Exhibit (d)(11)
HSBC INVESTOR PORTFOLIOS
GROWTH PORTFOLIO
SUB-ADVISORY AGREEMENT
AGREEMENT, effective commencing on February 27, 2004, between Xxxxxxx &
Xxxx Investment Management Company (the "Sub-adviser") and HSBC Asset Management
(Americas) Inc. (the "Manager").
WHEREAS, the Manager has been retained by HSBC Investor Portfolios, a New
York master trust (the " Trust") registered as an open-end diversified
investment management company under the Investment Company Act of 1940, as
amended (the "1940 Act"), to provide investment advisory services to Growth
Portfolio (the "Portfolio") pursuant to an Investment Advisory Contract and
Supplement thereto dated December 31, 1999 and amended and restated March 1,
2001 (the "Advisory Agreement");
WHEREAS, the Trust's Board of Trustees, including a majority of the
Trustees who are not parties to this Agreement or "interested persons," as
defined in the 1940 Act, of any party to this Agreement, have approved the
appointment of the Sub-adviser to perform certain investment advisory services
for the Portfolio pursuant to this Sub-advisory Agreement and the Sub-adviser is
willing to perform such services for the Portfolio;
WHEREAS, the Sub-adviser is registered or exempt from registration as an
investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Manager and the Sub-adviser as
follows:
1. Appointment. The Manager hereby appoints the Sub-adviser to perform
advisory services to the Portfolio for the periods and on the terms set forth in
this Sub-advisory Agreement. The Sub-adviser accepts such appointment and agrees
to furnish the services herein set forth, for the compensation herein provided.
2. Investment Advisory Duties. Subject to the supervision of the Board of
Trustees of the Trust and the Manager, the Sub-adviser will, in coordination
with the Manager, (a) provide a program of continuous investment management for
the Portfolio in accordance with the Portfolio's investment objectives, policies
and limitations as stated in the Portfolio's Prospectus and Statement of
Additional Information included as part of the Trust's Registration Statement on
behalf of the Portfolio filed with the Securities and Exchange Commission, as
they may be amended from time to time, copies of which shall be provided to the
Sub-adviser by the Manager; (b) make investment decisions for the Portfolio; and
(c) place orders to purchase and sell securities for the Portfolio. In
particular, the Sub-adviser will be responsible for the market timing of
purchases and sales and for all yield enhancement strategies used in managing
the Portfolio.
In performing its investment management services to the Portfolio
hereunder, the Sub-adviser will provide the Portfolio with ongoing investment
guidance and policy direction. The Sub-adviser will determine the securities,
instruments, repurchase agreements, options and other investments and techniques
that the Portfolio will purchase, sell, enter into or use, and will provide an
ongoing evaluation of the Portfolio. The Sub-adviser will determine what portion
of the Portfolio shall be invested in securities and other assets.
