SUB-INVESTMENT ADVISORY AGREEMENT
August 25, 1995
GE Investment Management Incorporated
0000 Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000
Dear Sirs:
Xxxxxxxx Xxxxxxxx/Xxxxxx, Xxxxxxx Investment Trust, a business trust
formed under the laws of the Commonwealth of Massachusetts (the "Trust") and
Xxxxxxxx Xxxxxxxx Asset Management Inc. ("Xxxxxxxx Xxxxxxxx"), the Fund's
manager, confirm their agreement with GE Investment Management Incorporated
("GEIM"), with respect to GEIM's serving as the investment adviser of
PaineWebber Global Equity Fund (the "Fund"), a series of the Trust, as follows:
Section 1. Services as Investment Adviser.
(a) The Trust anticipates that the Fund will employ its capital by
investing and reinvesting in investments of the type specified in the Trust's
Declaration of Trust dated March 28, 1991, as amended from time to time (the
"Declaration of Trust"), and in the current Prospectus and Statement of
Additional Information describing the Fund from time to time in effect, and
in the manner and to the extent approved by the Board of Trustees of the Trust.
Copies of the current Prospectus and Statement of Additional Information
describing the Fund have been submitted to GEIM and Xxxxxxxx Xxxxxxxx.
(b) Under an agreement dated as of August 25, 1995 between the Trust and
Xxxxxxxx Xxxxxxxx relating to the Fund (the "Management Agreement"), Xxxxxxxx
Xxxxxxxx serves as the Fund's manager and has the responsibility of selecting
and compensating an investment adviser to the Fund. Acting pursuant to the
authority provided in the Management Agreement, Xxxxxxxx Xxxxxxxx selects GEIM
to serve as the Fund's investment adviser for the compensation set out in
Section 4 of this Agreement.
(c) Subject to the supervision and direction of the Trust's Board of
Trustees, and subject to review by Xxxxxxxx Xxxxxxxx, XXXX, as the Fund's
investment adviser, will manage the Fund's portfolio in accordance with the
investment objective and stated policies of the Fund, will make investment
decisions for the Fund and will place purchase and sale orders for the Fund's
portfolio transactions.
(d) GEIM will, at its own expense, maintain sufficient staff, and
employ or retain sufficient personnel and consult with any other persons that it
determines may be necessary or useful to the performance of its obligations
under this Agreement.
Section 2. Selection of Investments on Behalf of the Fund.
Unless otherwise set forth in the current Prospectus describing the
Fund or directed by Xxxxxxxx Xxxxxxxx or the Trust, GEIM will, in selecting
brokers or dealers to effect transactions on behalf of the Fund, give primary
consideration to securing the most favorable price and efficient execution. In
so doing, GEIM may consider the financial responsibility, research and
investment information and other services provided by brokers or dealers who may
effect or be a party to any transaction to which the Fund is a party or other
transactions to which other clients of GEIM may be a party. The Trust recognizes
the desirability of GEIM's having access to supplemental investment and market
research and security and economic analyses provided by brokers and that those
brokers may execute brokerage transactions at a higher cost to the Fund than
would be the case if the transactions were executed on the basis of the most
favorable price and efficient execution. The Trust, thus, authorizes GEIM, to
the extent permitted by applicable law and regulations, to pay higher brokerage
commissions for the purchase and sale of securities for the Fund to brokers who
provide supplemental investment and market research and security and economic
analyses, subject to review by the Trustees of the Trust and of Xxxxxxxx
Xxxxxxxx from time to time with respect to the extent and continuation of this
practice. The Trust understands that the services provided by those brokers may
be useful to GEIM in connection with its services to other clients.
Section 3. Costs and Expenses.
