SUB-ADVISORY AGREEMENT
Exhibit (d)(28)
This SUB-ADVISORY AGREEMENT is made this 1st day of April, 2013, by and between Financial Investors Trust (the “Trust”), on behalf of its series, Redmont Resolute Fund I/II (“Client”), Highland Associates, Inc. (“Adviser”), and Xxxxxx Investments, L.P., a Pennsylvania limited partnership (“Xxxxxx”).
1. Appointment of Manager. Client and Adviser hereby appoint Xxxxxx to manage certain assets in accordance with the terms of this Agreement. Xxxxxx hereby accepts such appointment. Client has appointed a custodian or prime broker to take and have possession of the assets to be managed by Xxxxxx hereunder (the “Account”). Client shall promptly notify custodian/prime broker of the appointment of Xxxxxx as investment manager of the Account. Xxxxxx shall not act as custodian for, or have possession of any assets of, the Account. Xxxxxx shall provide such reports regarding the Account as are agreed upon by the parties from time to time.
2. Investment of Assets. Subject to the supervision and direction of the Board of Trustees of the Client and Highland Associates, Xxxxxx shall have sole discretion to invest the assets in the Account without prior consultation with Client, provided, however, Xxxxxx shall manage the Account in accordance with any objectives, guidelines or limitations set forth in the then-current prospectus and statement of additional information for the Client. Assets are defined by Client and/or custodian/prime broker at inception of the Account, as well as any additions or withdrawals as notified in writing by Client and/or custodian/prime broker. Xxxxxx will keep the Trust and the Adviser informed of developments materially affecting the Account, and will, on its own initiative, furnish the Trust from time to time with whatever information Xxxxxx believes
is appropriate for this purpose, and make available, upon reasonable advance request, its officers and employees for discussions relating to the Account with the Trust and/or the Adviser .
3. Brokerage. Xxxxxx shall have authority to select brokers, dealers and other firms to purchase and sell assets of the Account and may combine orders for the Account with orders for other accounts under management. When orders are placed, Xxxxxx shall issue suitable instructions to the custodian/prime broker with respect to delivery and payment.
Brokers shall be selected with a view to obtaining best price and execution of transactions for the Account, provided that Xxxxxx will not be deemed to have acted unlawfully, or to have breached a fiduciary duty hereunder or under state or federal law, solely by reason of its having caused the Account to pay a member of an exchange, a broker, or dealer a commission for effecting a securities transaction in excess of the amount of commission another member of an exchange, broker, or dealer would have charged for effecting that transaction, if Xxxxxx determined in good faith that such amount of commission was reasonable in relation to the value of the brokerage or research services provided to Xxxxxx by such member, broker or dealer, viewed in terms of either that particular transaction or Xxxxxx’x overall responsibilities with respect to the accounts as to which Xxxxxx exercises investment discretion.
4. Records. Xxxxxx will maintain and preserve all accounts, books and records with respect to the Account as are required of an investment adviser of a registered investment company pursuant to the Investment Company Act of 1940, as amended (the “1940 Act”), and the Investment Advisers Act of 1940 (the “Advisers
Act”) and the rules thereunder and shall file with the Securities and Exchange Commission all forms pursuant to Sections 13F and 13G of the Securities Exchange Act of 1934, with respect to its duties as are set forth herein. The records relating to the services provided under this Agreement shall be the property of the Client.
5. Fees. As compensation for its services under this Agreement, Adviser shall pay Xxxxxx a fee after the end of each calendar quarter based upon the total market value of the Account as hereinafter set forth. The fee shall be paid at the rate set forth on Schedule “A” attached hereto and made a part hereof.
The market value of the Account shall be determined as of the last day when the New York Stock Exchange is open for business of each calendar quarter during the term of this Agreement and as of the date of termination of this Agreement. The rate of fee set forth on Schedule “A” shall be applied to such market value, prorated on a daily basis over the portion of the calendar quarter that this Agreement was in effect. If, during any calendar quarter after the date hereof, Client allocates additional assets to, or withdraws a portion of the assets from, the Account then the fee for such quarter with respect to the additional assets, or in the case of a withdrawal, the total market value of the withdrawn assets as of the date of withdrawal, shall be prorated based on the number of days during such quarter that such assets were part of the Account, unless the parties shall agree otherwise in writing.