The Sub-adviser further agrees that, in performing its duties hereunder,
it will:
(a) comply with the 1940 Act and all rules and regulations thereunder, the
Advisers Act, applicable sections of the Internal Revenue Code of 1986, as
amended (the "Code"), and all other applicable federal and state laws and
regulations, and with any applicable procedures adopted by the Trustees;
(b) manage the Portfolio so that it will qualify, and continue to qualify
(except where extraordinary circumstances dictate otherwise), as a regulated
investment company under Subchapter M of the Code and regulations issued
thereunder;
(c) place orders pursuant to its investment determinations for the
Portfolio directly with the issuer, or with any broker or dealer the Sub-adviser
may choose, in accordance with applicable policies expressed in the Portfolio's
Prospectus and/or Statement of Additional Information and in accordance with
applicable legal requirements;
(d) furnish to the Trust whatever statistical information the Trust may
reasonably request in writing with respect to the Portfolio's assets or
contemplated investments. In addition, the Sub-adviser will keep the Trust and
the Trustees informed of developments materially affecting the Portfolio and
shall, on the Sub-adviser's own initiative, furnish to the Trust from time to
time whatever information the Sub-adviser believes appropriate for this purpose;
(e) make available to the Manager and the Trust, promptly upon their
written request, such copies of its investment records and ledgers with respect
to the Portfolio as may be required to assist the Manager and the Trust in their
compliance with applicable laws and regulations. The Sub-adviser will furnish
the Trustees with such periodic and special reports regarding the Portfolio as
they may reasonably request in writing;
(f) immediately notify the Manager and the Trust in the event that the
Sub-adviser or any of its affiliates: (1) becomes aware that it is subject to a
statutory disqualification that prevents the Sub-adviser from serving as an
investment adviser pursuant to this Sub-advisory Agreement; or (2) becomes aware
that it is the subject of an administrative proceeding or enforcement action by
the SEC or other regulatory authority. The Sub-adviser further agrees to notify
the Trust and the Manager promptly if any statement regarding the Sub-adviser
contained in the Trust's Registration Statement with respect to the Portfolio,
or any amendment or supplement thereto, becomes untrue or incomplete in any
material respect.
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In performing its duties under this Agreement, the Sub-adviser shall
manage and invest the Portfolio's assets in accordance with the Portfolio's
investment objectives, policies and restrictions as well as applicable federal
and state securities laws, based upon instructions as may be provided to the
Sub-adviser by the Manager, the Portfolio's administrator, accountant, custodian
or other agent designated by the Manager as responsible for testing compliance
of the Portfolio (the "Compliance Agent"). The Sub-adviser further agrees to
manage and invest the Portfolio's assets in accordance with instructions as may
be provided to the Sub-adviser from time to time by the Manager or the
Compliance Agent in an effort to ensure that the Portfolio meets and maintains,
so long as required by the Code, the requirements for qualification as a
regulated investment company under Subchapter M of the Code and regulations
issued thereunder.
In fulfilling its obligations under this Agreement, the Sub-adviser shall
be entitled to reasonably rely on and act in accordance with instructions
provided by the Manager or Compliance Agent.
3. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this Section 3, the Sub-adviser shall pay the compensation and
expenses of all its directors, partners, officers and employees, if any, who
serve as officers and executive employees of the Trust (including the
Portfolio's share of payroll taxes), and the Sub-adviser shall make available,
without expense to the Portfolio, the service of its directors, partners,
officers and employees, if any, who may be duly elected officers of the Trust,
subject to their individual consent to serve and to any limitations imposed by
law.
The Sub-adviser shall not be required to pay any expenses of the Portfolio
other than those specifically allocated to the Sub-adviser in this Section 3. In
particular, but without limiting the generality of the foregoing, the
Sub-adviser shall not be responsible, except to the extent of the reasonable
compensation of such of the Trust's employees as are officers or employees of
the Sub-adviser whose services may be involved, for the following expenses of
the Portfolio: organization and offering expenses of the Portfolio (including
out-of-pocket expenses); fees payable to any other Portfolio advisers or
consultants; legal expenses; auditing and accounting expenses; interest
expenses; telephone, telex, facsimile, postage and other communications
expenses; taxes and governmental fees; dues and expenses incurred by or with
respect to the Portfolio in connection with membership in investment company
trade organizations; cost of insurance relating to fidelity coverage for the
Trust's officers and employees; fees and expenses of any custodian,
subcustodian, transfer agent, registrar, or dividend disbursing agent of the
Portfolio; payments for maintaining the Portfolio's financial books and records
and calculating the daily net asset value of the Portfolio's shares; other
payments for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; expenses relating to
investor and public relations; expenses of registering and qualifying shares of
the Portfolio for sale (if any); freight, insurance and other charges in
connection with the shipment of the portfolio securities of the Portfolio;
brokerage commissions or other costs of acquiring or disposing of any portfolio
securities or other assets of the Portfolio, or of entering into other
transactions or engaging in any investment practices with
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respect to the Portfolio; expenses of printing and distributing prospectuses,
Statements of Additional Information, reports, notices and dividends to
stockholders; costs of stationery; litigation expenses; costs of stockholders'
and other meetings; the compensation and all expenses (specifically including
travel expenses relating to the Portfolio's business) of officers, trustees and
employees of the Trust who are not interested persons of the Sub-adviser; and
travel expenses (or an appropriate portion thereof) of officers or trustees of
the Trust who are officers, directors or employees of the Sub-adviser to the
extent that such expenses relate to attendance at meetings of the Board of
Trustees of the Trust or any committees thereof or advisers thereto.
