Exhibit d(2)
AMENDED AND RESTATED
SUBMANAGEMENT AGREEMENT
AMENDED AND RESTATED SUBMANAGEMENT AGREEMENT, dated as of October 22, 1997
and amended and restated as of November 15, 1999, by and between Domini Social
Investments LLC, a Massachusetts limited liability company ("DSI" or the
"Manager"), and Mellon Equity Associates, LLP, a Pennsylvania limited liability
partnership ("Mellon" or the "Submanager").
WITNESSETH:
WHEREAS, the Domini Social Index Portfolio (the "Portfolio") engages in
business as an open-end management investment company and is registered as such
under the Investment Company Act of 1940, as amended (collectively with the
rules and regulations promulgated thereunder, the "1940 Act"); and
WHEREAS, DSI has entered into a Management Agreement (the "Management
Agreement") with the Portfolio wherein DSI has agreed to serve as Manager to the
Portfolio;
WHEREAS, as permitted by Section 1(A) of the Management Agreement, DSI has
subcontracted some of the performance of its obligations thereunder to Mellon,
and Mellon accepted such obligations, on the terms and conditions hereinafter
set forth in that certain Submanagement Agreement dated as of October 22, 1997
(the "Original Submanagement Agreement"); and
WHEREAS, DSI and Mellon wish to amend and restate the Original
Submanagement Agreement in its entirety in order to reduce the amount of
compensation payable by DSI to Mellon thereunder from and after the effective
date hereof;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the Original Submanagement Agreement is
hereby amended and restated in its entirety as follows:
1. APPOINTMENT OF MELLON.
In accordance with and subject to the Management Agreement between the
Portfolio and the Manager, the Manager hereby retains Mellon to act as the
Submanager for the Portfolio for the period and on the terms set forth in this
Agreement. The Submanager accepts such appointment and agrees to provide an
investment program for the Portfolio for the compensation provided by this
Agreement.
2. DUTIES OF THE SUBMANAGER.
The Submanager shall provide the Portfolio and the Manager with such
investment advice and supervision as the Manager may from time to time consider
necessary for the proper supervision of such portion of the Portfolio's
investment
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assets as the Manager may designate from time to time. Notwithstanding any
provision of this Agreement, the Manager shall retain all rights and ultimate
responsibilities to supervise and, in its discretion, conduct investment
activities relating to the Portfolio.
The Submanager shall furnish continuously an investment program and shall
determine from time to time what securities shall be purchased, sold or
exchanged and what portion of the assets of the Portfolio allocated by the
Manager to the Submanager shall be held uninvested, subject always to the
restrictions of the Portfolio's Declaration of Trust, dated June 7, 1989, and
By-laws, as each may be amended from time to time (respectively, the
"Declaration" and the "By-Laws"), the provisions of the 1940 Act, and the then-
current registration statement of the Portfolio and, subject further, to the
Submanager notifying the Manager in advance of the Submanager's intention to
purchase any securities except insofar as the requirement for such notification
may be waived or limited by the Manager, it being understood that the Submanager
shall be responsible for compliance with any restrictions imposed in writing by
the Manager from time to time in order to facilitate compliance with the above-
mentioned restrictions and such other restrictions as the Manager may determine.
Further, the Manager or the Trustees of the Portfolio may at any time, upon
written notice to the Submanager, suspend or restrict the right of the
Submanager to determine what securities shall be purchased or sold on behalf of
the Portfolio and what portion, if any, of the assets of the Portfolio allocated
by the Manager to the Submanager shall be held uninvested. The Submanager shall
also, as requested, make recommendations to the Manager as to the manner in
which proxies, voting rights, rights to consent to corporate action and any
other rights pertaining to the Portfolio's portfolio securities shall be
exercised. Should the Board of Trustees of the Portfolio or the Manager at any
time, however, make any definite determination as to an investment policy
applicable to the Portfolio and notify the Submanager thereof in writing, the
Submanager shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination has
been revoked.
The Submanager shall take, on behalf of the Portfolio, all actions which it
deems necessary to implement the investment policies determined as provided
above and, in particular, to place all orders for the purchase or sale of
securities for the Portfolio's account with the brokers or dealers selected by
it, and to that end the Submanager is authorized as the agent of the Portfolio
to give instructions to the custodian or any subcustodian of the Portfolio as to
deliveries of securities and payments of cash for the account of the Portfolio.
The Submanager will advise the Manager on the same day it gives any such
instructions. In connection with the selection of such brokers or dealers and
the placing of such orders, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to the Portfolio and/or the other accounts
over which the Submanager, the Manager or a respective "affiliated person"
thereof exercises investment discretion. The Submanager is authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Submanager determines in good faith that such
amount of
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commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Submanager, the Manager and any "affiliated person" thereof have with
respect to accounts over which they exercise investment discretion. In making
purchases or sales of securities or other property for the account of the
Portfolio, the Submanager may deal with itself or with the Trustees of the
Portfolio or the Portfolio's underwriter or distributor to the extent such
actions are permitted by the 1940 Act. The Board of Trustees of the Portfolio,
in its discretion, may instruct the Submanager to effect all or a portion of its
securities transactions with one or more brokers and/or dealers selected by the
Board of Trustees if it determines that the use of such brokers and/or dealers
is in the best interest of the Portfolio.
