XXXXXX FUNDS
SUB-MANAGEMENT CONTRACT
This Sub-Management Contract is dated as of February 27, 2014
between XXXXXX INVESTMENT MANAGEMENT, LLC, a Delaware limited
liability company (the Manager) and XXXXXX INVESTMENTS LIMITED, a
company organized under the laws of England and Wales (the Sub-
Manager).
WHEREAS, the Manager is the investment manager of each of the
investment companies registered under the United States Investment
Company Act of 1940, as amended, that are identified on Schedule A
hereto, as it may from time to time be amended by the Manager (the
Funds), and a registered investment adviser under the United States
Investment Advisers Act of 1940, as amended;
WHEREAS, the Sub-Manager is licensed as an investment manager
by the Financial Conduct Authority of the United Kingdom (the FCA);
and
WHEREAS, the Manager desires to engage the Sub-Manager from
time to time to manage a portion of certain of the Funds:
NOW THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-MANAGER.
(a) The Sub-Manager, at its expense, will furnish
continuously an investment program for that portion of any Fund the
management of which is allocated from time to time by the Manager
to the Sub-Manager (an Allocated Sleeve). The Manager shall, in its
sole discretion, determine which Funds will have an Allocated
Sleeve and the amount of assets allocated from time to time to each
such Allocated Sleeve; provided that, with respect to any Fund, the
Trustees of such Fund must have approved the use of the Sub-Manager
prior to the creation of an Allocated Sleeve for such Fund. The
Sub-Manager will determine what investments shall be purchased,
held, sold or exchanged by any Allocated Sleeve and what portion,
if any, of the assets of the Allocated Sleeve shall be held
uninvested and shall, on behalf of the Fund, make changes in the
Funds investments held in such Allocated Sleeve.
(b) The Manager may also, at its discretion, request the Sub-
Manager to provide assistance with purchasing and selling
securities for any Fund, including the placement of orders with
broker-dealers selected in accordance with Section 1(d), even if
the Manager has not established an Allocated Sleeve for such Fund.
(c) The Sub-Manager at its expense will furnish all necessary
investment and management facilities, including salaries of
personnel, required for it to execute its duties faithfully.
(d) The Sub-Manager shall place all orders for the purchase
and sale of portfolio investments for any Allocated Sleeve with
brokers or dealers selected by the Sub-Manager. In the selection of
such brokers or dealers and the placing of such orders, the Sub-
Manager shall use its best efforts to obtain for the related Fund
the most favorable price and execution available, except to the
extent it may be permitted to pay higher brokerage commissions for
brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable price and
execution available, the Sub-Manager, bearing in mind the Funds
best interests at all times, shall consider all factors it deems
relevant, including by way of illustration, price, the size of the
transaction, the nature of the market for the security, the amount
of the commission, the timing of the transaction taking into
account market prices and trends, the reputation, experience and
financial stability of the broker or dealer involved and the
quality of service rendered by the broker or dealer in other
transactions. Subject to such policies as the Trustees of the Funds
may determine, the Sub-Manager shall not be deemed to have acted
unlawfully or to have breached any duty created by this Contract or
otherwise solely by reason of its having caused a Fund to pay a
broker or dealer that provides brokerage and research services to
the Manager or the Sub-Manager an amount of commission for
effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged
for effecting that transaction, if the Sub-Manager determines in
good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that
particular transaction or its overall responsibilities with respect
to the Fund and to other clients of the Manager or the Sub-Manager
as to which the Manager or the Sub-Manager exercises investment
discretion. The Sub-Manager agrees that in connection with
purchases or sales of portfolio investments for any Fund, neither
the Sub-Manager nor any officer, director, employee or agent of the
Sub-Manager shall act as a principal or receive any commission
other than as provided in Section 3.
(e) The Sub-Manager shall not be obligated to pay any
expenses of or for the Manager or any Fund not expressly assumed by
the Sub-Manager pursuant to this Section 1.
(f) In the performance of its duties, the Sub-Manager will
comply with the provisions of the Agreement and Declaration of
Trust and By-Laws of each applicable Fund and such Funds stated
investment objectives, policies and restrictions, and will use its
best efforts to safeguard and promote the welfare of such Fund and
to comply with other policies which the Manager or the Trustees may
from time to time determine and shall exercise the same care and
diligence expected of the Manager.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees,
officers and employees of a Fund may be a shareholder, director,
officer or employee of, or be otherwise interested in, the Sub-
Manager, and in any person controlled by or under common control
with the Sub-Manager, and that the Sub-Manager and any person
controlled by or under common control with the Sub-Manager may have
an interest in such Fund. It is also understood that the Sub-
Manager and any person controlled by or under common control with
the Sub-Manager have and may have advisory, management, service or
other contracts with other organizations and persons, and may have
other interests and business.
