Exhibit (d)(4)
FORM OF
SUBADVISORY AGREEMENT
PILGRIM INTERNATIONAL VALUE FUND
AGREEMENT made this ___th day of September 2000, by and between Pilgrim
Investments, Inc., Delaware Corporation (hereinafter the "Adviser"), investment
adviser for the Pilgrim International Value Fund, a series of the Pilgrim
Mayflower Trust (the "Trust") (hereinafter the "Fund") and Xxxxxxx Investment
Partners, L.P., a California limited partnership (hereinafter the "Subadviser").
WHEREAS, the Adviser has been retained by the Trust on behalf of the Fund
to provide investment advisory services to the Fund pursuant to an Investment
Advisory Agreement made on this ___th day of September 2000 (the "Investment
Advisory Agreement"); and
WHEREAS, the Fund's Trustees, including a majority of the Trustees who are
not "interested persons," as defined in the Investment Company Act of 1940, as
amended (the "1940 Act"), and the Fund's shareholders have approved the
appointment of the Subadviser to perform certain investment advisory services
for the Fund pursuant to this Subadvisory Agreement with the Adviser and the
Subadviser is willing to perform such services for the Fund;
WHEREAS, the Subadviser is registered 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 Adviser and the Subadviser as follows:
1. APPOINTMENT. The Adviser hereby appoints the Subadviser to perform advisory
services to the Fund for the periods and on the terms set forth in this
Subadvisory Agreement. 'Me Subadviser accepts such appointment and agrees
to furnish the services herein set forth, for the compensation herein
provided
2. DUTIES OF SUBADVISER. The Adviser hereby authorizes Subadviser to manage
the investment and reinvestment of cash and investments comprising those
assets of the Fund with power on behalf of and in the name of the Fund at
Subadviser's discretion, subject at all times to the supervision of the
Adviser and the Trustees of the Fund:
(a) to direct the purchase, subscription or other acquisition, and the
sale, redemption, and exchange of investments, subject to the duty -to
render to the Trustees of the Fund and the Adviser written reports of
the composition of the portfolio of the Fund as often as the Adviser
or the Trustees of the Fund shall reasonably require;
(b) to make all decisions relating to the manner, method, and timing of
investment transactions, to select brokers, dealers and other
intermediaries by or through whom such transactions will be effected,
and to engage such consultants, analysts and experts in connection
therewith as may be considered necessary or appropriate;
(c) to direct banks, brokers or custodians to disburse funds or assets
solely in order to execute investment transactions for the Fund,
provided the Subadviser shall have no authority to direct the transfer
of the Fund's funds or assets to itself or other affiliated persons
and shall have no authority over the disbursement (as opposed to
investment decisions) of funds or assets nor any custody of any of the
Fund's funds or assets; and
(d) to take all such other actions as may be considered necessary or
appropriate to discharge its duties hereunder; PROVIDED THAT any
specific or general directions which the Trustees of the Fund or the
Adviser may give in writing to the Subadviser with regard to any of
the foregoing powers shall, unless the contrary is expressly stated
herein, override the general authority given by this provision to the
extent that the Trustees of the Fund may, at any time and from time to
time, direct, either generally or to a limited extent and either alone
or in concert with the Adviser or the Subadviser (provided that such
directions would not cause the Subadviser to violate any fiduciary
duties or any laws with regard to the Subadviser's duties and
responsibilities), all or any of the same as they shall think fit and,
in particular, the Adviser shall have the right to direct the
Subadviser to place trades through brokers and other agents of the
Adviser's choice, subject to such brokers or agents executing such
trades on a "best execution basis", i.e. at the best price and/or with
research or other services which render that broker's services the
most appropriate for the Subadviser's needs, and further that the
Subadviser is satisfied that the dealing and execution quality of such
brokers are satisfactory to the Subadviser; and PROVIDED FURTHER that
nothing herein shall be construed as giving the Subadviser power to
manage the aforesaid cash and investments in such a manner as would
cause the Fund to be considered a "dealer" in stocks, securities or
commodities for U.S. federal income tax purposes.
The Adviser shall monitor and review the performance of the Subadviser
under this Agreement, including but not limited to the Subadviser's
performance of the duties delineated in subparagraphs (a)-(d) above.
