FORM OF
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
X. X. XXXXXX INVESTMENT MANAGEMENT INC.
AND
UBS GLOBAL ASSET MANAGEMENT (NEW YORK) INC.
INVESTMENT SUBADVISORY AGREEMENT, effective as of the 21st day of January 2003,
between X.X. Xxxxxx Investment Management Inc. (the "Adviser"), a corporation
organized and existing under the laws of the State of Delaware, and UBS Global
Asset Management (New York) Inc. ("Subadviser"), a corporation organized and
existing under the laws of the State of New York.
WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated as
of the 21st day of January 2003 ("Advisory Agreement") with X.X. Xxxxxx Xxxxxxx
Series Trust, a Massachusetts business trust (the "Trust"), which is engaged in
business as an open-end management investment company registered under the
Investment Company Act of 1940 ("1940 Act"); and
WHEREAS, the Trust is and will continue to be a series fund having two or more
investment portfolios, each with its own assets, investment objectives, policies
and restrictions (each a "Fund"); and
WHEREAS, the Subadviser is engaged principally in the business of rendering
investment advisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940 ("Advisers Act"); and
WHEREAS, the Adviser desires to retain the Subadviser to assist it in the
provision of a continuous investment program for that portion of the assets of
the Fund listed on Appendix A
which the Adviser may from time to time assign to the Subadviser (the
"Subadviser Assets") and the Subadviser is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual promises herein set
forth, the parties hereto agree as follows:
1. APPOINTMENT. Adviser hereby retains the Subadviser to act as investment
adviser for and to manage the Subadviser Assets for the period and on the terms
set forth in this Agreement. The Subadviser accepts such appointment and agrees
to render the services herein set forth, for the compensation herein provided.
The Subadviser shall for all purposes herein be deemed to be an independent
contractor and shall, except as expressly provided or authorized, have no
authority to act for or represent the Trust, the Fund or the Adviser in any way
or otherwise be deemed an agent of the Trust, the Fund or the Adviser.
2. DUTIES OF THE SUBADVISER
A. INVESTMENT SUBADVISORY SERVICES. Subject to the supervision of the
Trust's Board of Trustees (the "Board") and the Adviser, the Subadviser
shall (a) manage the investments of the Subadviser Assets in accordance
with the Fund's investment objective, policies, and restrictions as
provided in the Trust's Prospectus and Statement of Additional Information,
as currently in effect and as amended or supplemented from time to time
(hereinafter referred to as the "Prospectus"), (b) in compliance with the
requirements applicable to registered investment companies under applicable
laws and those requirements applicable to regulated investment companies
under Subchapter M of the Internal Revenue Code of 1986, as amended
("Code") and (c) in accordance with such other reasonable written
limitations as the Adviser may institute by written notice to, and received
by, Subadviser. The Subadviser shall (a) make investment decisions for the
Subadviser Assets; (b) place purchase and sale orders for portfolio
transactions for the Subadviser Assets; and (c) employ professional
portfolio managers and securities analysts to provide research services to
the Subadviser Assets. In providing these services, the Sub-Adviser will
conduct a continual program of investment, evaluation and, if appropriate,
sale and reinvestment of the Subadviser Assets.
B. SUBADVISER UNDERTAKINGS. In all matters relating to the performance of
this Agreement, the Subadviser shall act in conformity with the Trust's
Articles of Incorporation, By-Laws, and Prospectus and with the written
instructions and directions of the Board and the Adviser. The Subadviser
hereby agrees to:
(i) regularly report to the Board and the Adviser (in such form and
frequency as the Adviser and Subadviser mutually agree) with
respect to the implementation of the investment program,
compliance of the Subadviser Assets with the Prospectus, the 1940
Act and the Code, and on other topics as may reasonably be
requested by the Board or the Adviser, including attendance at
Board meetings, as reasonably requested, to present such reports
to the Board;
(ii) consult with the Trust's pricing agent regarding the valuation of
securities that are not registered for public sale, not traded on
any securities markets, or otherwise may be deemed illiquid for
purposes of the 1940 Act and for which market quotations are not
readily available;
(iii) Provide, subject to any obligations or undertakings reasonably
necessary to maintain the confidentiality of the Subadviser's
non-public information, any and all information, records and
supporting documentation about the composite of accounts and the
funds the Subadviser manages that have investment objectives,
policies, and strategies substantially similar to those employed
by the Subadviser in managing the Subadviser Assets which may be
reasonably necessary, under applicable laws, to allow the Trust or
its agent to present historical performance information concerning
the Subadviser's similarly managed accounts and funds, for
inclusion in the Trust's Prospectus and any other reports and
materials prepared by the Trust or its agent, in accordance
with regulatory requirements or as requested by applicable
federal or state regulatory authorities.
