SUB-ADVISORY AGREEMENT
AGREEMENT made as of the day of , 1998, by and between Xxxx
Xxxxxx InterCapital Inc., a Delaware corporation (hereinafter called the
"Investment Manager"), and Xxxxxx Xxxxxxx Asset Management Inc., a Delaware
corporation (hereinafter called the "Sub-Adviser").
WHEREAS, Xxxx Xxxxxx Select Dimensions Investment Series (hereinafter called
the "Fund") is engaged in business as an open-end management investment company
and is registered as such under the Investment Company Act of 1940, as amended
(the "Act"); and
WHEREAS, the Investment Manager has entered into an Investment Management
Agreement (hereinafter called the "Investment Management Agreement") with the
Fund wherein the Investment Manager has agreed to provide investment management
services to the thirteen current Portfolios of the Fund and may provide such
services to other Portfolios subsequently established by the Fund; and
WHEREAS, the Sub-Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of acting as an
investment adviser; and
WHEREAS, the Investment Manager desires to retain the services of the
Sub-Adviser to render investment advisory services for the Growth Portfolio in
the manner and on the terms and conditions hereinafter set forth (this Portfolio
together with all other Portfolios subsequently established by the Fund with
respect to which the Fund will have retained the Investment Manager to render
management and investment advisory services under the Investment Management
Agreement and with respect to which the Investment Manager desires to retain the
Sub-Adviser to render investment advisory services in the manner and on the
terms and conditions hereinafter set forth being collectively referred to as the
"Sub-Advisory Portfolios"); and
WHEREAS, the Sub-Adviser desires to be retained by the Investment Manager to
perform services on said terms and conditions:
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Subject to the supervision of the Fund, its officers and Trustees, and
the Investment Manager, and in accordance with the investment objectives,
policies and restrictions set forth in the then current Registration
Statement relating to the Fund, and such investment objectives, policies and
restrictions from time to time prescribed by the Trustees of the Fund and
communicated by the Investment Manager to the Sub-Adviser, the Sub-Adviser
agrees to provide each Sub-Advisory Portfolio with investment advisory
services; to obtain and evaluate such information and advice relating to the
economy, securities and commodities markets and securities or commodities as
it deems necessary or useful to discharge its duties hereunder; to
continuously manage the assets of the Sub-Advisory Portfolio in a manner
consistent with the investment objective and policies of the Sub-Advisory
Portfolio; to make decisions as to foreign currency matters and make
determinations as to forward foreign exchange contracts and options and
futures contracts in foreign currencies; to determine the securities and
commodities to be purchased or otherwise acquired, or sold or otherwise
disposed of, by the Sub-Advisory Portfolio and the timing of such purchases,
acquisitions, sales and dispositions; to take such further action, including
the placing of purchase and sale orders on behalf of the Sub-Advisory
Portfolio, as it shall deem necessary or appropriate; to furnish to or place
at the disposal of the Sub-Advisory Portfolio and the Investment Manager such
of the information, evaluations, analyses and opinions formulated or obtained
by it in the discharge of its duties as the Fund and the Investment Manager
may, from time to time, reasonably request. The Investment Manager and the
Sub-Adviser shall each make its officers and employees available to the other
from time to time at reasonable times to review investment policies of the
Sub-Advisory Portfolios and to consult with each other.
In the event the Fund establishes another Portfolio other than the current
Sub-Advisory Portfolio with respect to which the Investment Manager desires to
retain the Sub-Adviser to render investment advisory services
hereunder, the Investment Manager shall notify the Sub-Adviser in writing. If
the Sub-Adviser is willing to render such services, it shall notify the
Investment Manager in writing, whereupon such other Portfolio shall become a
Sub-Advisory Portfolio hereunder.
2. The Sub-Adviser 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 or useful to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Sub-Adviser shall
be deemed to include persons employed or otherwise retained by the
Sub-Adviser to furnish statistical and other factual data, advice regarding
economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Investment Manager may desire. The Sub-Adviser shall maintain whatever
records as may be required to be maintained by it under the Act. All such
records so maintained shall be made available to the Fund, upon the request
of the Investment Manager or the Fund.
3. The Fund will, from time to time, furnish or otherwise make available
to the Sub-Adviser such financial reports, proxy statements and other
information relating to the business and affairs of the Sub-Advisory
Portfolios as the Sub-Adviser may reasonably require in order to discharge
its duties and obligations hereunder or to comply with any applicable law and
regulations and the investment objectives, policies and restrictions from
time to time prescribed by the Trustees of the Fund.