Xxxxxx shall calculate the market value of the Account at the times required herein in accordance with its normal practices and procedures and shall provide Adviser with a report setting forth the value upon which each fee invoice hereunder is based. Adviser shall pay each fee invoice within thirty (30) days after receipt thereof. Xxxxxx shall
reconcile its calculation of the total market value of the Account used for purposes of calculating its fee hereunder with the report of the custodian/prime broker setting forth the custodian/prime broker’s calculation of such market value. If, as a result of such reconciliation, it is determined that Xxxxxx’x fee was based on an erroneous calculation of the market value of the Account, an appropriate adjustment shall be made in the fee to be billed for the following calendar quarter or upon termination of this Agreement, whichever occurs first.
6. Expenses. Xxxxxx will pay all expenses incurred in performing its investment advisory services under this Agreement, including compensation of and office space for officers and employees of Xxxxxx connected with management of the Account.
7. Liability. Xxxxxx shall not be liable for any loss incurred by the Client or the Account provided Xxxxxx has acted in good faith and with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent investor acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, nor shall Xxxxxx be responsible for any loss incurred by reason of any act or omission of any bank, broker, the custodian/prime broker or any administrator, trustee or other person or organization. Notwithstanding the foregoing, Client shall not be deemed to have waived any right which, under applicable law, cannot be waived.
8. Non-Exclusive Contract. The investment management services provided by Xxxxxx are not exclusive and Client and Adviser acknowledge that Xxxxxx may perform similar services for others. Xxxxxx will use its best efforts to allocate investment
opportunities among its clients in an equitable manner. Further, Client and Adviser understands the investment action taken for Client and other clients of Xxxxxx may differ.
9. Voting of Portfolio Securities. Client shall use its best efforts to deliver to Xxxxxx all proxies received by it or by others on its behalf on a timely basis. Xxxxxx is authorized to vote on behalf of the Client any proxies received by Xxxxxx relating to securities held in the Account. Xxxxxx will follow the proxy voting policy set forth on Schedule “B” attached hereto and made a part hereof.
10. Representations. Xxxxxx represents that (i) it is duly registered with the Securities and Exchange Commission pursuant to the Advisers Act, as amended, (ii) it has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act, as amended and Rule 204A-1 under the Advisers Act, as amended, and will provide the Adviser and the Client with a copy of such code of ethics, together with evidence of its adoption and (iii) it will maintain an appropriate level of errors and omissions or professional liability insurance coverage for the duration of this Agreement. Client acknowledges receipt of a copy of Part 2A and 2B of Xxxxxx’x current Form ADV at least forty-eight (48) hours prior to execution of this Agreement. Adviser represents and confirms that the employment of Xxxxxx is authorized by the governing documents relating to the Account and that:
(i) this Agreement has been duly authorized by appropriate action and by duly authorized persons and when executed and delivered will be legally binding upon Client and Adviser in accordance with its terms; and
(ii) Adviser will deliver to Xxxxxx evidence of such authority as Xxxxxx may reasonably require, whether by way of a certified resolution or otherwise.
11. Non-Confidentiality of Performance Results. Client agrees that Xxxxxx may inform others that Client is a client of Xxxxxx and that Xxxxxx may provide others with composite performance results related to Client’s Account without disclosing the specific performance results of the Client’s Account, provided that any such disclosure shall be made in accordance with any portfolio holdings disclosure policy applicable to Client.
12. Applicable Law. This Agreement shall be governed by the laws of the State of New York, except to the extent preempted by federal law.
13. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements or contemporaneous or agreements with respect to such subject matter. This Agreement may not be modified or amended in any manner except by a written agreement signed by the parties hereto.
14. Notices. Any notice provided for or required hereunder shall be in writing and sent to the person and address indicated below or to such other person or address as the respective party may designate by notice hereunder.
15. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original of the same Agreement, but all of which together shall constitute one Agreement.
