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EXHIBIT 5.14
XXXXXX & RYGEL INVESTMENT GROUP
INTERNATIONAL EQUITY FUND AND GLOBAL BALANCED FUND
SUBADVISORY AGREEMENT
This Subadvisory Agreement is made as of _____________, between Xxxxxx
& Rygel, a California corporation (the "Manager"), and Scottish Widows
Investment Management Limited, a corporation organized under the laws of
Scotland (the "Subadviser").
WHEREAS, the Manager has by separate contract agreed to serve as the
investment adviser to the Xxxxxx & Rygel European Growth & Income Fund (the
"Fund"), an investment portfolio of The Xxxxxx & Rygel Investment Group (the
"Trust"), a Massachusetts business trust registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company consisting of one or more investment series of shares, each
having its own assets and investment policies;
WHEREAS, the Manager's contract with the Trust allows it to delegate
certain investment advisory services for the Trust with respect to the Fund to
other parties; and
WHEREAS, the Manager desires to retain the Subadviser to perform
certain investment advisory services for the Trust with respect to the Fund,
and the Subadviser is willing to perform such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST.
(a) Investment Program. Subject to the control and
supervision of the Board of Trustees of the Trust and the
Manager, the Subadviser will, at its expense, continuously
furnish to the Fund an investment program for such
portion, if any, of Fund assets that is allocated to it by
the Manager from time to time. With respect to such
assets, the Subadviser will make investment decisions and
will place all orders for the purchase and sale of
portfolio securities. In the performance of its duties,
the Subadviser will act in the best interests of the Fund
and will comply with (i) applicable laws and regulations,
including, but not limited to, the 1940 Act, (ii) the
terms of this Agreement, (iii) the investment objective,
policies, and restrictions of the Fund as stated in the
then-current Registration Statement of the Trust, and (iv)
such other guidelines as the Trustees or Manager may
establish. The Manager shall be responsible for providing
the Subadviser with current copies of the materials
specified in Subsections (a)(iii) and (iv) of this Section
1. At such times as may be reasonably requested by the
Board or the Manager, the Subadviser will provide them
with economic and investment analysis and reports, and
make available to the Board any economical, statistical,
or investment services, normally available to similar
investment company clients of the Subadviser.
(b) Availability of Personnel. The Subadviser, at its expense,
will make available to the Trustees and the Manager at
reasonable times its portfolio managers and other
appropriate personnel in order to review investment
policies of the Fund and to consult with the Trustees and
the Manager regarding the investment affairs of the Fund,
including economic, statistical, and investment matters
relevant to the Subadviser's duties hereunder, and will
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provide periodic reports to the Trustees and the Manager
relating to the portfolio strategies it employs.
(c) Salaries and Facilities. The Subadviser, at its expense,
will pay for all salaries of personnel and facilities
required for it to execute its duties under this
Agreement.
(d) Compliance Reports. The Subadviser, at its expense, will
provide the Manager with reasonable compliance reports
relating to its duties under this Agreement as may be
agreed to upon by such parties from time to time.
(e) Valuation. The Subadviser, at its expense, will provide
the Trust's custodian with market price information
relating to the assets of the Fund at such times as the
parties hereto may agree upon from time to time.
(f) Executing Portfolio Transactions. The Subadviser will
place orders pursuant to its investment determinations for
the Fund either directly with the issuer or through other
brokers. In the selection of brokers and the placement of
orders for the purchase and sale of portfolio investments
for the Fund, the Subadviser shall use its best efforts to
obtain for the Fund the most favorable price and execution
available. In using its best efforts to obtain the most
favorable price and execution available, the Subadviser,
bearing in mind the Fund's best interests as 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 involved
and the quality of service rendered by the broker in other
transactions. In no instance will portfolio securities of
the Fund be purchased from or sold to the Subadviser or
any affiliated person of the Subadviser. The Trust agrees
that any entity or person associated with the Manager or
the Subadviser which is a member of a national securities
exchange is authorized to effect any transaction on such
exchange for the account of the Trust which is permitted
by Section 11(a) of the Securities Exchange Act of 1934,
as amended, and the Trust consents to the retention of
compensation for such transactions.
(g) Expenses. The Subadviser shall not be obligated to pay
any expenses of or for the Trust or the Fund not expressly
assumed by the Subadviser pursuant to this Agreement.
2. BOOKS AND RECORDS. Pursuant to Rule 31a-3 under the 1940 Act, the
Subadviser agrees that: (a) all records it maintains for the Trust
are the property of the Trust; (b) it will surrender promptly to
the Trust or the Manager any such records upon the Trust's or
Manager's request; (c) it will maintain for the Trust the records
that the Trust is required to maintain pursuant to Rule 31a-1
insofar as such records relate to the investment affairs of the
Fund; and (d) it will preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records it maintains for the Trust.
3. OTHER AGREEMENTS. The Subadviser and persons controlled by or
under common control with the Subadviser have and may have
advisory, management service or other agreements with other
organizations and persons, and may have other interests and
businesses. Nothing in this Agreement is intended to preclude
such other business relationships.
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4. COMPENSATION. The Fund pays to the Manager a monthly fee at the
following annual rate: 0.50% of the first $2 billion of average
daily net assets of the portfolio, and 0.40% thereafter (the
"Advisory Fee"). The Manager will pay to the Subadviser as
compensation for the Subadviser's services rendered pursuant to
this Agreement a subadvisory fee at an annual rate equal to 50% of
the Advisory Fee earned and received by the Manager. Such fees
shall be paid by the Manager (and not by the Trust) and shall be
correspondingly reduced on a pro rata basis by any reduction in
the fees paid to the Manager as a result of any voluntary,
statutory or regulatory limitation on investment company expenses.