4. Compensation. As compensation for the services provided and expenses
assumed by the Sub-adviser under this Agreement, the Trust will pay the
Sub-adviser within 21 calendar days after the end of each calendar quarter an
advisory fee computed daily based on the Portfolio's average daily net assets,
equal on an annual basis to 0.325% of the average net assets up to $50 million,
0.25% of the average net assets over $50 million up to $100 million, 0.20 % of
the average net assets over $100 million up to $200 million, and 0.15% of
average net assets in excess of $200 million. The "average daily net assets" of
the Portfolio shall mean the average of the values attributed to the Portfolio's
net assets as of 4:00 p.m. (New York time) on each day on which the net asset
value of the Portfolio is determined consistent with the provisions of Rule
22c-1 under the 1940 Act or, if the Portfolio lawfully determines the value of
its net assets as of some other time on each business day, as of such other
time. The value of net assets of the Portfolio shall always be determined
pursuant to the applicable provisions of the Trust's Declaration of Trust, as
amended, and Registration Statement. If, pursuant to such provisions, the
determination of net asset value is suspended for any particular business day,
then for the purposes of this Section 4, the value of the net assets of the
Portfolio as last determined shall be deemed to be the value of its net assets
as of the close of regular trading on the New York Stock Exchange, or as of such
other time as the value of the net assets of the Portfolio's portfolio may
lawfully be determined, on that day. If the determination of the net asset value
of the shares of the Portfolio has been so suspended for a period including any
quarter end when the Sub-adviser's compensation is payable pursuant to this
Section, then the Sub-adviser's compensation payable at the end of such quarter
shall be computed on the basis of the value of the net assets of the Portfolio
as last determined (whether during or prior to such quarter). If the Portfolio
determines the value of the net assets of its portfolio more than once on any
day, then the last such determination thereof on that day shall be deemed to be
the sole determination thereof on that day for the purposes of this Section 4.
In the event that this Agreement is terminated pursuant to Section 10 hereof,
the Sub-adviser shall be entitled to a pro rata portion of the fee under this
Section 4 through and including the date upon which the Agreement is terminated
and the Sub-adviser ceases to provide investment advisory services to the
Portfolio hereunder.
5. Books and Records. The Sub-adviser agrees to maintain such books and
records with respect to its services to the Portfolio as are required by Section
31 under the 1940 Act, and rules adopted thereunder, and by other applicable
legal provisions, including the Investment Advisers Act of 1940 and the
Securities and Exchange Act of 1934, and to preserve such records for the
periods and in the manner required by that Section, and those rules and legal
provisions. The Manager shall maintain all books and other records not related
to the Portfolio's
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transactions. The Sub-adviser also agrees that records it maintains and
preserves pursuant to Rules 31a-1 and Rule 31a-2 under the 1940 Act and
otherwise in connection with its services hereunder are the joint property of
the Portfolio and the Sub-adviser and a copy will be provided promptly to the
Portfolio upon its written request. The Sub-adviser further agrees that it will
furnish to regulatory authorities having the requisite authority any information
or reports in connection with its services hereunder which may be requested in
order to determine whether the operations of the Portfolio are being conducted
in accordance with applicable laws and regulations.
