XXXX XXXXXXX FUNDS II
SUBADVISORY AGREEMENT
AGREEMENT made this 14th day of October, 2005, between Xxxx Xxxxxxx
Investment Management Services, LLC, a Delaware limited liability company (the
"Adviser"), and A I M Capital Management, Inc., (the "Subadviser"). In
consideration of the mutual covenants contained herein, the parties agree as
follows:
WHEREAS, the Adviser represents that it is registered under the Investment
Advisers Act of 1940, as amended (the "Advisers Act") as an investment adviser
and engages in the business of acting as an investment adviser;
WHEREAS, the Subadviser represents that it is registered under the
Advisers Act as an investment adviser and as an investment adviser and engages
in the business of acting as an investment adviser;
WHEREAS, the Adviser represents that it has entered into an investment
advisory agreement with the Xxxx Xxxxxxx Funds II (the "Trust") dated as of
_______, 2005, as amended (the "Advisory Agreement"), pursuant to which the
Adviser shall act as the investment adviser to the Portfolios specified in
Appendix A and has the authority to delegate certain of its responsibilities
thereunder;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. APPOINTMENT OF SUBADVISER
The Subadviser undertakes to act as investment subadviser to, and, subject
to the supervision of the Trustees of the Trust and the Adviser and the terms of
this Agreement, to manage the investment and reinvestment of the assets of the
Portfolios specified in Appendix A to this Agreement as it shall be amended by
the Adviser and the Subadviser from time to time (the "Portfolios"). The
Subadviser will be an independent contractor and will have no authority to act
for or represent the Trust or Adviser in any way except as expressly authorized
in this Agreement or another writing by the Trust and Adviser.
2. SERVICES TO BE RENDERED BY THE SUBADVISER
a. Subject always to the direction and control of the Trustees of the Trust
and the Adviser, the Subadviser will manage the investments and determine
the composition of the assets of the Portfolios in accordance with the
Portfolios' registration statement, as amended. The Adviser agrees
promptly to provide for the duration of this Agreement copies of all
amendments and supplements to the current Registration Statement,
Prospectus and the Statement of Additional Information ("Statement") that
relate to: (i) the Subadviser, (ii) any of the Portfolios or (iii) the
management of any of the Portfolios, on or before the effective
date thereof. Until the Adviser delivers any such amendment or supplement
to the Subadviser, the Subadviser shall be fully protected in relying on
the Registration Statement, Prospectus and Statement as previously
furnished to the Subadviser.
In fulfilling its obligations to manage the investments and reinvestments
of the assets of the Portfolios, the Subadviser will:
i. formulate and implement a continuous investment program for each
Portfolio consistent with the investment objectives and related
investment policies for each such Portfolio as described in the
Trust's registration statement;
ii. take whatever steps are necessary to implement these investment
programs by the purchase and sale of securities including the
placing of orders for such purchases and sales;
iii. regularly report to the Trustees of the Trust with respect to the
implementation of these investment programs; and
iv. provide assistance to the Trust's Custodian, upon request, to enable
Custodian to discharge its responsibilities regarding the fair value
of securities held by the Portfolios for which market quotations are
not readily available.
v. Unless the Adviser gives the Subadviser written instruction to the
contrary, the Subadviser shall use its good faith judgment in a
manner which it reasonably believes best serves the interests of the
Portfolios' shareholders to vote or abstain from voting all proxies
solicited by or with respect to the issuers of securities in which
assets of the Portfolios may be invested.
vi. The Subadviser has adopted a written code of ethics that it
reasonably believes complies with the requirements of Rule 17j-1
under the Investment Company Act, which it will provide to the
Trust. The Subadviser has policies and procedures regarding the
detection and prevention and the misuse of material, nonpublic
information by the Subadviser and it employees as required by the
Xxxxxxx Xxxxxxx and Securities Fraud Enforcement Act of 1988.
b. The Subadviser, at its expense, will furnish (i) all necessary investment
and management facilities, including salaries of personnel required for it
to execute its duties faithfully, and (ii) sufficient administrative
facilities to perform its obligations under this Agreement.