GEIM will bear the cost of rendering the services it is obligated to
provide under this Agreement and will, at its own expense, pay the salaries of
all officers and employees who are employed by both it and the Trust. GEIM will
provide the Fund with investment officers who are authorized by the Trust's
Board of Trustees to execute purchases and sales of securities on behalf of the
Fund and will employ a professional staff of portfolio managers who draw upon a
variety of sources for research information for the Fund. Other expenses to be
incurred in the
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operation of the Fund and not specifically borne by Xxxxxxxx Xxxxxxxx or XXXX
will be borne by the Fund, including: Xxxxxxxx Xxxxxxxx' fees for services
rendered under the Management Agreement; shareholder servicing fees paid to
Xxxxxxxx Xxxxxxxx under the terms of the Trust's shareholder servicing plan
adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended (the "1940 Act"); charges and expenses of any registrar, custodian,
transfer and dividend disbursing agent providing services to the Trust in
connection with the Fund; brokerage fees and commissions; taxes; engraving and
printing of the Fund's share certificates, if any; registration costs of the
Fund and its shares under federal and state securities laws; the costs and
expense of printing, including typesetting, and distributing of prospectuses
and statements of additional information describing the Fund and supplements
thereto to regulatory authorities and the Fund's shareholders; all expenses
incurred in conducting meetings of the Fund's shareholders and meetings of the
Trust's Board of Trustees relating to the Fund; all expenses incurred in
preparing, printing and mailing proxy statements and reports to shareholders of
the Fund; fees and travel expenses of members of the Trust's Board of Trustees
or members of any advisory board or committee who are not employees of Xxxxxxxx
Xxxxxxxx, GEIM, or any of their affiliates; all expenses incident to any
dividend, withdrawal or redemption options provided to Fund shareholders;
charges and expenses of any outside service used for pricing the Fund's
portfolio securities and calculating the net asset value of the Fund's shares;
fees and expenses of legal counsel, including counsel to the members of the
Trust's Board of Trustees who are not interested persons of the Fund, Xxxxxxxx
Xxxxxxxx or XXXX, and independent auditors; membership dues of industry
associations; interest on Fund borrowings; postage; insurance premiums on
property or personnel (including officers and Trustees) of the Trust that inure
to their benefit; extraordinary expenses (including, but not limited to, legal
claims and liabilities and litigation costs and any indemnification relating
thereto); and all other costs of the Fund's operations.
Section 4. Compensation.
In consideration of services rendered pursuant to this Agreement, Xxxxxxxx
Xxxxxxxx will pay GEIM on the Trust's first business day of each month a fee
that is accrued daily at the annual rate of .31% of the value of the Fund's
average daily net assets up to and including, $500 million, .29% over $500
million and up to and including $1 billion, and .265% over $1 billion, for the
previous month. Upon any termination of this Agreement before the end of the
month, the fee for the portion of the month in which this Agreement is in effect
will be prorated according to the proportion that the portion bears to the full
monthly period and will be payable upon the date of termination of this
Agreement. For the purpose of determining fees payable to GEIM under this
Agreement, the value of the Fund's net assets will be
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computed in the manner described in the Trust's current Prospectus and/or
Statement of Additional Information describing the Fund.
Section 5. Excess Expense Reimbursement.
If, in any fiscal year of the Fund, the aggregate expenses of the Fund
(including management fees, but excluding interest, taxes, brokerage and, with
the prior written consent of the necessary state securities authorities,
extraordinary expenses) exceed the expense limitation of any state having
jurisdiction over the Trust, GEIM will reimburse Xxxxxxxx Xxxxxxxx for 70% of
the Fund's average daily net assets up to $200 million and 50% thereafter of the
amount Xxxxxxxx Xxxxxxxx is required to reimburse the Trust under the Management
Agreement. The expense reimbursement obligation of GEIM is limited to the amount
of fees to which GEIM is entitled under this Agreement. The expense
reimbursement payable under the terms of this Section 5 will be estimated,
reconciled and paid on a monthly basis.
Section 6. Services to Other Companies or Accounts.
