AMENDED AND RESTATED SUB-ADVISORY AGREEMENT
AGREEMENT made as of the 25th day of April, 2006, by and between XXXXXX
XXXXXXX INVESTMENT ADVISORS INC., a Delaware corporation (hereinafter
referred to as "Xxxxxx Xxxxxxx Investment Advisors"), and XXXXXX XXXXXXX
INVESTMENT MANAGEMENT LIMITED, a company incorporated under the laws of
England (hereinafter referred to the "Local Manager").
W I T N E S S E T H:
--------------------
WHEREAS, Xxxxxx Xxxxxxx International SmallCap Fund (the "Fund") is a
Massachusetts business trust engaged in business as an open-end management
investment company and is registered under the Investment Company Act of
1940, as amended (hereinafter referred to as the "Investment Company Act");
and
WHEREAS, Xxxxxx Xxxxxxx Investment Advisors and the Local Manager are
engaged principally in rendering investment advisory services and are
registered as investment advisers under the Investment Advisors Act of 1940,
as amended; and
WHEREAS, the Local Manager is regulated by the Financial Services
Authority in the United Kingdom; and
WHEREAS, Xxxxxx Xxxxxxx Investment Advisors has entered into an
investment advisory agreement (the "Advisory Agreement") with the Fund dated
May 31, 1997, as amended from time to time, pursuant to which Xxxxxx Xxxxxxx
Investment Advisors provides management and investment and advisory services
to the Fund; and
WHEREAS, the Local Manager is willing to provide investment management
services to Xxxxxx Xxxxxxx Investment Advisors in connection with the Fund's
operations on the terms and conditions hereinafter set forth and including
the terms and conditions contained in Annex 1 to this Agreement;
NOW THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Local Manager and Xxxxxx Xxxxxxx Investment
Advisors hereby agree as follows:
ARTICLE I
Duties of the Local Manager
---------------------------
Xxxxxx Xxxxxxx Investment Advisors hereby employs the Local Manager to
act as discretionary investment manager to Xxxxxx Xxxxxxx Investment Advisors
and to furnish the investment management services described below, subject to
the broad supervision of Xxxxxx Xxxxxxx Investment Advisors and the Fund, for
the period and on the terms and conditions set forth in this Agreement. The
Local Manager hereby accepts such employment and agrees during such period,
at its own expense, to render, or arrange for the rendering of, such services
and to assume the obligations herein set forth for the compensation provided
for herein. Xxxxxx Xxxxxxx Investment Advisors and its affiliates shall for
all purposes herein be deemed an Intermediate Customer as defined under the
rules and guidance promulgated by the Financial Services Authority
(hereinafter referred to as the "FSA Rules"). The Local Manager and its
affiliates shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have
no authority to act for or represent the Fund in any way or otherwise be
deemed an agent of the Fund.
The Local Manager shall have full discretion, power and authority on the
Fund's behalf to buy, sell, retain, exchange or otherwise deal in investments
and other assets, make deposits, subscribe to issues and offers for sale and
accept placings of any investments, enter into foreign currency transactions
on a spot or forward basis, effect transactions on any markets, take all day
to day decisions and otherwise act as the Local Manager judges appropriate in
relation to the investment and reinvestment of the portfolio of assets of the
Fund. This includes performing all acts and executing all documents which the
Local Manager reasonably considers incidental thereto, including (without
limitation) power to execute and deliver all applications, requests, or
claims for refund, reduction, repayment or credit of, or exemption or relief
from, any withholding tax or similar taxes in any jurisdiction in which such
applications, requests or claims may be made. Subject to guidelines adopted
by the Fund, the Local Manager shall also make recommendations or take action
as to the manner in which voting rights, rights to consent to corporate
action and any other rights pertaining to the portfolio of assets of the Fund
shall be exercised. All of the foregoing is subject always to the
restrictions of the Declaration of Trust and By-Laws of the Fund, as they may
be amended and/or restated from time to time and as provided to the Local
Manager by Xxxxxx Xxxxxxx Investment Advisors, the provisions of the
Investment Company Act and the statements relating to the Fund's investment
objective(s), investment policies and investment restrictions as the same are
set forth in the currently effective prospectus and statement of additional
information relating to the shares of the Fund under the Securities Act of
1933, as amended (the "Prospectus" and "Statement of Additional Information",
respectively), as well as to the supervision of Xxxxxx Xxxxxxx Investment
Advisors and the Board of Trustees of the Fund.
