EXHIBIT 5.Q.
SUB-INVESTMENT MANAGEMENT AGREEMENT BY,
BETWEEN AND AMONG CHUBB AMERICA FUND, INC.,
CHUBB INVESTMENT ADVISORY CORPORATION AND
MASSACHUSETTS FINANCIAL SERVICES COMPANY
FOR THE EMERGING GROWTH PORTFOLIO
TABLE OF CONTENTS
Section Page
1. Duties of the Sub-Investment Manager 2
2. Sub-Investment Management Services 2
3. Purchase and Sale of Assets 3
4. Compensation of the Sub-Investment Manager 4
5. Non-Exclusivity 5
6. Books and Records 5
7. Liability 5
8. Reliance on Documents 6
9. Duration and Termination of the Agreement 6
10. Amendment of Agreement 7
11. Definition 7
12. Notices 7
13. Governing Law 8
SUB-INVESTMENT MANAGEMENT AGREEMENT FOR
THE EMERGING GROWTH PORTFOLIO
THIS AGREEMENT, made this 14th day of April 1995, by, between and among
CHUBB AMERICA FUND, INC., a Maryland corporation with offices at Xxx Xxxxxxx
Xxxxx, Xxxxxxx, Xxx Xxxxxxxxx 00000 (the "Fund"), CHUBB INVESTMENT ADVISORY
CORPORATION, a Tennessee corporation with offices at Xxx Xxxxxxx Xxxxx, Xxxxxxx,
Xxx Xxxxxxxxx 00000 (the "Investment Manager") and MASSACHUSETTS FINANCIAL
SERVICES COMPANY, a Delaware corporation with offices at 000 Xxxxxxxx Xxxxxx in
Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Sub-Investment Manager");
WITNESSETH:
WHEREAS, the Fund is engaged in business as a diversified open-end
management investment company and is registered as such under the Investment
Company Act of 1940 (the "Investment Company Act");
WHEREAS, the Fund issues separate classes or series of stock, each of which
represents a separate portfolio of investments;
WHEREAS, the Fund is currently comprised of nine portfolios, which,
together with any portfolio subsequently added, are designed herein as the
"Portfolios", and each of which pursues or will pursue its investment objectives
through separate investment policies and separate investment management;
WHEREAS, the Fund has employed the Investment Manager to act as investment
manager of the Emerging Growth Portfolio, as set forth in an Investment
Management Agreement between the Fund and the Investment Manager dated ,
1995, (the "Investment Management Agreement") pursuant to which it was agreed
that the Investment Manager, with the approval of the Emerging Growth
Portfolio's shareholders may contract with the Sub-Investment Manager, or other
parties for certain investment management services;
WHEREAS, the Sub-Investment Manager is engaged in the business of rendering
investment advisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940;
WHEREAS, the Board of Directors of the Fund and the Investment Manager
desire to retain the Sub-Investment Manager to render investment management
services to the Fund's Emerging Growth Portfolio in the manner and on the terms
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund, the Investment Manager and the Sub-Investment
Manager hereby agree as follows:
1. Duties of Sub-Investment Manager. The Sub-Investment Manager hereby agrees,
subject to the supervision of the Investment Manager and the Board of Directors
of the Fund (1) to act as the sub-investment adviser to, and Sub-Investment
Manager of, the Emerging Growth Portfolio of the Fund (the "Emerging Growth
Portfolio"), (2) to manage the investment and reinvestment of the assets of the
Emerging Growth Portfolio for the period and on the terms and conditions set
forth in this Agreement, and (3) during the term hereof, to render the services
and to assume the obligations herein set forth in return for the compensation
provided for herein and to bear all expenses of its performance of such services
and obligations.
