EXHIBIT 99.(D)(20)
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FORM OF
THE DLB EMERGING MARKETS FUND
SUB-ADVISORY AGREEMENT
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Sub-Advisory Agreement executed as of February 21, 2003 between XXXXX X.
XXXXXX & COMPANY INC. (the "Manager") and FIRST STATE INVESTMENTS INTERNATIONAL
LIMITED (the "Sub-Adviser").
W I T N E S S E T H:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY THE SUB-ADVISER TO THE MANAGER.
(a) Subject always to the control of the Trustees of The DLB Fund Group
(the "Trust"), a Massachusetts business trust, and to such policies as the
Trustees or the Manager, as the case may be, may determine, the Sub-Adviser
will, at its expense, furnish continuously an investment program for the DLB
Emerging Markets Fund (the "Fund") and will make investment decisions on behalf
of the Fund and place all orders for the purchase and sale of its portfolio
securities. In the performance of its duties, the Sub-Adviser will comply with
the provisions of the Agreement and Declaration of Trust and By-laws of the
Trust and the Fund's stated investment objective, policies and restrictions.
(b) The Sub-Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940 as amended and is authorized by the Financial
Services Authority in the United Kingdom. It is agreed that the investment
management services are provided on the basis that the Sub-Adviser has taken
reasonable care to determine that the Manager has sufficient investment
experience and understanding to be treated as an Intermediate Client (as such
term is defined in the handbook of rules and guidance published by the Financial
Services Authority ("FSA rules")).
(c) In placing orders for the portfolio transactions of the Fund, the
Sub-Adviser will seek the best price and execution available, except to the
extent it may be permitted to pay higher brokerage commissions for brokerage and
research services as described below. In using its best efforts to obtain for
the Fund the most favorable price and execution available, the Sub-Adviser shall
consider all factors it deems relevant, including, without limitation, the
overall net economic result to the Fund (involving price paid or received and
any commissions and other costs paid), the efficiency with which the transaction
is effected, the ability to effect the transaction at all where a large block is
involved, availability of the broker to stand ready to execute possibly
difficult transactions in the future and the financial strength and stability of
the broker. Subject to such policies as the Trustees or the Manager, as the case
may be, may determine, the Sub-Adviser shall not be deemed to have
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acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Fund to pay a broker or
dealer that provides brokerage and research services to the Sub-Adviser an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction, if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Sub-Adviser's overall
responsibilities with respect to the Fund and to other clients of the
Sub-Adviser as to which the Sub-Adviser exercises investment discretion.
(d) The Sub-Adviser shall not be obligated under this Agreement to pay any
expenses of or for the Trust or of or for the Fund not expressly assumed by the
Sub-Adviser pursuant to this Section 1 other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a partner, shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any person
controlling, controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlling, controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is also
understood that the Sub-Adviser and persons controlling, controlled by or under
common control with the Sub-Adviser have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay to the Sub-Adviser as compensation for the
Sub-Adviser's services rendered, for the facilities furnished and for the
expenses borne by the Sub-Adviser pursuant to Section 1, a fee, computed and
paid monthly at the annual rate of 0.875% of the Fund's average daily net asset
value. Such average daily net asset value of the Fund shall be determined by
taking an average of all of the determinations of such net asset value during
such month while this Agreement is in effect. Such fee shall be payable for each
month within five (5) business days after the end of such month.
In the event that expenses of the Fund for any fiscal year should exceed
the expense limitation on investment company expenses imposed by any statute or
regulatory authority of any jurisdiction in which shares of the Trust are
qualified for offer and sale, the compensation due the Sub-Adviser for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses of the Fund exceed any expense
limitation which the Sub-Adviser may, by written notice to the Manager,
voluntarily declare to be effective with respect to the Fund, subject to such
terms and conditions as the Sub-Adviser may prescribe in such notice,
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the compensation due the Sub-Adviser shall be reduced, and, if necessary, the
Sub-Adviser shall bear the Fund's expenses to the extent required by such
expense limitation.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS AGREEMENT.
