EX-99.(d)(11)
NEW ENGLAND ZENITH FUND
SUBADVISORY AGREEMENT
(BALANCED SERIES)
This Subadvisory Agreement (this "Agreement") is entered into as of May 1,
2000 by and between New England Investment Management, Inc., a Massachusetts
corporation (the "Manager"), and Wellington Management Company, LLP (the
"Subadviser").
WHEREAS, the Manager has entered into an Advisory Agreement dated May 1,
1998 (the "Advisory Agreement") with New England Zenith Fund (the "Trust"),
pursuant to which the Manager provides portfolio management and administrative
services to the Balanced Series of the Trust (the "Series");
WHEREAS, the Advisory Agreement provides that the Manager may delegate any
or all of its portfolio management responsibilities under the Advisory Agreement
to one or more subadvisers;
WHEREAS, the Manager desires to retain the Subadviser to render portfolio
management services in the manner and on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the Manager and the Subadviser agree as follows:
1. Subadvisory Services.
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a. The Subadviser shall, subject to the supervision of the Manager
and in cooperation with the Manager, as administrator, or with any other
administrator appointed by the Manager (the "Administrator"), manage the
investment and reinvestment of the assets of the Series. The Subadviser shall
manage the Series in conformity with (1) the investment objective, policies and
restrictions of the Series set forth in the Trust's prospectus and statement of
additional information, as revised or supplemented from time to time, relating
to the Series (the "Prospectus"), (2) any additional policies or guidelines
established by the Manager or by the Trust's trustees that have been furnished
in writing to the Subadviser and (3) the provisions of the Internal Revenue Code
(the "Code") applicable to "regulated investment companies" (as defined in
Section 851 of the Code) and "segregated asset accounts" (as defined in Section
817 of the Code), all as from time to time in effect (collectively, the
"Policies"), and with all applicable provisions of law, including without
limitation all applicable provisions of the Investment Company Act of 1940 (the
"1940 Act") the rules and regulations thereunder and the interpretive opinions
thereof of the staff of the Securities and Exchange Commission ("SEC") ("SEC
Positions"); provided, however, that the Manager agrees to inform the Subadviser
of any and all applicable state insurance law restrictions that operate to limit
or restrict the investments the Series might otherwise make ("Insurance
Restrictions"), and to inform the Subadviser promptly of any changes in such
Insurance Restrictions. Subject to the foregoing, the Subadviser is authorized,
in its discretion and without prior consultation with the Manager, to buy, sell,
lend
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and otherwise trade in any stocks, bonds and other securities and investment
instruments on behalf of the Series, without regard to the length of time the
securities have been held and the resulting rate of portfolio turnover or any
tax considerations; and the majority or the whole of the Series may be invested
in such proportions of stocks, bonds, other securities or investment
instruments, or cash, as the Subadviser shall determine. Notwithstanding the
foregoing provisions of this Section 1.a, however, the Subadviser shall, upon
written instructions from the Manager, effect such portfolio transactions for
the Series as the Manager shall determine are necessary in order for the Series
to comply with the Policies.
b. The Subadviser shall furnish the Manager and the Administrator
daily, weekly, monthly, quarterly and/or annual reports concerning portfolio
transactions and the investment performance of the Series in such form as may be
mutually agreed upon, and agrees to review the Series and discuss the management
of the Series with representatives or agents of the Manager, the Administrator
or the Trust at their reasonable request. The Subadviser shall maintain all
books and records with respect to the Series' portfolio transactions required by
subparagraphs (b) (5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule
31a-1 under the 1940 Act. The Subadviser shall permit all books and records
with respect to the Series to be inspected and audited by the Manager and the
Administrator at all reasonable times during normal business hours, upon
reasonable notice. The Subadviser shall also provide the Manager, the
Administrator or the Trust with such other information and reports as may
reasonably be requested by the Manager, the Administrator or the Trust from time
to time, including without limitation all material as reasonably may be
requested by the Trustees of the Trust pursuant to Section 15(c) of the 1940
Act. The Subadviser shall furnish the Manager (which may also provide it to the
Trust's Board of Trustees) with copies of all comment letters received from the
SEC following routine or special SEC examinations or inspections.
c. The Subadviser shall provide to the Manager a copy of the
Subadviser's Form ADV as filed with the SEC and any amendments or restatements
as thereof in the future and a list of the persons whom the Subadviser wishes to
have authorized to give written and/or oral instructions to custodians of assets
of the Series.
d. Unless the Manager gives the Subadviser written instructions
indicating that the Manager will assume responsibilities for voting proxies, the
Subadviser shall use its good faith judgment in a manner which it reasonably
believes best serves the interest of the Series' shareholders to vote or abstain
from voting all proxies solicited by or with respect to the issuers of
securities in which assets of the Series are invested.