3. COMPENSATION.
Except as provided below, the Manager will pay to the Sub-
Manager as compensation for the Sub-Managers services rendered, a
fee, computed and paid quarterly at the annual rate of 0.35% per
annum of average aggregate net asset value of the assets in equity
and asset allocation Allocated Sleeves and 0.40% per annum of
average aggregate net asset value of the assets in fixed income
Allocated Sleeves, except for fixed income Allocated Sleeves in
certain fixed income Funds enumerated as follows (with the per
annum fee provided in parentheses): Xxxxxx Money Market Liquidity
Fund (0.20%), Xxxxxx Short Term Investment Fund (0.20%), Xxxxxx
Money Market Fund (0.25%), Xxxxxx Tax Exempt Money Market Fund
(0.25%), Xxxxxx VT Money Market Fund (0.25%), Xxxxxx Short Duration
Income Fund (0.25%), Xxxxxx Short-Term Municipal Income Fund
(0.25%), Xxxxxx American Government Income Fund (0.25%), Xxxxxx
Income Fund (0.25%), Xxxxxx U.S. Government Income Trust (0.25%),
Xxxxxx VT American Government Income Fund (0.25%), and Xxxxxx VT
Income Fund (0.25%).
Such average net asset value shall be determined by taking an
average of all of the determinations of such net asset value during
a quarter at the close of business on each business day during such
quarter while this Contract is in effect. Such fee shall be payable
for each quarter within 30 days after the close of such quarter.
The Sub-Manager shall look only to the Manager for payment of its
fees. No Fund shall have any responsibility for paying any fees due
the Sub-Manager.
With respect to each of Xxxxxx High Income Securities Fund,
Xxxxxx Master Intermediate Income Trust and Xxxxxx Premier Income
Trust, the Manager will pay to the Sub-Manager as compensation for
the Sub-Managers services rendered, a fee, computed and paid
quarterly at the annual rate of 0.40% of Average Weekly Assets in
Allocated Sleeves. Average Weekly Assets means the average of the
weekly determinations of the difference between the total assets of
the Fund (including any assets attributable to leverage for
investment purposes) attributable to an Allocated Sleeve and the
total liabilities of the Fund (excluding liabilities incurred in
connection with leverage for investment purposes) attributable to
such Allocated Sleeve, determined at the close of the last business
day of each week, for each week which ends during the quarter. Such
fee shall be payable for each quarter within 30 days after the
close of such quarter. As used in this Section 3, leverage for
investment purposes means any incurrence of indebtedness the
proceeds of which are to be invested in accordance with the Funds
investment objective. For purposes of calculating Average Weekly
Assets, liabilities associated with any instruments or transactions
used to leverage the Funds portfolio for investment purposes
(whether or not such instruments or transactions are covered within
the meaning of the Investment Company Act of 1940 and the rules and
regulations thereunder, giving effect to any interpretations of the
Securities and Exchange Commission and its staff) are not
considered liabilities. For purposes of calculating Average Weekly
Assets, the total assets of the Fund will be deemed to include (a)
any proceeds from the sale or transfer of an asset (the Underlying
Asset) of the Fund to a counterparty in a reverse repurchase or
dollar roll transaction and (b) the value of such Underlying Asset
as of the relevant measuring date.
In the event that the Managers management fee from any of
Xxxxxx High Income Securities Fund, Xxxxxx Master Intermediate
Income Trust or Xxxxxx Premier Income Trust is reduced pursuant to
the investment management contract between such Fund and the
Manager because during any Measurement Period (as defined below)
the amount of interest payments and fees with respect to
indebtedness or other obligation of the Fund incurred for
investment leverage purposes, plus additional expenses attributable
to any such leverage for investment purposes, exceeds the portion
of the Funds net income and net short-term capital gains (but not
long-term capital gains) accruing during such Measurement Period as
a result of the fact that such indebtedness or other obligation was
outstanding during the Measurement Period, the fee payable to the
Sub-Manager with respect to such Fund shall be reduced in the same
proportion as the fee paid to the Manager with respect to such Fund
is so reduced. Measurement Period shall be any period for which
payments of interest or fees (whether designated as such or
implied) are payable in connection with any indebtedness or other
obligation of the Fund incurred for investment purposes.
If the Sub-Manager shall serve for less than the whole of a
quarter, the foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS
CONTRACT.