The Local Manager will not hold money on behalf of Xxxxxx Xxxxxxx
Investment Advisors or the Fund, nor will the Local Manager be the registered
holder of the registered investment of Xxxxxx Xxxxxxx Investment Advisors or
the Fund or be the custodian of documents or other evidence of title.
The Local Manager may, where reasonable, employ agents (including
affiliates) to perform any administrative, dealing or ancillary services
required to enable the Local Manager to perform its services under this
Sub-Advisory Agreement.
ARTICLE II
Allocation of Charges and Expenses
----------------------------------
The Local Manager assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement and shall
at its own expense provide the office space, equipment and facilities which
it is obligated to provide under Article I hereof.
ARTICLE III
Compensation of the Local Manager
---------------------------------
For the services rendered, the facilities furnished and expenses assumed
by the Local Manager, Xxxxxx Xxxxxxx Investment Advisors shall pay to the
Local Manager a fee in an amount to be determined from time to time by Xxxxxx
Xxxxxxx Investment Advisors and the Local Manager but in no event in excess
of the amount that Xxxxxx Xxxxxxx Investment Advisors actually received for
providing services to the Fund pursuant to the Advisory Agreement.
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ARTICLE IV
Limitation of Liability of the Local Manager
--------------------------------------------
No warranty is given by the Local Manager as to the performance or
profitability of the Fund or any part of them.
If a percentage restriction contained in the Fund's investment
objective(s) or investment restrictions (as the same are set forth in the
Fund's currently effective Prospectus and Statement of Additional
Information) is adhered to at the time of investment, a later change in
percentage resulting from a change in values or assets will not constitute a
violation of such restriction.
The Local Manager will not be responsible to Xxxxxx Xxxxxxx Investment
Advisors or the Fund for the solvency, actions or omissions of any
counterparty, broker, dealer, market-maker, bank, custodian or sub-custodian,
with whom it transacts business on Xxxxxx Xxxxxxx Investment Advisors'
behalf, other than affiliates of the Local Manager.
Nothing in this Agreement will exclude or restrict any liability which
the Local Manager has under the Financial Services and Markets Xxx 0000, FSA
Rules or the Regulatory System in relation to Xxxxxx Xxxxxxx Investment
Advisors and which may not be excluded or restricted thereunder.
The Local Manager shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act
or omission in the performance of investment management services rendered
with respect to the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties hereunder. The exception in the
previous sentence shall apply to each limitation of the Local Manager's
liability contained in this Article IV. As used in this Article IV, the Local
Manager shall include any affiliates of the Local Manager performing services
for the Local Manager contemplated hereby and directors, officers and
employees of the Local Manager and such affiliates.
ARTICLE V
Activities of the Local Manager
-------------------------------
The services of the Local Manager to the Fund are not to be deemed to be
exclusive, the Local Manager and any person controlled by or under common
control with the Local Manager (for purposes of this Article V referred to as
"affiliates") being free to render services to others. It is understood that
Trustees, officers, employees and shareholders of the Fund are or may become
interested in the Local Manager and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers,
employees and shareholders of the Local Manager and its affiliates are or may
become similarly interested in the Fund, and that the Local Manager and
directors, officers, employees, partners and shareholders of its affiliates
may become interested in the Fund as shareholders or otherwise.
ARTICLE VI
Duration and Termination of this Agreement
------------------------------------------
This Agreement shall become effective as of the date first above written
and shall remain in force until the date of termination of the Advisory
Agreement (but not later than two years after the date hereof) and
thereafter, but only so long as such continuance is specifically approved at
least annually by (i) the Trustees of the Fund or by the vote of a majority
of the outstanding voting securities of the Fund and (ii) a
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majority of those Trustees who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for
the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by Xxxxxx Xxxxxxx Investment Advisors, by the Board of Trustees of
the Fund or by vote of a majority of the outstanding voting securities of the
Fund, or by the Local Manager, on sixty days' written notice to the other
party. This Agreement shall automatically terminate in the event of its
assignment or in the event of the termination of the Advisory Agreement. Any
termination shall be without prejudice to the completion of transactions
already initiated.
