EXHIBIT(d)(3)
INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN
XXX XXXXXX INVESTMENT ADVISORY CORP.
AND
XXXXXX XXXXXXX INVESTMENT MANAGEMENT COMPANY
THIS AGREEMENT is made as of this 11th day of August, 2003 by and
between XXX XXXXXX INVESTMENT ADVISORY CORP. ("VKIAC") a Delaware corporation,
and XXXXXX XXXXXXX INVESTMENT MANAGEMENT COMPANY (the "Local Manager"), a
company organized under the laws of Singapore.
WHEREAS, VKIAC acts as investment adviser to Xxx Xxxxxx Series Fund,
Inc. (the "Company") and each of its series identified at Schedule A (the
"Funds");
WHEREAS, the Local Manager has available a staff of experienced
investment personnel and facilities for providing investment sub-advisory
services to the Funds;
WHEREAS, the Local Manager is an investment adviser registered under
the Investment Advisers Act of 1940, as amended, and is willing to provide VKIAC
with investment advisory services on the terms and conditions hereinafter set
forth; and
WHEREAS, VKIAC and the Local Manager (jointly referred to as "the
Advisers") desire to enter into an agreement for the Local Manager to provide
sub-advisory services to the Company and to VKIAC with respect to the investment
of the assets of each of the Funds.
NOW THEREFORE it is mutually agreed:
1. INVESTMENT SUB-ADVISORY SERVICES.
(a) Investment Advice
(i) Effective on August 11, 2003, and subject to the overall
policies, control, direction and review of the Company's Directors and
VKIAC, the Local Manager shall manage the investment and reinvestment
of the assets of each of the Funds, continuously review, supervise and
administer the investment program of each of the Funds, determine in
its discretion the securities to be purchased or sold and the portion
of each Fund's assets to be held uninvested, to provide the Company
with records concerning the Local Manager's activities which the
Company is required to maintain, and to render regular reports to the
Company's officers and Board of Directors concerning the Local
Manager's discharge of the foregoing responsibilities.
(ii) Unless otherwise instructed by VKIAC or the Directors,
and subject to the provisions of this Agreement and to any guidelines
or limitations specified from time to time by VKIAC or by the
Directors, the Local Manager shall determine the securities to be
purchased and sold by the Funds and shall place orders for the
purchase, sale or exchange of securities for the Funds' accounts with
brokers or dealers and to that end the Local Manager is authorized to
give instructions to the custodian and any sub-custodian of the Company
as to deliveries of such securities, transfers of currencies and
payments of cash for the accounts of the Funds.
(iii) In performing these services, the Local Manager shall
adhere to each Fund's respective investment objective, policies,
restrictions and limitations as contained in its Prospectus, Statement
of Additional Information, the Company's Articles of Incorporation and
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the Company's By-Laws and shall comply with all statutory and
regulatory restrictions, limitations and requirements applicable to the
activity of the Company.
(iv) Unless otherwise instructed by VKIAC or the Directors,
and subject to the provisions of this Agreement and to any guidelines
or limitations specified from time to time by VKIAC or by the
Directors, the Local Manager shall have executed and performed on
behalf of and at the expense of the respective Funds:
(1) Purchases, sales, exchanges, conversions, and
placement or orders for execution; and
(2) Reporting of all transactions to VKIAC and to
other entities as directed by VKIAC or by the Directors.
(v) The Local Manager shall provide the Directors at least
quarterly, in advance of the regular meetings of the Directors, a
report of its activities hereunder on behalf of the Company and the
Funds and the Local Manager's proposed strategy for the next quarter,
all in such form and detail as requested by the Directors. The Local
Manager shall also make an investment officer available to attend such
meetings of the Directors as the Directors may reasonably request.
(b) Restriction of the Local Manager's Powers
(i) In carrying out its duties hereunder, the Local Manager
shall comply with all reasonable instructions of the Company or VKIAC
in connection therewith. Such instructions may be given by letter,
telex, telefax or telephone confirmed by telex, by the Directors or by
any other person authorized by a resolution of the Directors provided a
certified copy of such resolution has been supplied to the Local
Manager.
(ii) All securities, cash and other assets of the Funds shall
be placed and maintained in the care of a member bank of the Federal
Reserve System of the United States approved by the Directors as
custodian and one or more "Eligible Foreign Custodians" (as defined in
Rule 17f-5 under the Investment Company Act of 1940, as amended (the
"1940 Act")).
