XXXX XXXXXXX INVESTMENT TRUST III Xxxx Xxxxxxx Global Fund Sub-Investment
Management Contract Dated May 11, 2001 XXXX XXXXXXX ADVISERS, INC. 000
Xxxxxxxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000 XXXX XXXXXXX INVESTMENT TRUST III
- Xxxx Xxxxxxx Global Fund 000 Xxxxxxxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
XXXXXXXX-XXXXXXXXX CAPITAL MANAGEMENT 000 Xxxx Xxxxxxxx Xxx Xxxxx, Xxxxxxxxxx
00000 Sub-Investment Management Contract Ladies and Gentlemen: Xxxx Xxxxxxx
Investment Trust III (the "Trust") has been organized as a business trust under
the laws of The Commonwealth of Massachusetts to engage in the business of an
investment company. The Trust's shares of beneficial interest may be classified
into series, each series representing the entire undivided interest in a
separate portfolio of assets. Series may be established or terminated from time
to time by action of the Board of Trustees of the Trust. As of the date hereof,
the Trust has four series of shares, representing interests in Xxxx Xxxxxxx
Global Xxxx, Xxxx Xxxxxxx Large Cap Growth Xxxx, Xxxx Xxxxxxx International Fund
and Xxxx Xxxxxxx Mid Cap Growth Fund. The Board of Trustees of the Trust (the
"Trustees") has selected Xxxx Xxxxxxx Advisers, Inc. (the "Adviser") to provide
overall investment advice and management for the Xxxx Xxxxxxx Global Fund (the
"Fund"), and to provide certain other services, under the terms and conditions
provided in the Investment Management Contract, dated July 1, 1996, between the
Trust, the Fund and the Adviser (the "Investment Management Contract"). The
Adviser and the Trustees have selected Xxxxxxxx-Xxxxxxxxx Capital Managment (the
"Sub-Adviser") to provide the Adviser and the Fund with the advice and services
set forth below, and the Sub-Adviser is willing to provide such advice and
services, subject to the review of the Trustees and overall supervision of the
Adviser, under the terms and conditions hereinafter set forth. The Sub-Adviser
hereby represents and warrants that it is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended. Accordingly, the Trust,
on behalf of the Fund, and the Adviser agree with the Sub-Adviser as follows:
0.Xxxxxxxx of Documents. The Trust has furnished the Sub-Adviser with copies,
properly certified or otherwise authenticated, of each of the following:
(a)Amended and Restated Declaration of Trust of the Trust, dated July 1, 1996,
as amended from time to time (the "Declaration of Trust"); (b)By-Laws of the
Trust as in effect on the date hereof; (c)Resolutions of the Trustees approving
the form of this Agreement by and among the Adviser, the Sub-Adviser and the
Trust, on behalf of the Fund; (d)Resolutions of the Trustees selecting the
Adviser as investment adviser for the Fund and approving the form of the
Investment Management Contract; (e)the Investment Management Contract; (f)the
Fund's portfolio compliance checklists; (g)the Fund's current Registration
Statement, including the Fund's Prospectus and Statement of Additional
Information; and (h)the Fund's Code of Ethics. The Trust will furnish to the
Sub-Adviser from time to time copies, properly certified or otherwise
authenticated, of all amendments of or supplements to the foregoing, if any.
2.Investment Services. The Sub-Adviser will use its best efforts to provide to
the Fund continuing and suitable investment advice with respect to investments,
consistent with the investment policies, objectives and restrictions of the Fund
as set forth in the Fund's Prospectus and Statement of Additional Information.