Such fees shall be payable monthly, at one-twelfth of the above
rate, within 15 business days after the end of such month. If the
Subadviser shall serve for less than the whole of a month, the
compensation as specified shall be prorated.
5. AMENDMENT OF AGREEMENT. This Agreement shall not be materially
amended unless the Manager and Subadviser mutually agree to amend,
and that such amendment is approved by the affirmative vote of a
majority of the outstanding shares of the Fund, if required by the
1940 Act, and by the vote, cast in person at a meeting called for
the purpose of voting on such approval, of a majority of the
members of the Board of Trustees who are not interested persons of
the Trust, the Manager or the Subadviser (the "Independent
Trustees"). The Subadviser agrees to notify the Manager of any
anticipated change in control of the Subadviser within a
reasonable time prior to such change.
6. DURATION AND TERMINATION OF THE AGREEMENT. This Agreement shall
become effective upon its execution; provided, however, that this
Agreement shall not become effective unless it first has been
approved (a) by a vote of the Independent Trustees, cast in person
at a meeting called for the purpose of voting on such approval,
and (b) by an affirmative vote of a majority of the outstanding
voting shares of the Fund. This Agreement shall remain in full
force and effect continuously thereafter as follows:
(a) By vote of a majority of the (i) Independent Trustees, or
(ii) outstanding voting shares of the Fund, the Trust may
at any time terminate this Agreement without the payment
of penalty, by providing not more than 60 days' written
notice delivered or mailed by registered mail, postage
prepaid, to the Manager and the Subadviser.
(b) This Agreement will terminate automatically without
payment of any penalty, unless, within two years after its
initial effectiveness and at least annually thereafter,
the continuance of the Agreement is specifically approved
by (i) the Board of Trustees or the shareholders of the
Fund by the affirmative vote of a majority of the
outstanding shares of the Fund, and (ii) a majority of the
Independent Trustees, by vote cast in person at a meeting
called for the purpose of voting on such approval. If the
continuance of this Agreement is submitted to the
shareholders of the Fund for their approval and such
shareholders fail to approve such continuance as provided
herein, the Subadviser may continue to serve hereunder in
a manner consistent with the 1940 Act and the rules and
regulations thereunder.
(c) The Manager may at any time terminate this Agreement
without the payment of any penalty by not less than 60
days' written notice delivered or mailed by registered
mail, postage prepaid, to the Subadviser, and the
Subadviser may
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at any time without the payment of any penalty, terminate
this Agreement by not less than 90 days' written notice
delivered or mailed by registered mail, postage prepaid,
to the Manager.
(d) This Agreement automatically and immediately shall
terminate without the payment of any penalty, in the event
of its assignment or if the Investment Management
Agreement between the Manager and the Trust shall
terminate for any reason.
Upon termination of this Agreement, the duties of the Manager
delegated to the Subadviser under this Agreement automatically shall
revert to the Manager
7. NOTIFICATION OF THE MANAGER. The Subadviser promptly shall notify
the Manager in writing of the occurrence of any of the following
events.
(a) the Subadviser shall fail to be registered as an
investment adviser under the Investment Advisers Act of
1940, as amended, and 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 shall have been served or otherwise have
notice of any action, suit, or proceeding, inquiry, or
investigation at law or in equity, before or by any court,
public board or body, involving the affairs of the Trust
or any Portfolio; or
(c) any other occurrence that might affect the ability of the
Subadviser to provide the services provided for under this
Agreement.
8. DEFINITIONS. For the purposes of this Agreement, the terms "vote
of a majority of the outstanding shares," "affiliated person,"
"control," "interested person," and "assignment" shall have their
respective meanings as defined in the 1940 Act and the rules and
regulations thereunder, subject, however, to such exemptions as
may be granted by the Securities and Exchange Commission under
said Act; and references to annual approvals by the Board of
Trustees shall be construed in a manner consistent with the 1940
Act and the rules and regulations thereunder.
9. LIABILITY OF THE SUBADVISER. In the absence of its willful
misfeasance, bad faith, negligence, or disregard of its
obligations and duties hereunder, the Subadviser shall not be
subject to any liability to the Manager, the Trust or their
directors, Trustees, officers, or shareholders, for any act or
omission in the course of, or connected with, rendering services
hereunder. However, the Subadviser shall indemnify and hold
harmless such parties from any and all claims, losses, expenses,
obligations and liabilities (including reasonable attorneys fees)
which arise or result from Subadviser's willful misfeasance, bad
faith, negligence, or disregard of its obligations and duties
hereunder.
10. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of California, without giving effect to
the conflicts of laws principles thereof, and in accordance with
the 1940 Act. To the extent that the applicable laws of the State
of California conflict with the applicable provisions of the 1940
Act, the latter shall control.
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11. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule, or 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.
12. 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. Where the effect of a requirement of the 1940 Act
reflected in any provision of this agreement is made less
restrictive by a rule, regulation or order of the Securities and
Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
IN WITNESS WHEREOF, Xxxxxx & Rygel, and Scottish Widows Investment
Management Limited have each caused this instrument to be signed in duplicate
on its behalf by its duly authorized representative, all as of the day and year
first above written.
Attest: XXXXXX & RYGEL
By:______________________ By:________________________
Attest: SCOTTISH WIDOWS INVESTMENT
MANAGEMENT LIMITED
By:______________________ By:________________________