(iii) Persons authorized by resolution of the Directors shall
have the right to inspect and copy contracts, notes, vouchers, and
copies of entries in books or electronic recording media relating to
the Company's transactions at the registered office of the Local
Manager at any time during normal business hours. Such records, in
relation to each transaction effected by the Local Manager on behalf of
the Company shall be maintained by the Local Manager for a period of
seven years from the date of such transaction.
(c) Purchase and Sale of Securities
In performing the services described above, the Local Manager shall use
its best efforts to obtain for the Funds the most favorable price and execution
available. Subject to prior authorization of appropriate policies and procedures
by the Directors, the Local Manager may, to the extent authorized by law, cause
the Funds to pay a broker or dealer who provides brokerage and research services
an amount of commission for effecting the Funds' investment transactions in
excess of the amount of commission another broker or dealer would have charged
for effecting such transactions, in recognition of the brokerage and research
services provided by the broker or dealer. To the extent authorized by law, the
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Local Manager shall not be deemed to have acted unlawfully or to have breached
any duty created by this Agreement or otherwise solely by reason of such action.
(d) Custodian
The Local Manager shall not act as custodian for the securities or any
other assets of the Company. All such assets shall be held by the custodian or
sub-custodian appointed by the Directors or by a Fund's "Foreign Custody
Manager" (as defined by Rule 17f-5 under the 1940 Act).
2. DUTIES OF VKIAC.
(a) Provision of Information
VKIAC shall advise the Local Manager from time to time with respect to
each Fund of its investment objective and policies and of any changes or
modifications thereto, as well as any specific investment restrictions and
limitations by sending to the Local Manager a copy of each registration
statement and amendment thereto relating to the Company as filed with the
Securities and Exchange Commission. As requested by the Local Manager, VKIAC
shall furnish such information to the Local Manager as to holdings, purchases,
and sales of the securities under its management as will reasonably enable the
Local Manager to furnish its investment advice under this Agreement.
(b) Compensation to the Local Manager
For the services rendered, the facilities furnished and expenses
assumed by the Local Manager, VKIAC shall pay to the Local Manager a fee in an
amount to be determined from time to time by VKIAC and the Local Manager but in
no event in excess of the amount that VKIAC actually received for providing
services to the Company pursuant to the investment advisory agreement between
VKIAC and the Fund.
3. MISCELLANEOUS.
(a) Activities of the Local Manager
The services of the Local Manager as sub-adviser to VKIAC under this
Agreement are not to be deemed exclusive, the Local Manager and its affiliates
being free to render services to others. It is understood that shareholders,
directors, officers and employees of the Local Manager may become interested in
the Company or VKIAC as shareholders, directors, officers, partners or
otherwise.
(b) Services to Other Clients
VKIAC acknowledges that the Local Manager may have investment
responsibilities, or render investment advice to, or perform other investment
advisory services for, other individuals or entities ("Clients"). Subject to the
provisions of this paragraph, VKIAC agrees that the Local Manager may give
advice or exercise investment responsibility and take such other action with
respect to such Clients which may differ from advice given or the timing or
nature of action taken with respect to the Company, provided that the Local
Manager acts in good faith, and provided, further, that it is the Local
Manager's policy to allocate, within its reasonable discretion, investment
opportunities to the Funds over a period of time on a fair and equitable basis
relative to the Clients, taking into account the investment objectives and
policies of the Funds and any specific investment restrictions and limitations
applicable thereto. VKIAC acknowledges that one or more of the Clients may at
any time hold, acquire, increase, decrease, dispose of or otherwise deal with
positions in investments in which the Funds may have an interest from time to
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time, whether in transactions which may involve the Funds or otherwise. The
Local Manager shall have no obligation to acquire for any Fund a position in any
investment which any Client may acquire, and VKIAC shall have no first refusal,
coinvestment or other rights in respect of any such investment, either for the
Funds or otherwise.
(c) Best Efforts
It is understood and agreed that in furnishing the investment advice
and other services as herein provided, the Local Manager shall use its best
professional judgment to recommend actions which will provide favorable results
for the Funds. The Local Manager shall not be liable to the Company or to any
shareholder of the Company to any greater degree than VKIAC.
(d) Compliance with Applicable Laws and Regulations.
The Local Manager shall obtain and at all times maintain and comply
with the terms of all relevant authorizations, licenses, consents, approvals and
registrations and comply with all relevant laws and regulations, necessary for
the purpose of performing any of its duties and obligations under this
Agreement. The Local Manager shall inform VKIAC as soon as possible if at any
time the Local Manager becomes unable to comply with the terms of or maintain
any such authorizations, licenses, consents, approvals or registrations.
