SUBADVISORY AGREEMENT
Exhibit (d)(10)
This SUBADVISORY AGREEMENT (“Agreement”) is made this 1st day of August, 2006, by and between
Xxxx Xxxxx Partners Fund Advisor, LLC, a Delaware limited liability company (the “Manager”), and
CAM North America LLC, a Delaware limited liability company (the “Subadviser”).
WHEREAS, the Manager has been retained by Xxxx Xxxxx Partners Variable Portfolios II (the
“Trust”), a registered management investment company under the Investment Company Act of 1940, as
amended (the “1940 Act”) to provide investment advisory, management, and administrative services to
the Trust with respect to certain series of the Trust; and
WHEREAS, the Manager wishes to engage the Subadviser to provide certain investment advisory
services to the Trust with respect to the series of the Trust designated in Schedule A annexed
hereto (the “Fund”) and Subadviser is willing to furnish such services on the terms and conditions
hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, it is
agreed as follows:
1. In accordance with and subject to the Management Agreement between the Trust and the
Manager with respect to the Fund (the “Management Agreement”), the Manager hereby appoints the
Subadviser to act as Subadviser with respect to the Fund for the period and on the terms set forth
in this Agreement. The Subadviser accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.
2. The Manager shall cause the Subadviser to be kept fully informed at all times with regard
to the securities owned by the Fund, its funds available, or to become available, for investment,
and generally as to the condition of the Fund’s affairs. Manager shall furnish the Subadviser with
such other documents and information with regard to the Fund’s affairs as the Subadviser may from
time to time reasonably request.
3. (a) Subject to the supervision of the Trust’s Board of Trustees (the “Board”) and the
Manager, the Subadviser shall regularly provide the Fund with respect to such portion of the Fund’s
assets as shall be allocated to the Subadviser by the Manager from time to time (the “Allocated
Assets”) with investment research, advice, management and supervision and shall furnish a
continuous investment program for the Allocated Assets consistent with the Fund’s investment
objectives, policies and restrictions, as stated in the Fund’s current Prospectus and Statement of
Additional Information. The Subadviser shall, with respect to the Allocated Assets, determine from
time to time what securities and other investments will be purchased, retained, sold or exchanged
by the Fund and what portion of the Allocated Assets will be held in the various securities and
other investments in which the Fund invests, and shall implement those decisions, all subject to
the provisions of the Trust’s Declaration of Trust and By-Laws (collectively, the “Governing
Documents”), the 1940 Act, and the applicable rules and regulations promulgated thereunder by the
Securities and Exchange Commission (the “SEC”) and interpretive guidance issued thereunder by the
SEC staff and any other applicable federal and state law, as well as the investment objectives,
policies and restrictions of the Fund referred to above, and any other specific policies adopted by
the Board and disclosed to the Subadviser. The Subadviser is authorized as the agent of the Trust
to give instructions with respect to the Allocated Assets to the custodian of the Fund as to
deliveries of securities and other investments and payments of cash for the account of the Fund.
Subject to applicable provisions of the 1940 Act, the investment program to be provided hereunder
may
entail the investment of all or substantially all of the assets of a Fund in one or more
investment companies. The Subadviser will place orders pursuant to its investment determinations
for the Fund either directly with the issuer or with any broker or dealer, foreign currency dealer,
futures commission merchant or others selected by it. In connection with the selection of such
brokers or dealers and the placing of such orders, subject to applicable law, brokers or dealers
may be selected who also provide brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) to the Funds
and/or the other accounts over which the Subadviser or its affiliates exercise investment
discretion. The Subadviser is authorized to pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for a Fund which is in excess
of the amount of commission another broker or dealer would have charged for effecting that
transaction if the Subadviser determines in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular transaction or the overall
responsibilities which the Subadviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Board may adopt policies and procedures that modify and
restrict the Subadviser’s authority regarding the execution of the Fund’s portfolio transactions
provided herein. The Subadviser shall exercise voting rights, rights to consent to corporate action
and any other rights pertaining to the Allocated Assets subject to such direction as the Board may
provide, and shall perform such other functions of investment management and supervision as may be
directed by the Board.
(b) The Fund hereby authorizes any entity or person associated with the Subadviser which is a
member of a national securities exchange to effect any transaction on the exchange for the account
of the Fund which is permitted by Section 11(a) of the Exchange Act and Rule 11a2-2(T) thereunder,
and the Fund hereby consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(a)(2)(iv). Notwithstanding the foregoing, the Subadviser agrees that it will
not deal with itself, or with members of the Board or any principal underwriter of the Fund, as
principals or agents in making purchases or sales of securities or other property for the account
of a Fund, nor will it purchase any securities from an underwriting or selling group in which the
Subadviser or its affiliates is participating, or arrange for purchases and sales of securities
between a Fund and another account advised by the Subadviser or its affiliates, except in each case
as permitted by the 1940 Act and in accordance with such policies and procedures as may be adopted
by a Fund from time to time, and will comply with all other provisions of the Governing Documents
and the Fund’s then-current Prospectus and Statement of Additional Information relative to the
Subadviser and its directors and officers.