C. EXPENSES. The Subadviser will bear all of its expenses in connection
with the performance of its services under this Agreement. All other
expenses to be incurred in the operation of the Fund will be borne by the
Trust, except to the extent specifically assumed by the Subadviser. The
expenses to be borne by the Trust include, without limitation, the
following: organizational costs, taxes, interest, brokerage fees and
commissions, Trustees' fees, Securities and Exchange Commission fees and
state Blue Sky qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses, costs of
independent pricing services, costs of maintaining existence, costs
attributable to investor services (including, without limitation, telephone
and personnel expenses), costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing stockholders, costs of stockholders' reports and
meetings, and any extraordinary expenses.
D. BROKERAGE. The Subadviser will select brokers and dealers to effect all
orders for the purchase and sale of Subadviser Assets. In selecting brokers
or dealers to execute transactions on behalf of the Subadviser Assets of
the Fund, the Subadviser will seek the best overall terms available. In
assessing the best overall terms available for any transaction, the
Subadviser will consider factors it deems relevant, including, without
limitation, the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer and the reasonableness of the commission, if any, for the specific
transaction and on a continuing basis. In selecting brokers or dealers to
execute a particular transaction, and in evaluating the best overall terms
available, the Subadviser is authorized to consider the brokerage and
research services (within the meaning of Section 28(e) of the Securities
Exchange Act of 1934, as
amended) provided to the Fund and/or other accounts over which the
Subadviser exercises investment discretion. Until permitted by rule or
order of the SEC, Subadviser will not engage in principal transactions with
any affiliate of the Adviser or of any other subadviser to the Fund, and
will engage in agency transactions with such affiliates only in accordance
with all applicable rules and regulations. Subadviser will provide a list
of its affiliates to Adviser, as such may be amended from time to time.
Adviser will provide to Subadviser a list of affiliated brokers and dealers
of the Adviser and of each other subadviser to the Fund.
E. AGGREGATION OF ORDERS. On occasions when the Subadviser deems the
purchase or sale of a security to be in the best interest of the Subadviser
Assets as well as other clients of the Subadviser, the Subadviser to the
extent permitted by applicable laws and regulations, may, but shall be
under no obligation to, aggregate the orders for securities to be purchased
or sold. In such event, allocation of the securities so purchased or sold,
as well as the expenses incurred in the transaction, will be made by the
Subadviser in the manner the Subadviser considers to be the most equitable
and consistent with its fiduciary obligations to the Subadviser Assets of
the Fund and to its other clients over a period of time. The Adviser
recognizes that, in some cases, the Subadviser's allocation procedure may
limit the size of the position that may be acquired or sold for the
Subadviser Assets.
F. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Subadviser hereby agrees that all records which it
maintains for the Subadviser Assets of the Fund are the property of the
Trust and further agrees to surrender promptly to the Trust copies of any
of such records upon the Fund's or the Adviser's request, provided,
however, that Subadviser may retain copies of any records to the extent
required for it to comply with applicable laws. The Subadviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940
Act the records relating to its activities hereunder required to be
maintained by Rule 31a-1 under the 1940 Act and to preserve the records
relating to its activities hereunder
required by Rule 204-2 under the Advisers Act for the period specified in
said Rule. Notwithstanding the foregoing, Subadviser has no responsibility
for the maintenance of the records of the Fund, except for those related to
the Subadviser Assets.
G. SUBADVISER COMPLIANCE RESPONSIBILITIES. The Subadviser and the Adviser
acknowledge that the Subadviser is not the compliance agent for the Fund,
and does not have access to all of the Trust's books and records necessary
to perform certain compliance testing. However, to the extent that the
Subadviser has agreed to perform the services specified in this Agreement,
the Subadviser shall perform compliance testing with respect to the
Subadviser Assets based upon information in its possession and upon written
information and reasonable written instructions received from the Adviser
or the Trust's Administrator and shall not be held in breach of this
Agreement so long as it performs in accordance with such information and
instructions. The Subadviser shall not be responsible for the Fund being in
violation of any applicable law or regulation or investment policy or
restriction applicable to the Fund as a whole or for the Fund's failure to
qualify as a regulated investment company under the Code if the Subadviser
Assets comply with the applicable laws, regulations, investment policies or
restrictions and would qualify as a regulated investment company if the
Subadviser Assets were deemed a separate series of the Trust. The Adviser
shall or shall cause the Trust's Administrator to promptly provide the
Subadviser with copies of the Trust's Articles of Incorporation, By-Laws,
current Prospectus and any written policies or procedures adopted by the
Board applicable to the Fund and any amendments or revisions thereto.
