SUB-ADVISORY AGREEMENT
AGREEMENT made as of the 16th day of December, 1999 by and between Friends
Ivory & Sime, Inc., a Delaware corporation (herein referred to as the
"Adviser"), and Friends Ivory & Sime plc, a U.K. corporation, (herein referred
to as the "Sub-Adviser").
WHEREAS, Friends Ivory Funds (herein referred to as the "Trust") 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 "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement with
the Trust dated December 16, 1999 (the "Investment Advisory Agreement"), wherein
the Adviser has agreed to provide investment management services to the various
portfolios of the Trust; 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 Adviser desires to retain the services of the Sub-Adviser to
render investment advisory services for the funds of the Trust (each a "Fund")
in the manner and on the terms and conditions hereinafter set forth in Schedule
A hereto; and
WHEREAS, the Sub-Adviser desires to be retained by the Adviser 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 supervision by the Adviser and the Trust's Board of Trustees,
the Sub-Adviser shall carry out the advisory services hereunder with
respect to all of the securities and other assets of the Fund entrusted to
it hereunder (the "Assets"), including the purchase, retention and
disposition of the Assets, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Fund's prospectus
and statement of additional information, as currently in effect and as
amended or supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall determine from time to time what Assets will be
purchased, retained or sold by the Fund, and what portion of the Assets
will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the
requirements of all applicable federal and state laws and regulations, as each
is amended from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Fund as provided in subparagraph (a) and will place orders with or through
such persons, brokers or dealers to carry out the policy with respect to
brokerage set forth in the Fund's Registration Statement (as defined
herein) and Prospectus or as the Board of Trustees or the Adviser may
direct from time to time, in conformity with federal securities laws. In
executing Fund transactions and selecting brokers or dealers, the
Sub-Adviser will use its best efforts to seek on behalf of the Fund the
best overall terms available. In assessing the best overall terms available
for any transaction, the Sub-Adviser shall consider all factors that it
deems relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability of
the broker or dealer, and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis. In evaluating
the best overall terms available, and in selecting the broker-dealer to
execute a particular transaction, the Sub-Adviser may also consider the
brokerage and research services provided (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934). Consistent with any
guidelines established by the Board of Trustees of the Trust, the
Sub-Adviser is authorized to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction
if, but only if, the Sub-Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer - - viewed in terms of
that particular transaction or terms of the overall responsibilities of the
Sub-Adviser to the Fund. In addition, the Sub-Adviser is authorized to
allocate purchase and sale orders for securities to brokers or dealers
(including brokers and dealers that are affiliated with the Adviser,
Sub-Adviser or the Trust's principal underwriter) to take into account the
sale of shares of the Trust if the Sub-Adviser believes that the quality of
the transaction and the commission are comparable to what they would be
with other qualified firms. In no instance, however, will the Fund's Assets
be purchased from or sold to the Adviser, Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust,
Adviser, the Sub-Adviser or the principal underwriter, acting as principal
in the transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC") and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Fund required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the SEC or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Fund are property of the Fund
and the Sub-Adviser will surrender promptly to the Fund any of such records
upon the Fund's request; provided, however, that the Sub-Adviser may retain
a copy of such records. In addition, for the duration of this Agreement,
the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2
under the 1940 Act any such records as are required to be maintained by it
pursuant to this Agreement, and shall transfer said records to any
successor sub-adviser upon the termination of this Agreement (or, if there
is no successor sub-adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business day
with information relating to all transactions concerning the Fund's Assets
and shall provide the Adviser with such information upon request of the
Adviser.
(f) The Adviser acknowledges that the Sub-Adviser performs investment advisory
services for various other clients and may give advice, and take action,
with respect to any of those other clients which may differ from the advice
given, or the timing or nature of action taken, with respect to the Fund,
provided that over a period of time the Sub-Adviser, to the extent
practical, will allocate investment opportunities to the Fund on a fair and
equitable basis relative to other similarly-situated accounts and will
attempt to minimize any dispersion of returns between the Fund and such
accounts.