4. The Subadviser may delegate to any other one or more companies that the Subadviser
controls, is controlled by, or is under common control with, or to specified employees of any such
companies, certain of the Subadviser’s duties under this Agreement, provided in each case the
Subadviser will supervise the activities of each such entity or employees thereof, that such
delegation will not relieve the Subadviser of any of its duties or obligations under this Agreement
and provided further that any such arrangements are entered into in accordance with all applicable
requirements of the 1940 Act.
5. The Subadviser agrees that it will keep records relating to its services hereunder in
accordance with all applicable laws, and in compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Subadviser hereby agrees that any records that it maintains for the Fund are the
property of the Fund, and further agrees to surrender promptly to the Fund any of such records upon
the Fund’s request. The Subadviser further agrees to arrange for the preservation of the records
required to be maintained by Rule 31a-1 under the 1940 Act for the periods prescribed by Rule 31a-2
under the 1940 Act.
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6. (a) The Subadviser, at its expense, shall supply the Board, the officers of the Trust, and
the Manager with all information and reports reasonably required by them and reasonably available
to the Subadviser relating to the services provided by the Subadviser hereunder.
(b) The Subadviser shall bear all expenses, and shall furnish all necessary services,
facilities and personnel, in connection with its responsibilities under this Agreement. Other than
as herein specifically indicated, the Subadviser shall not be responsible for the Fund’s expenses,
including, without limitation, advisory fees; distribution fees; interest; taxes; governmental
fees; voluntary assessments and other expenses incurred in connection with membership in investment
company organizations; organization costs of the Fund; the cost (including brokerage commissions,
transaction fees or charges, if any) in connection with the purchase or sale of the Fund’s
securities and other investments and any losses in connection therewith; fees and expenses of
custodians, transfer agents, registrars, independent pricing vendors or other agents; legal
expenses; loan commitment fees; expenses relating to share certificates; expenses relating to the
issuing and redemption or repurchase of the Fund’s shares and servicing shareholder accounts;
expenses of registering and qualifying the Fund’s shares for sale under applicable federal and
state law; expenses of preparing, setting in print, printing and distributing prospectuses and
statements of additional information and any supplements thereto, reports, proxy statements,
notices and dividends to the Fund’s shareholders; costs of stationery; website costs; costs of
meetings of the Board or any committee thereof, meetings of shareholders and other meetings of the
Fund; Board fees; audit fees; travel expenses of officers, members of the Board and employees of
the Fund, if any; and the Fund’s pro rata portion of premiums on any fidelity bond and other
insurance covering the Fund and its officers, Board members and employees; litigation expenses and
any non-recurring or extraordinary expenses as may arise, including, without limitation, those
relating to actions, suits or proceedings to which the Fund is a party and the legal obligation
which the Fund may have to indemnify the Fund’s Board members and officers with respect thereto.
7. No member of the Board, officer or employee of the Trust or Fund shall receive from the
Trust or Fund any salary or other compensation as such member of the Board, officer or employee
while he is at the same time a director, officer, or employee of the Subadviser or any affiliated
company of the Subadviser, except as the Board may decide. This paragraph shall not apply to Board
members, executive committee members, consultants and other persons who are not regular members of
the Subadviser’s or any affiliated company’s staff.
8. As compensation for the services performed by the Subadviser, including the services of any
consultants retained by the Subadviser, the Manager shall pay the Subadviser out of the management
fee it receives with respect to the Fund, and only to the extent thereof, as promptly as possible
after the last day of each month, a fee, computed daily at an annual rate set forth on Schedule A
annexed hereto. The first payment of the fee shall be made as promptly as possible at the end of
the month succeeding the effective date of this Agreement, and shall constitute a full payment of
the fee due the Subadviser for all services prior to that date. If this Agreement is terminated as
of any date not the last day of a month, such fee shall be paid as promptly as possible after such
date of termination, shall be based on the average daily net assets of the Fund or, if less, the
portion thereof comprising the Allocated Assets in that period from the beginning of such month to
such date of termination, and shall be that proportion of such average daily net assets as the
number of business days in such period bears to the number of business days in such month. The
average daily net assets of the Fund or the portion thereof comprising the Allocated Assets shall
in all cases be based only on business days and be computed as of the time of the regular close of
business of the New York Stock Exchange, or such other time as may be determined by the Board.