16. Commencement. Xxxxxx shall commence providing the services under this Agreement on April 1, 2013.
17. Termination. This Agreement shall remain in force for an initial term of two (2) years and from year to year thereafter, but only so long as such continuance is specifically approved at least annually by the vote of a majority of the Trustees of the
Client who are not interested persons, cast in person at a meeting called for the purpose of voting on such approval and by a vote of the Trustees or of a majority of the outstanding voting securities of the Account(s). The requirement that continuance of this Agreement be specifically approved at least annually shall be construed in a manner consistent with the 1940 Act and the rules and regulations thereunder. This Agreement may be terminated with respect to any Account at any time, without the payment of any penalty, by a vote of the majority of the Trustees of the Client, by the vote of a majority of the outstanding voting securities of such Account, or by the Adviser on sixty (60) days’ prior written notice to the Sub-Adviser, and the Adviser as appropriate. In addition, this Agreement may be terminated with respect to any Account by the Sub-Adviser upon sixty (60) days written notice to the Adviser. This Agreement will automatically terminate, without the payment of any penalty in the event the Investment Advisory Agreement between the Investment Adviser and the Client with respect to the Accounts t is assigned (as defined in the 0000 Xxx) or terminates for any other reason. This Agreement will also terminate upon written notice to the other party that the other party is in material breach of this Agreement, unless the other party in material breach of this Agreement cures such breach to the reasonable satisfaction of the party alleging the breach within thirty (30) days after written notice.
18. Amendment. Except to the extent permitted by the 1940 Act or the rules or regulations thereunder or pursuant to exemptive relief granted by the SEC, this Agreement may be amended by the parties with respect to any Account only if such amendment, if material, is specifically approved by the vote of a majority of the
outstanding voting securities of such Account (unless such approval is not required by Section 15 of the 1940 Act as interpreted by the SEC or its staff or unless the SEC has granted an exemption from such approval requirement) and by the vote of a majority of the Trustees of the Client who are not interested persons, cast in person at a meeting called for the purpose of voting on such approval.
19. Assignment. The Sub-Adviser shall not assign this Agreement. Any assignment (as that term is defined in the 0000 Xxx) of this Agreement shall result in the automatic termination of this Agreement. Notwithstanding the foregoing, no assignment shall be deemed to result from any changes in the directors, officers or employees of the Sub-Adviser except as may be provided to the contrary in the 1940 Act or the rules or regulations thereunder.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed this Agreement the day first above written.
| FINANCIAL INVESTORS TRUST, | XXXXXX INVESTMENTS, L.P. | |||||||||
| on behalf of Redmont Resolute Fund I and Redmont Resolute Fund II |
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| By: | /s/ Xxxxxxxx X. Xxxxxx |
By: | /s/ Xxxxx X. XxXxxxx | |||||||
| Name: Xxxxxxxx X. Xxxxxx | Name: Xxxxx X. XxXxxxx | |||||||||
| Title: Treasurer | Title: General Counsel and CCO | |||||||||
| Attest: | Attest: | |||||||||
| By: | /s/ Xxxxx X. Xxxxxx |
By: /s/ Xxxxxx Xxxxx, Xx. | ||||||||
| Authorized Officer | Authorized Officer | |||||||||
| Designee for Notice: | Designee for Notice: | |||||||||
| Financial Investors Trust | Xxxxxx Investments, L.P. | |||||||||
| 0000 Xxxxxxxx, Xxxxx 0000 | 0000 Xxxxxxxxx Xxxxx, Xxxxx 000 | |||||||||
| Xxxxxx, XX 00000 | Xxxxxx, XX 00000 | |||||||||
| Attn: Secretary | Attn: Xxxxx X. XxXxxxx, Esq. | |||||||||
| HIGHLAND ASSOCIATES, INC. | ||||||||||
| By: | /s/ Xxxxxxx X. Xxxxx |
|||||||||
| Name: Xxxxxxx X. Xxxxx | ||||||||||
| Title: Principal | ||||||||||
| Attest: | ||||||||||
| By: | /s/ Xxxxxxx Xxxxx |
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SCHEDULE A
INVESTMENT MANAGEMENT FEES
Annual fee as a percent of market value = 1.20%
SCHEDULE B
PROXY VOTING POLICY
XXXXXX INVESTMENTS, X.X.