In the performance of the Sub-Adviser's duties hereunder, subject always (x) to
the provisions contained in the documents delivered to the Sub- Adviser pursuant
to Section 1, as each of the same may from time to time be amended or
supplemented, and (y) to the limitations set forth in the Registration Statement
of the Trust, on behalf of the Fund, as in effect from time to time under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended (the "1940 Act"), the Sub-Adviser will have investment discretion with
respect to the Fund and will, at its own expense: (a)furnish the Adviser and the
Fund with advice and recommendations, consistent with the investment policies,
objectives and restrictions of the Fund as set forth in the Fund's Prospectus
and Statement of Additional Information, with respect to the purchase, holding
and disposition of portfolio securities including the purchase and sale of
options; (b)furnish the Adviser and the Fund with advice as to the manner in
which voting rights, subscription rights, rights to consent to corporate action
and any other rights pertaining to the Fund's assets shall be exercised, the
Fund having the responsibility to exercise such voting and other rights;
(c)furnish the Adviser and the Fund with research, economic and statistical data
in connection with the Fund's investments and investment policies; (d)submit
such reports relating to the valuation of the Fund's securities as the Trustees
may reasonably request; (e)subject to prior consultation with the Adviser,
engage in negotiations relating to the Fund's investments with issuers,
investment banking firms, securities brokers or dealers and other institutions
or investors; (f)The Sub-Adviser shall have full authority and discretion to
select brokers and dealers to execute portfolio transactions for the Fund and
for the selection of the markets on or in which the transaction will be
executed. In providing the Fund with investment management, it is recognized
that the Sub-Adviser will give primary consideration to securing the most
favorable price and efficient execution considering all circumstances. Within
the framework of this policy, the Sub-Adviser may consider the financial
responsibility, research and investment information and other research services
and products provided by brokers or dealers who may effect or be a party to any
such transaction or other transactions to which the Sub-Adviser's other clients
may be a party. It is understood that it is desirable for the Fund that the
Sub-Adviser have access to brokerage and research services and products and
security and economic analysis provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than broker-dealers that do not
provide such brokerage and research services. Therefore, in compliance with
Section 28(e) of the Securities Exchange Act of 1934 ("1934 Act"), the
Sub-Adviser is authorized to place orders for the purchase and sale of
securities for the Fund with such brokers, that provide brokerage and research
products and/or services that charge an amount of commission for effecting
securities transaction in excess of the amount of commission another broker
would have charged for effecting that transaction, provided the Sub-Adviser
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research products and/or services
provided by such broker viewed in terms of either that particular transaction or
the overall responsibilities of the Sub-Adviser for this or other advisory
accounts, subject to review by the Adviser from time to time with respect to the
extent and continuation of this practice. It is understood that the information,
services and products provided by such brokers may be useful to the Sub-Adviser
in connection with the Sub-Adviser's services to other clients; (g)from time to
time or at any time requested by the Adviser or the Trustees, make reports to
the Adviser or the Trust of the Sub-Adviser's performance of the foregoing
services; (h)subject to the supervision of the Adviser, maintain all books and
records with respect to the Fund's securities transactions required by the 1940
Act, and preserve such records for the periods prescribed therefor by the 1940
Act (the Sub-Adviser agrees that such records are the property of the Trust and
copies will be surrendered to the Trust promptly upon request therefor); (i)give
instructions to the Fund's custodian as to deliveries of securities to and from
such custodian and transfer of payment of cash for the account of the Fund, and
advise the Adviser on the same day such instructions are given; and (j)cooperate
generally with the Fund and the Adviser to provide information necessary for the
preparation of registration statements and periodic reports to be filed with the
Securities and Exchange Commission, including Form N-1A, periodic statements,
shareholder communications and proxy materials furnished to holders of shares of
the Fund, filings with state "blue sky" authorities and with United States
agencies responsible for tax matters, and other reports and filings of like
nature. 3.Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay the cost of
maintaining the staff and personnel necessary for it to perform its obligations
under this Agreement, the expenses of office rent, telephone, telecommunications
and other facilities it is obligated to provide in order to perform the services
specified in Section 2, and any other expenses incurred by it in connection with
the performance of its duties hereunder. 4.Expenses of the Fund Not Paid by the
Sub-Adviser. The Sub-Adviser will not be required to pay any expenses which this
Agreement does not expressly make payable by the Sub- Adviser. In particular,
and without limiting the generality of the foregoing but subject to the
provisions of Section 3, the Sub-Adviser will not be required to pay under this
Agreement: (a)the compensation and expenses of Trustees and of independent
advisers, independent contractors, consultants, managers and other agents
employed by the Trust or the Fund other than through the Sub-Adviser; (b)legal,
accounting and auditing fees and expenses of the Trust or the Fund; (c)the fees
and disbursements of custodians and depositories of the Trust or the Fund's
assets, transfer agents, disbursing agents, plan agents and registrars; (d)taxes
and governmental fees assessed against the Trust or the Fund's assets and
payable by the Trust or the Fund; (e)the cost of preparing and mailing
dividends, distributions, reports, notices and proxy materials to shareholders
of the Trust or the Fund except that the Sub-Adviser shall bear the costs of
providing the information referred to in Section 2(j) to the Adviser;
(f)brokers' commissions and underwriting fees; and (g)the expense of periodic
calculations of the net asset value of the shares of the Fund. 5.Compensation of
the Sub-Adviser. For all services to be rendered, facilities furnished and
expenses paid or assumed by the Sub-Adviser as herein provided for the Fund, the
Adviser will pay the Sub-Adviser quarterly, in arrears, a fee at the annual rate
of : (i) 0.50% of the first $500,000,000 of the average daily net asset value of
the Fund; and (ii) 0.45% of the average daily net asset value of the Fund in
excess of $500,000,000. The "average daily net assets" of the Fund shall be
determined on the basis set forth in the Fund's Prospectus or otherwise
consistent with the 1940 Act and the regulations promulgated thereunder. The
Sub-Adviser will receive a pro rata portion of such fee for any periods in which
the Sub-Adviser advises the Fund less than a full quarter. The Fund shall not be
liable to the Sub-Adviser for the Sub-Adviser's compensation hereunder.