This Contract shall automatically terminate without the
payment of any penalty, in the event of its assignment; and this
Contract shall not be amended with respect to any Allocated Sleeve
unless such amendment be approved at a meeting by the vote, cast in
person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of the related Fund who are
not interested persons of such Fund or of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and
shall remain in full force and effect continuously thereafter
(unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) Either party hereto or, with respect to any Allocated
Sleeve, the related Fund may at any time terminate this Contract by
not more than sixty days nor less than thirty days written notice
delivered or mailed by registered mail, postage prepaid, to the
other party, or
(b) With respect to any Allocated Sleeve, if (i) the Trustees
of the related Fund or the shareholders by the affirmative vote of
a majority of the outstanding shares of such Fund, and (ii) a
majority of the Trustees of such Fund who are not interested
persons of such Fund or of the Manager, by vote cast in person at a
meeting called for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the
close of business on the anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later, or
(c) With respect to any Allocated Sleeve, automatically upon
termination of the Managers investment management contract with the
related Fund.
Action by a Fund under (a) above may be taken either (i) by
vote of a majority of its Trustees, or (ii) by the affirmative vote
of a majority of the outstanding shares of such Fund.
Termination of this Contract pursuant to this Section 5 will
be without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the affirmative vote of a
majority of the outstanding shares of a Fund means the affirmative
vote, at a duly called and held meeting of shareholders of such
Fund, (a) of the holders of 67% or more of the shares of such Fund
present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares
of such Fund entitled to vote at such meeting are present in person
or by proxy, or (b) of the holders of more than 50% of the
outstanding shares of such Fund entitled to vote at such meeting,
whichever is less.
For the purposes of this Contract, the terms affiliated
person, control, interested person and assignment shall have their
respective meanings defined in the United States Investment Company
Act of 1940 and the Rules and Regulations thereunder (the 1940
Act), subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act; the term
specifically approve at least annually shall be construed in a
manner consistent with the 1940 Act, and the Rules and Regulations
thereunder; and the term brokerage and research services shall have
the meaning given in the United States Securities Exchange Act of
1934 and the Rules and Regulations thereunder.
7. NON-LIABILITY OF SUB-MANAGER.
In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Sub-Manager, or reckless disregard of
its obligations and duties hereunder, the Sub-Manager shall not be
subject to any liability to the Manager, any Fund or to any
shareholder of any Fund, for any act or omission in the course of,
or connected with, rendering services hereunder.
8. ADDITIONAL PROVISIONS.
(a) The Sub-Manager represents that it is regulated by the
FCA in the conduct of its investment business. The Sub-Manager has
in operation a written procedure in accordance with FCA rules for
the effective consideration and proper handling of complaints from
customers. Any complaint by the Manager or any Fund should be sent
to the Compliance Officer of the Sub-Manager. The Manager and any
Fund is also entitled to make any complaints about the Sub-Manager
to the Financial Ombudsman Service established by the FCA. The
Manager and any Fund may also request a statement describing its
rights to compensation in the event of the Sub-Managers inability
to meet its liabilities.
(b) The Manager represents that it and each Fund are
Professional Customers in the meaning of the FCAs rules.
(c) Although each Fund is not a party hereto and shall have
no responsibility for the Managers or the Sub-Managers obligations
hereunder, each Fund is named as explicit third party beneficiary
of the parties agreements hereunder.
IN WITNESS WHEREOF, XXXXXX INVESTMENTS LIMITED and XXXXXX
INVESTMENT MANAGEMENT, LLC have each caused this instrument to be
signed in duplicate on its behalf by an officer duly authorized,
all as of the day and year first above written.
XXXXXX INVESTMENTS LIMITED