(a) The Trust and Xxxxxxxx Xxxxxxxx understand and acknowledge that
GEIM now acts and will continue to act as investment manager or adviser to
various fiduciary or other managed accounts and the Trust and Xxxxxxxx Xxxxxxxx
have no objection to GEIM's so acting, so long as that when the Fund and any
account served by GEIM are prepared to invest in, or desire to dispose of the
same security, available investments or opportunities for sales will be
allocated in a manner believed by GEIM to be equitable to the Fund and the
account. The Trust and Xxxxxxxx Xxxxxxxx recognize that, in some cases, this
procedure may adversely affect the price paid or received by the Fund or the
size of the position obtained or disposed of by the Fund.
(b) The Trust and Xxxxxxxx Xxxxxxxx understand and acknowledge that the
persons employed by GEIM to assist in the performance of its duties under this
Agreement will not devote their full time to that service: nothing contained in
this Agreement will be deemed to limit or restrict the right of GEIM or any
affiliate of GEIM to engage in and devote time and attention to other businesses
or to render services of whatever kind or nature.
Section 7. Continuance and Termination of the Agreement.
(a) This Agreement will become effective as of August 25, 1995, and will
continue for an initial two-year term and will continue thereafter so long as
the continuance is specifically approved at least annually (a) by the Trustees
of the Trust or (b) by a vote of a majority of the Fund's outstanding voting
securities, as defined in the 1940 Act, provided that in either
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event the continuance is also approved by a majority of the Trustees who
are not "interested persons" (as defined in the 0000 Xxx) of any party
to this Agreement, by vote cast in person at a meeting called for the purpose
of voting on the approval.
(b) This Agreement is terminable without penalty, by the Trust on not
more than 60 nor less than 30 days' notice to Xxxxxxxx Xxxxxxxx and XXXX, by
vote of holders of a majority of the Fund's outstanding voting securities, as
defined in the 1940 Act, or by Xxxxxxxx Xxxxxxxx or GEIM on not more than 60 nor
less than 30 days' notice to the Trust.
(c) This Agreement will terminate automatically in the event of
its assignment (as defined in the 1940 Act or in rules adopted under the 1940
Act).
Section 8. Filing of Declaration of Trust.
The Trust represents that a copy of the Declaration of Trust is on file
with the Secretary of the Commonwealth of Massachusetts and with the Boston City
Clerk.
Section 9. Limitation of Liability.
(a) GEIM will not be liable for any error of judgment or mistake of law
or for any loss suffered by the Trust in connection with the matters to which
this Agreement relates, except for a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of GEIM in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also an officer, director,
employee or agent of GEIM, who may be or become an officer, Trustee, employee or
agent of the Trust, will be deemed, when rendering services to the Trust or
acting on any business of the Trust, to be rendering services to, or acting
solely for, the Trust and not as an officer, director, employee or agent, or one
under the control or direction of, GEIM even though paid by GEIM.
(b) The Trust, Xxxxxxxx Xxxxxxxx and XXXX agree that the obligations of
the Trust under this Agreement will not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past, present or
future, of the Trust, individually, but are binding only upon the assets and
property of the Trust, as provided in the Declaration of Trust. The execution
and delivery of this Agreement have been authorized by the Trustees of the
Trust, and signed by an authorized officer of the Trust, acting as such, and
neither the authorization by the Trustees nor the execution and delivery by the
officer will be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but will bind only the trust
property of the Trust as provided in the
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Declaration of Trust. No series of the Trust, including the Fund, will be
liable for any claims against any other series.
Section 10. Dates.
This Agreement has been executed by the Trust, GEIM and Xxxxxxxx
Xxxxxxxx as of August 25, 1995 and will become effective as of this date.
If the terms and conditions described above are in accordance
with your understanding, kindly indicate your acceptance of this Agreement by
signing and returning to us the enclosed copy of this Agreement.
XXXXXXXX XXXXXXXX/XXXXXX, XXXXXXX
INVESTMENT TRUST
By: ______________________________
XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC.
By: ______________________________
Accepted:
GE INVESTMENT MANAGEMENT INCORPORATED
By: _______________________________
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