The Portfolios will bear certain other expenses to be incurred in its
operation, including, but not limited to, investment advisory fees,
subadvisory fees (other than sub-advisory fees paid pursuant to this
Agreement) and administration fees; fees for necessary professional and
brokerage services; costs relating to local administration of securities;
fees for any pricing service; the costs of regulatory compliance; and pro
rata costs associated with maintaining the Trust's legal existence and
shareholder relations. All other expenses not specifically assumed by the
Subadviser hereunder are borne by the Adviser or the Trust.
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c. The Subadviser will select brokers and dealers to effect all transactions
subject to the following conditions: The Subadviser will place all
necessary orders with brokers, dealers, or issuers, and will negotiate
brokerage commissions if applicable. The Subadviser is directed at all
times to seek to execute brokerage transactions for the Portfolios in
accordance with such policies or practices as may be established by the
Trustees and described in the Trust's registration statement. The
Subadviser's primary consideration in effecting a security transaction
will be execution at the most favorable price. In selecting a
broker-dealer to execute each particular transaction, the Subadviser will
take the following into consideration: the best net price available; the
reliability, integrity and financial condition of the broker-dealer, the
size of and difficulty in executing the order; and the value of the
expected contribution of the broker-dealer to the investment performance
of the Portfolio on a continuing basis. Accordingly, the price to a
Portfolio in any transaction may be less favorable than that available
from another broker-dealer if the difference is reasonably justified by
other aspects of the portfolio execution services offered. Subject to such
policies as the Trustees may from time to time determine, the Subadviser
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of its having
caused a Portfolio to pay a broker or dealer that provides brokerage and
research services to the Subadviser a higher spread or commission for a
particular transaction than otherwise might have been charged by another
broker-dealer, if the Subadviser determines that the higher spread or
commission is reasonable in relation to the value of the brokerage and
research services that such broker-dealer provides, viewed in terms of
either the particular transaction or the Subadviser's overall
responsibilities with respect to accounts managed by the Subadviser. The
Subadviser is further authorized to allocate the orders placed by it on
behalf of the Portfolios to such brokers and dealers who also provide
research or statistical material, or other services to the Portfolios or
to the Subadviser. Such allocation shall be in such amount and proportions
as the Subadviser shall determine and the Subadviser will report on said
allocations regularly to the Trustees indicating the brokers to whom such
allocations have been made and the basis therefor. The Subadviser may use
for the benefit of the Subadviser's other clients, or make available to
companies affiliated with the Subadviser or to its directors for the
benefit of its clients, any such brokerage and research services that the
Subadviser obtains from brokers or dealers.
d. On occasions when the Subadviser deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other clients of
the Subadviser, the Subadviser to the extent permitted by applicable laws
and regulations, may, but shall be under no obligation to, aggregate the
securities to be purchased or sold to attempt to obtain a more favorable
price or lower brokerage commissions and efficient execution. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Subadviser in
the manner the Subadviser considers to be the most equitable and
consistent with its fiduciary obligations to the Portfolio and to its
other clients.
e. The Subadviser will maintain all accounts, books and records with respect
to the Portfolios as are required of an investment adviser of a registered
investment company pursuant to the Investment Company Act of 1940 (the
"Investment Company Act") and Investment Advisers Act of 1940 (the
"Investment Advisers Act") and the rules thereunder. The
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Adviser will maintain and preserve all books and other records not related
to the Portfolios' investment transactions as required of an investment
adviser of a registered investment company pursuant to the Investment
Company Act of 1940.
f. The Subadviser shall vote proxies relating to the Portfolio's investment
securities in accordance with the Trust's proxy voting policies and
procedures, which provide that the Subadviser shall vote all proxies
relating to securities held by the Portfolio in accordance with the proxy
voting policies and procedures adopted by the Subadviser in conformance
with Rule 206(4)-6 under the Investment Advisers Act and provided to the
Trust and the Adviser. The Subadviser shall review its proxy voting
activities on a periodic basis with the Trustees.
3. COMPENSATION OF SUBADVISER
The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.