XXXXXX INVESTMENT MANAGEMENT LLC
Proxy Voting Policy and Procedures
Xxxxxx Investments, L.P., as well as its investment advisory affiliate, Xxxxxx Investment Management LLC (collectively, “Xxxxxx”), act as fiduciaries in relation to their clients and the assets entrusted by them to their management. Where the assets placed in Xxxxxx’x care include shares of corporate stock, and except where the client has expressly reserved to itself or another party the duty to vote proxies, it is Xxxxxx’x duty as a fiduciary to vote all proxies relating to such shares.
Duties with Respect to Proxies:
Xxxxxx has an obligation to vote all proxies appurtenant to shares of corporate stock owned by its client accounts in the best interests of those clients. In voting these proxies, Xxxxxx may not be motivated by, or subordinate the client’s interests to, its own objectives or those of persons or parties unrelated to the client. Xxxxxx will exercise all appropriate and lawful care, skill, prudence and diligence in voting proxies, and shall vote all proxies relating to shares owned by its client accounts and received by Xxxxxx. Xxxxxx shall not be responsible, however, for voting proxies that it does not receive in sufficient time to respond.
Delegation to Proxy Voter Services:
In order to carry out its responsibilities in regard to voting proxies, Xxxxxx must track all shareholder meetings convened by companies whose shares are held in Xxxxxx client accounts, identify all issues presented to shareholders at such meetings, formulate a principled position on each such issue and ensure that proxies pertaining to all shares owned in client accounts are voted in accordance with such determinations.
Consistent with these duties, Xxxxxx has delegated certain aspects of the proxy voting process to Institutional Shareholder Services, and its Proxy Voter Services (PVS) subsidiary. PVS is a separate investment adviser registered under the Investment Advisers Act of 1940, as amended. Under an agreement entered into with Xxxxxx, PVS has agreed to vote proxies in accordance with recommendations developed by PVS and overseen by Xxxxxx, except in those instances where Xxxxxx has provided it with different direction.
PVS’s voting recommendations typically favor the interests of the shareholder/owner rather than a company’s management. Xxxxxx’x long-standing practice has been to follow voting guidelines of this type. Although Xxxxxx has not chosen PVS or its services for this reason, its engagement of PVS could be interpreted as helpful to maintaining or attracting clients or potential clients
supportive of shareholder/owner rights. In this respect its engagement of PVS potentially presents a conflict of interest for Xxxxxx, which has a number of clients concerned with shareholder/owner rights, including but not limited to public plans and unions.
It should be emphasized that any client or potential client of Xxxxxx need not delegate the voting of proxies to Xxxxxx (and thus indirectly to PVS as overseen by Xxxxxx), and may instead direct its custodian or another party to undertake this responsibility. Alternatively, a client or potential client may direct Xxxxxx to vote following guidelines it selects rather than following the Xxxxxx selected PVS guidelines if its preference is to follow voting guidelines that typically favor the interests of company management. Xxxxxx will provide upon request a copy of the current proxy voting guidelines followed by PVS to assist you in this evaluation.
Review and Oversight:
Xxxxxx has reviewed the methods used by PVS to identify and track shareholder meetings called by publicly traded issuers throughout the United States and around the globe. Xxxxxx has satisfied itself that PVS operates a system reasonably designed to identify all such meetings and to provide Xxxxxx with timely notice of the date, time and place of such meetings. Xxxxxx has further reviewed the principles and procedures employed by PVS in making recommendations on voting proxies on each issue presented, and has satisfied itself that PVS’s recommendations are: (i) based upon an appropriate level of diligence and research, and (ii) designed to further the interests of shareholders and not serve other unrelated or improper interests. Xxxxxx, either directly or through its duly-constituted Proxy Committee, shall review its determinations as to PVS at least annually.