6. Standard of Care and Limitation of Liability. The Sub-adviser shall
exercise its best judgment in rendering the services provided by it under this
Sub-advisory Agreement. The Sub-adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Portfolio or the
holders of the Portfolio's shares in connection with the matters to which this
Sub-advisory Agreement relate, provided that nothing in this Sub-advisory
Agreement shall be deemed to protect or purport to protect the Sub-adviser
against any liability to the Portfolio or to holders of the Portfolio's shares
to which the Sub-adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or by reason of the Sub-adviser's reckless disregard of its obligations
and duties under this Sub-advisory Agreement. As used in this Section 6, the
term "Sub-adviser" shall include any officers, directors, partners, employees,
agents or other affiliates of the Sub-adviser performing services for the
Portfolio.
7. Indemnification.
(a) The Sub-adviser hereby agrees to indemnify and hold harmless the
Manager from any controversies, claims, suits, losses, liabilities, judgments,
awards or settlements, and costs or expenses, including reasonable legal fees,
directly or proximately caused by, the investment decisions rendered by the
Sub-adviser in bad faith in a grossly negligent manner inconsistent with the
Portfolio's stated investment objectives, guidelines and restrictions, any
intentional failure of the Sub-adviser to fulfill any of its other obligations
under this Sub-advisory Agreement, any willful omission to disclose material
facts, by the Sub-adviser to the Portfolio or the Manager or any willful
violation of applicable law by the Sub-adviser. The Sub-adviser also agrees to
indemnify and hold harmless the Manager with respect to any reasonable losses
incurred as the result of grossly negligent errors made by the Sub-adviser in
transmitting orders to any broker for execution.
(b) The Manager hereby agrees to indemnify and hold harmless the
Sub-adviser from any controversies, claims, suits, losses, liabilities,
judgments, awards or settlements, and costs or expenses, including reasonable
legal fees, caused by, or in any related to, its failure to fulfill any of its
obligations under this Sub-advisory Agreement.
(c) If any party seeks indemnification under this Agreement (an
"indemnified party"), it shall notify the other party (the "indemnifying party")
in writing of the assertion of any third party claim or action and shall deliver
all copies of materials received in connection with the
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matter to the indemnifying party. The indemnifying party shall have the right to
control the defense of any such claim or action with counsel of its own
choosing, and the indemnified party shall cooperate fully with the indemnifying
party in the defense or settlement of any matter that is covered by paragraphs
(a) or (b) above, subject to reimbursement by the indemnifying party for
expenses incurred by the indemnified party in connection with the indemnifying
party's participation in the defense.
8. Services Not Exclusive. It is understood that the services of the
Sub-adviser are not exclusive, and that nothing in this Sub-advisory Agreement
shall prevent the Sub-adviser from providing similar services to other
individuals, institutions or investment companies (whether or not their
investment objectives and policies are similar to those of the Portfolio) or
from engaging in other activities, provided such other services and activities
do not, during the term of this Sub-advisory Agreement, interfere in a material
manner with the Sub-adviser's ability to meet its obligations to the Trust and
the Portfolio hereunder. When the Sub-adviser recommends the purchase or sale of
a security for other investment companies and other clients, and at the same
time the Sub-adviser recommends the purchase or sale of the same security for
the Portfolio, the Sub-adviser may, but shall not be obligated to, aggregate the
orders for securities to be purchased or sold. It is understood that in light of
its fiduciary duty to the Portfolio, such transactions will be executed on a
basis that is fair and equitable to the Portfolio. In connection with purchases
or sales of portfolio securities for the account of the Portfolio, neither the
Sub-adviser nor any of its directors, partners, officers or employees shall act
as a principal or agent or receive any commission.