Subadviser shall supply such reports or other documentation as reasonably
requested from time to time by the Adviser to evidence Subadviser's
compliance with such Prospectus, policies or procedures applicable to the
Subadviser Assets. Adviser agrees that Subadviser shall not be charged with
knowledge of any such information until such information is received (in
written form) by Subadviser.
H. PROXY VOTING. The Subadviser shall use its good faith judgment in a
manner which it reasonably believes best serves the interests of the
Fund's shareholders to vote or abstain from voting all proxies
solicited by or with respect to the issuers of securities in the
Subadviser Assets. The Adviser shall cause to be forwarded to
Subadviser all proxy solicitation materials that Adviser receives.
Subadviser shall provide to the Advisor a summary of the votes cast.
I. USE OF NAMES. The Subadviser shall not use the name, logo,
insignia, or other identifying xxxx of the Trust or the Adviser or any
of their affiliates or any derivative or logo or trade or service xxxx
thereof, or disclose information related to the business of the
Adviser or any of its affiliates in any material in any manner not
approved prior thereto by the Adviser; provided, however, that the
Adviser shall approve all uses of its or the Trust's name and that of
their affiliates which are required by the SEC or a state securities
commission; and provided, further, that in no event shall such
approval be unreasonably withheld. The Adviser shall not use the name,
logo, insignia, or other identifying xxxx of the Subadviser or any of
its affiliates or any derivative or logo or trade or service xxxx
thereof, or disclose information related to the business of the
Subadviser or any of its affiliates in any material (including but not
limited to, any prospectus, sales literature or other material
relating to the Trust), in any manner not approved prior thereto by
the Subadviser; provided, however, that the Subadviser shall approve
all uses of its name which are required by the SEC or a state
securities commission; and provided, further that in no event shall
such approval be unreasonably withheld.
J. OTHER SUBADVISERS. With respect to any Fund, (i) the Subadviser
will not consult with any other subadviser to that Fund (including, in
the case of an offering of securities subject to Section 10(f) of the
1940 Act, any subadviser that is a principal underwriter or an
affiliated person of a principal underwriter of such offering)
concerning transactions for that Fund in securities or other assets,
except, in the case of transactions involving securities of persons
engaged in securities-
related businesses, for purposes of complying with the conditions of
paragraphs (a) and (b) of Rule 12d3-1 under the 1940 Act; and (ii) the
Subadviser will provide advice and otherwise perform services
hereunder exclusively with respect to the Subadviser Assets of that
Fund.
3. COMPENSATION OF SUBADVISER. The Adviser will pay the Subadviser, with respect
to each Fund on Appendix A attached hereto the compensation specified in
Appendix A. Such fees will be computed daily and paid monthly, calculated at an
annual rate based on the Subadviser Assets' average daily net assets as
determined by the Trust's accounting agent. Compensation for any partial period
shall be pro-rated based on the length of the period.
4. STANDARD OF CARE. In rendering its services described in this Agreement, the
Subadviser shall observe a standard of care no lower than the standard it
observes when providing such services to its other customers or in respect of
its own assets. Except as may otherwise be required by the 1940 Act or the rules
thereunder or other applicable law, 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
Adviser or their shareholders, in connection with the matters to which this
Agreement relates, except a loss resulting from Subadviser's willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties hereunder or from reckless disregard by it of its obligations and duties
under this Agreement.
5. INDEMNIFICATION.
A. The Adviser agrees to indemnify and hold harmless the Sub-Adviser from
and against any and all claims, losses, liabilities or damages (including
reasonable attorneys' fees and other related expenses) ("Losses"), howsoever
arising, from or in connection with this Agreement or the performance by the
Sub-Adviser of its duties hereunder; provided however that the Adviser will not
indemnify or hold harmless the Subadviser for Losses resulting from the
Subadviser's willful misfeasance, bad faith or gross negligence in the
performance of its duties or from the Subadviser's reckless disregard of its
obligations and duties under this Agreement.
