XXXXXX FUNDS
SUBMANAGEMENT CONTRACT
This SubManagement Contract is dated as of February 27, 2014
between XXXXXX INVESTMENT MANAGEMENT, LLC, a Delaware limited
liability company (the Manager) and XXXXXX INVESTMENTS LIMITED, a
company organized under the laws of England and Wales (the
SubManager).
WHEREAS, the Manager is the investment manager of each of the
investment companies registered under the United States Investment
Company Act of 1940, as amended, that are identified on Schedule A
hereto, as it may from time to time be amended by the Manager (the
Funds), and a registered investment adviser under the United States
Investment Advisers Act of 1940, as amended
WHEREAS, the SubManager is licensed as an investment manager
by the Financial Conduct Authority of the United Kingdom (the FCA)
and
WHEREAS, the Manager desires to engage the SubManager from
time to time to manage a portion of certain of the Funds
NOW THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed as follows
1. SERVICES TO BE RENDERED BY SUBMANAGER.
(a) The SubManager, at its expense, will furnish
continuously
an investment program for that portion of any Fund the management
of which is allocated from time to time by the Manager to the
SubManager (an Allocated Sleeve). The Manager shall, in its sole
discretion, determine which Funds will have an Allocated Sleeve and
the amount of assets allocated from time to time to each such
Allocated Sleeve provided that, with respect to any Fund, the
Trustees of such Fund must have approved the use of the SubManager
prior to the creation of an Allocated Sleeve for such Fund. The
SubManager will determine what investments shall be purchased,
held, sold or exchanged by any Allocated Sleeve and what portion,
if any, of the assets of the Allocated Sleeve shall be held
uninvested and shall, on behalf of the Fund, make changes in the
Funds investments held in such Allocated Sleeve.
(b) The Manager may also, at its discretion, request the
SubManager to provide assistance with purchasing and selling
securities for any Fund, including the placement of orders with
brokerdealers selected in accordance with Section 1(d), even if the
Manager has not established an Allocated Sleeve for such Fund.
(c) The SubManager at its expense will furnish all
necessary
investment and management facilities, including salaries of
personnel, required for it to execute its duties faithfully.
(d) The SubManager shall place all orders for the
purchase
and sale of portfolio investments for any Allocated Sleeve with
brokers or dealers selected by the SubManager. In the selection of
such brokers or dealers and the placing of such orders, the
SubManager shall use its best efforts to obtain for the related
Fund 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 for the Fund the most favorable price
and execution available, the SubManager, bearing in mind the Funds
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 Funds
may determine, the SubManager shall not be deemed to have acted
unlawfully or to have breached any duty created by this Contract or
otherwise solely by reason of its having caused a Fund to pay a
broker or dealer that provides brokerage and research services to
the Manager or the SubManager 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 SubManager 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 its overall responsibilities with respect to the
Fund and to other clients of the Manager or the SubManager as to
which the Manager or the SubManager exercises investment
discretion. The SubManager agrees that in connection with purchases
or sales of portfolio investments for any Fund, neither the
SubManager nor any officer, director, employee or agent of the
SubManager shall act as a principal or receive any commission other
than as provided in Section 3.
(e) The SubManager shall not be obligated to pay any expenses
of or for the Manager or any Fund not expressly assumed by the
SubManager pursuant to this Section 1.
(f) In the performance of its duties, the SubManager will
comply with the provisions of the Agreement and Declaration of
Trust and ByLaws of each applicable Fund and such Funds stated
investment objectives, policies and restrictions, and will use its
best efforts to safeguard and promote the welfare of such Fund and
to comply with other policies which the Manager or the Trustees may
from time to time determine and shall exercise the same care and
diligence expected of the Manager.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees,
officers and employees of a Fund may be a shareholder, director,
officer or employee of, or be otherwise interested in, the
SubManager, and in any person controlled by or under common control
with the SubManager, and that the SubManager and any person
controlled by or under common control with the SubManager may have
an interest in such Fund. It is also understood that the SubManager
and any person controlled by or under common control with the
SubManager have and may have advisory, management, service or other
contracts with other organizations and persons, and may have other
interests and business.
