Exhibit d(xi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
SUBADVISORY CONTRACT
AGREEMENT made as of the 29th day of March, 1999 by and between M&I
Investment Management Corp., an investment adviser registered under the
Investment Advisers Act of 1940, organized under the laws of Wisconsin and
having its principal place of business in Milwaukee, Wisconsin (the "Adviser"),
and BPI Global Asset Management, LLP, a limited liability partnership organized
under the laws of Delaware (the "Subadviser").
WITNESSETH:
WHEREAS, Xxxxxxxx Funds, Inc. (the "Corporation") is an open-end,
management investment company, registered under the Investment Company Act of
1940, as amended (the "1940 Act"), the Corporation has eleven (11) Portfolios
including the Xxxxxxxx International Stock Fund (the "Fund") and the Subadviser
is an investment adviser registered under the Investment Advisers Act of 1940
(the "Advisers Act"), and
WHEREAS, pursuant to authority granted the Adviser by the Corporation's
Directors and pursuant to the provisions of the Investment Advisory Contract
dated October 1, 1992 between the adviser and the Corporation with respect to
the Fund (the "Advisory Contract"), the Adviser has selected the Subadviser to
act as a sub-investment adviser of the Fund and to provide certain other
services, as more fully set forth below, and to perform such services under the
terms and conditions hereinafter set forth,
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, it is agreed as follows:
1. THE SUBADVISER'S SERVICES.
(a) Within the framework of the fundamental policies, investment
objectives, and investment restrictions of the Fund, and subject
to the supervision and review of the Adviser and of the Directors
of the Corporation, the Subadviser shall have the sole and
exclusive responsibility for the making and execution of all
investment decisions for that portion or all of the Fund's
portfolio as designated by the Adviser (the "Portfolio"),
including the purchase, retention and disposition of securities,
in accordance with the Fund's investment objectives, policies and
restrictions as stated in the Corporation's Registration
Statement, including the Prospectus and Statement of Additional
Information (such Registration Statement, as currently in effect
and as amended or supplemented from time to time, collectively
called the "Prospectus") and subject to the following
understandings:
(i) The Subadviser shall supervise the Portfolio's investments
and determine from time to time what securities will be
purchased, retained, sold or loaned by the Portfolio, and
what portion of the assets will be invested or held
uninvested as cash.
(ii) In performance of its duties and obligations under this
Agreement, the Subadviser shall act in conformity with the
Corporation's Articles of Incorporation and By-Laws and
the Fund's Prospectus and with the instructions and
directions received in writing from the Adviser or the
Directors of the Corporation and will conform to and
comply with the requirements of the 1940 Act, the Internal
Revenue Code of 1986, as amended (including the
requirements for qualification as a regulated investment
company) and all other applicable federal and state laws
and regulations.
(b) The Subadviser shall not be responsible for the provision of
administrative, bookkeeping or accounting services to the Fund,
except as otherwise provided herein or as may be necessary for
the Subadviser to supply to the Adviser, the Corporation or its
Directors the information required to be supplied under this
Contract.
The Subadviser shall maintain separate books and detailed records
of all matters pertaining to the Fund and the Portfolio (the
"Fund's Books and Records"), including without limitation a daily
ledger of such assets and liability relating thereto and
brokerage and other records of all securities transactions. The
Subadviser shall also require that its Access Persons (as defined
in the Corporation's Code of Ethics) provide the Subadviser with
monthly reports of their personal securities transactions. The
Fund's Books and Records shall be available by overnight delivery
of copies or for telecopying without delay to the Adviser during
any day that the Fund is open for business, upon reasonable
notice to the Subadviser.
(c) The Subadviser shall determine the securities to be purchased or
sold by the Fund in respect of the Portfolio and will place
orders with or through such persons, brokers or dealers to carry
out the policy with respect to brokerage as set forth in the
Fund's Prospectus or as the Directors may direct from time to
time. Subject to the provisions of the following paragraph, the
Subadviser will take reasonable steps to assure that Portfolio
transactions are effected at the best price and execution
available, as such phrase is sued in the Fund's Prospectus, as in
effect from time to time.