4. The Sub-Adviser shall bear the cost of rendering the investment
advisory services to be performed by it under this Agreement, and shall, at
its own expense, pay the compensation of the officers and employees, if any,
of the Fund, employed by the Sub-Adviser, and such clerical help and
bookkeeping services as the Sub-Adviser shall reasonably require in
performing its duties hereunder.
5. The Fund, on behalf of each Sub-Advisory Portfolio, assumes and shall
pay or cause to be paid all other expenses of the Sub-Advisory Portfolio,
including, without limitation: any fees paid to the Investment Manager; the
charges and expenses of any registrar, any custodian, sub-custodian or
depository appointed by the Fund for the safekeeping of the Sub-Advisory
Portfolio's cash, portfolio securities and other property, and any stock
transfer or dividend agent or agents appointed by the Fund; brokers'
commissions chargeable to the Sub-Advisory Portfolio in connection with
portfolio securities transactions to which the Sub-Advisory Portfolio is a
party; all taxes, including securities issuance and transfer taxes, and fees
payable by the Sub-Advisory Portfolio to federal, state or other governmental
agencies or pursuant to any foreign laws; the cost and expense of engraving
or printing certificates representing shares of the Sub-Advisory Portfolio;
all costs and expenses in connection with the registration and maintenance of
registration of the Sub-Advisory Portfolio and its shares with the Securities
and Exchange Commission and various states and other jurisdictions or
pursuant to any foreign laws (including filing fees and legal fees and
disbursements of counsel); the cost and expense of printing (including
typesetting) and distributing prospectuses of the Fund and supplements
thereto to the Sub-Advisory Portfolio's shareholders; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any advisory board or committee who are not employees
of the Investment Manager or Sub-Adviser; all expenses incident to the
payment of any dividend, distribution, withdrawal or redemption whether in
shares or in cash; charges and expenses of any outside service used for
pricing of the Sub-Advisory Portfolio's shares; charges and expenses of legal
counsel, including counsel to the Trustees of the Fund who are not interested
persons (as defined in the Act) of the Fund, the
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Investment Manager or the Sub-Adviser, and of independent accountants, in
connection with any matter relating to the Sub-Advisory Portfolio; membership
dues of industry associations; interest payable on Sub-Advisory Portfolio
borrowings; postage; insurance premiums on property or personnel (including
officers and Trustees) of the Sub-Advisory Portfolio which inure to its
benefit; extraordinary expenses (including but not limited to legal claims
and liabilities and litigation costs and any indemnification related
thereto); and all other charges and costs of the Sub-Advisory Portfolio's
operation unless otherwise explicitly provided herein.
6. For the services to be rendered, the facilities furnished, and the
expenses assumed by the Sub-Adviser, the Investment Manager shall pay to the
Sub-Adviser monthly compensation equal to 40% of its monthly compensation
receivable pursuant to the Investment Management Agreement in respect of the
Growth Portfolio. Any subsequent change in the Investment Management
Agreement which has the effect of raising or lowering the compensation of the
Investment Manager will have the concomitant effect of raising or lowering
the fees payable to the Sub-Adviser under this Agreement. In addition, if the
Investment Manager has undertaken in the Fund's Registration Statement as
filed under the Act or elsewhere to waive all or part of its fees under the
Investment Management Agreement, the Sub-Adviser's fees payable under this
Agreement will be proportionately waived in whole or in part. The calculation
of the fees payable to the Sub-Adviser pursuant to this Agreement will be
made, each month, at the time designated for the monthly calculation of the
fees payable to the Investment Manager pursuant to the Investment Management
Agreement. If this Agreement becomes effective subsequent to the first day of
a month or shall terminate before the last day of a month, compensation for
the part of the month this Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees as set forth above.
Subject to the provisions of paragraph 7 hereof, payment of the Sub-Adviser's
compensation for the preceding month shall be made as promptly as possible
after completion of the computations contemplated by paragraph 7 hereof.