Calculations of the Sub-Adviser's fee will be based on average net asset values
as provided by the Adviser. In addition to the foregoing, the Sub-Adviser may
from time to time agree not to impose all or a portion of its fee otherwise
payable hereunder (in advance of the time such fee or portion thereof would
otherwise accrue) and/or undertake to pay or reimburse the Fund for all or a
portion of its expenses not otherwise required to be borne or reimbursed by it.
Any such fee reduction or undertaking may be discontinued or modified by the
Sub-Adviser at any time. 6.Other Activities of the Sub-Adviser and Its
Affiliates. Nothing herein contained shall prevent the Sub-Adviser or any
associate of the Sub-Adviser from engaging in any other business or from acting
as investment adviser or investment manager for any other person or entity. It
is understood that officers, directors and employees of the Sub-Adviser or its
affiliates may continue to engage in providing portfolio management services and
advice to other investment companies, whether or not registered, to other
investment advisory clients of the Sub-Adviser or its affiliates and to said
affiliates themselves. 7.Avoidance of Inconsistent Position. In connection with
purchases or sales of portfolio securities for the account of the Fund, neither
the Sub-Adviser nor any of its investment management subsidiaries nor any of
such investment management subsidiaries' directors, officers or employees will
act as principal or agent or receive any commission, except as may be permitted
by the 1940 Act and rules and regulations promulgated thereunder. The
Sub-Adviser shall not knowingly recommend that the Fund purchase, sell or retain
securities of any issuer in which the Sub-Adviser has a financial interest
without obtaining prior approval of the Adviser prior to the execution of any
such transaction. Nothing herein contained shall limit or restrict the
Sub-Adviser or any of its officers, affiliates or employees from buying, selling
or trading in any securities for its or their own account or accounts. The Trust
and Fund acknowledge the Sub-Adviser and its officers, affiliates, and
employees, and its other clients may at any time have, acquire, increase,
decrease or dispose of positions in investments which are at the same time being
acquired or disposed of hereunder. The Sub-Adviser shall have no obligation to
acquire with respect to the Fund, a position in any investment which the
Sub-Adviser, its officers, affiliates or employees may acquire for its or their
own accounts or for the account of another client, if in the sole discretion of
the Sub-Adviser, it is not feasible or desirable to acquire a position in such
investment on behalf of the Fund. Nothing herein contained shall prevent the
Sub-Adviser from purchasing or recommending the purchase of a particular
security for one or more funds or clients while other funds or clients may be
selling the same security. 0.Xx Partnership or Joint Venture. The Trust, the
Fund, the Adviser and the Sub-Adviser are not partners of or joint venturers
with each other and nothing herein shall be construed so as to make them such
partners or joint venturers or impose any liability as such on any of them.
0.Xxxx of the Trust, the Fund and the Sub-Adviser. The Trust and the Fund may
use the name "Xxxx Xxxxxxx" or any name or names derived from or similar to the
names "Xxxx Xxxxxxx Advisers, Inc." or "Xxxx Xxxxxxx Life Insurance Company"
only for so long as this Agreement remains in effect. At such time as this
Agreement shall no longer be in effect, the Trust and the Fund will (to the
extent that they lawfully can) cease to use such a name or any other name
indicating that the Fund is advised by or otherwise connected with the Adviser.