In using its best efforts to obtain for the Fund the most
favorable price and execution available, the Subadviser, bearing
in mind the Fund's 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
Directors of the Corporation may determine, the Subadviser is
specifically authorized to allocate brokerage business to firms
that provide such services or facilities and to cause the Fund to
pay a member of a securities exchange or any other securities
broker or dealer an amount of commission for effecting a
securities transaction in excess of the amount of commission
another member of an exchange, broker, or dealer would have
charged for effecting that transaction, if the Subadviser
determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research
services (as such services are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided by such member, broker,
or dealer, viewed in terms either of that particular transaction
or the Subadviser's overall responsibilities with respect to the
accounts as to which it exercises investment discretion.
Consistent with the foregoing paragraph, nothing in this
agreement is intended to inhibit the Subadviser's selection of
broker-dealers used to execute trades for the Fund, including
trades placed with broker-dealers who provide investment research
services to the Subadviser. Such research services may include,
but are not limited to, advice provided either directly or
through publications or writings, including electronic
publications, telephone contacts and personal meetings with
security analysts, economists and corporate and industry
spokespersons, and analyses and reports concerning issues,
industries, securities economic factors and trends, accounting
and tax law interpretations and political developments. Research
so provided is in addition to and not in lieu of the services
required to be performed by the Subadviser.
It is understood that the Subadviser may have advisory,
management, service or other contracts with other individuals or
entities, and may have other interests and businesses. When a
security proposed to be purchased or sold for the Fund is also
being purchased or sold for other accounts managed by the
Subadviser at the same time, the Subadviser shall make such
purchases or sales on a pro-rata, rotating or other equitable
basis so as to avoid any one account being systematically
preferred over any other account.
The Subadviser will advise the Adviser and, if instructed by the
Adviser, the Fund's custodian or sub-custodians on a prompt basis
each day by electronic telecommunication of each confirmed
purchase and sale of a Portfolio security specifying the name of
the issuer, the full description of the security including its
class, and amount or number of shares of the security purchase or
sold, the market price, commission, government charges and gross
or net price, trade date, settlement date and identity of the
clearing broker. Under no circumstances may the Subadviser or any
affiliates of the Subadviser act as a principal in a securities
transaction with the Fund or any other investment company managed
by the Adviser unless (i) permitted by an exemptive provision,
rule or order under the 1940 Act and (ii) upon obtaining prior
approval of the securities transaction from the Adviser. Any such
transactions shall be reported quarterly to the Corporation's
Directors.
(d) From time to time as the Adviser or the Directors of the
Corporation may reasonably request, the Subadviser shall furnish
to the Adviser and to each of the Corporation's Directors reports
of Portfolio transactions and reports on securities held in the
Portfolio, all in such detail as the Adviser or the Directors may
reasonably request. The Subadviser will also promptly inform the
Adviser and the Corporation's Directors of changes in investment
strategy or tactics or in key personnel.
It shall be the duty of the Subadviser to furnish to the
Corporation's Directors such information as may reasonably be
necessary in order for such Directors to evaluate this Contract
or any proposed amendments thereto for the purpose of casting a
vote pursuant to Section 8 or 9 hereof.
2. ALLOCATION OF CHARGES AND EXPENSES. The Subadviser will bear its own
costs of providing services hereunder. Other than as specifically indicated
herein the Subadviser shall not be responsible for the Corporation's or the
Adviser's expenses, including, without limitation, the expenses of organizing
the Corporation and continuing its existence; fees and expenses of Directors and
officers of the Corporation; fees for investment advisory services and
administrative personnel and services; expenses incurred in the distribution of
its shares ("Shares"), including expenses of administrative support services,
fees and expenses of preparing and printing its Registration Statements under
the Securities Act of 1933 and the 1940 Act, and any amendments thereto,
expenses of registering and qualifying the Corporation, the Fund and Shares of
the Fund under federal and state laws and regulation; expenses of preparing,
printing and distributing prospectuses (and any amendments thereto) to
shareholders, interest expense taxes, fees and commissions of every kind,
expenses of issue (including cost of Share certificates), purchase, repurchase
and redemption of Shares including expenses attributable to a program of
periodic issue, charges and expenses of custodians, transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars, printing and
mailing costs, auditing, accounting and legal expenses; reports to shareholders
and governmental officers and commissions; expenses of meetings of Directors and
shareholders and proxy solicitations in connection with such meetings; insurance
expenses; association membership dues and such nonrecurring items as may arise,
including all losses and liabilities incurred in administrating the Corporation
and the Fund. The Corporation or the Adviser, as the case may be, shall
reimburse the Subadviser for any such expenses or other expenses of the Fund or
the Adviser, as may be reasonably incurred by such Subadviser on behalf of the
Fund or the Adviser. The Subadviser shall keep and supply to the Corporation and
the Adviser adequate records of all such expenses.