9. Documentation. The Trust shall provide the Sub-adviser with the
following documents, as requested by the Sub-adviser:
(a) the Trust's registration statement relating to the Portfolio, and any
amendments thereto;
(b) the current Declaration of Trust and By-laws (and any amendments
thereto) of the Trust;
(c) resolutions of the Board of Trustees of the Trust authorizing the
appointment of the Sub-adviser to serve as Sub-adviser and approving this
Sub-advisory Agreement; and
(d) the Trust's Notification of Registration on Form N-8A.
10. Duration and Termination. This Sub-advisory Agreement shall continue
for an initial term of two years from the date set forth above, unless sooner
terminated as provided herein. Notwithstanding the foregoing, this Sub-advisory
Agreement may be terminated: (a) at any time without penalty upon thirty (30)
days' written notice to the Sub-adviser by the Portfolio upon the vote of a
majority of the Trustees or upon the vote of a majority of the Portfolio's
outstanding voting securities, (b) at any time without penalty upon thirty (30)
days' written notice to the Sub-adviser by the Manager, or (c) by the
Sub-adviser upon thirty (30) days' written notice
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to the Trust or the Manager. Anything to the contrary herein notwithstanding,
any termination carried out pursuant to this Section 10(c) shall be without
penalty and, further, the compensation schedule set forth in Section 4 hereof
shall apply to the service of the Sub-adviser beyond the end of the notice
period provided in this Section 10(c). This Sub-advisory Agreement will also
terminate automatically in the event of its assignment (as defined in the 0000
Xxx) or the assignment or termination of the Advisory Agreement.
11. Amendments. No provision of this Sub-advisory Agreement may be
changed, waived, discharged or terminated orally, unless by an instrument in
writing signed by both parties, and no amendment of this Sub-advisory Agreement
shall be effective until approved by an affirmative vote of (i) a majority of
the outstanding voting securities of the Portfolio, and (ii) a majority of the
Trustees of the Portfolio, including a majority of Trustees who are not
interested persons of any party to this Sub-advisory Agreement, cast in person
at a meeting called for the purpose of voting on such approval, if such approval
is required by applicable law.
12. Notices. Any notice or other communication required or permitted to be
given hereunder shall be given in writing and mailed, faxed or delivered to the
other party at its address as follows:
If to the Manager:
HSBC Asset Management (Americas) Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
If to the Sub-adviser:
Xxxxxxx & Xxxx Investment Management Company
0000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxx 00000
Attention: [________]
Any party may specify a different or additional address for notice by
sending a written notice to the other at the address above, or at that or those
last given hereunder.
13. Miscellaneous.
(a) This Sub-advisory Agreement shall be governed by the laws of the laws
of the State of New York, provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act, the Advisers Act, or rules or orders of
the SEC thereunder. Exclusive original jurisdiction to any claim, action or
dispute between the parties arising out of this Agreement shall be solely in
state or federal district courts sitting in the State of New York.
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(b) The captions of this Sub-advisory Agreement are included for
convenience only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
(c) If any provision of this Sub-advisory Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Sub-advisory Agreement shall not be affected hereby and, to this extent, the
provisions of this Sub-advisory Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting the Sub-adviser, or
any of its directors, officers or employees, an agent of the Manager or the
Portfolio, nor the Manager, or any of its directors, officers or employees, an
agent of the Sub-adviser.
(e) This Sub-advisory Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but counterparts
shall, together, constitute only one Sub-advisory Agreement.
(f) The undersigned officer of the Portfolio has executed this
Sub-advisory Agreement not individually, but as an officer under the Portfolio's
Declaration of Trust, and the obligations of this Sub-advisory Agreement are not
binding upon the Portfolio's Trustees, its officers, or shareholders in the
Portfolio individually, but bind only the Portfolio Trust estate.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of February 27, 2004.
XXXXXXX & XXXX INVESTMENT MANAGEMENT COMPANY
By ______________________________
Name:
Title:
HSBC ASSET MANAGEMENT (AMERICAS) INC.
By ______________________________
Name:
Title:
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