B. The Subadviser agrees to indemnify and hold harmless the Adviser from
and against any and all Losses resulting from the Subadviser's willful
misfeasance, bad faith, or gross negligence in the performance of, or from
reckless disregard of, the Subadviser's obligations and duties under this
Agreement; ; provided however that the Subadviser will not indemnify or hold
harmless the Adviser for Losses resulting from the Adviser's willful
misfeasance, bad faith or gross negligence in the performance of its duties or
from the Adviser's reckless disregard of its obligations and duties under this
Agreement.
6. NON-EXCLUSIVITY. The services of the Subadviser to the Fund and the Trust are
not to be deemed to be exclusive, and the Subadviser and its affiliates shall be
free to render investment advisory or other services to others (including other
investment companies) and to engage in other activities. It is understood and
agreed that the directors, officers, and employees of the Subadviser are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors,
trustees, or employees of any other firm or corporation, including other
investment companies. Adviser acknowledges that Subadviser or its affiliates may
give advice and take actions in the performance of its duties to clients which
differ from the advice, or the timing and nature of actions taken, with respect
to other clients' accounts or employee accounts which may invest in some of the
same securities recommended to advisory clients. In addition, advice provided by
the Subadviser may differ from advice given by its affiliates.
7. MAINTENANCE OF INSURANCE. During the term of this Agreement and for a period
of one year after the termination hereof, Subadviser will maintain comprehensive
general liability coverage and will carry a fidelity bond covering it and each
of its employees and authorized agents with limits of not less than those
considered commercially reasonable and appropriate under current industry
practices.
8. CONFIDENTIALITY. Each party to this Agreement shall keep confidential any
nonpublic information concerning the other party and will not use or disclose
such information for any purpose other than the performance of its
responsibilities and duties hereunder, unless the non-disclosing party has
authorized in writing such disclosure or if such disclosure is expressly
required or requested by applicable federal or state regulatory authorities.
Nonpublic information shall not include information a party to this Agreement
can clearly establish was (a) known to the party prior to this Agreement and in
possession of the receiving party who in good faith believes that such
information is without any obligation of confidentiality; (b) rightfully
acquired by the party from third parties whom the party reasonably believes are
not under an obligation of confidentiality to the other party to this Agreement;
(c) placed in public domain without fault of the party or its affiliates; or (d)
independently developed by the party without reference or reliance upon the
nonpublic information.
9. TERM OF AGREEMENT. This Agreement shall become effective as of the date of
its execution and shall continue in effect for a period of two years from the
date of execution. Thereafter, this Agreement shall continue automatically for
successive annual periods, provided such continuance is specifically approved at
least annually by (i) the Board or (ii) a vote of a "majority" (as defined in
the 0000 Xxx) of the Fund's outstanding voting securities, provided that in
either event the continuance also is approved by a majority of the Board who are
not "interested persons" (as defined in the 0000 Xxx) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. This Agreement is terminable, without penalty, on 60 days'
written notice, by the Adviser, by the Board, by vote of holders of a majority
of the Fund's shares or by the Subadviser, and will terminate five business days
after the Subadviser receives written notice of the termination of the Advisory
Agreement between the Trust and the Adviser. This Agreement also will terminate
automatically in the event of its assignment (as defined in the 0000 Xxx) by
either party without the prior written consent of the other party, expect that
Subadviser may enter into arrangements with its affiliates to better enable the
Subadviser to fulfill its obligations under this Agreement for the provision of
certain personnel and facilities to the Subadviser, provided, however, that
investment decisions will be made by the Subadviser.
10. REPRESENTATIONS OF SUBADVISER. The Subadviser represents, warrants, and
agrees as follows:
A. The Subadviser: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement;
(iii) has met, and will continue to meet for so long as this Agreement
remains in effect, any other applicable federal or state requirements, or
the applicable requirements of any regulatory or industry self-regulatory
organization, necessary to be met in order to perform the services
contemplated by this Agreement; (iv) has the authority to enter into and
perform the services contemplated by this Agreement; and (v) will promptly
notify the Adviser of the occurrence of any event that would disqualify the
Subadviser from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.
B. The Subadviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and, if it has not already
done so, will provide the Adviser and the Trust with a copy of such code of
ethics. On at least an annual basis, the Subadviser will comply with the
reporting requirements of Rule 17j-1, which may include (i) certifying to
the Adviser that the Subadviser and its Access Persons have complied with
the Subadviser's Code of Ethics with respect to the Subadviser Assets and
(ii) identifying any material violations which have occurred with respect
to the Subadviser Assets.