By:
/s/ Xxxxx Xxxxx
Xxxxx Xxxxx
XXXXXX INVESTMENT MANAGEMENT, LLC
By:
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Director of Trustee Relations and
Authorized Person
Schedule A
Effective February 27, 2014, unless otherwise noted
As amended as of November 20, 2014
Xxxxxx Xxxxxxxx Xxxxxx 000 Xxxx
Xxxxxx Absolute Return 300 Fund
Xxxxxx Absolute Return 500 Fund
Xxxxxx Absolute Return 700 Fund
Xxxxxx American Government Income Fund
Xxxxxx AMT-Free Municipal Fund
Xxxxxx Arizona Tax Exempt Income Fund
Xxxxxx Asia Pacific Equity Fund
Xxxxxx California Tax Exempt Income Fund
Xxxxxx Capital Spectrum Fund
Xxxxxx Capital Opportunities Fund
Xxxxxx Convertible Securities Fund
Xxxxxx Diversified Income Trust
Xxxxxx Dynamic Asset Allocation Balanced Fund
Xxxxxx Dynamic Asset Allocation Conservative Fund
Xxxxxx Dynamic Asset Allocation Equity Fund
Xxxxxx Dynamic Asset Allocation Growth Fund
Xxxxxx Dynamic Risk Allocation Fund
Xxxxxx Equity Income Fund
Xxxxxx Emerging Markets Equity Fund
Xxxxxx Emerging Markets Income Fund
Xxxxxx Europe Equity Fund
Xxxxxx Equity Spectrum Fund
Xxxxxx Floating Rate Income Fund
Xxxxxx Xxxxxx Balanced Fund
Xxxxxx Global Consumer Fund
Xxxxxx Global Dividend Fund
Xxxxxx Global Energy Fund
Xxxxxx Global Equity Fund
Xxxxxx Global Financials Fund
Xxxxxx Global Health Care Fund
Xxxxxx Global Income Trust
Xxxxxx Global Industrials Fund
Xxxxxx Global Natural Resources Fund
Xxxxxx Global Sector Fund
Xxxxxx Global Technology Fund
Xxxxxx Global Telecommunications Fund
Xxxxxx Global Utilities Fund
The Xxxxxx Fund for Growth and Income
Xxxxxx Growth Opportunities Fund
Xxxxxx High Income Securities Fund
Xxxxxx High Yield Advantage Fund
Xxxxxx High Yield Trust
Xxxxxx Income Fund
Xxxxxx Intermediate-Term Municipal Income Fund
Xxxxxx International Capital Opportunities Fund
Xxxxxx International Equity Fund
Xxxxxx International Value Fund
Xxxxxx International Growth Fund
Xxxxxx Investors Fund
Xxxxxx Low Volatility Equity Fund
Xxxxxx Managed Municipal Income Trust
Xxxxxx Massachusetts Tax Exempt Income Fund
Xxxxxx Master Intermediate Income Trust
Xxxxxx Michigan Tax Exempt Income Fund
Xxxxxx Minnesota Tax Exempt Income Fund
Xxxxxx Money Market Fund
Xxxxxx Money Market Liquidity Fund
Xxxxxx Mortgage Opportunities Fund (effective November 20, 2014)
Xxxxxx Mortgage Recovery Fund
Xxxxxx Multi-Cap Core Fund
Xxxxxx Multi-Cap Growth Fund
Xxxxxx Multi-Cap Value Fund
Xxxxxx Municipal Opportunities Trust
Xxxxxx New Jersey Tax Exempt Income Fund
Xxxxxx New York Tax Exempt Income Fund
Xxxxxx Ohio Tax Exempt Income Fund
Xxxxxx Pennsylvania Tax Exempt Income Fund
Xxxxxx Premier Income Trust
Xxxxxx Research Fund
Xxxxxx Retirement Income Fund Lifestyle 1
Xxxxxx Retirement Income Fund Lifestyle 2
Xxxxxx Retirement Income Fund Lifestyle 3
Xxxxxx RetirementReady 2055 Fund
Xxxxxx RetirementReady 2050 Fund
Xxxxxx RetirementReady 2045 Fund
Xxxxxx RetirementReady 2040 Fund
Xxxxxx RetirementReady 2035 Fund
Xxxxxx RetirementReady 2030 Fund
Xxxxxx RetirementReady 2025 Fund
Xxxxxx RetirementReady 2020 Fund
Xxxxxx RetirementReady 2015 Fund
Xxxxxx Short Term Investment Fund
Xxxxxx Short-Term Municipal Income Fund
Xxxxxx Small Cap Growth Fund
Xxxxxx Small Cap Value Fund
Xxxxxx Strategic Volatility Equity Fund
Xxxxxx Tax Exempt Income Fund
Xxxxxx Tax Exempt Money Market Fund
Xxxxxx Tax-Free High Yield Fund
Xxxxxx U.S. Government Income Trust
Xxxxxx Voyager Fund
Xxxxxx VT Absolute Return 500 Fund
Xxxxxx VT American Government Income Fund
Xxxxxx VT Capital Opportunities Fund
Xxxxxx VT Diversified Income Fund
Xxxxxx VT Equity Income Fund
Xxxxxx VT Xxxxxx Xxxxxx Balanced Fund
Xxxxxx VT Global Asset Allocation Fund
Xxxxxx VT Global Equity Fund
Xxxxxx VT Global Health Care Fund
Xxxxxx VT Global Utilities Fund
Xxxxxx VT Growth and Income Fund
Xxxxxx VT Growth Opportunities Fund
Xxxxxx VT High Yield Fund
Xxxxxx VT Income Fund
Xxxxxx VT International Equity Fund
Xxxxxx VT International Value Fund
Xxxxxx VT International Growth Fund
Xxxxxx VT Investors Fund
Xxxxxx VT Money Market Fund
Xxxxxx VT Multi-Cap Growth Fund
Xxxxxx VT Multi-Cap Value Fund
Xxxxxx VT Research Fund
Xxxxxx VT Small Cap Value Fund
Xxxxxx VT Voyager Fund
XXXXXX INVESTMENTS LIMITED
By: /s/ Xxxx X. XxXxxxxxx
Xxxx X. XxXxxxxxx
XXXXXX INVESTMENT MANAGEMENT, LLC
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Director of Trustee Relations and
Authorized Person
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Schedule A
(continued)
A-3
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A-1
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