2. Sub-Investment Services. In performing the duties stated in Paragraph 1
above, the Sub-Investment Manager will regularly provide the Investment Manager
and the Fund with such investment research, advice and management as the
Investment Manager and the Board of Directors or officers of the Fund may from
time to time consider necessary for the proper management of the Emerging Growth
Portfolio. The Sub-Investment Manager will furnish continuously an investment
program and will conduct a continuous program of evaluation of assets in the
Emerging Growth Portfolio. In this connection the Sub-Investment Manager will
provide the Board of Directors and officers of the Fund with such asset
valuations daily at the close of business and, subject to the consent of the
Sub-Investment Manager with all statistical information with respect to
investments of the Fund and such periodic and special reports and information as
the Investment Manager or the Board of Directors or officers of the Fund may
reasonably request. In addition, the Sub-Investment Manager will determine
which securities or other investments shall be purchased, sold or exchanged and
what portion of the assets of the Emerging Growth Portfolio shall be held in
securities or other assets in which the Emerging Growth Portfolio may invest. In
so acting, the Sub-Investment Manager shall always be subject to, and shall
follow at all times (i) any restrictions of the Fund's Articles of Incorporation
and By-Laws, as amended from time to time, (ii) the applicable provisions of the
Investment Company Act, and any rules and regulations adopted thereunder, (iii)
the statements relating to the Fund's investment objectives, investment policies
and investment restrictions as the same are set forth in the prospectus of the
Fund and Statement of Additional Information then currently effective under the
Securities Act of 1933 (the "Prospectus"), and (iv) any other provisions of
state and federal securities law applicable to it in connection with its duties
hereunder. Should the Board of Directors of the Fund or the Investment Manager
at any time, however, make any definite determination as to the investment
policy of the Emerging Growth Portfolio and notify the Sub- Investment Manager
thereof, the Sub-Investment Manager shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. The Sub-Investment Manager shall take, on behalf
of the Fund, all actions which it deems necessary to implement the investment
objectives, policies and restrictions of the Emerging Growth Portfolio,
determined as provided above, and in particular shall place orders for the
purchase or sale of securities or other investments for the Emerging Growth
Portfolio with brokers or dealers selected by the Sub-Investment Manager.
3. Purchase and Sale of Assets. Nothing in this Sub-Investment Management
Agreement shall preclude the combining of orders for the sale or purchase of
securities or other investments with other accounts managed by the Sub-
Investment Manager, provided that the Sub-Investment Manager does not favor any
account over any other account and provided further that any such purchase or
sale orders executed contemporaneously shall be allocated in a manner that the
Sub-Investment Manager deems to be equitable to all accounts involved and, under
normal circumstances, such transactions will be (1) done on a pro-rata basis,
substantially in proportion to the amounts ordered by each account, (2) entered
into only if, in the Sub-Investment Manager's opinion, the trade is likely to
produce a benefit for the Emerging Growth Portfolio, and (3) is at a price which
is approximately the same for all parties involved. Neither the Sub-Investment
Manager, nor any of its directors, officers or employees, nor any person, firm
or corporation controlling, controlled by or under common control with it shall
act as a principal or receive any commissions as agent in connection with the
purchase or sale of assets for the Emerging Growth Portfolio.
In placing orders for the purchase or sale of investments for the Fund, in the
name of the Fund or its nominees, the Sub-Investment Manager shall use its best
efforts to obtain for the Fund the most favorable price and best execution
available, considering all of the circumstances.
Subject to appropriate policies and procedures approved by the Board of
Directors of the Fund, the Sub-Investment Manager may, to the extent authorized
by Section 28(e) of the Securities and Exchange Act of 1934, cause the Fund to
pay a broker or dealer that provides research or other brokerage services to the
Sub-Investment Manager, the Investment Manager and the Fund an amount of
commission for effecting a portfolio transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Investment Manager determines, in good faith, that such
amount of commission is reasonable in relationship to the value of such
services, viewed in terms of that particular transaction or the Sub-Investment
Manager's overall responsibilities to the Fund or its other advisory clients. To
the extent authorized by said Section 28(e) and the Fund's Board of Directors,
the Sub-Investment Manager shall not be deemed to have acted unlawfully or to
have breached any duty created by this Agreement or otherwise solely by reason
of such action.