C. The Subadviser has provided the Adviser and the Trust with a copy of its
Form ADV as most recently filed with the SEC and hereafter will furnish a
copy of its annual amendment to the Adviser. The Adviser acknowledges
receipt of the Subadviser's Form ADV more than 48 hours prior to the
execution of this Agreement.
11. PROVISION OF CERTAIN INFORMATION BY SUBADVISER. The Subadviser will promptly
notify the Adviser (1) in the event the SEC or other governmental authority has
placed limitations upon its activities, functions or operations; suspended or
revoked its registration, if any, as an investment adviser; or has commenced
formal legal proceedings or a formal investigation that may result in any of
these actions and (2) upon having a reasonable basis for believing that the Fund
has ceased to qualify or might not qualify as
a regulated investment company under Subchapter M of the Code. The Subadviser
further agrees to notify the Adviser promptly of any material fact known to the
Subadviser respecting or relating to the Subadviser that is not contained in the
Prospectus, and is required to be stated therein or necessary to make the
statements therein not misleading, or of any statement contained therein that
becomes untrue in any material respect. As reasonably requested by the Adviser
or the Fund and to the extent consistent with the scope of Subadviser's
obligations and responsibilities contained in this Agreement, Subadviser will
cooperate to provide reasonable assistance to Adviser or the Fund in connection
with Adviser's or Fund's compliance with the Xxxxxxxx-Xxxxx Act and the rules
and regulations promulgated by the SEC thereunder.
12. PROVISION OF CERTAIN INFORMATION BY THE ADVISER. The Adviser will promptly
notify the Subadviser (1) in the event that the SEC or other governmental
authority has placed limitations upon either of their activities, functions, or
operations; suspended or revoked the Adviser's registration as an investment
adviser; or has commenced proceedings or a formal investigation that may result
in any of these actions and (2) upon having a reasonable basis for believing
that the Fund has ceased to qualify or might not qualify as a regulated
investment company under Subchapter M of the Code.
13. AMENDMENT OF AGREEMENT. No provision of this Agreement may be changed,
waived, discharged, or terminated orally, but only by an instrument in writing
signed by both parties.
14. MISCELLANEOUS.
A. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of New York, without giving effect to the conflicts of
laws principles thereof, and with the 1940 Act. To the extent that the
applicable laws of the State of New York conflict with the applicable
provisions of the 1940 Act, the latter shall control.
B. CAPTIONS. The Captions contained 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.
C. ENTIRE AGREEMENT. This Agreement represents the entire agreement and
understanding of the parties hereto and shall supersede any prior
agreements between the parties relating to the subject matter hereof.
D. DEFINITIONS. Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the
United States courts or, in the absence of any controlling decision of any
such court, by rules, releases or orders of the SEC validly issued pursuant
to the Act. As used in this Agreement, the terms "majority of the
outstanding voting securities," "affiliated person," "interested person,"
"assignment," "broker," "investment adviser," "net assets," "sale," "sell,"
and "security" shall have the same meaning as such terms have in the 1940
Act, subject to such exemptions as may be granted by the SEC by any rule,
release or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Agreement is made less
restrictive by a rule, release, or order of the SEC, whether of special or
general application, such provision shall be deemed to incorporate the
effect of such rule, release, or order.
NOTICES. Any notice herein required is to be in writing and is deemed to
have been given to Subadviser or Adviser upon receipt of the same at their
respective addresses set forth below. All written notices required or
permitted to be given under this Agreement will be delivered by personal
service, by postage mail return receipt requested or by facsimile machine
or similar means of delivery that provide evidence of receipt. All notices
to Adviser shall be sent to: X.X. Xxxxxx Investment Management Inc, 000
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx Xxxxxxxx.
All notices to Subadviser shall be sent to: Xxx Xxxxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx, 00000, Attention: Xxxx Xxxxxxx.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the dates and year
written below.
X.X. XXXXXX INVESTMENT MANAGEMENT INC.
Attest: By:
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(Title)
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Date:
UBS GLOBAL ASSET MANAGEMENT (NEW YORK) INC.
ttest: By:
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(Title)
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Date:
APPENDIX A
FEE SCHEDULE
For the services provided by Subadviser to the Subadviser Assets, pursuant to
the attached Investment Sub-Advisory Agreement, the Adviser will pay the
Subadviser a fee, computed daily and payable monthly, based on the average daily
net assets of the Subadvisory Assets at the following annual rates of the
average daily net assets of the Subadviser Assets as determined by the Trust's
accounting agent:
FUND RATE
JPMorgan Multi-Manager Small Cap Growth Fund 0.55%
