVESTMENT COUNSEL, INC.
By:
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