The Subadviser further agrees that, in performing its duties
hereunder, it will:
(a) (i) comply with the 1940 Act and all rules and regulations thereunder,
the Advisers Act, the Internal Revenue Code of 1986, as amended, (the
"Code") and all other applicable federal and state laws and
regulations, the Prospectus and Statement of Additional Information
for the Fund, and with any applicable procedures adopted by the
Trustees in writing and made available to Subadviser; (ii) manage the
Fund in accordance with the investment requirements for regulated
investment companies under Subchapter M of the Code and regulations
issued thereunder, and (iii) direct the placement of orders pursuant
to its investment determinations for the Fund directly with the
issuer, or with any broker or dealer, in accordance with applicable
policies expressed in the Fund's Prospectus and/or Statement of
Additional Information and in accordance with applicable legal
requirements;
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(b) furnish to the Fund whatever non-proprietary reports the Fund may
reasonably request with respect to the Fund's assets or contemplated
investments. In addition, the Subadviser will keep the Fund and the
Trustees informed of developments materially affecting the Fund's
portfolio and shall, on the Subadviser's own initiative, furnish to
the Fund from time to time whatever information the Subadviser
believes appropriate for this purpose;
(c) make available to the Fund's administrator, Northstar Administrators
Corporation (the "Administrator"), the Adviser, and the Fund, promptly
upon their request, such copies of its investment records and ledgers
with respect to the Fund as may be required to assist the Adviser, the
Administrator and the Fund in their compliance with applicable laws
and regulations. The Subadviser will furnish the Trustees with such
periodic and special reports regarding the Fund as they may reasonably
request;
(d) immediately notify the Adviser and the Fund in the event that the
Subadviser or any of its affiliates (i) becomes aware that it is
subject to a statutory disqualification that prevents the Subadviser
from serving as an investment adviser pursuant to this Subadvisory
Agreement; or (ii) becomes aware that it is the subject of an
administrative proceeding or enforcement action by the Securities and
Exchange Commission ("SEC") or other regulatory authority. The
Subadviser further agrees to notify the Fund and the Adviser
immediately of any material fact known to the Subadviser respecting or
relating to the Subadviser that is not contained in the Fund's
Registration Statement, or any amendment or supplement thereto, but
that is required to be disclosed therein, and of any statement
contained therein respecting or relating to the Subadviser that
becomes untrue in any material respect. The Adviser shall likewise
immediately notify the Subadviser if it becomes aware of any
regulatory action of the type described in this subparagraph 2(d)
respecting or relating to the Fund, the Adviser, or any Affiliates of
the Adviser.
3. ALLOCATION OF CHARGES AND EXPENSES. The Subadviser shall pay all expenses
associated with the management of its business operations in performing its
responsibilities hereunder, including the cost of its own overhead,
research, compensation and expenses of its partners, officers and
employees, and other internal operating costs. The Fund shall bear its own
overhead and other internal operating costs (whether incurred directly or
by the Adviser or the Subadviser) including, without limitation:
(a) the costs incurred by the Fund in the preparation and printing of its
Prospectus or any offering literature (including any form of
advertisement or other solicitation materials calculated to lead to
investors subscribing for shares);
(b) all fees and expenses on behalf of the Fund to the Transfer Agent and
the Custodian;
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(c) the reasonable fees and expenses of accountants, auditors, lawyers and
other professional advisors to the Fund;
(d) any interest, fee or charge payable on or on account of any borrowing
by the Fund;
(e) fiscal and governmental charges and duties relating to the purchase,
sale, issue or redemption of shares and increases in authorized share
capital of the Fund;
(f) the fees of any stock exchange or over-the-counter market on which the
shares may from time to time be listed, quoted or dealt in and the
expenses of obtaining any such listing, quotation or permission to
deal;
(g) the fees and expenses (if any) payable to Trustees;
(h) brokerage, fiscal or governmental charges or duties in respect of or
in connection with the acquisition, holding or disposal of any of the
assets of the Fund or otherwise in connection with its business;
(i) the expenses of publishing details and prices of shares in newspapers
and other publications;
(j) all expenses incurred in the convening of meetings of shareholders or
in the preparation of agreements or other documents relating to the
Fund or in relation to the safe custody of the documents of title of
any investments;
(k) all Trustees communication costs; and
(l) all premiums and costs for Fund insurance and blanket fidelity bonds.