4. LIABILITY OF SUBADVISER
Neither the Subadviser nor any of its directors, officers or employees
shall be liable to the Adviser or the Trust for any error of judgment or mistake
of law or for any loss suffered by the Adviser, the Trust or any shareholders of
the Trust in connection with the matters to which this Agreement relates except
for losses resulting from willful misfeasance, bad faith or gross negligence in
the performance of, or from the reckless disregard of, the duties of the
Subadviser.
5. CONFLICTS OF INTEREST
It is understood that trustees, officers, agents and shareholders of the
Trust are or may be interested in the Subadviser as trustees, officers,
shareholders or otherwise; that employees, agents and partners of the Subadviser
are or may be interested in the Trust as trustees, officers, shareholders or
otherwise; that the Subadviser may be interested in the Trust; and that the
existence of any such dual interest shall not affect the validity hereof or of
any transactions hereunder except as otherwise provided in the Agreement and
Declaration of Trust of the Trust and the certificate of incorporation of the
Subadviser, respectively, or by specific provision of applicable law.
6. REGULATION
The Subadviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
7. DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective with respect to each Portfolio on
the later of (i) its execution, (ii) the date of the meeting of the Board of
Trustees of the Trust, at which meeting this Agreement is approved and (iii)
disclosure of the terms of this Agreement with respect to a
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Portfolio in the prospectus of Manufacturers Investment Trust. The Agreement
will continue in effect for an initial term of two years and shall continue in
effect thereafter only if approved as required by the Investment Company Act.
Any required shareholder approval of the Agreement or of any continuance of the
Agreement shall be effective with respect to any Portfolio if a majority of the
outstanding voting securities of the series (as defined in Rule 18f-2(h) under
the Investment Company Act) of shares of that Portfolio votes to approve the
Agreement or its continuance, notwithstanding that the Agreement or its
continuance may not have been approved by a majority of the outstanding voting
securities of (a) any other Portfolio affected by the Agreement or (b) all the
portfolios of the Trust.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Adviser or Subadviser on sixty days' written notice to the Trust and the other
party. This Agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act) or in the event the Advisory Agreement between the Adviser and the Trust
terminates for any reason.
8. PROVISION OF CERTAIN INFORMATION BY SUBADVISER
The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:
a. the Subadviser fails to be registered as an investment adviser under the
Investment Advisers Act or under the laws of any jurisdiction in which the
Subadviser is required to be registered as an investment adviser in order
to perform its obligations under this Agreement;
b. the Subadviser is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust; and
c. any change in actual control or management of the Subadviser or the
portfolio manager of any Portfolio.
9. SERVICES TO OTHER CLIENTS
The Trust and the Adviser understand that the Subadviser now acts, will
continue to act and may in the future act, as an investment adviser to fiduciary
and other managed accounts and as investment adviser or subadviser to other
investment companies, including any offshore entitities, or accounts, and the
Trust has no objection to the Subadviser's so acting, provided that whenever the
Portfolios and one or more other investment companies or accounts managed or
advised by the Subadviser have available funds for investment, investments
suitable and appropriate for each will be allocated in accordance with a formula
believed to be equitable to each company and account. The Trust recognizes that
in some cases this procedure may adversely affect the size of the position
obtainable for the Portfolios. In addition, the Trust understands that the
persons employed by the
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Subadviser to assist in the performance of the Subadviser's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement shall be deemed to limit or restrict the right of the
Subadviser or any affiliate of the Subadviser to engage in and devote time and
attention to other businesses or to render services of what ever kind or nature.
Further, the Trust and the Adviser understand that the Subadviser and its
affiliates may give advice and take action for its accounts, including
investment companies, which differs from advice given on the timing or nature of
action taken for the Portfolio. The Subadviser is not obligated to initiate
transactions for a Portfolio in any security which the Subadviser, its
affiliates or employees may purchase or sell for their own accounts or other
clients.