3. COMPENSATION.
Except as provided below, the Manager will pay to the
SubManager as compensation for the SubManagers services rendered, a
fee, computed and paid quarterly at the annual rate of 0.35% per
annum of average aggregate net asset value of the assets in equity
and asset allocation Allocated Sleeves and 0.40% per annum of
average aggregate net asset value of the assets in fixed income
Allocated Sleeves, except for fixed income Allocated Sleeves in
certain fixed income Funds enumerated as follows (with the per
annum fee provided in parentheses) Xxxxxx Money Market Liquidity
Fund (0.20%), Xxxxxx Government Money Market Fund (0.20%), Xxxxxx
Short Term Investment Fund (0.20%), Xxxxxx Money Market Fund
(0.25%), Xxxxxx Tax Exempt Money Market Fund (0.25%), Xxxxxx VT
Money Market Fund (0.25%), Xxxxxx Short Duration Income Fund
(0.25%), Xxxxxx ShortTerm Municipal Income Fund (0.25%), Xxxxxx
American Government Income Fund (0.25%), Xxxxxx Income Fund
(0.25%), Xxxxxx U.S. Government Income Trust (0.25%), Xxxxxx VT
American Government Income Fund (0.25%), and Xxxxxx VT Income Fund
(0.25%).
Such average net asset value shall be determined by taking an
average of all of the determinations of such net asset value during
a quarter at the close of business on each business day during such
quarter while this Contract is in effect. Such fee shall be payable
for each quarter within 30 days after the close of such quarter.
The SubManager shall look only to the Manager for payment of its
fees. No Fund shall have any responsibility for paying any fees due
the SubManager.
With respect to each of Xxxxxx High Income Securities Fund,
Xxxxxx Master Intermediate Income Trust and Xxxxxx Premier Income
Trust, the Manager will pay to the SubManager as compensation for
the SubManagers services rendered, a fee, computed and paid
quarterly at the annual rate of 0.40% of Average Weekly Assets in
Allocated Sleeves. Average Weekly Assets means the average of the
weekly determinations of the difference between the total assets of
the Fund (including any assets attributable to leverage for
investment purposes) attributable to an Allocated Sleeve and the
total liabilities of the Fund (excluding liabilities incurred in
connection with leverage for investment purposes) attributable to
such Allocated Sleeve, determined at the close of the last business
day of each week, for each week which ends during the quarter. Such
fee shall be payable for each quarter within 30 days after the
close of such quarter. As used in this Section 3, leverage for
investment purposes means any incurrence of indebtedness the
proceeds of which are to be invested in accordance with the Funds
investment objective. For purposes of calculating Average Weekly
Assets, liabilities associated with any instruments or transactions
used to leverage the Funds portfolio for investment purposes
(whether or not such instruments or transactions are covered within
the meaning of the Investment Company Act of 1940 and the rules and
regulations thereunder, giving effect to any interpretations of the
Securities and Exchange Commission and its staff) are not
considered liabilities. For purposes of calculating Average Weekly
Assets, the total assets of the Fund will be deemed to include (a)
any proceeds from the sale or transfer of an asset (the Underlying
Asset) of the Fund to a counterparty in a reverse repurchase or
dollar roll transaction and (b) the value of such Underlying Asset
as of the relevant measuring date.
In the event that the Managers management fee from any of
Xxxxxx High Income Securities Fund, Xxxxxx Master Intermediate
Income Trust or Xxxxxx Premier Income Trust is reduced pursuant to
the investment management contract between such Fund and the
Manager because during any Measurement Period (as defined below)
the amount of interest payments and fees with respect to
indebtedness or other obligation of the Fund incurred for
investment leverage purposes, plus additional expenses attributable
to any such leverage for investment purposes, exceeds the portion
of the Funds net income and net shortterm capital gains (but not
longterm capital gains) accruing during such Measurement Period as
a result of the fact that such indebtedness or other obligation was
outstanding during the Measurement Period, the fee payable to the
SubManager with respect to such Fund shall be reduced in the same
proportion as the fee paid to the Manager with respect to such Fund
is so reduced. Measurement Period shall be any period for which
payments of interest or fees (whether designated as such or
implied) are payable in connection with any indebtedness or other
obligation of the Fund incurred for investment purposes.
If the SubManager shall serve for less than the whole of a
quarter, the foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT AMENDMENTS OF THIS
CONTRACT.
This Contract shall automatically terminate without the
payment of any penalty, in the event of its assignment and this
Contract shall not be amended with respect to any Allocated Sleeve
unless such amendment be approved at a meeting 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 related Fund who are
not interested persons of such Fund or of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and
shall remain in full force and effect continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows
(a) Either party hereto or, with respect to any Allocated
Sleeve, the related Fund may at any time terminate this Contract by
not more than sixty days nor less than thirty days written notice
delivered or mailed by registered mail, postage prepaid, to the
other party, or
(b) With respect to any Allocated Sleeve, if (i) the Trustees
of the related Fund or the shareholders by the affirmative vote of
a majority of the outstanding shares of such Fund, and (ii) a
majority of the Trustees of such Fund who are not interested
persons of such Fund or of the Manager, 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
Contract, then this Contract shall automatically terminate at the
close of business on the anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later, or
(c) With respect to any Allocated Sleeve, automatically upon
termination of the Managers investment management contract with the
related Fund.