4. COMPENSATION. The Subadviser agrees to waive all compensation until the
Fund's net assets exceed $50 million. After the Fund's net assets exceed
$50 million, the Adviser will pay the Subadviser at the end of each
calendar month an advisory fee computed daily at an annual rate equal to
fifty (50) percent of the management fee that the Fund pays the Adviser.
5. BOOKS AND RECORDS. The Subadviser agrees to maintain such books and records
with respect to its services to the Fund as are required by Section 31
under the 1940 Act, and rules adopted thereunder, and by other applicable
legal provisions, and to preserve such records for the periods and in the
manner required by applicable laws or regulations. The Subadviser also
agrees that records it maintains and preserves pursuant to Rules 3 1 a-2
under the 1940 Act (excluding trade secrets or intellectual property
rights) in connection with its services hereunder are the property of the
Fund and will be surrendered promptly to the Fund upon its request and the
Subadviser 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 Fund are being conducted in accordance with
applicable laws and regulations. 6.
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6. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Subadviser shall exercise
its best business judgment and reasonable care in rendering the services
provided by it under this Subadvisory Agreement. The Subadviser shall not
be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund or the holders of the Fund's shares or by the Adviser
in connection with the matters to which this Subadvisory Agreement relates,
provided that nothing in this Subadvisory Agreement shall be deemed to
protect or purport to protect the Subadviser against liability to the Fund
or to holders of the Fund's shares or to the Adviser to which the
Subadviser would otherwise be subject by reason of willful misfeasance, bad
faith or negligence on its part in the performance of its duties or by
reason of the Subadviser's reckless disregard of its obligations and duties
under this Subadvisory Agreement. As used in this Section 6, the term
"Subadviser" shall include any officers, directors, employees or other
affiliates of the Subadviser performing services for the Fund.
7. SERVICES NOT EXCLUSIVE. It is understood that, except as may otherwise be
agreed by the Adviser and the Subadviser, the services of the Subadviser
are not exclusive. The Subadviser is not required to recommend to the Fund
the same investments it recommends to its other clients. In connection with
purchases or sales of portfolio securities for the account of the Fund,
neither the Subadviser nor any of its partners officers or employees shall
act as principal or agent or receive any commission. If the Subadviser
provides any advice to its clients concerning the shares of the Fund, the
Subadviser shall act solely as investment counsel for such clients and not
in any way on behalf of the Fund.
8. DURATION AND TERMINATION. This Subadvisory Agreement shall continue in
effect for a period of two years unless sooner terminated as provided
herein and shall continue automatically for successive annual periods
provided that such continuance is specifically approved at least annually
by the affirmative vote of (i) a majority of the Trustees of the Trust who
are not interested persons of the Trust (as defined in the 1940 Act), cast
in person at a meeting called for the purpose of voting on such approval,
and (ii) a majority of the Trustees of the Trust or the holders of a
majority of the outstanding voting securities of the Fund (as defined in
the 1940 Act). Notwithstanding the foregoing, this Subadvisory Agreement
may be terminated: (a) at any time without penalty by the. Fund or Adviser
upon the vote of a majority of the Trustees or by vote of the majority of
the Fund's outstanding voting securities (as defined in the 1940 Act), upon
sixty (60) days' written notice to the Subadviser, or (b) by the Subadviser
at any time without penalty, upon (60) days' written notice to the Fund or
Adviser. This Subadvisory Agreement will also terminate automatically in
the event of its assignment (as defined in the 0000 Xxx) or the assignment
or termination of the Investment Advisory Agreement.
9. AMENDMENTS. No provision of this Subadvisory Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in
writing signed by both parties, and no material amendment of this
Subadvisory Agreement shall be effective until approved by an affirmative
vote of (i) a majority of the outstanding voting securities of the Fund,
and (ii) a majority of the Trustees of the Fund, including a majority of
Trustees who are not interested persons of any party to this Subadvisory
Agreement, cast in person at a
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meeting called for the purpose of voting on such approval, if such approval
is required by applicable law.
