EXHIBIT EX-99.D5
FORM OF
SUB-ADVISORY AGREEMENT
Investment Sub-Advisory Agreement (the "Agreement") dated this 1st day of
October, 2008 by and between Commonwealth Capital Management, LLC, a Virginia
limited liability company (the "Adviser"), a registered investment adviser under
the Investment Advisers Act of 1940, as amended, and Xxxxxxxx Capital
Management, Inc. (the "Sub-Adviser"), a registered investment adviser under the
Investment Advisers Act of 1940, as amended.
WHEREAS, The World Funds Trust. (the "Trust") is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and consists of one or more series of shares, each
having its own investment objective and policies and each with one or more
separate classes of shares;
WHEREAS, the Trust has retained the Adviser to furnish investment advisory
and management services to the Frantzen Small Cap Growth Fund, the Frantzen
Large Cap Growth Fund and the Frantzen Growth and Income Fund, each a series of
the Trust (the "Funds"), subject to the control of the Trust's Board of Trustees
(the "Board" or the "Trustees"), and the Adviser is willing to so furnish such
services; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to assist it in
furnishing investment advisory and management services to the Funds, subject to
the control of the Adviser, and the Sub-Adviser is willing to so furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be bound, it is agreed between the parties
hereto as follows:
1. Appointment. The Adviser, as permitted by the investment advisory agreement
by and between the Trust and the Adviser, hereby appoints the Sub-Adviser to act
as the sub-adviser to the Funds for the period and on the terms set forth in
this Agreement. The Sub-Adviser accepts such appointment and agrees to furnish
the services herein set forth, for the compensation herein provided.
2. Duties of the Sub-Adviser. Subject to the supervision of the Adviser, the
Sub-Adviser will assist the Adviser in managing the investment and reinvestment
of the assets of the Funds, and will continuously review, supervise, and
administer the investment program of the Funds, to determine in its discretion
the securities to be purchased or sold, to provide the Trust and Commonwealth
Shareholder Services, Inc. (the "Administrator") with records concerning the
Sub-Adviser's activities which the Trust is required to maintain, and to render
regular reports to the Adviser, the Trust's officers and Board and to the
Administrator, concerning the Sub-Adviser's discharge of the foregoing
responsibilities.
The Sub-Adviser shall discharge the foregoing responsibilities subject to
the control of the Adviser and the Trust's Board and in compliance with such
policies as the Board may from time to time establish, and in compliance with
the objectives, policies and limitations for the Funds as set forth in the
Funds' prospectus and statement of additional information, as amended from time
to time, and applicable laws and regulations. The Trust will instruct each of
its agents and contractors to cooperate in the conduct of the business of the
Funds.
The Sub-Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings, and equipment
and the personnel required by it to perform the services on the terms and for
the compensation provided herein.
3. Portfolio Transactions. The Sub-Adviser is authorized to select the brokers
and dealers that will execute the purchases and sales of portfolio securities
for the Funds and is directed to use its best efforts to obtain the best price
and execution for the Funds' transactions in accordance with the policies of the
Trust as set forth from time to time in the Funds' prospectus and Statement of
Additional Information. The Sub-Adviser will promptly communicate to the Trust
and to the Administrator such information relating to portfolio transactions as
they may reasonably request.
It is understood that the Sub-Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or be in breach of
any obligation owing to the Trust under this Agreement, or otherwise, by reason
of its having directed a securities transaction on behalf of the Trust to an
unaffiliated broker-dealer in compliance with the provisions of Section 28(e) of
the Securities Exchange Act of 1934 or as described from time to time by the
Funds' prospectus and statement of additional information. Subject to the
foregoing, the Sub-Adviser may direct any transaction of the Funds to a broker
which is affiliated with the Adviser or Sub-Adviser in accordance with, and
subject to, the policies and procedures approved by the Board pursuant to Rule
17e-1 under the 1940 Act. Such brokerage services are not deemed to be provided
under this Agreement.
4. Compensation of the Sub Adviser. For the services to be rendered by the
Sub-Adviser under this Agreement, the Adviser shall pay to the Sub-Adviser
compensation at the rate specified in the Schedule attached hereto and made a
part of this Agreement. Such compensation shall be paid monthly to the
Sub-Adviser and calculated by applying a daily rate, based on the annual
percentage rates as specified in the attached Schedule, to the assets. The fee
shall be based on the average daily net assets for the month involved.
All rights of compensation under this Agreement for services performed as
of the termination date shall survive the termination of this Agreement.
5. Expenses. During the term of this Agreement, the Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased for the
Funds.
6. Reports. The Sub-Adviser agrees to furnish to the Adviser and the Trust
current information required for the preparation by such parties of
prospectuses, statements of additional information, proxy statements, reports to
shareholders, certified copies of the Funds' financial statements, and to
furnish such other information and documents with regard to its affairs as each
may reasonably request.
7. Status of the Sub-Adviser. The services of the Sub-Adviser to the Adviser and
to the Trust are not to be deemed exclusive, and the Sub-Adviser shall be free
to render similar services to others so long as its services to the Adviser and
to the Trust are not impaired thereby.
Pursuant to comparable agreements, the Adviser and/or the Trust may also
retain the services of the Sub-Adviser to serve as the investment advisor or
sub-adviser to other series of the Trust.
8. Books and Records. In compliance with the requirements of the 1940 Act, the
Sub-Adviser hereby agrees that all records which it maintains for the Trust are
the property of the Trust, and further agrees to surrender promptly to the Trust
any of such records upon the Trust's request. The Sub-Adviser further agrees to
preserve for the periods prescribed by the 1940 Act, and the rules or orders
there under, the records required to be maintained by the 1940 Act.