Notwithstanding its belief that PVS’s recommendations are consistent with the best interests of shareholders and appropriate to be implemented for Xxxxxx’x client accounts, Xxxxxx has the right and the ability to depart from a recommendation made by PVS as to a particular vote, slate of candidates or otherwise, and can direct PVS to vote all or a portion of the shares owned for client accounts in accordance with Xxxxxx’x preferences. PVS is bound to vote any such shares subject to that direction in strict accordance with all such instructions. Xxxxxx, through its Proxy Committee, reviews on a regular basis the overall shareholder meeting agenda, and seeks to identify shareholder votes that warrant further review based upon either (i) the total number of shares of a particular company stock that Xxxxxx holds for its clients accounts, or (ii) the particular subject matter of a shareholder vote, such as board independence or shareholders’ rights issues. In determining whether to depart from a PVS recommendation, the Xxxxxx Proxy Committee looks to its view of the best interests of shareholders, and provides direction to PVS only where in Xxxxxx’x view departing from the PVS recommendation appears to be in the best interests of Xxxxxx’x clients as shareholders. The Proxy Committee keeps minutes of its determinations in this regard.
The Xxxxxx Proxy Committee has only very infrequently departed from the PVS recommendation, and clients should expect that the PVS recommendation will be followed for the vast majority of votes.
Conflicts of Interest:
Xxxxxx stock is not publicly traded, and Xxxxxx is not otherwise affiliated with any issuer whose shares are available for purchase by client accounts. Further, no Xxxxxx affiliate currently
provides brokerage, underwriting, insurance, banking or other financial services to issuers whose shares are available for purchase by client accounts.
Where a client of Xxxxxx is a publicly traded company in its own right, Xxxxxx may be restricted from acquiring that company’s securities for the client’s benefit. Further, while Xxxxxx believes that any particular proxy issues involving companies that engage Xxxxxx, either directly or through their pension committee or otherwise, to manage assets on their behalf, generally will not present conflict of interest dangers for the firm or its clients, in order to avoid even the appearance of a conflict of interest, the Proxy Committee will determine, by surveying the Firm’s employees or otherwise, whether Xxxxxx, an affiliate or any of their officers has a business, familial or personal relationship with a participant in a proxy contest, the issuer itself or the issuer’s pension plan, corporate directors or candidates for directorships. In the event that any such relationship is found to exist, the Proxy Committee will take appropriate steps to ensure that any such relationship (or other potential conflict of interest), does not influence Xxxxxx’x or the Committee’s decision to provide direction to PVS on a given vote or issue. Further to that end, Xxxxxx will adhere to all recommendations made by PVS in connection with all shares issued by such companies and held in Xxxxxx client accounts, and, absent extraordinary circumstances that will be documented in writing, will not subject any such proxy to special review by the Proxy Committee.
As discussed above, Xxxxxx’x selection of PVS may be considered a potential conflict of interest. Xxxxxx will in all instances seek to resolve any conflicts of interests that may arise prior to voting proxies or selecting a proxy voting agent/research provider in a manner that reflects the best interests of its clients.
Securities Lending:
Xxxxxx will generally not vote nor seek to recall in order to vote shares on loan in connection with client administered securities lending programs, unless it determines that a vote is particularly significant. Seeking to recall securities in order to vote them even in these limited circumstances may nevertheless not result in Xxxxxx voting the shares because the securities are unable to be recalled in time from the party with custody of the securities, or for other reasons beyond Xxxxxx’x control. Clients that participate in securities lending programs should expect that Xxxxxx will not frequently vote or seek to recall in order to vote shares that are on loan.
Obtaining Proxy Voting Information:
To obtain information on how Xxxxxx voted proxies or for a copy of current PVS guidelines, please contact:
Xxxxxx Xxxx, Director of Operations and Technology Administration
c/x Xxxxxx Investments, L.P.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Recordkeeping:
Xxxxxx shall retain its (i) proxy voting policies and procedures; (ii) proxy statements received regarding client statements; (iii) records or votes it casts on behalf of clients; (iv) records of
client requests for proxy voting information, and (v) any documents prepared by Xxxxxx that are material in making a proxy voting decision. Such records may be maintained with a third party, such as PVS, that will provide a copy of the documents promptly upon request.
Adopted: July 1, 2003
Last revised: June 15, 2009