4. Compensation of the Sub-Investment Manager. For the services rendered and
expenses assumed by the Sub-Investment Manager, while this Agreement is in
effect, the Investment Manager shall pay to the Sub-Investment Manager at the
end of each calendar quarter a fee which shall accrue daily at the annual rate
of 0.50% of the first $200,000,000 of the average of the aggregate net asset
value of the Emerging Growth Portfolio determined as of the close of business on
each day and, in the case of any day which is not a business day, determined as
of the close of business on the last preceding business day, of all of the
issued and outstanding shares of the Emerging Growth Portfolio ("net asset
value") during the quarter preceding such payment, reduced to 0.45% of such net
asset value in excess of $200,000,000 up to $1,300,000,000 and further reduced
to 0.40% of such net asset value in excess of $1,300,000,000. The net asset
value of the Growth and Income Portfolio shall be determined and computed in
accordance with the description of the method of determining the net asset value
contained in the Prospectus.
The fees payable to the Sub-Investment Manager by the Investment Manager
hereunder shall be reduced by any tender solicitation fees or similar payments
received by the Sub-Investment Manager, or any affiliated person of the Sub-
Investment Manager, in connection with the tender of investments of the Emerging
Growth Portfolio (less any direct expenses incurred by the Sub-Investment
Manager, or any affiliated person of the Sub-Investment Manager, in connection
with obtaining such fees or payments). The Sub-Investment Manager shall use its
best efforts to recapture all available tender offer solicitation fees and
similar payments in connection with tenders of the securities of the Emerging
Growth Portfolio, provided, however, that neither the Sub-Investment Manager,
nor any affiliate of the Sub-Investment Manager shall be required to register as
a broker/dealer for this purpose. The Sub-Investment Manager shall advise the
Board of Directors of any fees or payments of whatever type which it may be
possible for the Sub-Investment Manager or an affiliate of the Sub-Investment
Manager to receive in connection with the purchase or sale of investment
securities for the Emerging Growth Portfolio.
The payment of the advisory fees and the allocation of charges and expenses
between the Fund and the Investment Manager are set forth in the Investment
Management Agreement. Nothing in this Sub-Investment Management Agreement shall
change or affect that arrangement. The payment of advisory
fees and the apportionment of any expenses related to the services of the Sub-
Investment Manager shall be the sole concern of the Investment Manager and the
Sub-Investment Manager and shall not be the responsibility of the Fund.
5. Non-Exclusivity. The Fund and the Investment Manager agree that the
services of the Sub-Investment Manager are not to be deemed exclusive and the
Sub-Investment Manager is free to act as investment manager to various
investment companies and as fiduciary for ot her managed accounts. The Sub-
Investment Manager, shall for all purposes herein, be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent the Fund or the Investment Manager in any
way or otherwise be deemed an agent of the Fund or Investment Manager other than
in furtherance of its duties and responsibilities as set forth in this Sub-
Investment Management Agreement.
6. Books and Records. The Sub-Investment Manager agrees that all books and
records which it maintains for the Fund are the Fund's property, and, in the
event of termination of this Agreement for any reason, the Sub-Investment
Manager agrees promptly to return to the Fund, free from any claim or retention
of rights by the Sub-Investment Manager, all records relating to the Emerging
Growth Portfolio. The Sub-Investment Manger also agrees upon request of the
Investment Manager or the Fund, promptly to surrender the books and records to
either party or make the book and records available for inspection by
representatives of regulatory authorities. In connection with its duties
hereunder, the Sub-Investment Manager further agrees to maintain, prepare and
preserve books and records in accordance with the Investment Company Act and
rules thereunder, including but not limited to, Rule 31a-1 and 31a-2.
The Sub-Investment Manager will use records or information obtained under this
Agreement only for the purpose contemplated hereby, and will not disclose such
records or information in any manner other than expressly authorized by the
Fund, or if disclosure is expressly required by applicable federal or state
regulatory authorities or by this Agreement. The Sub-Investment Manager will
furnish any informational reports requested by any state insurance commissioner.
7. Liability. The Sub-Investment Manager will not be liable for any loss
suffered by the Fund in connection with any investment policy established by the
Fund for the purchase, sale or redemption of any securities at the direction of
the Board of Directors of the Fund or the Investment Manager. Nothing herein
contained shall be construed to protect the Sub-Investment Manager against any
liability resulting from the willful misfeasance, bad faith or gross negligence
of the Sub-Investment Manager in the performance of its duties or from reckless
disregard of its obligations and duties under this Sub-Investment Management
Agreement.
