SUBADVISORY AGREEMENT
FOR
HERITAGE CONVERTIBLE INCOME-GROWTH TRUST
Agreement made as of October 31, 1986 between RJ Fund Management,
Inc., a Florida corporation (the "Manager"), and Eagle Asset Management,
Inc., a Florida corporation (the "Subadviser").
WHEREAS, the Manager has by separate contract agreed to serve as
the investment adviser and administrator to the Heritage Convertible
Income-Growth Trust ("Trust"), a Massachusetts business trust engaged in
business as an open-end diversified management investment company that is
so registered under the Investment Company Act of 1940 ("1940 Act');
WHEREAS, the Manager's contract with the Trust allows it to
delegate certain investment advisory services for the Trust to other
parties; and
WHEREAS, the Manager desires to retain the Subadviser to perform
certain investment advisory services for the Trust and the Subadviser is
willing to perform such services;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. SERVICES TO BE RENDERED BY SUBADVISER TO THE TRUST
(a) Subject always to the control of the Trustees and Manager of
the Trust, the Subadviser, at its expense, will furnish continuously an
investment program for the Trust. The Subadviser will make investment
decisions on behalf of the Trust and place all orders for the purchase and
sale of portfolio securities. In the performance of its duties, the
Subadviser will comply with the provisions of this Agreement and the
Trust's Declaration of Trust, Bylaws and Registration Statement as from
time to time amended, any relevant undertakings provided to State
securities regulators, and the stated investment objective, policies and
restrictions of the Trust, and will use its best efforts to safeguard and
promote the welfare of the Trust, and to comply with other policies which
the Trustees or the Manager, as the case may be, may from time to time
determine, and shall exercise the same care and diligence as are expected
of the Trustees.
(b) The Subadviser, at its expense, will make available its
officers and advisory and other personnel, particularly portfolio managers
and research analysts to the Trustees and Manager at reasonable times, to
review investment policies of the Trust and to consult with the Trustees
and Manager regarding the investment affairs of the Trust and 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) The Subadviser, at its expense, will furnish all salaries of
personnel and facilities to provide for the efficient conduct of the
investment affairs of the Trust, such affairs to include the monitoring of
the portfolio accounting services provided by the Trust's custodian.
(d) The Subadviser, at its expense, also will provide the
Manager with compliance reports relating to the Trust's investment
operations, including regular, periodic reports which monitor investment
restrictions and other guidelines of the Trust's prospectus and statement
of additional information, and such other compliance reports as may be
agreed upon from time to time.
(e) The Subadviser, at its expense, also will provide the
Trust's custodian bank with market price information relating to portfolio
instruments on a daily basis.
(f) In the selection of brokers or dealers and the placement of
orders for the purchase and sale of portfolio investments for the Trust,
the Subadviser shall use its best efforts to obtain for the Trust 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 Trust'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, the timing of the transaction taking into account market
prices and trends, the reputation, experience and financial stability of
the broker or dealer involved and the quality of service rendered by the
broker or dealer in other transactions. Subject to such policies as the
Trustees of the Trust 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 Trust to
pay a broker or 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 or dealer 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 or dealer, viewed in terms of either that
particular transaction or the Subadviser's overall responsibilities with
respect to the Trust and to other clients of the Subadviser as to which
the Subadviser exercises investment discretion. As provided in the
Investment Advisory and Administration Agreement between the Manager and
the Trust referred to in Section 4 below, the Trust agrees that any entity
or person associated with the Manager which is a member of a national
securities exchange is authorized to effect any transaction on such
exchange for the account of the Trust which is permitted by Section 11(a)
of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
Rule 11a2-2(T) thereunder, and the Trust has consented to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(a)(2)(iv).
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(g) The Subadviser shall not be obligated to pay any expenses of
or for the Trust not expressly assumed by the Subadviser pursuant to this
Section 1 and Section 2 hereafter.
2. BOOKS AND RECORDS
In compliance with the requirements of Rule 31a-3 under the
Investment Company Act of 1940 (the "1940 Act"), the Subadviser agrees
that all records it maintains for the Trust are the property of the Trust
and further agrees to surrender promptly to the Trust or Manager any such
records upon the Trust's or Manager's request. The Subadviser further
agrees to maintain for the Trust the records the Trust is required to
maintain under Rule 31a-l(b) insofar as such records relate to the
investment affairs of the Trust. The Subadviser further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records it maintains for the Trust.
3. OTHER AGREEMENTS
It is understood that any of the shareholders, Trustees, officers
and employees of the Trust may be a shareholder, director, officer or
employee of, or be otherwise interested in the Subadviser and in any
person controlled by or under common control with the Subadviser, and that
the Subadviser and any Person controlled by or under common control with
the Subadviser may have an interest in the Trust. It is also understood
that the Subadviser and persons controlled by or under common control with
the Subadviser have and may have advisory, management service or other
contracts with other organizations and persons, and may have other
interests and businesses; provided, however, that neither the Subadviser
nor any of its investment adviser affiliates shall undertake to act as
investment adviser or subadviser for any other registered investment
company offered to the general public that is not sponsored by the
Subadviser or an affiliate of the Subadviser except upon not less than 60
days' notice in writing to the Manager and the Trust.
4. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUBADVISER
The Manager will pay to the Subadviser as compensation for the
Subadviser's services rendered and for the expenses borne by the
Subadviser pursuant to Sections 1 and 2, a fee, computed and paid monthly
at an annual rate equal to 50% of fees payable by the Trust to the Manager
under the Investment Advisory and Administration Agreement between the
Manager and the Trust. Such fee shall be paid by the Manager and not by
the Trust without regard to any reduction in the fees paid to the Manager
as a result of any statutory or regulatory limitation on investment
company expenses. Such fee shall be payable for each month within 10
business days after the end of such month. If the Subadviser shall serve
for less than the whole of a month, the foregoing compensation shall be
prorated.
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5. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENT OF THIS AGREEMENT
This Agreement shall automatically terminate, without the payment
of any penalty, in the event of its assignment or in the event that the
Investment Advisory and Administration Agreement between the Manager and
the Trust shall have terminated for any reason; and this Agreement shall
not be amended unless such amendment be approved at a meeting by the
affirmative vote of a majority of the outstanding shares of the Trust, and
by the vote, cast in person at a meeting called for the purpose of voting
on such approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or of the Subadviser.
6. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective upon its execution, and
shall remain in full force and effect continuously thereafter (unless
terminated automatically as set forth in Section 5) until terminated as
follows:
(a) The Trust may at any time terminate this Agreement
by providing not more than 60 days' written notice delivered or
mailed by registered mail, postage prepaid, to the Manager and
the Subadviser; or
(b) If (i) the Trustees of the Trust or the shareholders
by the affirmative vote of a majority of the outstanding shares
of the Trust, and (ii) a majority of the Trustees of the Trust
who are not interested persons of the Trust or of the Manager or
of the Subadviser, by vote cast in person at a meeting called for
the purpose of voting on such approval, do not specifically
approve at least annually the continuance of this Agreement, then
this Agreement shall automatically terminate at the close of
business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Agreement is submitted to the shareholders of
the Trust for their approval and such shareholders fail to
approve such continuance of this Agreement as provided herein,
the Subadviser may continue to serve hereunder in a manner
consistent with the 1940 Act and the rules and regulations
thereunder; or
(c) The Manager may at any time terminate this Agreement
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 terminate this Agreement by not less
than 90 days' written notice delivered or mailed by registered
mail, postage prepaid, to the Manager.
Action by the Trust under paragraph (a) above may be taken either
(i) by vote of a majority of its Trustees, or (ii) by the affirmative vote
of a majority of the outstanding Shares of the Trust.
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Termination of this Agreement pursuant to this Section 6 shall be
without the payment of any penalty. Upon termination of this Agreement,
the duties of the Manager delegated to the Subadviser under this Agreement
automatically revert to the Manager.
7. CERTAIN INFORMATION
The Subadviser shall promptly 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 1940 Act, as
amended from time to time, and under the laws of any jurisdiction in which
the Subadviser is required to be registered as an investment adviser in
order to perform its obligations under this Agreement; (b) the Subadviser
shall have been served or otherwise have notice of any action, suit, pro-
ceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, involving the affairs of the Trust; or (c)
any other occurrence that might affect the ability of the Subadviser to
provide the services provided for under this Agreement.
8. CERTAIN DEFINITIONS
For the purposes of this Agreement, the "affirmative vote of a
majority of the outstanding Shares" means the affirmative vote, at a duly
called and held meeting of shareholders, of the lesser of: (a) the holders
of 67% or more of the Shares present (in person or by proxy) and entitled
to vote at such meeting if the holders of more than 50% of the Shares
entitled to vote at such meeting are present in person or by proxy, or (b)
the holders of more than 50% of Shares entitled to vote at such meeting.
For the purposes of this Agreement, the terms "affiliated
person," "control," "interested person" and "assignment" shall have their
respective meanings defined in the 1940 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; the term "specifically
approve at least annually" shall be construed in a manner consistent with
the 1940 Act and the rules and regulations thereunder; and the term
"brokerage and research services" shall have the meaning given in the 1934
Act and the rules and regulations thereunder.
9. NONLIABILITY OF SUBADVISER
In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Subadviser, or reckless disregard of its
obligations and duties hereunder, the Subadviser shall not be subject to
any liability to the Trust, or to any shareholder of the Trust, for any
act or omission in the course of, or connected with, rendering services
hereunder.
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IN WITNESS WHEREOF, RJ Fund Management, Inc. and Eagle Asset
Management Company, 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.
Dated: December 5, 1986
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Attest: RJ FUND MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
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Attest: EAGLE ASSET MANAGEMENT COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Officer
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