3. INFORMATION SUPPLIED BY THE ADVISER. The Adviser shall provide the
Subadviser with the Corporation's Articles of Incorporation and By-Laws, the
Fund's most current Prospectus and Statement of Additional Information, and the
Corporation's Code of Ethics and instructions, policies and directions of the
Directors of the Corporation pertaining to the Adviser and the Fund, as in
effect from time to time; and the Subadviser shall have no responsibility for
actions taken in reliance on any such documents. The Adviser shall promptly
furnish to the Subadviser copies of all material amendments or supplements to
the foregoing documents.
4. REGISTRATION AS AN ADVISER. The Adviser and the Subadviser represent
and warrant to each of the Corporation and each other that they are registered
as an "investment adviser" under the Advisers Act and covenant that they will
remain so registered for the duration of this Contract.
5. SUBADVISER'S COMPENSATION. The Adviser shall pay to the Subadviser,
as compensation for the Subadviser's services hereunder 0.40% per annum of the
Fund's average daily net assets ("Sub-Advisory Fee"). Such fee shall be computed
daily and paid monthly. The method of determining net assets of the Fund for
purposes hereof shall be the same as the method of determining net assets for
purposes of establishing the offering and redemption price of Fund shares as
described in the Fund's Prospectus. If this Contract shall be effective for only
a portion of a month, the aforesaid fee shall be prorated for the portion of
such month during which this contract is in effect.
Notwithstanding any other provision of this Contract, the
Subadviser may from time to time agree not to impose all or any portion of its
fee otherwise payable hereunder (in advance of the time such fee or portion
thereof would otherwise accrue). Any such fee reduction may be discontinued or
modified by the Subadviser at any time.
6. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder,
the Subadviser is and shall be an independent contract and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Corporation in any way or otherwise be
deemed to be an agent of the Corporation or of the Adviser.
7. SALES LITERATURE. The Adviser and Subadviser acknowledge that all
sales literature for investment companies (such as the Corporation) are subject
to strict regulatory oversight. The Subadviser agrees to submit any proposed
sales literature for the Corporation (or any Fund) or for itself or its
affiliates which mentions the Corporation (or any Fund) to the Corporation's
distributor for review and filing with the appropriate regulatory authorities
prior to the public release of any such sales literature, provided, however,
that nothing herein shall be construed so as to create any obligations or duty
on the part of the Subadviser to produce sales literature for the Corporation
(or any Fund). Further, the Adviser agrees to submit to the Subadviser any and
all sales literature referencing Subadviser by name or any affiliate of
Subadviser for review and approval prior to filing or public release.
8. ASSIGNMENT AND AMENDMENTS. This Contract may not be assigned by the
Subadviser and shall automatically terminate, without the payment of any
penalty, in the event (i) of its assignment, including any change of control of
the Adviser or Subadviser, or (ii) in the event of the termination of the
Advisory Contract, provided that such termination shall not relieve the Adviser
or the Subadviser of any liability incurred hereunder. The Subadviser, as a
limited liability partnership, will promptly notify Adviser of any change in the
membership of Subadviser.
The terms of this Contract shall not be changed unless such
change is approved at a meeting by the affirmative vote of a majority of the
outstanding voting securities of the Fund and unless also approved by the
affirmative vote of a majority of Directors of the Corporation voting in person,
including a majority of the Directors who are not interested persons of the
Corporation, the Adviser or the Subadviser, at a meeting called for the purpose
of voting at such change.
9. DURATION AND TERMINATION. This Contract shall become effective as of
the date firs above written and shall terminate 120 days from such date of
execution, unless this Contract is approved by shareholders of the Fund. Upon
such shareholder approval, this contract shall remain in full force and effect
continually thereafter unless terminated automatically as set forth in Section 8
hereof or until terminated as follows
(a) The Corporation or the Adviser may at any time terminate this
Contract, without payment of any penalty, on sixty (60) days'
written notice delivered or mailed by registered mail, postage
prepaid, to the Subadviser. Action of the Corporation under this
Subsection may be taken either (i) by vote of its Directors or
(ii) by the affirmative vote of a majority of the outstanding
voting securities of the Fund.
