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EXHIBIT 5(c)
THE GALAXY FUND
SUB-ADVISORY AGREEMENT
INTERNATIONAL EQUITY FUND
AGREEMENT made as of August 12, 1996 between FLEET INVESTMENT
ADVISORS INC., a New York corporation (the "Adviser"), and XXXXXXX INTERNATIONAL
ADVISORS, L.P., a Delaware limited partnership ("Xxxxxxx").
WHEREAS, The Galaxy Fund ("Galaxy") is registered as an
open-end, diversified management investment company under the Investment Company
Act of 1940, as amended (the "1940 Act");
WHEREAS, the Adviser has been appointed investment adviser to
Galaxy's International Equity Fund (the "Fund");
WHEREAS, the Adviser desires to retain Xxxxxxx to assist it in
the provision of a continuous investment program for the Fund and Xxxxxxx is
willing to do so;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Adviser hereby appoints Xxxxxxx to act as
sub-adviser to the Fund as permitted by the Adviser's Advisory Agreement with
Galaxy pertaining to the Fund. Intending to be legally bound, Xxxxxxx accepts
such appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. Sub-Advisory Services. Subject to the supervision of
Galaxy's Board of Trustees, Xxxxxxx will assist the Adviser in providing a
continuous investment program for the Fund, including research and management
with respect to all securities and investments and cash equivalents in the Fund.
Xxxxxxx will provide services under this Agreement in accordance with the Fund's
investment objective, policies and restrictions as stated in the Fund's
prospectuses and statement of additional information and resolutions of Galaxy's
Board of Trustees applicable to the Fund.
Without limiting the generality of the foregoing, Xxxxxxx
further agrees that it will:
(a) prepare, subject to the Adviser's approval, lists
of foreign countries for investment by the Fund and determine from time
to time what securities and other investments will be purchased,
retained or sold for the
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Fund, including, with the assistance of the Adviser, the
Fund's investments in futures and forward currency
contracts;
(b) manage in consultation with the Adviser the
Fund's temporary investments in securities;
(c) place orders for the Fund either directly
with the issuer or with any broker or dealer;
(d) manage the Fund's overall cash position, and
determine from time to time what portion of the Fund's assets will be
held in different currencies;
(e) provide the Adviser with foreign broker research,
a quarterly review of international economic and investment
developments, and occasional "White Papers" on international investment
issues;
(f) attend regular business and investment-related
meetings with Galaxy's Board of Trustees and the Adviser if requested
to do so by Galaxy and/or the Adviser; and
(g) maintain books and records with respect to the
securities transactions for the Fund, furnish to the Adviser and
Galaxy's Board of Trustees such periodic and special reports as they
may request with respect to the Fund, and provide in advance to the
Adviser all reports to the Board of Trustees for examination and review
within a reasonable time prior to Galaxy Board meetings.
3. Covenants by Sub-Adviser. Xxxxxxx agrees with respect to
the services provided to the Fund that it:
(a) will conform with all Rules and Regulations
of the Securities and Exchange Commission ("SEC") applicable to
it;
(b) will use the same skill and care in providing
such services as it uses in providing services to other
investment companies;
(c) will telecopy trade information to the
Adviser on the first business day following the day of the trade and cause
broker confirmations to be sent directly to the Adviser. In executing portfolio
transactions and selecting brokers or dealers, Xxxxxxx will use its best efforts
to seek on behalf of the Fund the best overall terms available. In assessing the
best overall terms available for any transaction, Xxxxxxx shall consider all
factors it deems relevant, including the breadth of the market in the security,
the price of the
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security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall terms
available, and in selecting the broker or dealer to execute a particular
transaction, Xxxxxxx may also consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
provided to the Fund and/or other accounts over which Xxxxxxx or any affiliate
of Xxxxxxx exercises investment discretion. Xxxxxxx is authorized, subject to
the prior approval of Galaxy's Board of Trustees, to pay to a broker or dealer
who provides such brokerage and research services a commission for executing a
portfolio transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, Xxxxxxx determines in good faith that such
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer--viewed in terms of that particular
transaction or in terms of the overall responsibilities of Xxxxxxx to the Fund
and to Galaxy.
Except to the extent permitted by the SEC or by applicable
law, portfolio securities will not be purchased from or sold to the Adviser,
Xxxxxxx, the Fund's distributor (the "Distributor"), or any affiliated person of
either Galaxy, the Adviser, Xxxxxxx, or the Distributor.
(d) will treat confidentially and as proprietary
information of Galaxy all records and other information relative to the Fund 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
Galaxy, which approval shall not be unreasonably withheld and may not be
withheld and will be deemed granted where Xxxxxxx 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
Galaxy).
(e) Xxxxxxx will notify Galaxy of any change in its
membership within a reasonable time after such change.
4. Services Not Exclusive. (a) The services furnished by
Xxxxxxx hereunder are deemed not to be exclusive, and nothing in this Agreement
shall (i) prevent Xxxxxxx or any affiliated person (as defined in the 0000 Xxx)
of Oechsle from acting as investment adviser or manager for any other person or
persons, including other management investment companies with investment
objectives and policies the same as or similar to those of the Fund or (ii)
limit or restrict Xxxxxxx or any such affiliated person from buying, selling or
trading any securities or other investments (including any securities or other
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investments which the Fund is eligible to buy) for its or their own accounts or
for the accounts of others for whom it or they may be acting; provided, however,
that Xxxxxxx agrees that it will not undertake any activities which, in its
judgment, will adversely affect the performance of its obligations to the Fund
under this Agreement.