9. Limitation of Liability of Sub-Adviser. The duties of the Sub-Adviser shall
be confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Sub-Adviser hereunder. The Sub-Adviser
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust or the Adviser in connection with the performance of this
Agreement, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or negligence on the part of the Sub-Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement (as used in this paragraph 9, the term
"Sub-Adviser" shall include directors, officers, employees and other corporate
agents of the Sub-Adviser as well as that corporation itself).
10. Permissible Interest. Trustees, agents, and shareholders of the Trust or the
Adviser are or may be interested in the Sub-Adviser (or any successor thereof)
as directors, officers, or shareholders, or otherwise; directors, officers,
agents and shareholders of the Sub-Adviser are or may be interested in the Trust
or the Adviser as directors, officers, shareholders or otherwise; and the
Sub-Adviser (or any successor) is or may be interested in the Trust or the
Adviser as a shareholder or otherwise. In addition, brokerage transactions for
the Trust may be effected through affiliates of the Adviser or Sub-Adviser if
approved by the Trust's Board of Trustees subject to the rules and regulations
of the U.S. Securities and Exchange Commission, and the policies and procedures
adopted by the Trust.
11. Duties and Termination. This Agreement shall become effective on the date
first above written subject to its approval by the shareholders of the Funds and
unless sooner terminated as provided herein, shall continue in effect for two
(2) years from that date. Thereafter, this Agreement shall be renewable for
successive periods of one year each, provided such continuance is specifically
approved annually (a) by the vote of a majority of those members of the Trust's
Board who are not parties to this Agreement or interested persons of any such
party (as that term is defined in the 1940 Act), cast in person at a meeting
called for the purpose of voting on such approval, and (b) by vote of either the
Board or of a majority of the outstanding voting securities (as that term is
defined in the 0000 Xxx) of the Funds. Notwithstanding the foregoing, this
Agreement may be terminated by the Adviser, the Funds or by the Trust at any
time on sixty (60) days' written notice, without the payment of any penalty,
provided that termination must be authorized either by vote of the Board or by
vote of a majority of the outstanding voting securities of the Funds or by the
Sub-Adviser on sixty (60) days written notice. This Agreement will automatically
terminate upon the termination of the Investment Advisory Agreement between the
Adviser and the Trust with respect to the Funds. This Agreement will
automatically terminate in the event of its assignment (as that term in defined
in the 1940 Act).
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 material amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the Funds'
outstanding voting securities (as defined in the 1940 Act).
13. Notice. Any notice required or permitted to be given by either party to the
other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
address stated below:
(a) To the Trust at: 0000 Xxxxx Xxxxx Xxxxxxx Xxxxx
000 Xxxxxxxx, Xxxxxxxx 00000
(b) To the Adviser at: 0000 Xxxxx Xxxxx Xxxxxxx Xxxxx
000 Xxxxxxxx, Xxxxxxxx 00000
(c) To the Sub-Adviser at: Two Harbour Place 000
Xxxxxxx Xxx Xxxxxx, Xxxxx 000 Xxxxx, XX 00000
14. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of the Agreement shall not be affected thereby. This
Agreement shall be binding and shall inure to the benefit of the parties hereto
and their respective successors.
15. Applicable Law. This Agreement shall be construed in accordance with, and
governed by, the laws of the Commonwealth of Virginia, and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Virginia, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
16. Entire Agreement. This Agreement consists of the entire agreement of the
parties with respect to the subject matter hereof and supercedes all prior
writings and understandings relating thereto.
17. Counterparts. This Agreement may be executed in two or more counterparts,
each of which, when so executed, shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
COMMONWEALTH CAPITAL MANAGEMENT, LLC
BY: ___________________________________
Xxxx Xxxxx, III
President
Xxxxxxxx Capital Management, Inc.
BY: ____________________________________
Xxxx Xxxxxxxx
Chief Executive Officer
SCHEDULE A TO
SUB-ADVISORY AGREEMENT
BY AND BETWEEN
COMMONWEALTH CAPITAL MANAGEMENT, LLC
AND XXXXXXXX CAPITAL MANAGEMENT, INC.
ON BEHALF OF THE FUNDS:
Pursuant to Paragraph 4 of the Sub-Advisory Agreement, dated July 30th
2008 between Commonwealth Capital Management, LLC (the "Adviser") and Xxxxxxxx
Capital Management, Inc. for the Frantzen Small Cap Growth Fund a series of
World Funds Trust. (the "Fund"), the Adviser shall pay to the Sub-Adviser
compensation at an annual rate as follows:
The amount of such fee shall be 0.55%
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Pursuant to Paragraph 4 of the Sub-Advisory Agreement, dated July 30th 2008
between Commonwealth Capital Management, LLC (the "Adviser") and Xxxxxxxx
Capital Management, Inc. for the Frantzen Large Cap Growth Fund a series of
World Funds Trust. (the "Fund"), the Adviser shall pay to the Sub-Adviser
compensation at an annual rate as follows:
The amount of such fee shall be 0.45%
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Pursuant to Paragraph 4 of the Sub-Advisory Agreement, dated July 30th 2008
between Commonwealth Capital Management, LLC (the "Adviser") and Xxxxxxxx
Capital Management, Inc. for the Frantzen Growth and Income Fund a series of
World Funds Trust. (the "Fund"), the Adviser shall pay to the Sub-Adviser
compensation at an annual rate as follows:
The amount of such fee shall be 0.45%