10. AMENDMENTS TO THE AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the Trustees of the Trust and
by the vote of a majority of the Trustees of the Trust who are not interested
persons of any party to this Agreement cast in person at a meeting called for
the purpose of voting on such approval. Any required shareholder approval shall
be effective with respect to any Portfolio if a majority of the outstanding
voting securities of that Portfolio vote to approve the amendment,
notwithstanding that the amendment may not have been approved by a majority of
the outstanding voting securities of (a) any other Portfolio affected by the
amendment or (b) all the portfolios of the Trust.
11. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties.
12. HEADINGS
The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
13. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or
applicable party in person or by registered mail or a private mail or delivery
service providing the sender with notice of receipt. Notice shall be deemed
given on the date delivered or mailed in accordance with this paragraph.
14. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, insofar as is possible, as
if such portion had never been contained herein.
15. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of The Commonwealth of Massachusetts, or any of the
applicable provisions of the
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Investment Company Act or the Advisers Act. To the extent that the laws of The
Commonwealth of Massachusetts, or any of the provisions in this Agreement,
conflict with applicable provisions of the Investment Company Act or the
Advisers Act, the Investment Company Act and the Advisers Act shall control.
16. LIMITATION OF LIABILITY
The Agreement and Declaration of Trust, a copy of which, together with all
amendments thereto (the "Declaration"), is on file in the office of the
Secretary of The Commonwealth of Massachusetts, provides that the name " Xxxx
Xxxxxxx Funds II" refers to the Trustees under the Declaration collectively as
Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of the Trust shall be held to any personal liability,
nor shall resort be had to their private property, for the satisfaction of any
obligation or claim, in connection with the affairs of the Trust or any
portfolio thereof, but only the assets belonging to the Trust, or to the
particular Portfolio with respect to which such obligation or claim arose, shall
be liable.
17. USE OF NAME
The Adviser and its affiliates may use the name "A I M Capital Management,
Inc.," "AIM Capital Management," or AIM Capital" (collectively, the "AIM Names")
only for so long as this Agreement or any extension, renewal, or amendment
hereof remains in effect. At such times as this Agreement shall no longer be in
effect, the Adviser and its affiliates shall cease to use such names or any
other name indicating that it is advised by or otherwise connected with the
Subadviser and shall promptly change it name accordingly. The Adviser
acknowledges that it has authority to use the AIM Names through permission of
the Subadviser, and agrees that the Subadviser reserves to itself and any
successor to its business the right to grant the non-exclusive right to use the
aforementioned names or any similar names to any other corporation or entity,
including, but not limited to, any investment company of which the Subadviser or
any subsidiary or affiliate thereof or any successor to the business of any
thereof shall be the investment adviser.
18. CONSULTATION WITH SUBADVISERS TO OTHER TRUST PORTFOLIOS
As required by Rule 17a-10 under the Investment Company Act of 1940, the
Subadviser is prohibited from consulting with the entities listed below
concerning transactions for a Portfolio in securities or other assets:
1. other subadvisers to a Portfolio
2. other subadvisers to a Trust portfolio
3. other subadvisers to a portfolio under common control with the
Portfolio
19. CONFIDENTIALITY OF TRUST PORTFOLIO HOLDINGS
The Subadviser agrees to treat Trust portfolio holdings as confidential
information in accordance with the Trust's "Policy Regarding Disclosure of
Portfolio Holdings," as such policy may be amended from time to time, and to
prohibit its employees from trading on any such
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confidential information; provided, however, the Trust and the Adviser each
understand, acknowledge and agree that the Portfolios are managed by the
Subadviser using investment models which are used by the Subadviser and its
affiliates to manage other accounts (specifically including, but not limited to,
other registered mutual funds), that such other accounts may have portfolio
holdings that are substantially similar or identical to those of the Portfolios,
and that the use of such other portfolio holdings information is not subject to
the restrictions of this Agreement of the Trust's "Policy Regarding Disclosure
of Portfolio Holdings."