Action by a Fund under (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 such Fund.
Termination of this Contract pursuant to this Section 5 will
be without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the affirmative vote of a
majority of the outstanding shares of a Fund means the affirmative
vote, at a duly called and held meeting of shareholders of such
Fund, (a) of the holders of 67% or more of the shares of such Fund
present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares
of such Fund entitled to vote at such meeting are present in person
or by proxy, or (b) of the holders of more than 50% of the
outstanding shares of such Fund entitled to vote at such meeting,
whichever is less.
For the purposes of this Contract, the terms affiliated
person, control, interested person and assignment shall have their
respective meanings defined in the United States Investment Company
Act of 1940 and the Rules and Regulations thereunder (the 1940
Act), 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 United States Securities Exchange Act of
1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF SUBMANAGER.
In the absence of willful misfeasance, bad faith or gross
negligence on the part of the SubManager, or reckless disregard of
its obligations and duties hereunder, the SubManager shall not be
subject to any liability to the Manager, any Fund or to any
shareholder of any Fund, for any act or omission in the course of,
or connected with, rendering services hereunder.
8. ADDITIONAL PROVISIONS.
(a) The SubManager represents that it is regulated by the FCA
in the conduct of its investment business. The SubManager has in
operation a written procedure in accordance with FCA rules for the
effective consideration and proper handling of complaints from
customers. Any complaint by the Manager or any Fund should be sent
to the Compliance Officer of the SubManager. The Manager and any
Fund is also entitled to make any complaints about the SubManager
to the Financial Ombudsman Service established by the FCA. The
Manager and any Fund may also request a statement describing its
rights to compensation in the event of the SubManagers inability to
meet its liabilities.
(b) The Manager represents that it and each Fund are
Professional Customers in the meaning of the FCAs rules.
(c) Although each Fund is not a party hereto and shall have
no responsibility for the Managers or the SubManagers obligations
hereunder, each Fund is named as explicit third party beneficiary
of the parties agreements hereunder.
IN WITNESS WHEREOF, XXXXXX INVESTMENTS LIMITED and XXXXXX
INVESTMENT MANAGEMENT, LLC have each caused this instrument to be
signed in duplicate on its behalf by an officer duly authorized,
all as of the day and year first above written.
XXXXXX INVESTMENTS LIMITED
By
/s/ Xxxxx Xxxxx
Xxxxx Xxxxx
XXXXXX INVESTMENT MANAGEMENT, LLC
By
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Director of Trustee Relations and
Authorized Person
Schedule A
Effective as of March 24, 2016 unless otherwise noted
Xxxxxx Xxxxxxxx Xxxxxx 000 Xxxx
Xxxxxx Absolute Return 300 Fund
Xxxxxx Absolute Return 500 Fund
Xxxxxx Absolute Return 700 Fund
Xxxxxx American Government Income Fund
Xxxxxx AMTFree Municipal Fund
Xxxxxx Arizona Tax Exempt Income Fund
Xxxxxx Asia Pacific Equity Fund
Xxxxxx California Tax Exempt Income Fund
Xxxxxx Capital Spectrum Fund
Xxxxxx Capital Opportunities Fund
Xxxxxx Convertible Securities Fund
Xxxxxx Diversified Income Trust
Xxxxxx Dynamic Asset Allocation Balanced Fund
Xxxxxx Dynamic Asset Allocation Conservative Fund
Xxxxxx Dynamic Asset Allocation Equity Fund