9. The Subadviser assumes no responsibility under this Agreement other than to render the
services called for hereunder, in good faith, and shall not be liable for any error of judgment or
mistake of
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law, or for any loss arising out of any investment or for any act or omission in the execution
of securities transactions for a Fund, provided that nothing in this Agreement shall protect the
Subadviser against any liability to the Manager or the Fund to which the Subadviser would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of
its duties or by reason of its reckless disregard of its obligations and duties hereunder. As used
in this Section 9, the term “Subadviser” shall include any affiliates of the Subadviser performing
services for the Trust or the Fund contemplated hereby and the partners, shareholders, directors,
officers and employees of the Subadviser and such affiliates.
10. Nothing in this Agreement shall limit or restrict the right of any director, officer, or
employee of the Subadviser who may also be a Board member, officer, or employee of the Trust or the
Fund, to engage in any other business or to devote his time and attention in part to the management
or other aspects of any other business, whether of a similar nature or a dissimilar nature, nor to
limit or restrict the right of the Subadviser to engage in any other business or to render services
of any kind, including investment advisory and management services, to any other fund, firm,
individual or association. If the purchase or sale of securities consistent with the investment
policies of a Fund or one or more other accounts of the Subadviser is considered at or about the
same time, transactions in such securities will be allocated among the accounts in a manner deemed
equitable by the Subadviser. Such transactions may be combined, in accordance with applicable laws
and regulations, and consistent with the Subadviser’s policies and procedures as presented to the
Board from time to time.
11. For the purposes of this Agreement, the Fund’s “net assets” shall be determined as
provided in the Fund’s then-current Prospectus and Statement of Additional Information and the
terms “assignment,” “interested person,” and “majority of the outstanding voting securities” shall
have the meanings given to them by Section 2(a) of the 1940 Act, subject to such exemptions as may
be granted by the SEC by any rule, regulation or order.
12. This Agreement will become effective with respect to the Fund on the date set forth
opposite the Fund’s name on Schedule A annexed hereto, provided that it shall have been approved by
the Trust’s Board and, if so required by the 1940 Act, by the shareholders of the Fund in
accordance with the requirements of the 1940 Act and, unless sooner terminated as provided herein,
will continue in effect through November 30, 2007. Thereafter, if not terminated, this Agreement
shall continue in effect with respect to the Fund, so long as such continuance is specifically
approved at least annually (i) by the Board or (ii) by a vote of a majority of the outstanding
voting securities of the Fund, provided that in either event the continuance is also approved by a
majority of the Board members who are not interested persons of any party to this Agreement, by
vote cast in person at a meeting called for the purpose of voting on such approval.
13. This Agreement is terminable with respect to the Fund without penalty by the Board or by
vote of a majority of the outstanding voting securities of the Fund, in each case on not more than
60 days’ nor less than 30 days’ written notice to the Subadviser, or by the Subadviser upon not
less than 90 days’ written notice to the Fund and the Manager, and will be terminated upon the
mutual written consent of the Manager and the Subadviser. This Agreement shall terminate
automatically in the event of its assignment by the Subadviser and shall not be assignable by the
Manager without the consent of the Subadviser.
14. The Subadviser agrees that for any claim by it against the Fund in connection with this
Agreement or the services rendered under this Agreement, it shall look only to assets of the Fund
for satisfaction and that it shall have no claim against the assets of any other portfolios of the
Trust.
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15. No provision of this Agreement may be changed, waived, discharged or terminated orally,
but only by an instrument in writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought, and no material amendment of the Agreement shall be
effective until approved, if so required by the 1940 Act, by vote of the holders of a majority of
the Fund’s outstanding voting securities.
16. This Agreement, and any supplemental terms contained on Annex I hereto, if applicable,
embodies the entire agreement and understanding between the parties hereto, and supersedes all
prior agreements and understandings relating to the subject matter hereof. Should any part of this
Agreement 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 on and shall inure to
the benefit of the parties hereto and their respective successors.
17. This Agreement shall be construed and the provisions thereof interpreted under and in
accordance with the laws of the State of New York.
[signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
officers thereunto duly authorized.
| XXXX XXXXX PARTNERS FUND ADVISOR, LLC | ||||||
| By: | ||||||
| Name: Title: |
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| CAM NORTH AMERICA LLC | ||||||
| By: | ||||||
| Name: Title: |
||||||
The foregoing is acknowledged:
The undersigned officer of the Trust has executed this Agreement not individually but in
his/her capacity as an officer of the Trust. The Trust does not hereby undertake, on behalf of the
Fund or otherwise, any obligation to the Subadviser.
| XXXX XXXXX PARTNERS VARIABLE PORTFOLIOS II | ||||||
| By: | ||||||
| Name: Title: |
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ANNEX I
Not applicable.
SCHEDULE A
Xxxx Xxxxx Partners Variable Capital and Income Portfolio
Date:
August 1, 2006
Fee:
The sub-advisory fee will be 70% of the management fee paid to Xxxx Xxxxx Partners Fund Advisor,
LLC, net of expense waivers and reimbursements, with respect to the Allocated Assets only.
