Exhibit d-31
NEW ENGLAND ZENITH FUND
SUBADVISORY AGREEMENT
(Xxxxxxxx Focused Growth Series)
This Subadvisory Agreement (this "Agreement") is entered into as of May
1, 2002 by and between MetLife Advisers, LLC, a Delaware limited liability
company (the "Manager"), and Xxxxxxxx Associates, LLC, a Delaware limited
liability company (the "Subadviser").
WHEREAS, the Manager has entered into an Advisory Agreement dated as of
May 1, 2002 (the "Advisory Agreement") with New England Zenith Fund (the
"Trust"), pursuant to which the Manager provides portfolio management and
administrative services to the Xxxxxxxx Focused Growth 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.
--------------------
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
invest and reinvest the assets of 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
-1-
is authorized, in its discretion and without prior consultation
with the Manager, to buy, sell, lend 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
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 material comments relevant to
the Series 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
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 to the contrary, 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.
--------------------------
a. The Manager shall provide (or cause the Trust's custodian
to provide) information to the Subadviser in a timely manner 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.
-2-
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 Series' 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 Custody
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. Expenses. Except for expenses specifically assumed or agreed
--------
to be 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.
5. Purchase and Sale of Assets. Absent instructions from the
---------------------------
Manager to 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 SEC 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 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.
6. Compensation of the Subadviser. As full compensation for all
------------------------------
services rendered, facilities furnished and expenses borne by the Subadviser
hereunder, the Manager shall pay the
-3-
Subadviser compensation at the annual rate of 0.45% of the first $100 million of
the average daily net assets of the Series during the Series' then-current
fiscal year, 0.40% of the next $400 million of such assets, 0.35% of the next
$500 million of such assets and 0.30% of such assets in excess of $1 billion.
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.
7. Non-Exclusivity. The Manager agrees that the services of the
---------------
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 except in connection
with the investment management services provided by the Subadviser hereunder.
8. Liability and Indemnification. Except as may otherwise be
-----------------------------
provided by 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 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 this Agreement or (ii)
resulting from the failure of the Manager to inform the Subadviser of any
applicable Insurance Restrictions or any changes therein or of any policies and
guidelines as established by the Manager or the Trustees. The Subadviser agrees
to indemnify the Manager for any loss, liability, cost, damage or expense
(including reasonable attorney's fees) resulting from a material
-4-
misstatement or omission in the Series' Prospectus with respect to disclosure of
the Series' investment objectives, policies andrisks. 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.
9. Effective Date and Termination. This Agreement shall become
------------------------------
effective as of the date of its execution, and
a. unless otherwise terminated, this Agreement shall continue
in effect until August 30, 2003, 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 9 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.
10. Amendment. This Agreement may be amended at any time by mutual
---------
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.
11. Certain Definitions. For the purpose of this Agreement, the
-------------------
terms "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.
-5-
12. General.
-------
a. The Subadviser may perform its services through any
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 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.
13. Use of Name.
------------
It is understood that the name "Xxxxxxxx" and any logos
associated with that name are the valuable property of the Subadviser, and that
the Trust has the right to include such name as a part of the name of its series
or for any other purpose only so long as this Agreement shall continue. Upon
termination of this Agreement the Trust shall forthwith cease to use such
phrases and logos.
METLIFE ADVISERS, LLC
By:
Xxxx X. Xxxxxxx, Xx.
Senior Vice President
XXXXXXXX ASSOCIATES, LLC
By:
Name:
Title:
-6-