This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment or in the event that the Management
Contract between the Manager and the Trust relating to the Fund shall have
terminated for any reason; and to the extent required by the 1940 Act, this
Agreement shall not be amended unless such amendment is approved at a meeting by
the affirmative vote of a majority of the outstanding shares of the Fund, and by
the vote, cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the Trust who are not interested
persons of the Trust or of the Manager or of the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon the date of shareholder
approval, and shall remain in full force and effect continuously thereafter
(unless terminated automatically as set forth in Section 4.) until terminated as
follows:
(a) The Trust may at any time terminate this Agreement by written
notice delivered or mailed by registered mail, postage prepaid, to the
Manager and Subadviser, or
(b) Either party hereto may at any time terminate this Agreement by
not more than sixty days' written notice delivered or mailed by registered
mail, postage prepaid, to the other party, or
(c) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of the Fund, and
(ii) a majority of the Trustees of the Trust who are not interested persons
of the Trust, the Manager or of the Sub-Adviser, by vote cast in person at
a meeting called for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this Agreement,
then this Agreement shall automatically terminate at the close of business
on the second anniversary of its execution, or upon the expiration of one
year from the effective date of the last such continuance, whichever is
later; provided, however, that 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 of this Agreement as provided
herein, the Sub-Adviser may continue to serve hereunder in a manner
consistent with the 1940 Act and the rules and regulations thereunder.
Action by the Trust under paragraph (a) above may be taken either (i) by
vote of a majority of the Trustees, or (ii) by the affirmative vote of a
majority of the outstanding shares of the Fund.
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Termination of this Agreement pursuant to this Section 5 shall be without
the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall fail to be
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended from time to time, and under the laws of any jurisdiction in which
the Sub-Adviser is required to be registered as an investment adviser in order
to perform its obligations under this Agreement or any other agreement
concerning the provision of investment advisory services to the Trust, (b) the
Sub-Adviser shall be disqualified from serving as investment adviser to the Fund
pursuant to Section 9 of the 1940 Act, or otherwise, (c) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit, proceeding or
inquiry or investigation, at law or in equity, before or by any court, public
board or body, involving the affairs of the Trust, (d) there is a change in
control of the Sub-Adviser or any parent of the Sub-Adviser within the meaning
of the 1940 Act or (e) there is a material adverse change in the business or
financial position of the Sub-Adviser.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority of
the outstanding shares" of the Fund means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of the
shares of the Fund present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares of the Fund
entitled to vote at such meeting are present in person or by proxy, or (b) of
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting, whichever is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their respective
meanings 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 the phrase "specifically approve at
least annually" shall be construed in a manner consistent with the 1940 Act and
the rules and regulations thereunder.
8. NONLIABILITY OF THE SUB-ADVISER.
In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser shall not be subject to any liability to the Trust,
or to any shareholder of the Trust, or the Manager, for any act or omission in
the course of, or connected with, rendering services hereunder.
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9. EXERCISE OF VOTING RIGHTS.
Except as instructed otherwise by the Trustees of the Trust or the Manager,
the Sub-Adviser shall at its discretion exercise or procure the exercise of any
voting right attaching to investments of the Fund.
10. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and the obligations of this instrument
are not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Fund.
11. NOTICES.
Unless otherwise permitted, all notices, instructions, and advice with
respect to securities transactions or any other matters contemplated by this
Agreement shall be deemed duly given when received in writing by the Company
Secretary at 00 Xx. Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx XX0 0XX with a copy to
Xxxx Xxxxxxx at First State Investments 0xx Xxxxx, 00 Xxxxxx Xxxxxx Xxxxxx, XX0X
0XX for the Sub Adviser or when received in writing by the Manager by Xxxxx X.
Xxxxxxxxx at Xxxxx X. Xxxxxx & Company Inc., Xxx Xxxxxxxx Xxxxx, Xxxxxxxxx, XX
00000, with a copy to such other person or persons at such other addresses as
shall be specified in each case in a notice similarly given.
12. GOVERNING LAW.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, Xxxxx X. Xxxxxx & Company Inc. and First State
Investments International 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.
XXXXX X. XXXXXX & COMPANY INC.
By _______________________________
XxXxxx X. Xxxxxx
Managing Director
FIRST STATE INVESTMENTS INTERNATIONAL LIMITED
By _______________________________
Accepted and agreed to as of the day and year first above written:
THE DLB FUND GROUP,
on behalf of its
DLB Emerging Markets Fund
By __________________________
Xxxxx X. Xxxxxxxxx
President
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