(b) Nothing contained herein, however, shall
prohibit Xxxxxxx from advertising or soliciting the public generally with
respect to other products or services, regardless of whether such advertisement
or solicitation may include prior, present or potential shareholders of Galaxy.
5. Portfolio Transactions. Investment decisions for the Fund
shall be made by Xxxxxxx independently from those for any other investment
companies and accounts advised or managed by Xxxxxxx. The Fund and such
investment companies and accounts may, however, invest in the same securities.
When a purchase or sale of the same security is made at substantially the same
time on behalf of the Fund and/or another investment company or account, the
transaction will be averaged as to price, and available investments allocated as
to amount, in a manner which Xxxxxxx believes to be equitable to the Fund and
such other investment company or account. In some instances, this investment
procedure may adversely affect the price paid or received by the Fund or the
size of the position obtained or sold by the Fund. To the extent permitted by
law, Xxxxxxx may aggregate the securities to be sold or purchased for the Fund
with those to be sold or purchased for other investment companies or accounts in
order to obtain best execution.
6. Books and Records. In compliance with the requirements of
Rule 31a-3 under the 1940 Act, Xxxxxxx hereby agrees that all records which it
maintains for Galaxy are the property of Galaxy and further agrees to surrender
promptly to Galaxy any of such records upon Galaxy's request. Xxxxxxx further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the 1940 Act.
7. Expenses. During the term of this Agreement, Xxxxxxx 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 Fund.
8. Compensation. For the services provided and the expenses
assumed with respect to the Fund pursuant to this Agreement, the Adviser will
pay Xxxxxxx and Xxxxxxx will accept as full compensation therefor fees, computed
daily and paid quarterly, at the annual rate of .40% of the first $50 million of
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the Fund's average daily net assets, plus .35% of average daily net assets in
excess of $50 million.
9. Limitation of Liability of Xxxxxxx. Xxxxxxx shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
Galaxy or the Adviser, 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 gross negligence on the part of Xxxxxxx
in the performance of its duties or from reckless disregard of its obligations
and duties under this Agreement.
10. Reference to Xxxxxxx. Neither the Adviser nor any
affiliate or agent of it shall make reference to or use the name of Xxxxxxx or
any of its affiliates, or any of their clients, except references concerning the
identify of and services provided by Xxxxxxx to the Fund, which references shall
not differ in substance from those included in the current registration
statement pertaining to the Fund, this Agreement and the Advisory Agreement
between the Adviser and Galaxy with respect to the Fund, in any advertising or
promotional materials without the prior approval of Xxxxxxx, which approval
shall not be unreasonably withheld or delayed. The Adviser hereby agrees to make
all reasonable efforts to cause Galaxy and any affiliate thereof to satisfy the
foregoing obligation.
11. Duration and Termination. This Agreement shall become
effective as of the date hereof and, unless sooner terminated, shall continue in
effect until August 10, 1997. Thereafter if not terminated, this Agreement shall
continue in effect for successive twelve-month periods ending on August 10,
provided such continuance is specifically approved at least annually (a) by the
vote of a majority of those members of Galaxy's Board of Trustees who are not
parties to this Agreement, or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by Galaxy's Board of Trustees or by the vote of a majority of the outstanding
voting securities of the Fund. Notwithstanding the foregoing, this Agreement may
be terminated at any time, without the payment of any penalty, by the Adviser or
by Galaxy (by Galaxy's Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund) on 60 days' written notice to Xxxxxxx
(which notice may be waived by the party entitled to receive the same) and will
automatically terminate upon the termination of the Advisory Agreement between
the Adviser and Galaxy with respect to the Fund. This Agreement may be
terminated by Xxxxxxx at any time, without payment of any penalty, on 90 days'
written notice to Galaxy and the Adviser (which notice may be waived by the
party entitled to receive the same). This Agreement will immediately terminate
in the event of its assignment. (As used in this Agreement, the terms "majority
of the outstanding voting securities," "interested persons" and
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"assignment" shall have the same meanings as such terms 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 amendment of this
Agreement shall be effective with respect to the Fund until approved by the vote
of a majority of the outstanding voting securities of the Fund.
13. Notice. Any notice, advice or report to be given pursuant
to this Agreement shall be delivered or mailed:
To Xxxxxxx at:
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
With a copy to:
Xxxxxxxxxxx X. Xxxxxx, Esq.
Xxxx and Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
To the Adviser at:
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X'Xxxxx
To Galaxy at:
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
With a copy to:
W. Xxxxx XxXxxxxx, III, Esq.
Drinker Xxxxxx & Xxxxx
1100 Philadelphia National Bank Building
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
14. Miscellaneous. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit 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
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otherwise, the remainder of this Agreement shall not be affected thereby.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by New York law.
15. Names. The names "The Galaxy Fund" and "Trustees of The
Galaxy Fund" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust dated March 31, 1986 which is hereby referred to and a copy
of which is on file at the office of the State Secretary of the Commonwealth of
Massachusetts and the principal office of the Trust. The obligations of "The
Galaxy Fund" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of Galaxy personally, but bind only the property of Galaxy, and
all persons dealing with any class of shares of Galaxy must look solely to the
property of Galaxy belonging to such class for the enforcement of any claims
against Galaxy.
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.
Attest: FLEET INVESTMENT ADVISORS INC.
By:/s/Xxxxxx X'Xxxxx
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Attest: XXXXXXX INTERNATIONAL
ADVISORS, L.P.
By:/s/Xxxx Xxxxx
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