ARTICLE VII
Amendments to this Agreement
----------------------------
This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) the Trustees of the Fund or by the vote of a
majority of outstanding voting securities of the Fund and (ii) a majority of
those Trustees who are not parties to this Agreement or interested persons of
any such party cast in person at a meeting called for the purpose of voting
on such approval.
ARTICLE VIII
Definitions of Certain Terms
----------------------------
The terms "vote of a majority of the outstanding voting securities",
"assignment", "affiliated person" and "interested person" used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the rules and regulations thereunder, subject, however, to
such exemptions as may be granted by the Securities and Exchange Commission
under said Act.
ARTICLE IX
Governing Law
-------------
This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Investment Company
Act. To the extent that the applicable laws of the State of New York, or any
of the provisions herein, conflict with the applicable provisions of the
Investment Company Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
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XXXXXX XXXXXXX INVESTMENT ADVISORS
INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
XXXXXX XXXXXXX INVESTMENT
MANAGEMENT LIMITED
By: /s/ Xxxxxxx Xxxxx
------------------
Name: Xxxxxxx Xxxxx
Title: Director
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SUB-ADVISORY AGREEMENT
ANNEX 1
1. DEALING AND COUNTERPARTIES
1.1 The Local Manager will act in good faith and with due diligence in its
choice and use of counterparties. Unless directed by Xxxxxx Xxxxxxx
Investment Advisors or the Fund to use a specific counterparty, the Local
Manager undertakes to secure Best Execution (as defined in the FSA Rules)
of all the Fund's transactions. In securing Best Execution, the Local
Manager will take reasonable care to obtain the best available price in
accordance with FSA Rules. Subject thereto, the Local Manager may deal
on such markets or exchanges and with such counterparties (including any
affiliate) as it thinks fit. All transactions will be effected in
accordance with the rules and regulations of the relevant market or
exchange, and the Local Manager may take all such steps as may be
required or permitted by such rules and regulations and/or by
appropriate market practice.
1.2 If any counterparty should fail to deliver any necessary documents or
to complete any transaction, the Local Manager will take all reasonable
steps on behalf of Xxxxxx Xxxxxxx Investment Advisors or the Fund to
rectify such failure or obtain compensation. Xxxxxx Xxxxxxx Investment
Advisors shall procure that the Fund pay all reasonable costs and
expenses properly incurred by the Local Manager.
1.3 The Local Manager may aggregate the Fund's orders with orders of other
clients (whether or not connected with the Local Manager). Xxxxxx Xxxxxxx
Investment Advisors is aware and has made the Fund aware that the
aggregation of the Fund's orders with those of other clients may result
in the Fund obtaining on some occasions a more favourable price and on
others a less favourable price, than if such orders had not been
aggregated.
2. MATERIAL INTERESTS
2.1 The Local Manager and any affiliate may, subject to the limitations of
the U.S. Investment Company Act of 1940 (as amended), and to the
overriding principles of suitability and Best Execution and without
prior reference to Xxxxxx Xxxxxxx Investment Advisors or the Fund,
effect transactions in which the Local Manager or affiliate has,
directly or indirectly, a material interest or a relationship of any
description with another party, which may involve a potential conflict
with the Local Manager's duty to Xxxxxx Xxxxxxx Investment Advisors or
the Fund. Neither the Local Manager nor any affiliate shall be liable to
account to Xxxxxx Xxxxxxx Investment Advisors or the Fund for any profit,
commission or remuneration made or received from or by reason of such
transactions or any connected transactions nor will the Local Manager's
fees, unless otherwise provided, be abated. For example, such potential
conflicting interests or duties may arise because:
(a) any of the Local Manager's or affiliate's directors or employees
is a director of, holds or deals in securities of, or is otherwise
interested in any company whose securities are held or dealt in on
behalf of the Fund;
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(b) the transaction is in the securities of a company for which an
affiliate has provided corporate finance advice, underwritten,
managed or arranged an issue or offer for sale;
(c) the Local Manager deals on behalf of the Fund with an affiliate;
(e) the Local Manager may effect transactions involving placings
and/or new issues with an Affiliate who may be acting as principal
or receiving agent's commission. Affiliates may retain any agent's
commission or discount or other benefit (including directors' fees)
that accrues to them; or
(f) the transaction is in units or shares of a collective investment
scheme (regulated or unregulated) of which the Local Manager or
any affiliate is the manager, operator, banker, adviser, custodian
or trustee.