2. Obligations of the Manager.
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a. The Manager shall provide (or cause the Trust's custodian to
provide) timely information to the Subadviser regarding such matters as the
composition of assets in the Series, cash requirements and cash available for
investment in the Series, and all other information as may be reasonably
necessary for the Subadviser to perform its responsibilities hereunder.
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b. The Manager has furnished the Subadviser a copy of the Prospectus
and agrees during the continuance of this Agreement to furnish the Subadviser
copies of any revisions or supplements thereto at, or, if practicable, before
the time the revisions or supplements become effective. The Manager agrees to
furnish the Subadviser with relevant sections of minutes of meetings of the
Trustees of the Trust applicable to the Series to the extent they may affect the
duties of the Subadviser, and with copies of any financial statements or reports
of the Trust with respect to the Series to its shareholders, and any further
materials or information which the Subadviser may reasonably request to enable
it to perform its functions under this Agreement, including, but not limited to,
timely information relating to any Insurance Restrictions.
3. Custodian. The Manager shall provide the Subadviser with a copy of the
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Series's agreement with the custodian designated to hold the assets of the
Series (the "Custodian") and any modifications thereto (the "Custody
Agreement"). The assets of the Series shall be maintained in the custody of the
Custodian identified in, and in accordance with the terms and conditions of, the
Custody Agreement (or any sub-custodian properly appointed as provided in the
Custody Agreement). The Subadviser shall provide timely instructions directly
to the Trust's custodian, in the manner and form as required by the Trust's
custodian agreement (including with respect to exchange offerings and other
corporate actions) necessary to effect the investment and reinvestment of the
Series' assets. Any assets added to the Series shall be delivered directly to
the Custodian.
4. Proprietary Rights. The Manager agrees and acknowledges that the
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Subadviser is the sole owner of the name and trade or service xxxx "Wellington"
and that all use of any designation consisting in whole or part of such trade or
service xxxx under this Agreement shall inure to the benefit of the Subadviser.
The Manager agrees not to use the name "Wellington" in any marketing,
promotional or other documents without giving the Subadviser an opportunity to
review and comment on a draft of such document and without the Subadviser's
prior consent to such use.
5. Expenses. Except for expenses specifically assumed or agreed to be
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paid by the Subadviser pursuant hereto, the Subadviser shall not be liable for
any expenses of the Manager or the Trust including, without limitation, (a)
interest and taxes, (b) brokerage commissions and other costs in connection with
the purchase or sale of securities or other investment instruments with respect
to the Series, and (c) custodian fees and expenses. The Subadviser will pay its
own expenses incurred in furnishing the services to be provided by it pursuant
to this Agreement.
6. Purchase and Sale of Assets. Absent instructions from the Manager to
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the contrary, the Subadviser shall place all orders for the purchase and sale of
securities for the Series with brokers or dealers selected by the Subadviser,
which may include brokers or dealers affiliated with the Subadviser, provided
such orders comply with Rule 17e-1 (or any successor or other relevant
regulations) under the 1940 Act in all respects. To the extent consistent with
applicable law and then-current staff positions, purchase or sell orders for the
Series may be aggregated with contemporaneous purchase or sell orders of other
clients of the Subadviser. The Subadviser shall use its best efforts to obtain
execution of transactions for the Series at prices which are advantageous to the
Series and at commission rates that are reasonable in relation to
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the benefits received. However, the Subadviser may select brokers or dealers on
the basis that they provide brokerage, research or other services or products to
the Series and/or other accounts serviced by the Subadviser. Not all such
services or products need to be used by the Subadviser in managing the Series.
7. Compensation of the Subadviser. As full compensation for all services
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rendered, facilities furnished and expenses borne by the Subadviser hereunder,
the Manager shall pay the Subadviser compensation at the annual rate of 0.325%
of the first $100 million of the average daily net assets of the Series during
the Series' then-current fiscal year, 0.275% of the next $100 million of such
assets and 0.25% of such assets in excess of $200 million. Such compensation
shall be payable monthly in arrears or at such other intervals, not less
frequently than quarterly, as the Manager is paid by the Series pursuant to the
Advisory Agreement. If the Subadviser shall serve for less than the whole of
any month or other agreed-upon interval, the foregoing compensation shall be
prorated. The Manager may from time to time waive the compensation it is
entitled to receive from the Trust; however, any such waiver will have no effect
on the Manager's obligation to pay the Subadviser the compensation provided for
herein.
8. Non-Exclusivity. The Manager agrees that the services of the
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Subadviser are not to be deemed exclusive and that the Subadviser and its
affiliates are free to act as investment manager and provide other services to
various investment companies and other managed accounts, except as the
Subadviser and the Manager or the Administrator may otherwise agree from time to
time in writing before or after the date hereof. This Agreement shall not in
any way limit or restrict the Subadviser or any of its directors, officers,
employees or agents from buying, selling or trading any securities or other
investment instruments for its or their own account or for the account of others
for whom it or they may be acting, provided that such activities do not
adversely affect or otherwise impair the performance by the Subadviser of its
duties and obligations under this Agreement. The Manager recognizes and agrees
that the Subadviser may provide advice to or take action with respect to other
clients, which advice or action, including the timing and nature of such action,
may differ from or be identical to advice given or action taken with respect to
the Series. The Subadviser shall for all purposes hereof be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent the Trust or the Manager in any way or
otherwise be deemed an agent of the Trust or the Manager.