3. ALLOCATION OF CHARGES AND EXPENSES.
The Submanager shall furnish at its own expense all necessary services,
facilities and personnel in connection with its responsibilities under Section 2
above. Except as provided in the foregoing sentence, it is understood that the
Portfolio will pay all of its own expenses including, without limitation,
organization costs of the Portfolio; compensation of Trustees who are not
"interested persons" of the Portfolio; governmental fees; interest charges; loan
commitment fees; taxes; membership dues in industry associations allocable to
the Portfolio; fees and expenses of independent auditors, legal counsel and any
transfer agent, distributor, registrar or dividend disbursing agent of the
Portfolio; expenses relating to the issuance and redemption of beneficial
interests in the Portfolio and servicing investor accounts; expenses of
preparing, typesetting, printing and mailing investor reports, notices, proxy
statements and reports to governmental officers and commissions and to investors
in the Portfolio; expenses connected with the execution, recording and
settlement of security transactions; insurance premiums; fees and expenses of
the custodian for all services to the Portfolio, including safekeeping of funds
and securities and maintaining required books and accounts; expenses of
calculating the net asset value of the Portfolio (including but not limited to
the fees of independent pricing services); expenses of meetings of the
Portfolio's investors; and such non-recurring or extraordinary expenses as may
arise, including those relating to actions, suits or proceedings to which the
Portfolio may be a party and the legal obligation which the Portfolio may have
to indemnify its Trustees and officers with respect thereto.
4. COMPENSATION OF THE SUBMANAGER.
For the services to be rendered by the Submanager hereunder, the Manager
shall pay to the Submanager a fee computed and paid monthly at an annual rate
equal to 0.07% of the Portfolio's average daily net assets for its then-current
fiscal year. (For the period from October 22, 1997 to October 22, 1999, the fee
was computed and paid monthly at an annual rate equal to 0.10% of the
Portfolio's average daily net assets for its then-current fiscal year.) If
Mellon serves as Submanager for less than the whole of any period specified in
this Section 4, the compensation to Mellon, as Submanager, shall be prorated.
5. COVENANTS OF THE SUBMANAGER.
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The Submanager agrees that it will not deal with itself, or with the
Trustees of the Portfolio or the Portfolio's principal underwriter or
distributor, if any, as principals in making purchases or sales of securities or
other property, except as permitted by the 1940 Act, will not take a long or
short position in beneficial interests of the Portfolio, except as permitted by
the Declaration, and will comply with all other provisions of the Declaration
and By-Laws and the then-current registration statement of the Portfolio
relative to the Submanager and its directors and officers.
6. LIMITATION OF LIABILITY OF THE SUBMANAGER.
The Submanager shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission in
the execution of securities transactions for the Portfolio, except for willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of reckless disregard of its obligations and duties hereunder. As
used in this Section 6, the term "Submanager" shall include directors, officers
and employees of the Submanager as well as the Submanager itself. The Portfolio
is expressly made a third party beneficiary of this Agreement and may enforce
any obligations of the Submanager under this Agreement and recover directly from
the Submanager for any liability the Submanager may have hereunder.
7. ACTIVITIES OF THE SUBMANAGER.
The services of the Submanager to the Portfolio are not to be deemed to be
exclusive, the Submanager being free to render investment advisory,
administrative and/or other services to others. It is understood that Trustees,
officers and investors of the Portfolio or the Manager are or may be or may
become interested in the Submanager as directors, officers, employees or
otherwise and that directors, officers and employees of the Submanager are or
may become similarly interested in the Portfolio or the Manager and that the
Submanager may be or may become interested in the Portfolio as an investor or
otherwise.
8. DURATION, TERMINATION AND AMENDMENTS OF THIS AGREEMENT.
This Agreement shall become effective as of October 22, 1997, shall govern
the relations between the parties hereto thereafter and shall remain in force
until October 22, 1999, on which date it will terminate unless its continuance
after October 22, 1999 is "specifically approved at least annually" (a) by the
vote of a majority of the Trustees of the Portfolio who are not "interested
persons" of the Portfolio or of DSI or the Submanager at a meeting specifically
called for the purpose of voting on such approval and (b) by the Board of
Trustees of the Portfolio or by "vote of a majority of the outstanding voting
securities" of the Portfolio. The parties acknowledge that the continuance of
this Agreement through and including April 30, 2000 was approved by the vote of
a majority of the Trustees of the Portfolio who are not "interested persons" of
the Portfolio or of DSI or the Submanager at a meeting specifically called for
the purpose of voting on such approval.
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This Agreement may be terminated at any time without the payment of any
penalty by (i) the Trustees of the Portfolio, (ii) the "vote of a majority of
the outstanding voting securities" of the Portfolio or (iii) DSI with the prior
consent of the Trustees of the Portfolio, in each case on not more than 60 days'
nor less than 30 days' written notice to the other party. This Agreement may be
terminated at any time without the payment of any penalty by the Submanager on
not less than 90 days' written notice to the Manager and the Trustees of the
Portfolio.
This Agreement shall automatically terminate in the event of its
"assignment." This Agreement constitutes the entire agreement between the
parties and may be amended only if such amendment is approved by the parties
hereto, the Trustees of the Portfolio and the "vote of a majority of the
outstanding voting securities" of the Portfolio (except for any such amendment
as may be effected in the absence of such vote without violating the 1940 Act or
any exemptive order granted thereunder).
The terms "specifically approved at least annually," "vote of a majority of
the outstanding voting securities," "assignment," "affiliated person" and
"interested persons," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the Act.
So long as the Submanager is organized as a limited liability partnership,
the Submanager agrees it will notify the Manager of any change in its ownership
within a reasonable period after such change.
9. GOVERNING LAW.
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts;
provided, however, that nothing herein will be construed in a manner
inconsistent with the 1940 Act, the Investment Advisers Act of 1940 or any rules
or regulations of the Securities and Exchange Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
MELLON EQUITY ASSOCIATES, LLP
By: Xxxxxxx Xxxxxx
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Title: President and CEO
DOMINI SOCIAL INVESTMENTS LLC
By: Xxxxx X. Xxxxxx
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Title: Managing Principal