(e) Duration of Agreement
(i) This Agreement, unless terminated pursuant to paragraph
(ii), (iii) or (iv) below, shall continue in effect through August 11,
2005, and thereafter shall continue in effect from year to year,
provided that its continued applicability is specifically approved at
least annually by the Directors or by a vote of the holders of a
majority of the outstanding shares of the appropriate Funds. In
addition, such continuation shall be approved by vote of a majority of
the Directors who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval. As used in this paragraph, the term
"interested person" shall have the same meaning as set forth in the
1940 Act.
(ii) This Agreement may be terminated by sixty (60) days'
written notice by either VKIAC or the Local Manager to the other party,
provided that VKIAC's termination of this Agreement shall be approved
by vote of a majority of the Directors who are not parties to this
Agreement or interested persons of any such party. The Agreement may
also be terminated at any time, without the payment of any penalty,
with respect to one or more Funds (by vote of the Directors or, by the
vote of a majority of the outstanding voting securities of such
Fund(s)), on sixty (60) days' written notice to both VKIAC and the
Local Manager. This Agreement shall automatically terminate in the
event of the termination of the investment advisory agreement between
VKIAC and the Company.
(iii) This Agreement shall terminate in the event of its
assignment. The term "assignment" for this purpose shall have the same
meaning set forth in Section 2(a)(4) of the 1940 Act.
(iv) This Agreement shall terminate forthwith by notice in
writing on the happening of any of the following events:
(1) If VKIAC or the Local Manager shall go into
liquidation (except a voluntary liquidation for the purpose of and followed by a
bona fide reconstruction or amalgamation upon
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terms previously approved in writing by the party not in liquidation) or if a
receiver or receiver and manager of any of the assets of either of them is
appointed; or
(2) If either of the parties hereto shall commit any
breach of the provisions hereof and shall not have remedied such breach within
30 days after the service of notice by the party not in breach on the other
requiring the same to be remedied.
(v) Termination shall be without prejudice to the completion
of any transactions which the Local Manager shall have committed to on
behalf of the Funds prior to the time of termination. the Local Manager
shall not effect and the Company shall not be entitled to instruct the
Local Manager to effect any further transactions on behalf of the Funds
subsequent to the time termination takes effect.
(vi) On the termination of this Agreement and completion of
all matters referred to in the foregoing paragraph (v) the Local
Manager shall deliver or cause to be delivered to the Company copies of
all documents, records and books of the Company required to be
maintained pursuant to Rules 31 a-1 or 31 a-2 of the 1940 Act which are
in the Local Manager's possession, power or control and which are valid
and in force at the date of termination.
(f) Notices
Any notice, request, instruction, or other document to be given under
this Agreement by any party hereto to the other parties shall be in writing and
delivered personally or sent by mail or telecopy (with a hard copy to follow):
If to the Local Manager to:
Xxxxxx Xxxxxxx Investment Management Company
00 Xxxxxx Xxxxxx,
00-00 Xxxxxxx Xxxxxx
Xxxxxxxxx 000000
If to VKIAC, to:
Xxx Xxxxxx Investment Advisory Corp.
0 Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Secretary
or at such other address for a party as shall be specified by like notice. Any
notice that is delivered personally in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party (or its agent for notices hereunder). Any notice that is
addressed and mailed in the manner herein provided shall be presumed to have
been duly given to the party to which it is addressed, on the date three (3)
days after mailing, and in the case of delivery by telecopy, on the date the
hard copy is received.
(g) Choice of Law
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This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the United
States and the State of New York, without regard to the conflicts of laws
principles thereof.
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IN WITNESS WHEREOF, the Agreement has been executed as of the date
first above given.
XXX XXXXXX INVESTMENT ADVISORY CORP. XXXXXX XXXXXXX
INVESTMENT MANAGEMENT COMPANY
By: /s/ XXXXXX X. XXXX, III By: /s/ XXXXXXX XXXX XXXX
------------------------------ ---------------------------------
Name: Xxxxxx X. Xxxx Name: Xxxxxxx Xxxx Xxxx
Title: Executive Director & Chief Title: Director
Administrative Officer
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SCHEDULE A
Fund*
International Magnum Fund
-------------------------
*For ease of reference, the words "Xxx Xxxxxx," which begin the name of the
Fund, have been omitted.
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