2.2 Nothing in this Agreement shall oblige the Local Manager or any
affiliate to accept responsibilities more extensive than those
set out in this Agreement or shall give rise to any fiduciary or
equitable duties which would prevent or hinder any affiliate acting
both as market-maker and broker, principal or agent, dealing with
other affiliates and other clients and generally effecting transactions
as provided above nor from retaining any remuneration received in respect
thereof.
3. RECORDS AND REPORTS
3.1 The Local Manager will keep accurate and detailed records with respect
to all receipts, investments, sales, disbursements and other transactions
carried out by the Local Manager for Xxxxxx Xxxxxxx Investment Advisors
or with the Fund.
3.2 All records held pursuant to this clause by the Local Manager shall be
open to inspection by Xxxxxx Xxxxxxx Investment Advisors or the Fund
and the Local Manager will provide Xxxxxx Xxxxxxx Investment Advisors
and the Fund with such access as it itself has to records held by any
relevant third party, in each case at reasonable times during business
hours and upon the giving of reasonable notice by Xxxxxx Xxxxxxx
Investment Advisors or the Fund.
3.3 The Local Manager shall, not later than 10 working days following the
end of each calendar month, furnish to Xxxxxx Xxxxxxx Investment
Advisors a statement showing all transactions that have occurred in
the Fund and a monthly listing of all investments and cash balances held
as of the end of such month.
3.4 The monthly statement will show the cost or amount realised (in the
case of any relevant new purchase or sale) and, where available, the
current value (where applicable) of each investment held in the Fund and
any income arising on the Fund's account during the relevant calendar
month, and will also include a statement showing the measure of the
performance of the assets of the Fund. The basis of all valuations will
be as stated in the first monthly statement, unless otherwise agreed.
3.5 The Local Manager will not provide Xxxxxx Xxxxxxx Investment Advisors
with an individual trade confirmation of each portfolio transaction
unless Xxxxxx Xxxxxxx Investment Advisors has specifically requested the
Local Manager to do so.
4. FORCE MAJEURE
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The Local Manager shall not be responsible or liable to Xxxxxx Xxxxxxx
Investment Advisors or the Fund for any failure or delay in the
performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable
control, including, without limitation, acts of God; earthquakes; fires;
floods; wars; civil or military disturbances; sabotage; epidemics;
riots; interruptions, loss or malfunctions of utilities; computer
(hardware or software) or communications services; accidents; labor
disputes; acts of civil or military authority or governmental actions;
it being understood that the Local Manager shall use reasonable efforts
which are consistent with accepted practices in the investment management
industry to resume performance as soon as practicable under the
circumstances.
5. COMPLAINTS
The Local Manager maintains procedures in accordance with FSA Rules for
the effective consideration and handling of client complaints. Complaints
will be considered promptly by the appropriate supervisory manager who
is not personally involved in the subject matter of the complaint. Where
appropriate, the complaint will be passed to the Compliance Officer.
6. CONFIDENTIALITY AND DISCLOSURE
The Local Manager and Xxxxxx Xxxxxxx Investment Advisors undertake to
keep private and confidential all information acquired in connection with
this Agreement, and not to disclose such information to any person except
to the extent that:
(a) the other party gives prior consent; or
(b) the Local Manager is required to disclose the information by the
FSA, the Bank of England, the London Stock Exchange or any other
recognised investment exchange, the City Panel on Takeovers and
Mergers or any other regulatory authority having jurisdiction over
the Local Manager or the performance by it of its obligations
under this Agreement or by English Law; or
(c) disclosure to a counterparty to a transaction effected for the
Fund is required as a condition to such transaction; or
(d) disclosure is necessary to enable the Local Manager to perform
its obligations under this Agreement.
7. DATA PROTECTION
7.1 The Local Manager will, in connection with the Sub-Advisory Agreement,
comply (where applicable) with the UK Data Protection Xxx 0000 and other
applicable data protection laws and regulations (together, the "Data
Protection Laws").
7.2 Xxxxxx Xxxxxxx Investment Advisors will comply (where applicable) with
the Data Protection Laws and (where applicable) take all reasonable
steps to ensure that it has obtained all necessary consents for the
Local Manager to process any personal data for the purposes of the
Agreement.
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