10. INDEMNIFICATION. (a) The Adviser hereby agrees to indemnify the Subadviser
from and against all liabilities, losses, expenses, reasonable attorneys'
fees and costs or damages (other than liabilities, losses, expenses,
attorneys fees and costs or damages arising from the Subadviser failing to
meet the standard of care required hereunder in the performance by the
Subadviser of, or its failure to perform, the services required hereunder),
arising from: (i) the Adviser's (or its affiliates' and their respective
agents' and employees') failure to perform its duties or assume its
obligations hereunder, or from its wrongful actions or omissions,
including, but not limited to claims asserted or threatened by any
shareholder of the Fund, governmental or regulatory agency, or any other
person; (ii) claims arising from any wrongful act by the Fund or any of the
Fund's trustees, officers, employees, or representatives, or by the
Adviser, its officers, employees or representatives, or from any actions by
the Funds distributors or any representative of the Fund; (iii) any action
or claim against the Subadviser based on any alleged untrue statement or
misstatement of material fact in any registration statement, prospectus,
shareholder report or other information or materials relating to the Fund
or shares issued by the Fund or any amendment thereof or supplement
thereto, or the failure or alleged failure to state therein a material fact
required to be stated in order that the statements therein are not
misleading, provided that such claim is not based upon information provided
to the Adviser by the Subadviser or which facts or information the
Subadviser failed to provide or disclose. With respect to any claim for
which the Subadviser shall be entitled to indemnity hereunder, the Adviser
shall assume the reasonable expenses and costs (including any reasonable
attorneys' fees and costs) of the Subadviser of investigating and/or
defending any claim asserted or threatened by any party, subject always to
the Adviser first receiving a written undertaking from the Subadviser to
repay any amounts paid on its behalf in the event and to the extent of any
subsequent final determination by a court that the Subadviser was not
entitled to indemnification hereunder in respect of such claim.
(a) The Subadviser hereby agrees to indemnify the Adviser, its affiliates
and the Fund from and against all liabilities, losses, expenses,
reasonable attorneys' fees and costs or damages (other than
liabilities, losses, expenses, attorneys fees and costs or damages
arising from the Adviser's failure to perform its responsibilities
hereunder or claims arising from its acts or failure to act in
performing this Agreement) arising from Subadviser's or its agents'
and employees' failure to perform its duties and assume its
obligations hereunder, or from any failure of Subadviser to meet the
standard of care set forth in Section 6 of this Agreement, including
any action or claim against the Adviser based on any alleged untrue
statement or misstatement of a material fact made or provided by the
Subadviser contained in any registration statement, prospectus,
shareholder report or other information or materials relating to the
Fund or shares issued by the Fund, or the failure or alleged failure
to state a material fact therein required to be stated in order that
the statements therein are not misleading, which fact should have been
made or provided by the Subadviser to the Adviser. With respect to any
claim for which the Adviser is entitled to indemnity hereunder, the
Subadviser shall assume the reasonable
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expenses and costs (including any reasonable attorneys' fees and
costs) of the Adviser of investigating and/or defending any claim
asserted or threatened by any party, subject always to the Subadviser
first receiving a written undertaking from the Adviser to repay any
amounts paid on its behalf in the event and to the extent of any
subsequent final determination by a court that the Adviser was not
entitled to indemnification hereunder in respect of such claim.
(b) In the event that the Subadviser or Adviser is or becomes a party to
any action or proceedings in respect of which indemnification may be
sought hereunder, the party seeking indemnification (the "Indemnitee")
shall promptly notify the other party thereof. After becoming notified
of the same, the party from whom indemnification is sought (the
"Indemnitor") shall be entitled to participate in any such action or
proceeding and shall assume any payment for the full defense of the
Indemnitee therein with counsel reasonably satisfactory to the party
seeking indemnification. The Indemnitor shall not in connection with
any action or proceeding or separate but similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegation or circumstances, be liable for the fees or expenses of
more than one separate firm of attorneys at any time for Indemnitees.
After properly assuming the defense thereof, the Indemnitor shall not
be liable hereunder to the Indemnitee for any legal or other expenses
subsequently incurred by the Indemnitee in connection with the defense
thereof, other than damages, if any, by way of judgment, settlement,
or otherwise pursuant to this provision. The Indemnitor shall not be
liable hereunder for any settlement of any action or claim effected
without its written consent, which consent shall not be unreasonably
withheld. The Indemnitee shall fully cooperate with the Indemnitor in
the defense of any claim and any litigation or other legal proceedings
resulting from the claim. The Indemnitee may participate in the
defense of the claim and any litigation or other legal proceedings
resulting from the claim. The Indemnitee may employ separate counsel
to participate in such defense, and the fees and expenses of such
counsel shall not be at the expense of the Indemnitee, but only if the
employment thereof (a) has been specifically authorized in writing by
the Indemnitor, which authorization shall not be unreasonably withheld
and (b) relates to the defense of any claim or any litigation or other
legal proceedings resulting from the claim to the extent the claim or
any litigation or other legal proceedings resulting from the claim
seeks injunctive, specific performance or other nonmonetary relief
involving or affecting the business, operations or assets of the
Indemnitee (or an Affiliate of the Indemnitee). The provisions of this
Section 10 shall survive the termination of this Agreement.