Xxxxxx Dynamic Asset Allocation Growth Fund
Xxxxxx Dynamic Risk Allocation Fund
Xxxxxx Equity Income Fund
Xxxxxx Emerging Markets Equity Fund
Xxxxxx Emerging Markets Income Fund
Xxxxxx Europe Equity Fund
Xxxxxx Equity Spectrum Fund
Xxxxxx Floating Rate Income Fund
Xxxxxx Xxxxxx Balanced Fund
Xxxxxx Global Consumer Fund
Xxxxxx Global Dividend Fund
Xxxxxx Global Energy Fund
Xxxxxx Global Equity Fund
Xxxxxx Global Financials Fund
Xxxxxx Global Health Care Fund
Xxxxxx Global Income Trust
Xxxxxx Global Industrials Fund
Xxxxxx Global Natural Resources Fund
Xxxxxx Global Sector Fund
Xxxxxx Global Technology Fund
Xxxxxx Global Telecommunications Fund
Xxxxxx Global Utilities Fund
Xxxxxx Government Money Market Fund (effective October 16, 2015)
The Xxxxxx Fund for Growth and Income
Xxxxxx Growth Opportunities Fund
Xxxxxx High Income Securities Fund
Xxxxxx High Yield Advantage Fund
Xxxxxx High Yield Trust
Xxxxxx Income Fund
Xxxxxx IntermediateTerm Municipal Income Fund
Xxxxxx International Capital Opportunities Fund
Xxxxxx International Equity Fund
Xxxxxx International Value Fund
Xxxxxx International Growth Fund
Xxxxxx Investors Fund
Xxxxxx Low Volatility Equity Fund
Xxxxxx Managed Municipal Income Trust
Xxxxxx Massachusetts Tax Exempt Income Fund
Xxxxxx Master Intermediate Income Trust
Xxxxxx Michigan Tax Exempt Income Fund
Xxxxxx Minnesota Tax Exempt Income Fund
Xxxxxx Money Market Fund
Xxxxxx Money Market Liquidity Fund
Xxxxxx Mortgage Opportunities Fund
Xxxxxx Mortgage Recovery Fund
Xxxxxx MultiCap Core Fund
Xxxxxx MultiCap Growth Fund
Xxxxxx MultiCap Value Fund
Xxxxxx Municipal Opportunities Trust
Xxxxxx New Jersey Tax Exempt Income Fund
Xxxxxx New York Tax Exempt Income Fund
Xxxxxx Ohio Tax Exempt Income Fund
Xxxxxx Pennsylvania Tax Exempt Income Fund
Xxxxxx Premier Income Trust
Xxxxxx Research Fund
Xxxxxx Retirement Income Fund Lifestyle 1
Xxxxxx Retirement Income Fund Lifestyle 2
Xxxxxx Retirement Income Fund Lifestyle 3
Xxxxxx RetirementReady 2060 Fund
Xxxxxx RetirementReady 2055 Fund
Xxxxxx RetirementReady 2050 Fund
Xxxxxx RetirementReady 2045 Fund
Xxxxxx RetirementReady 2040 Fund
Xxxxxx RetirementReady 2035 Fund
Xxxxxx RetirementReady 2030 Fund
Xxxxxx RetirementReady 2025 Fund
Xxxxxx RetirementReady 2020 Fund
Xxxxxx Short Term Investment Fund
Xxxxxx ShortTerm Municipal Income Fund
Xxxxxx Small Cap Growth Fund
Xxxxxx Small Cap Value Fund
Xxxxxx Strategic Volatility Equity Fund
Xxxxxx Tax Exempt Income Fund
Xxxxxx Tax Exempt Money Market Fund
Xxxxxx TaxFree High Yield Fund
Xxxxxx U.S. Government Income Trust
Xxxxxx Voyager Fund
Xxxxxx VT Absolute Return 500 Fund
Xxxxxx VT American Government Income Fund
Xxxxxx VT Capital Opportunities Fund
Xxxxxx VT Diversified Income Fund
Xxxxxx VT Equity Income Fund
Xxxxxx VT Xxxxxx Xxxxxx Balanced Fund
Xxxxxx VT Global Asset Allocation Fund
Xxxxxx VT Global Equity Fund
Xxxxxx VT Global Health Care Fund
Xxxxxx VT Global Utilities Fund
Xxxxxx VT Growth and Income Fund
Xxxxxx VT Growth Opportunities Fund
Xxxxxx VT High Yield Fund
Xxxxxx VT Income Fund
Xxxxxx VT International Equity Fund
Xxxxxx VT International Value Fund
Xxxxxx VT International Growth Fund
Xxxxxx VT Investors Fund
Xxxxxx VT Money Market Fund
Xxxxxx VT MultiCap Growth Fund
Xxxxxx VT MultiCap Value Fund
Xxxxxx VT Research Fund
Xxxxxx VT Small Cap Value Fund
Xxxxxx VT Voyager Fund
XXXXXX INVESTMENTS LIMITED
By /s/ Xxxxx Xxxxx
Xxxxx Xxxxx
XXXXXX INVESTMENT MANAGEMENT, LLC
By /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Director of Trustee Relations and
Authorized Person
6
509621991
509621991
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7
Schedule A
(continued)
A3
509621991
A1
509621991