The Fund acknowledges that it has adopted the name Xxxx Xxxxxxx Global Fund
through permission of Xxxx Xxxxxxx Life Insurance Company, a Massachusetts
insurance company, and agrees that Xxxx Xxxxxxx Life Insurance Company reserves
to itself and any successor to its business the right to grant the nonexclusive
right to use the name "Xxxx Xxxxxxx" or any similar name or names to any other
corporation or entity, including but not limited to any investment company of
which Xxxx Xxxxxxx Life Insurance Company or any subsidiary or affiliate thereof
shall be the investment adviser. In addition, the Fund and the Trust hereby
consent to the reasonable use of the name of the Fund in marketing/client
materials developed and distributed by or on behalf of Sub-Adviser. In addition,
it is understood that the name "Xxxxxxxx-Xxxxxxxxx" or the name of any of its
affiliates, or any derivative associated with those names, are the valuable
property of the Sub- Adviser and its affiliates and that the Fund, Trust and/or
the Adviser have the right to use such name(s) or derivative(s) in offering
materials and sales literature so long as this Agreement is in effect. Upon
termination of the Agreement, such authorization shall forthwith cease to be in
effect. 10.Limitation of Liability of Sub-Adviser. 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 Fund or the Adviser in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the Sub-Adviser's part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also employed by the Sub-Adviser, who may be
or become an employee of and paid by the Trust or the Fund shall be deemed, when
acting within the scope of his employment by the Trust or the Fund, to be acting
in such employment solely for the Trust or the Fund and not as the Sub-Adviser's
employee or agent. 11.Duration and Termination of this Agreement. This Agreement
shall remain in force until June 30, 2002. This Agreement may, on 60 days'
written notice, be terminated at any time without the payment of any penalty by
the Trust or the Fund by vote of a majority of the outstanding voting securities
of the Fund, by the Trustees, the Adviser or the Sub-Adviser. Termination of
this Agreement with respect to the Fund shall not be deemed to terminate or
otherwise invalidate any provisions of any contract between the Sub-Adviser and
any other series of the Trust. This Agreement shall automatically terminate in
the event of its assignment or upon termination of the Investment Management
Contract. In interpreting the provisions of this Section 11, the definitions
contained in Section 2(a) of the 1940 Act (particularly the definitions of
"assignment," "interested person" or "voting security"), shall be applied.
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, and no amendment, transfer, assignment, sale,
hypothecation or pledge of this Agreement shall be effective until approved by
(a) the Trustees, including a majority of the Trustees who are not interested
persons of the Adviser, the Sub-Adviser, or (other than as Board members) of the
Trust or the Fund, cast in person at a meeting called for the purpose of voting
on such approval, and (b) a majority of the outstanding voting securities of the
Fund, as defined in the 1940 Act. 13.Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the Commonwealth of
Massachusetts. 14.Severability. The provisions of this Agreement are independent
of and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be deemed invalid or unenforceable in whole or in part.
15.Miscellaneous. (a) 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. This
Agreement 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. The name Xxxx Xxxxxxx Investment Trust III is the
designation of the Trustees under the Amended and Restated Declaration of Trust
dated July 1, 1996, as amended from time to time. The Declaration of Trust has
been filed with the Secretary of The Commonwealth of Massachusetts. The
obligations of the Trust and the Fund are not personally binding upon, nor shall
resort be had to the private property of, any of the Trustees, shareholders,
officers, employees or agents of the Fund, but only the Fund's property shall be
bound. The Trust or the Fund shall not be liable for the obligations of any
other series of the Trust. (b) Any information supplied by the Sub-Adviser,
which is not otherwise in the public domain, in connection with the performance
of its duties hereunder is to be regarded as confidential and for use only by
the Fund and/or its agents, and only in connection with the Fund and its
investments. 16.Xxxxxxxx-Xxxxxxxxx undertakes to promptly notify Fund of any
change in its general partner(s). 17.The Fund agrees to obtain and maintain
insurance coverage satisfying any insurance requirements under the 1940 Act, to
carry errors and omissions coverage in the amount of $10,000,000. Yours very
truly, XXXX XXXXXXX INVESTMENT TRUST III on behalf of Xxxx Xxxxxxx Global Fund
By: ______________________________________ President The foregoing contract is
hereby agreed to as of the date hereof. XXXX XXXXXXX ADVISERS, INC. By:
______________________________________ President XXXXXXXX-XXXXXXXXX CAPITAL
MANAGEMENT By: ____________________________ Name: Title:
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