20. COMPLIANCE
Upon execution of this Agreement, the Subadviser shall provide the Adviser
with the Subadviser's written policies and procedures ("Compliance Policies") as
required by Rule 206(4)-7 under the Investment Advisers Act. Throughout the term
of this Agreement, the Subadviser shall promptly submit to the Adviser: (i) any
material changes to the Compliance Policies, (ii) notification of the
commencement of a regulatory examination of the Subadviser and documentation
describing the results of any such examination and of any periodic testing of
the Compliance Policies, and (iii) notification of any material compliance
matter that relates to the services provided by the Subadviser to the Trust
including but not limited to any material violation of the Compliance Policies
or of the Subadviser's code of ethics and/or related code. Throughout the term
of this Agreement, the Subadviser shall provide the Adviser with certifications,
information and access to personnel and resources (including those resources
that will permit testing of the Compliance Policies by the Adviser) that the
Adviser may reasonably request to enable the Trust to comply with Rule 38a-1
under the Investment Company Act.
(THE REMAINDER OF THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.
XXXX XXXXXXX INVESTMENT MANAGEMENT
SERVICES, LLC
By: Xxxx Xxxxxxx Life Insurance Company
(U.S.A.), Managing Member
By: _________________________________________
Xxxx X. XxxXxxx III
Chairman
A I M CAPITAL MANAGEMENT, INC.
By: _________________________________________
Xxxxxxxx X. Xxxx
Managing Director
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APPENDIX A
The Subadviser shall serve as investment subadviser for each Portfolio of
the Trust listed below. The Adviser will pay the Subadviser, as full
compensation for all services provided under this Agreement with respect to each
Portfolio, the fee computed separately for such Portfolio at an annual rate
stated as a percentage of current net assets as follows (the "Subadviser Fee"):
PORTFOLIO FIRST $250 MILLION EXCESS OVER $250 MILLION*
------------------------- ------------------ -------------------------
Small Company Growth Fund 0.600% 0.550%
*The Subadviser Fee for the Small Company Growth Trust will be .550% on all net
assets when the aggregate net assets of the Small Company Growth Trust and the
portions of the following other portfolios managed by the Subadviser (in each
case only for the period during which the Subadviser also serves as the
subadviser for such portion of the other portfolio) exceed $1 billion: the All
Cap Growth Trust and Mid Cap Core Trust, each a series of the Trust, and the
Small Company Growth Fund, All Cap Growth Fund and Mid Cap Core Fund, each a
series of Xxxx Xxxxxxx Funds II.
BETWEEN BETWEEN BETWEEN
$10 MILLION $50 MILLION $200 MILLION
FIRST AND AND AND EXCESS OVER
PORTFOLIO $10 MILLION $50 MILLION $200 MILLION $500 MILLION $500 MILLION
----------------- ----------- ----------- ------------ ------------ ------------
Mid Cap Core Fund 0.500% 0.450% 0.425% 0.400% 0.375%
BETWEEN BETWEEN
$50 MILLION $200 MILLION
FIRST AND AND EXCESS OVER
PORTFOLIO $50 MILLION $200 MILLION $500 MILLION $500 MILLION
------------------- ----------- ------------ ------------ ------------
All Cap Growth Fund .450% .450% .450% .400%
For purposes of determining net assets or aggregate net assets, the net
assets of each portfolio of the Trust are determined as of the close of business
on the previous business day of the Trust, and the net assets of each portfolio
of each other fund are determined as of the close of business on the previous
business day of that fund.
The Subadviser Fee for each Portfolio shall be accrued for each calendar
day, and the sum of the daily fee accruals shall be paid monthly to the
Subadviser within 30 calendar days of the end of each month. The daily fee
accruals will be computed by multiplying the fraction of one over the number of
calendar days in the year by the applicable annual fee rate, and multiplying
this product by the net assets of the Portfolio. The Adviser shall provide
Subadviser with such information as Subadviser may reasonably request supporting
the calculation of the fees paid to it hereunder. Fees shall be paid either by
wire transfer or check, as directed by Subadviser.
If, with respect to any Portfolio, this Agreement becomes effective or
terminates, or the portfolios to be included for purposes of determining
aggregate net assets changes, before the end
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of any month, the fee (if any) for the period from the effective date to the end
of such month or from the beginning of such month to the date of termination or
from the beginning of such month to the date such change, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination or change occurs.
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