11. INDEPENDENT CONTRACTOR. Subadviser shall for all purposes of this Agreement
be deemed to be an independent contractor and, except as otherwise
expressly provided herein, shall have no authority to act for, bind or
represent the Fund in any way or otherwise be deemed to be an agent of the
Fund. Likewise, the Fund, the Adviser and their respective affiliates,
agents and employees shall not be deemed agents of the Subadviser and shall
have no authority to bind Subadviser.
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12. USE OF NAMES. (a) The Fund may, subject to sub-clause (b) below, use the
name, "Xxxxxxx Investment Partners, L.P." ("Brandes") or the name of any
principal of Brandes, or any component, abbreviation or other name derived
therefrom for promotional purposes only for so long as this Subadvisory
Agreement (or any extension, renewal or amendment thereof) continues in
force, unless the Subadviser or such principal shall specifically consent
in writing to such continued use thereafter. Any permitted use by the Fund
during the term hereof of the name of the Subadviser or any of its
principals, or any derivative thereof, shall in no way prevent the
Subadviser or any of it shareholders or any of their successors, from using
or permitting the use of such name (whether singly or in any combination
with any other words) for, by or in connection with an entity or enterprise
other than the Fund. At the conclusion of this Subadvisory Agreement or in
the event of any termination of this Subadvisory Agreement for any reason,
each of the authorized parties and their respective employees,
representatives, affiliates, and associates agree that they shall
immediately cease using each such name and any derivatives of said names
for any purpose whatsoever.
(a) The Adviser and its affiliates on one hand, and the Subadviser on the
other, shall not publish or distribute, and the Adviser shall cause
the Fund not to publish or distribute to Fund shareholders,
prospective investors, sales agents or members of the public, any
disclosure document, offering literature (including any form of
advertisement or other solicitation materials calculated to lead
investors to subscribe for and purchase shares of the Fund) or other
document referring by name to the Subadviser or its affiliates on one
hand and the Adviser or its affiliates on the other, unless the other
party shall have consented in writing to such references in the form
and context in which they appear.
13. CHANGE IN IDENTITY. The Subadviser shall notify the Adviser of any change
in the identity or control of its general or limited partners promptly
after such change occurs.
14. MISCELLANEOUS.
(a) This Subadvisory Agreement shall be governed by the laws of the State
of Massachusetts (without regard to principles of conflicts of law),
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.
(b) The captions of this Subadvisory 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) This Agreement may be executed in one or more counterparts, all of
which taken together shall be deemed to constitute one and the same
instrument.
15. NOTICES. Any notice, instruction or other instrument required or permitted
to be given hereunder may be delivered in person to the offices of the
parties as set forth therein during normal business
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hours, or delivered or sent by prepaid registered mail, express mail or by
facsimile to the parties at such offices or such other address as may be
notified by either party from time to time addressed to its President. Such
notice, instruction or other instrument shall be deemed to have been
served, in the case of a registered letter at the expiration of seventy-two
(72) hours after posting; in the case of express mail, within twenty-four
(24) hours after dispatch; and in the case of facsimile, immediately on
dispatch; and if delivered outside normal business hours it shall be deemed
to have been received at the next time after delivery or transmission when
normal business hours commence. Evidence that the notice, instruction or
other instrument was properly addressed, stamped and put into the post
shall be conclusive evidence of posting.
16. ATTORNEYS' FEES. In the event of a material breach of this Agreement by any
party hereto, the prevailing party, as determined by the trier of fact,
shall be entitled to reasonable attorneys' fees and costs as determined by
the court in such action, in addition to any other damages awarded.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year set forth
above.
Pilgrim Investments, Inc.
By:________________________________
Title:
Xxxxxxx Investment Partners, L.P.
By:_________________________________
Title:
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