9. Liability and Indemnification. Except as may otherwise be provided by
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the 1940 Act or other federal securities laws, neither the Subadviser nor any of
its officers, partners, managing directors, employees, affiliates or agents (the
"Indemnified Parties") shall be subject to any liability to the Manager, the
Trust, the Series or any shareholder of the Series for any error of judgment, or
any loss arising out of any investment or other act or omission in the course
of, connected with, or arising out of any service to be rendered under this
Agreement, except by reason of a violation of law, willful misfeasance, bad
faith or gross negligence in the performance of any Indemnified Party's duties
or by reason of reckless disregard by any Indemnified Party of its obligations
and duties. The Manager shall hold harmless and indemnify the Subadviser for
any loss, liability, cost, damage or expense (including reasonable attorneys
fees and costs) arising (i) from any claim or demand by any past or present
shareholder of the Series that is not based upon the obligations of the
Subadviser with respect to the Series under
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this Agreement or (ii) resulting from the failure of the Manager to inform the
Subadviser of any applicable Insurance Restrictions or any changes therein. The
Manager acknowledges and agrees that the Subadviser makes no representation or
warranty, express or implied, that any level of performance or investment
results will be achieved by the Series or that the Series will perform
comparably with any standard or index, including other clients of the
Subadviser, whether public or private.
10. Effective Date and Termination. This Agreement shall become effective
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as of the date of its execution, and
a. unless otherwise terminated, this Agreement shall continue in
effect for two years from the date of execution, and from year to year
thereafter so long as such continuance is specifically approved at least
annually (i) by the Board of Trustees of the Trust or by vote of a majority of
the outstanding voting securities of the Series, and (ii) by vote of a majority
of the trustees of the Trust who are not interested persons of the Trust, the
Manager or the Subadviser, cast in person at a meeting called for the purpose of
voting on such approval;
b. this Agreement may at any time be terminated on sixty days'
written notice to the Subadviser either by vote of the Board of Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the
Series;
c. this Agreement shall automatically terminate in the event of its
assignment or upon the termination of the Advisory Agreement;
d. this Agreement may be terminated by the Subadviser on sixty days'
written notice to the Manager and the Trust, or, if approved by the Board of
Trustees of the Trust, by the Manager on sixty days' written notice to the
Subadviser; and
Termination of this Agreement pursuant to this Section 10 shall be without
the payment of any penalty. In the event of termination of this Agreement, all
compensation due to the Subadviser through the date of termination will be
calculated on a pro rata basis through the date of termination and paid on the
first business day after the next succeeding month end.
11. Amendment. This Agreement may be amended at any time by mutual
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consent of the Manager and the Subadviser, provided that, if required by law (as
may be modified by any exemptions received by the Manager), such amendment shall
also have been approved by vote of a majority of the outstanding voting
securities of the Series and by vote of a majority of the trustees of the Trust
who are not interested persons of the Trust, the Manager or the Subadviser, cast
in person at a meeting called for the purpose of voting on such approval.
12. Certain Definitions. For the purpose of this Agreement, the terms
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"vote of a majority of the outstanding voting securities," "interested person,"
"affiliated person" and "assignment" shall have their respective meanings
defined in the 1940 Act, subject, however, to such exemptions as may be granted
by the SEC under the 1940 Act.
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13. General.
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a. The Subadviser may perform its services through any partner,
employee, officer or agent of the Subadviser, and the Manager shall not be
entitled to the advice, recommendation or judgment of any specific person;
provided, however, that the persons identified in the Prospectus of the Series
shall perform the portfolio management duties described therein until the
Subadviser notifies the Manager that one or more other partners, employees,
officers or agents of the Subadviser, identified in such notice, shall assume
such duties as of a specific date. The Subadviser shall use commercially
reasonable efforts to inform the Manager of any such events enough time prior to
the event taking effect such that allows the Manager sufficient time to prepare
and file any necessary supplement to the Prospectus.
b. If any term or provision of this Agreement or the application
thereof to any person or circumstances is held to be invalid or unenforceable to
any extent, the remainder of this Agreement or the application of such provision
to other persons or circumstances shall not be affected thereby and shall be
enforced to the fullest extent permitted by law.
c. This Agreement shall be governed by and interpreted in accordance
with the laws of the Commonwealth of Massachusetts.
NEW ENGLAND INVESTMENT MANAGEMENT, INC.
By: /s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx, Xx.
Senior Vice President
WELLINGTON MANAGEMENT COMPANY, LLP
By: /s/ XXXXXX X. XXXXXXXXX
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Name: Xxxxxx X. XxXxxxxxx
Title: President
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