7. In the event the operating expenses of the Growth Portfolio, including
amounts payable to the Investment Manager pursuant to the Investment
Management Agreement in respect of this Sub-Advisory Portfolio, for any
fiscal year ending on a date on which this Agreement is in effect, exceed
2.5% of the average daily net assets of the Sub-Advisory Portfolio up to $30
million, 2.0% of the next $70 million and 1.5% of the average daily net
assets of the Sub-Advisory Portfolio in excess of $100 million (the "expense
limitation"), the Sub-Adviser shall reduce its advisory fee to the extent of
40% of such excess and will reimburse the Investment Manager for annual
operating expenses in the amount of 40% of such excess of the expense
limitation, up to the amount of the Sub-Adviser's fee which would otherwise
be payable under this Agreement for that year, it being understood that the
Investment Manager has agreed to effect a reduction and reimbursement of 100%
of such excess, up to the amount of its management fee in respect of the
Sub-Advisory Portfolio which otherwise would be payable for that year, in
accordance with the terms of the Investment Management Agreement; provided,
however, there shall be excluded from such expenses the amount of any
interest, taxes, brokerage commissions, and extraordinary expenses (including
but not limited to legal claims and liabilities and litigation costs and any
indemnification related thereto) paid or payable by the Sub-Advisory
Portfolio. Such reduction, if any, shall be computed and accrued daily, shall
be settled on a monthly basis, and shall be based upon the expense limitation
applicable to the Sub-Advisory Portfolio as at the end of the last business
day of the month.
8. The Sub-Adviser will use its best efforts in the performance of
investment activities on behalf of the Sub-Advisory Portfolios, but in the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of
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its obligations hereunder, the Sub-Adviser shall not be liable to the
Investment Manager or the Fund or any of its investors for any error of
judgment or mistake of law or for any act or omission by the Sub-Adviser or
for any losses sustained by the Sub-Advisory Portfolios or their investors.
9. It is understood that any of the shareholders, Trustees, officers and
employees of the Fund may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Sub-Adviser, and in any person controlled
by or under common control or affiliated with the Sub-Adviser, and that the
Sub-Adviser and any person controlled by or under common control or
affiliated with the Sub-Adviser may have an interest in the Fund. It is also
understood that the Sub-Adviser and any affiliated persons thereof or any
persons controlled by or under common control with the Sub-Adviser have and
may have advisory, management service or other contracts with other
organizations and persons, and may have other interests and businesses, and
further may purchase, sell or trade any securities or commodities for their
own accounts or for the account of others for whom they may be acting.
Nothing contained in this Agreement shall limit or restrict the Sub-Adviser
or any affiliated person thereof from so acting or engaging in any other
business.
10. This Agreement shall remain in effect until April 30, 1999 and from
year to year thereafter with respect to each Sub-Advisory Portfolio provided
such continuance with respect to a Sub-Advisory Portfolio is approved at
least annually by the vote of holders of a majority, as defined in the Act,
of the outstanding voting securities of the Sub-Advisory Portfolio or by the
Trustees of the Fund; provided, that in either event such continuance is also
approved annually by the vote of a majority of the Trustees of the Fund who
are not parties to this Agreement or "interested persons" (as defined in the
Act) of any such party, which vote must be cast in person at a meeting called
for the purpose of voting on such approval; provided, however, that (a) the
Fund may, at any time and without the payment of any penalty, terminate this
Agreement upon thirty days' written notice to the Investment Manager and the
Sub-Adviser, either by majority vote of the Trustees of the Fund or, with
respect to a Sub-Advisory Portfolio, by the vote of a majority of the
outstanding voting securities of such Sub-Advisory Portfolio; (b) this
Agreement shall immediately terminate in the event of its assignment (within
the meaning of the Act) unless such automatic termination shall be prevented
by an exemptive order of the Securities and Exchange Commission; (c) this
Agreement shall immediately terminate in the event of the termination of the
Investment Management Agreement; (d) the Investment Manager may terminate
this Agreement without payment of penalty on thirty days' written notice to
the Fund and the Sub-Adviser; and (e) the Sub-Adviser may terminate this
Agreement without the payment of penalty on thirty days' written notice to
the Fund and the Investment Manager. Any notice under this Agreement shall be
given in writing, addressed and delivered, or mailed post-paid, to the other
party at the principal office of such party.
11. This Agreement may be amended by the parties without the vote or
consent of the shareholders of any Sub-Advisory Portfolio to supply any
omission, to cure, correct or supplement any ambiguous, defective or
inconsistent provision hereof, or if they deem it necessary to conform this
Agreement to the requirements of applicable federal laws or regulations, but
neither the Fund, the Investment Manager nor the Sub-Adviser shall be liable
for failing to do so.
12. This Agreement shall be construed in accordance with the law of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflicts with the applicable provisions of the Act, the latter shall control.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in New York, New York.
XXXX XXXXXX INTERCAPITAL INC.
By:
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Attest:
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XXXXXX XXXXXXX ASSET MANAGEMENT INC.
By:
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Attest:
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Accepted and agreed to as of
the day and year first above written:
XXXX XXXXXX SELECT DIMENSIONS
INVESTMENT SERIES
By:
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Attest:
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