(b) The Subadviser may at any time terminate this Contract by not less
than sixty (60) days' written notice delivered or mailed by registered
mail, postage prepaid, to the Adviser; or
(c) This Contract shall automatically terminate on May 1, of any year
beginning in 2000, in which its terms and renewal shall not have
been approved (i) a majority vote of the Directors of the
Corporation voting in person, including a majority of the
Directors who are not interested persons of the Corporation, the
Adviser or the Subadviser, at a meeting called for the purpose of
voting on such approval or (ii) the affirmative vote of a
majority of the outstanding voting securities of the Fund;
provided, however, that if the continuance of this Contract is
submitted to the shareholders of the Fund for their approval and
such shareholders fail to approve such continuance of this
contract as provided herein, the Subadviser may continue to serve
hereunder as to the Fund in a manner consistent with the 1940 Act
and the rules and regulations thereunder.
(d) Termination of this Contract pursuant to this Section shall be
without payment of any penalty.
(e) In the event of termination of this Contract for any reason, the
Subadviser shall, immediately upon notice of termination or on
such later date as may be specified in such notice, cease all
activity on behalf of the Fund and with respect to any of its
assets, except as expressly directed by the Adviser. In addition,
the Subadviser shall deliver the Fund's Books and Records to the
Adviser by such means and in accordance with such schedule as the
Adviser shall direct and shall otherwise cooperate, as reasonably
directed by the Adviser, in the transition of portfolio assets
management to any successors of the Subadviser, including the
Adviser.
10. CERTAIN DEFINITIONS. For the purposes of this Contract:
(a) "Affirmative vote of a majority of the outstanding voting securities
of the Fund" means the affirmative vote, at an annual or Annual
meeting of shareholders of the Fund, duly called and held, (a) of 67%
or more of the shares of the Fund present (in person or by proxy) and
entitled to vote at such meeting, if the holder or more than 50% of
the outstanding shares of the Fund entitled to vote at such meeting
are present (in person or by proxy), or (b) of more than 50% of the
outstanding shares of the Fund entitled to vote at such meeting,
whichever is less.
(b) "Interested persons" and "Assignment" shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission
under said Act.
11. STANDARD OF CARE, LIABILITY AND INDEMNIFICATION.
(a) The Subadviser shall exercise its best judgment in rendering the
services provided by it under this Contract. In the absence of
willful misfeasance, bad faith or gross negligence on the part of
the Subadviser, or of reckless disregard of its obligations and
duties hereunder, the Subadviser shall not be subject to any
liability to the Adviser or the Corporation, to any shareholder
of the Fund, or to any person, firm or organization, for any act
or omission in the course of, or connected with the rendering of
services by Subadviser. Nothing herein, however, shall derogate
from the Subadviser's obligations under federal and state
securities laws.
(b) The Subadviser shall indemnify and hold the Adviser harmless from
and against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liabilities arising out of or
attributable to any action or failure or omission to act by the
Subadviser as a result of the Subadviser's willful misfeasance,
bad faith, gross negligence or reckless disregard of its
obligations and duties hereunder.
(c) The Adviser shall indemnify and hold the Subadviser harmless from
and against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liabilities arising out of or
attributable to any action or failure or omission to act by the
Adviser as a result of the Adviser's willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations
and duties hereunder.
12. JURISDICTION. This Contract shall be governed by and construed to be
consistent with the Advisory Contract and in accordance with substantive laws of
the State of Wisconsin without giving regard to the conflicts of law principals
thereof and in accordance with the 1940 Act. In the case of any conflict between
state law and the 1940 Act, the 1940 Act shall control.
13. COUNTERPARTS. This Contract may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14. MISCELLANEOUS.
(a) Subadviser is a limited liability partnership formed under Delaware
law. Subadviser will notify the Adviser of any changes in the membership of such
partnership within a reasonable time after such changes.
(b) Adviser acknowledges having received, not less than 48 hours prior to
entering into this Investment Advisory Agreement, and reviewed the Subadviser's
most recent Form ADV.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed on behalf of their duly authorized officers as of the date first above
written.
M&I INVESTMENT MANAGEMENT CORP.
/S/ ILLEGIBLE SIGNATURE By: /S/ XXXXX X. XXXXXX
President
BPI GLOBAL ASSET MANAGEMENT, LLP.
/S/ ILLEGIBLE SIGNATURE By: /S/ XXXX XXXXXX
President