The Adviser also acknowledges that the Sub-Adviser, its principals,
employees and affiliates, and other clients of the Sub-Adviser may have,
acquire, increase, decrease, or dispose of securities or interests therein
at or about the same time that the Sub-Adviser is purchasing or selling
securities or interests therein for the Fund which are or may be deemed to
be inconsistent with the actions taken by such persons. The Sub-Adviser
shall not have any obligations to purchase or sell, or recommend the
purchase or sale, for the Fund any securities transactions that the
Sub-Adviser, its principals, employees or affiliates, or other clients
undertake.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and shall
provide the Fund's custodian with instructions for voting all proxies in
relation to the securities held in the Fund. The Adviser shall instruct the
custodian and other parties
providing services to the Fund to promptly forward misdirected proxies to
the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
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
Adviser may desire. The Sub-Adviser shall maintain whatever records as may
be required to be maintained by it under the 0000 Xxx. All such records so
maintained shall be made available to the Trust, upon the request of the
Adviser or the Trust.
3. The Trust 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 Fund 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 Directors of the Trust.
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
Trust, 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. For the services to be provided by the Sub-Adviser pursuant to this
Agreement, the Adviser will pay the Sub-Adviser, and the Sub-Adviser agrees
to accept as full compensation therefor, a sub-advisory fee at the rate
specified in the Schedules which are attached hereto and made part of this
Agreement. The fee will be calculated based on the average daily net assets
under the Sub-Adviser's management and will be paid to the Sub-Adviser
monthly. Except as may otherwise be prohibited by law or regulation
(including any then current SEC staff interpretation), the Sub-Adviser may,
in its discretion and from time to time, waive a portion of its fee.
6. The Sub-Adviser will use its best efforts in the performance of investment
activities on behalf of the Trust, but in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Sub-Adviser shall not be liable to the Adviser
or the Trust 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 Trust or its investors.
7. 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 interest in, the Sub-Adviser, and in any person
controlled by or under common control with the Sub-Adviser, and that the
Sub-Adviser and any person controlled by or under common control with the
Sub-Adviser may have an interest in the Trust. 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.
8. This Agreement, unless sooner terminated as provided herein, shall remain
in effect until two years from date of execution, and thereafter, for
periods of one year so long as such continuance thereafter is specifically
approved at least annually (a) by the vote of a majority of those Trustees
of the Trust 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, and (b) by the Trustees of the Trust or by vote of
a majority of the outstanding voting securities of each Fund; provided,
however, that if the shareholders of any Fund fail to approve the Agreement
as provided herein, the Adviser may continue to serve hereunder in the
manner and to the extent permitted by the 1940 Act and rules and
regulations thereunder. The foregoing requirement that continuance of this
Agreement be "specifically approved at least annually" shall be construed
in a manner consistent with the 1940 Act and the rules and regulations
thereunder.
This Agreement may be terminated as to any Fund at any time, without the
payment of any penalty by vote of a majority of the Trustees of the Trust
or by vote of a majority of the outstanding voting securities of the Fund
on not less than 30 days nor more than 60 days written notice to the
Adviser, or by the Adviser at any time without the payment of any penalty,
on 90 days written notice to the Trust. This Agreement will automatically
and immediately terminate in the event of its assignment. Any notice under
this Agreement shall be given in writing, addressed and delivered, or
mailed postpaid, to the other party at any office of such party.
As used in this Section 12, the terms "assignment," "interested persons,"
and a "vote of a majority of the outstanding voting securities" shall have
the respective meanings set forth in the 1940 Act and the rules and
regulations thereunder; subject to such exemptions as may be granted by the
SEC under said Act.
9. This Agreement may be amended by the parties without the vote or consent of
the shareholders of the Fund 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 Trust, the Adviser nor the
Sub-Adviser shall be liable for failing to do so.
10. This Agreement shall be construed in accordance with the law of the State
of Delaware and the applicable provisions of the 1940 Act. To the extent
the applicable law of the State of Delaware, or any of the provisions
herein, conflict with the applicable provisions of the 1940 Act, the latter
shall control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first written above.
FRIENDS IVORY & SIME, Inc.
By: /s/ J. Xxxxxx Xxxxx, Jr.
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Name: J. Xxxxxx Xxxxx, Jr.
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Attest: /s/ Xxxxxxxxxxx X. Xxxxxxxxx
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FRIENDS IVORY & SIME plc
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
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Attest: /s/ Xxxxxx Xxxx
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Accepted and agreed to as of the day and year first above written:
FRIENDS IVORY FUNDS
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
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Attest: /s/ Xxxxxxxxxxx X. Xxxxxxxxx
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SCHEDULE A DATED DECEMBER 16, 1999
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT DATED DECEMBER 16, 1999
BETWEEN
FRIENDS IVORY & SIME, INC.
AND
FRIENDS IVORY & SIME PLC
Pursuant to Article 5, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
Fund Annual Fee
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Friends Ivory European Social Awareness Fund 0.15% (15 basis points)
