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Exhibit 5(b)-11
INVESTMENT SUB-ADVISORY AGREEMENT
February 3, 1992
Xxxxxxx, Xxxxxxx & Xxxxx, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Dear Sirs:
XX Xxxxxx Trust Funds (the "Company"), an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts, and Great Western
Financial Advisors Corporation ("GW Advisors"), a corporation organized under
the laws of the state of California, hereby agree with Xxxxxxx, Xxxxxxx & Xxxxx,
Inc. (the "Sub-Advisor"), a corporation organized under the laws of the State of
Delaware, as follows:
1. Investment Description; Appointment
The Company desires to employ the capital of XX Xxxxx Term Global
Government Income Fund (the "Fund") by investing and reinvesting in investments
of the kind and in accordance with the limitations specified in its Master Trust
Agreement, as amended (the "Master Trust Agreement"), and in its Prospectus and
Statement of Additional Information relating to the Fund as in effect and which
may be amended from time to time, and in such manner and to such extent as may
from time to time be approved by the Board of Trustees of the Company. Copies of
the Fund's Prospectus and Statement of Additional Information and the Company's
Master Trust Agreement, as amended, have been or will be submitted to the
Sub-Advisor. The Company agrees to provide copies of all amendments to the
Fund's Prospectus and Statement of Additional Information and the Company's
Master Trust Agreement to the Sub-Advisor on an on-going basis. The Company has
employed GW Advisors to invest and reinvest the Fund's assets in accordance with
the terms of an Investment Advisory Agreement between the Company and GW
Advisors dated February 3, 1992. In connection therewith, GW Advisors desires to
employ and hereby appoints the Sub-Advisor to act as investment sub-advisor to
the Fund. The Sub-Advisor accepts the appointment and agrees to furnish the
services described herein for the compensation set forth below. The Company
hereby accepts and acknowledges the appointment of the Sub-Advisor to act as
investment sub-advisor to the Fund.
2. Services as Investment Sub-Advisor
Subject to the supervision and direction of the Board of Trustees of
the Company and of GW Advisors, the Fund's
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investment adviser, the Sub-Advisor will (a) act in conformity with the
Company's Master Trust Agreement, the Investment Company Act of 1940 (the "1940
Act"), the Investment Advisers Act of 1940 and the Internal Revenue Code, as the
same may from time to time be amended, (b) make investment decisions for the
Fund in accordance with the Fund's investment objective(s) and policies as
stated in the Fund's Prospectus and Statement of Additional Information as in
effect and, after notice to the Sub-Advisor, and which may be amended from time
to time, (c) place purchase and sale orders on behalf of the Fund to effectuate
the investment decisions made, (d) maintain books and records with respect to
the securities transactions of the Fund and will furnish the Company's Board of
Trustees such periodic, regular and special reports as the Board may request;
and (e) treat confidentially and as proprietary information of the Company, all
records and other information relative to the Company and prior, present or
potential shareholders; and will not use such records and information for any
purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Company, which
approval shall not be unreasonably withheld and such records may not be withheld
where the Sub-Advisor may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Company. In providing those
services, the Sub-Advisor will supervise the Fund's investments and conduct a
continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Fund's assets. The Sub-Advisor will furnish the Fund or GW
Advisors with whatever statistical information the Fund or GW Advisors may
reasonably request with respect to the instruments that the Fund may hold or
contemplate purchasing. In addition, the Sub-Advisor will follow such written
instructions pertaining to the Fund as may be provided by GW Advisors from time
to time, provided, such instructions are not in violation of the Company's
Master Trust Agreement and the Fund's Prospectus and Statement of Additional
Information.
3. Brokerage
In executing transactions for the Fund and selecting brokers or
dealers, the Sub-Advisor will use its best efforts to seek the best overall
terms available and shall execute or direct the execution of all such
transactions in a manner permitted by law and in a manner that is in the best
interest of the Fund and its shareholders. In assessing the best overall terms
available for any Fund transaction, the Sub-Advisor will consider all factors it
deems relevant including, but not limited to, breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer and the reasonableness of any commission for
the specific transaction and on a continuing basis. Pursuant to its investment
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determinations for the Fund, in placing orders with brokers and dealers, the
Sub-Advisor will attempt to obtain the best net price and the most favorable
execution of its orders. Consistent with this obligation, when the execution and
price offered by two or more brokers or dealers are comparable, the Sub-Advisor
may, in its discretion, purchase and sell portfolio securities to and from
brokers and dealers who provide the Company with research advice and other
services.
4. Information Provided to the Company
The Sub-Advisor will keep the Company and GW Advisors informed of
developments materially affecting the Fund, and will on its own initiative,
furnish the Company and GW Advisors on at least a quarterly basis with whatever
information the Sub-Advisor believes is appropriate for this purpose.
5. Standard of Care
The Sub-Advisor shall exercise its best judgment in rendering the
services described in paragraphs 2 and 3 above. The Sub-Advisor shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates, except
(a) a loss resulting from a breach of fiduciary duty with respect to the receipt
of compensation for services (in which case any award of damages shall be
limited to the period and the amount set forth in Section 36(b)(3) of the 0000
Xxx) or (b) a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement (each such
breach, act or omission described in (a) or (b) shall be referred to as
"Disqualifying Conduct").
6. Compensation
In consideration of the services rendered pursuant to this Agreement,
GW Advisors will pay the Sub-Advisor on the first business day of each month a
fee for the previous month at the annual rate of .28% of the Fund's average
daily net assets up to $200 million and .10% of the Fund's average daily net
assets exceeding $200 million, provided, however, that in no event shall the
annual fee paid to the Sub-Advisor be less than $137,500. The Sub-Advisor shall
have no right to obtain compensation directly from the Fund or the Company for
services provided hereunder and agrees to look solely to GW Advisors for payment
of fees due. Upon any termination of this Agreement before the end of a month,
the fee for such part of that month shall be prorated according to the
proportion that such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. For the purpose of
determining fees payable to the Sub-Advisor, the value of the Fund's net assets
shall be computed at the times and in the
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manner specified in the Fund's Prospectus or Statement of Additional Information
as from time to time in effect.
7. Expenses
The Sub-Advisor will bear all expenses in connection with the
performance of its services under this Agreement, which expenses shall not
include brokerage fees or commissions in connection with the effectuation of
securities transactions. The Company will bear certain other expenses to be
incurred in its operation, including but not limited to: organizational
expenses, taxes, interest, brokerage fees and commissions, if any; fees of
trustees of the Company who are not officers, directors or employees of the
Sub-Advisor, GW Advisors, the Fund's sub-administrator or any of their
affiliates; Securities and Exchange Commission fees and state Blue Sky
qualification fees; out-of-pocket expenses of custodians, transfer and dividend
disbursing agents and the Company's sub-administrator and transaction charges of
custodians; insurance premiums; outside auditing and legal expenses; costs of
maintenance of the Company's existence; costs attributable to investor services,
including without limitation, telephone and personnel expenses; costs of
preparing and printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders; costs of
shareholders' reports and meetings of the shareholders of the Fund and of the
officers or Board of Trustees of the Company; and any extraordinary expenses. In
addition, the Fund pays a distribution fee pursuant to the terms of a
Distribution Plan, as amended, adopted pursuant to Rule 12b-1 of the 1940 Act.
8. Services to Other Companies or Accounts
The Company understands that the Sub-Advisor now acts, will continue to
act and may act in the future as investment adviser to fiduciary and other
managed accounts and as investment adviser to one or more other investment
companies or series of investment companies, and the Company has no objection to
the Sub-Advisor so acting, provided that whenever the Fund and one or more other
accounts or investment companies advised by the Sub-Advisor have available funds
for investment, investments suitable and appropriate for each will be allocated
in accordance with procedures believed to be equitable to each entity.
Similarly, opportunities to sell securities will be allocated in an equitable
manner. The Company recognizes that in some cases this procedure may limit the
size of the position that may be acquired or disposed of for the Fund. In
addition, the Company understands that the persons employed by the Sub-Advisor
to assist in the performance of the Sub-Advisor's duties hereunder will not
devote their full time to such service and nothing contained herein shall be
deemed to limit or restrict the right of the Sub-Advisor or any affiliate of the
Sub-Advisor to engage in and devote time and attention to other business or to
render services of whatever kind or nature.
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9. Term of Agreement
This Agreement shall become effective as of February 3, 1992 and shall
continue for a one year term and shall continue thereafter so long as such
continuance is specifically approved at least annually by (i) the Board of
Trustees of the Company or (ii) a vote of a "majority" (as defined in the 0000
Xxx) of the Fund's outstanding voting securities, provided that in either event
the continuance is also approved by a majority of the Board of 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 such approval. This Agreement is terminable, without penalty, on 30 days'
written notice, by GW Advisors, the Board of Trustees of the Company or by vote
of holders of a majority of the Fund's shares, or upon 90 days' written notice,
by the Sub-Advisor and, will terminate automatically upon any termination of the
advisory agreement between the Company and GW Advisors. In addition, this
Agreement will also terminate automatically in the event of its assignment (as
defined in the 1940 Act). The Sub-Advisor agrees to notify the Company of any
circumstances that might result in this Agreement being deemed to be assigned.
10. Representations of the Company and the Sub-Advisor
The Company represents that (i) a copy of its Master Trust Agreement,
dated February 22, 1989, together with all amendments thereto, is on file in the
office of the Secretary of the Commonwealth of Massachusetts, (ii) the
appointment of the Sub-Advisor has been duly authorized, and (iii) it has acted
and will continue to act in conformity with the 1940 Act, and other applicable
laws.
GW Advisors represents that (i) it is authorized to perform the
services herein, (ii) the appointment of the Sub-Advisor has been duly
authorized, and (iii) it will act in conformity with the 1940 Act, and other
applicable laws.
The Sub-Advisor represents that it is authorized to perform the
services described herein.
11. Indemnification
GW Advisors shall indemnify and hold harmless the Sub-Advisor from and
against any and all claims, losses, liabilities or damages (including reasonable
attorneys' fees and other related expenses), howsoever arising from or in
connection with this Agreement or the performance by the Sub-Advisor of its
duties hereunder; provided, however, that nothing contained herein shall require
that the Sub-Advisor be indemnified for Disqualifying Conduct.
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12. Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought. No amendment of this Agreement shall be effective with respect to any
Fund until approved by vote of a majority of the outstanding voting securities
of such Fund.
13. Limitation of Liability
This Agreement has been executed on behalf of the Company by the
undersigned officer of the Company in his capacity as an officer of the Company.
The obligations of this Agreement shall be binding upon the assets and property
of the Fund only and not upon the assets and property of any other investment
fund of the Company and shall not be binding upon any Trustee, officer or
shareholder of the Fund and/or the Company individually.
14. Entire Agreement
This Agreement constitutes the entire agreement between the parties
hereto.
15. Governing Law
This Agreement shall be governed in accordance with the laws of the
Commonwealth of Massachusetts.
If the foregoing accurately sets forth our agreement, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
XX XXXXXX TRUST FUNDS
By: /s/ Xxxxx Xxxxxx
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Title: President
GREAT WESTERN FINANCIAL
ADVISORS CORPORATION
By: /s/
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Title: President
Accepted:
XXXXXXX, XXXXXXX & XXXXX, INC.
By: /s/
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Title: Chairman