8. Reliance on Documents. The Board of Directors of the Fund or its officers
or agent will provide timely information to the Sub-Investment Manager regarding
such matters as purchases and redemptions of shares in the Emerging Growth
Portfolio, the cash requirements, and cash available for investment in the
Emerging Growth Portfolio, and all other information as may be reasonably
necessary or appropriate in order for the Sub-Investment Manager to perform its
responsibilities hereunder.
Neither the Fund not the Investment Manager, nor their respective designees
or agents shall use any material describing or identifying the Sub-Investment
Manager or its affiliates without the prior consent of the Sub-Investment
Manager. Any material utilized by the Fund, the Investment Manager or their
respective designees or agents which contain information as to the Sub-
Investment Manager and/or its affiliates shall be submitted to the Sub-
Investment Manager for approval prior to use, not less than five (5) business
days before such approval is requested.
The Investment Manager has herewith furnished the Sub-Investment Manager copies
of the Fund's Prospectus, Articles of Incorporation and By-Laws as currently in
effect and agrees during the continuance of the Agreement to furnish the Sub-
Investment Manager copies of any amendments or supplements thereto before or at
the time the amendments or supplements become effective. The Sub-Investment
Manager will be entitled to rely on all such documents furnished to it by the
Investment Manager of the Fund.
9. Duration and Termination of the Agreement. This Sub-Investment Management
Agreement shall become effective as of the date first above written and shall
remain in force until the first meeting of shareholders of the Emerging Growth
Portfolio. Thereafter, it shall continue in effect from year to year, but only
so long as such continuance is specifically approved at least annually by (a)
the Board of Directors of the Fund, or by the vote of a majority of the
outstanding voting securities of the Emerging Growth Portfolio, and (b) a
majority of those directors who are not parties to this Sub-Investment
Management Agreement, nor interested persons of any party to this Sub-Investment
Management Agreement, cast in person at a meeting called for the purpose of
voting on such approval. This Agreement may be terminated, without the payment
of any penalty, by the Board of Directors of the Fund, by a vote of a majority
of the outstanding shares of the Emerging Growth Portfolio, or by the Investment
Manager on sixty days' written notice to the Sub-Investment Manager, or by the
Sub-Investment Manager on sixty
days' written notice to the Fund or the Investment Manager. Termination by the
Board of Directors or by the Investment Manager shall be subject to shareholder
approval to the extent legally required. This Agreement shall automatically
terminate in the event of its assignment or in the event of termination of the
Investment Management Agreement.
10. Amendment of the Agreement. This Agreement may be amended only if such
amendment is specifically approval by (a) the vote of a majority of the
outstanding voting securities of the Emerging Growth Portfolio, and (b) the vote
of a majority of those directors of the Fund 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.
11. Definitions. The terms "assignment", "interested person", and "majority of
the outstanding voting securities", when used in this Agreement, shall have the
respective meaning specified under the Investment Company Act and the rules
thereunder.
12. Notices. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be given in writing, delivered, or
mailed postpaid to the other party, or transmitted by facsimile with
acknowledgement of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Sub-Investment Manager:
Massachusetts Financial Services Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Facsimile: (000) 000-0000
(b) If to the Investment Manager:
Chubb Investment Advisory Corporation
Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Facsimile (000)-000-0000
(c) If to the Fund:
Chubb America Fund, Inc.
Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Facsimile (000)-000-0000
13. Governing Law. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the Commonwealth of Massachusetts as
at the time in effect and the applicable provisions of the Investment Company
Act or other federal laws and regulations which may be applicable. To the extent
that the applicable law of the Commonwealth of Massachusetts or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act or other federal laws and regulations which may be applicable, the
latter shall control.
CHUBB AMERICA FUND, INC.
By: Xxxxx Xxxxxxx
Title: President
CHUBB INVESTMENT ADVISORY
CORPORATION
By: Xxxxx Xxxxxxx
Title: President
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By: Xxxxxx X. Xxxxx
Title: Senior Vice President
General Counsel
and Assistant Secretary
Attest:
Title:
