EXHIBIT (d)(7)
SUBADVISORY CONTRACT
AGREEMENT made as of the ___ day of _____, 1998 by and between Xxxxxx
Xxxxxxxx Investment Trust (the "Trust"), on behalf of Xxxxxx Xxxxxxxx Total
Return Bond Fund, Xxxxxx Xxxxxxxx Capital Management, Incorporated, a Delaware
corporation (the "Adviser"), and Xxxxxx Xxxxxxxx Investment Services Limited, a
United Kingdom corporation.
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
consisting of several series of shares, each having its own investment policies.
WHEREAS, the Trustees of the Trust (the "Trustees") have selected the
Adviser to provide overall investment advice and management for Xxxxxx Xxxxxxxx
Total Return Bond Fund (the "Portfolio") and to provide certain other services,
under the terms and conditions provided in the investment management contract,
dated January 30, 1998, between the Trust, on behalf of the Portfolio, and the
Adviser (the "Investment Management Contract").
WHEREAS, the Adviser and the Trustees have selected Xxxxxx Xxxxxxxx
Investment Services Limited (the "Subadviser") to provide the Adviser and the
Portfolio with the advice and services set forth below, and the Subadviser is
willing to provide such advice and services, subject to the review of the
Trustees and overall supervision of the Adviser, under the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF SUBADVISER. The Subadviser will manage the investment
and reinvestment of that component of the Portfolio's assets
designated by the Adviser from time to time as the Portfolio's
international component, and will continuously review, supervise and
administer the international investment program of the Portfolio, to
determine in its discretion the securities to be purchased or sold and
to effect such purchases and sales for that component, to provide the
Adviser and the Trust with records concerning the Subadviser's
activities which the Trust is required to maintain, and to render
regular reports to the Adviser and to the Trust's officers and
trustees concerning the Subadviser's discharge of the foregoing
responsibilities.
The Subadviser will, to the extent reasonably required in
the conduct of the business of the Portfolio and upon the Trust's
request, furnish to the Portfolio research, statistical, valuation and
advisory reports on countries, regions, currencies, industries, and
issuers, whether or not the international component of the Portfolio
shall have any instruments in such countries, regions, currencies,
industries or issuers. The Subadviser will use its best efforts in
the preparation of such reports.
The Subadviser accepts such employment and agrees, at its
own expense, to render the services described and to provide the
office space, furnishings and the personnel required by it to perform
the services described on the terms and for the compensation provided
herein.
The Subadviser shall pay directly or reimburse the Portfolio
for (i) the compensation, if any, of the Trustees and officers of the
Trust who are affiliated with, or interested persons of, the
Subadviser; and (ii) all expenses not hereinafter specifically assumed
by the Trust or the Portfolio, or by the Adviser pursuant to the
Investment Management Contract, where such expenses are incurred by
the Subadviser or by the Trust or the Portfolio, in connection with
the management of the investment and reinvestment of the assets of the
international component of the Portfolio.
The Subadviser shall discharge the foregoing
responsibilities subject to the control of the Board of Trustees of
the Trust and the overall supervision of the Adviser and in compliance
with such policies as the Trustees or the Adviser may from time to
time establish, and in compliance with the objectives, policies, and
limitations for the Portfolio as set forth in the Portfolio's
prospectus and statement of additional information, as amended from
time to time, and applicable laws and regulations. The Trust and the
Adviser hereby agree that the Subadviser shall not be bound by changes
to the Fund's prospectus or statement of additional information until
the Subadviser has been notified of such changes in writing.
2. PORTFOLIO TRANSACTIONS. The Subadviser is authorized in its
discretion to select the brokers or dealers that will execute the
purchases and sales of portfolio securities in the international
component of the Portfolio and is directed to use its best efforts to
obtain the best net results as described from time to time in the
Portfolio's prospectus and statement of additional information. The
Subadviser will promptly communicate to the Adviser and to the
officers and the Trustees of the Trust such
information relating to portfolio transactions as they may reasonably
request.
It is understood that the Subadviser will not be deemed to
have acted unlawfully, or to have breached a fiduciary duty to the
Trust or be in breach of any obligation owing to the Trust under this
Agreement, or otherwise, solely by reason of its having directed a
securities transaction on behalf of the Trust to a broker-dealer in
compliance with the provisions of Section 28(e) of the Securities
Exchange Act of 1934 or as otherwise permitted from time to time by
the Portfolio's prospectus and statement of additional information.
3. EXPENSES OF THE PORTFOLIO NOT PAID BY THE SUBADVISER. The
Subadviser will not be required to pay any expenses which this
Agreement does not expressly state shall be payable by the Subadviser.
In particular, and without limiting the generality of the foregoing,
the Subadviser will not be required to pay:
(a) any and all expenses, taxes and governmental fees
incurred by the Trust prior to the date hereof;
(b) without limiting the generality of the foregoing clause
(a), the expenses of organizing the Trust or the Portfolio
(including without limitation legal, accounting and auditing fees
and expenses incurred in connection with the matters referred to
in this clause (b)), of initially registering the shares of the
Trust or the Portfolio under the Securities Act of 1933 and of
qualifying the shares for sale under state securities laws for
the initial offering and sale of shares;
(c) the compensation and expenses of Trustees of the Trust
not affiliated with the Subadviser, and of independent advisers,
independent contractors, consultants, managers and other agents
employed by the Trust or the Portfolio other than through the
Subadviser;
(d) legal, accounting and auditing fees and expenses of the
Trust or the Portfolio;
(e) the fees or disbursements of custodians, and
depositories of the Trust or the Portfolio's assets, transfer
agents, disbursing agents, plan agents and registrars;
(f) taxes and governmental fees assessed against the
Trust's assets and payable by the Trust;
(g) the cost of preparing and mailing dividends,
distributions, reports, notices and proxy materials to
shareholders of the Trust and the Portfolio;
(h) broker's commissions and underwriting fees; and
(i) the expense of periodic calculation of the net asset
value of shares of the Portfolio.
4. COMPENSATION OF THE SUBADVISER. For the services to be rendered
by the Subadviser as provided in this Agreement, the Adviser shall pay
to the Subadviser compensation at the rates specified in the
Schedule A which is attached hereto and made a part of this Agreement.
Such compensation shall be paid to the Subadviser at the end of each
month, and calculated by applying a daily rate, based on the annual
percentage rates as specified in the attached Schedule A, to the
assets of the Portfolio. The fee shall be based on the average daily
net assets for the month involved (less any assets of the Portfolio
held in non-interest bearing special deposits with a Federal Reserve
Bank).
All rights of compensation under this Agreement for services
performed as of the termination date shall survive the termination of
this Agreement.
5. REPORTS. The Trust, the Adviser and the Subadviser each agree to
furnish each other, as applicable, current prospectuses, proxy
statements, reports to shareholders, certified copies of their
financial statements, and such other information with regard to their
affairs as each may reasonably request.
6. CERTAIN RECORDS. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule 31a-2
promulgated under the 1940 Act which are prepared or maintained by the
Subadviser on behalf of the Trust are the property of the Trust and
will be surrendered promptly to the Trust on request.
7. OTHER ACTIVITIES OF THE SUBADVISER AND ITS AFFILIATES. Each of
the Adviser and the Subadviser hereby represents and warrants that it
is registered as an investment adviser under the Investment Advisers
Act of 1940, as amended.
Nothing herein contained shall prevent the Subadviser or any of its
affiliates or associates from engaging in any other business or from
acting as investment adviser or investment manager for any other
person or entity, whether or not having investment policies or a
portfolio similar to the Portfolio. It is specifically understood
that officers, directors and employees of the Subadviser and those of
it affiliates may engage in providing investment advice to portfolio
advisory clients of the Subadviser or of its affiliates.
8. AVOIDANCE OF INCONSISTENT POSITION. In connection with purchases
or sales of portfolio securities for the account of the Trust or the
Portfolio, neither the Subadviser nor any of its directors, officers
or employees will act as principal or agent or receive any commission.
The Subadviser shall not knowingly recommend that the Portfolio
purchase, sell or retain securities of any issuer in which the
Subadviser has a financial interest without obtaining prior approval
of the Adviser prior to the execution of any such transaction.
9. NO PARTNERSHIP OR JOINT VENTURE. The Trust, the Portfolio, the
Adviser and the Subadviser are not partners of or joint venturers with
each other and nothing herein shall be construed so as to make them
such partners or joint venturers or impose any liability as such on
any of them. The Subadviser shall be deemed to be an independent
contractor, and except as otherwise provided herein, shall have no
authority to act for or bind the Adviser or the Trust as an agent.
10. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of the
Trust are or may be interested in the Subadviser (or any successor
thereof) as directors, partners, officers, or shareholders, or
otherwise; directors, partners, officers, agents, and shareholders of
the Subadviser are or may be interested in the Trust as Trustees,
shareholders or otherwise; and the Subadviser (or any successor
thereof) is or may be interested in the Trust as a shareholder or
otherwise. In addition, brokerage transactions for the Portfolio may
be effected through affiliates of the Subadviser if approved by the
Trustees, subject to the rules and regulations of the Securities and
Exchange Commission.
11. LIMITATION OF LIABILITY OF SUBADVISER. The duties of the
Subadviser shall be confined to those expressly set forth herein, and
no implied duties are assumed by or may be asserted against the
Subadviser hereunder. The Subadviser shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in carrying out its duties
hereunder, except a loss resulting from willful
misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and
duties hereunder, except as may otherwise be provided under provisions
of applicable state law or federal securities law which cannot be
waived or modified hereby.
12. DURATION AND TERMINATION. This Agreement, unless sooner
terminated as provided herein, shall remain in effect with respect to
the Portfolio until two years from the date first set forth above, and
thereafter, for periods of one year so long as such continuance
thereafter is specifically approved at least annually (a) by the vote
of a majority of those Trustees of the Trust 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, and
(b) by vote of a majority of the outstanding voting securities of the
Fund; provided however, that if the shareholders of the Portfolio fail
to approve the Agreement as provided in Section 15 of the 1940 Act,
the Subadviser may continue to serve hereunder in the manner and to
the extent permitted by the 1940 Act and rules and regulations
thereunder. The foregoing 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 as to the Portfolio at any
time, without the payment of any penalty by vote of a majority of the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Portfolio or the Adviser on not less than 30
days nor more than 60 days written notice to the Subadviser, or by the
Subadviser at any time without the payment of any penalty, on 60 days
written notice to the Adviser and the Trust. This Agreement will
automatically and immediately terminate in the event of its
assignment. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, to the other party at any
office of such party.
As used in this Section 10, the term "assignment" shall have
the meaning as set forth in the 1940 Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the
Commission.
13. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may
be changed or waived orally, but only by an instrument in writing
signed by the party against which enforcement of the change or waiver
is sought, and no amendment to this Agreement shall be effective until
approved by (a) the Trustees, including a majority of the Trustees who
are
not interested persons of the Adviser, the Subadviser or (other than
as Board members) the Trust, cast in person at a meeting called for
the purpose of voting on such approval, and (b) a majority of the
outstanding voting securities of the Portfolio, as defined in the 1940
Act.
14. MISCELLANEOUS.
(a) The captions in this Agreement are included for
convenience of reference only and in no way define or limit any
of the provisions hereof or otherwise affect their construction
or effect. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument. The name "Xxxxxx Xxxxxxxx Investment Trust" is the
designation of the Trustees under the Declaration of Trust and
The Declaration of Trust has been filed with the Secretary of
State of Delaware. The obligations of the Trust and the
Portfolio are not personally binding upon, nor shall resort be
had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Trust or the
Portfolio, but only the Portfolio's property shall be bound. The
Portfolio shall not be liable for the obligations of any other
series of the Trust.
(b) Nothing herein contained shall limit or restrict the
Subadviser or any of its officers, affiliates or employees from
buying, selling or trading in any securities for its or their own
account or accounts. The Trust and Portfolio acknowledge the
Subadviser and its officers, affiliates and employees, and its
other clients may at any time have, acquire, increase, decrease
or dispose of positions in investments which are at the same time
being acquired or disposed of hereunder. The Subadviser shall
have no obligation to acquire with respect to the Portfolio, a
position in any investment which the Subadviser, its officers,
affiliates or employees may acquire for its or their own accounts
or for the account of another client if, in the sole discretion
of the Subadviser, it is not feasible or desirable to acquire a
position in such investment on behalf of the Portfolio. Nothing
herein contained shall prevent the Subadviser from purchasing or
recommending the purchase of a particular security for one or
more funds or clients while other funds or clients may be selling
the same security.
(c) Any information supplied by the Subadviser, which is
not otherwise in the public domain, in connection with the
performance of its duties hereunder is to be regarded as
confidential and for use only by the Portfolio and/or its agents,
and only in connection with the Portfolio and its investments.
15. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of New York and the applicable provisions
of the 1940 Act.
16. NOTICE. Any notice required or permitted to be given by any
party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice
to the other party at the address specified below for the receiving
party or such other address as the receiving party may hereinafter
designate in writing to the other parties: if to the Trust, at 000
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 Attention: President, if to the
Adviser, at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 Attention: President,
and if to the Subadviser, at 00 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx XX0X
0XX Attention: President.
17. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
XXXXXX XXXXXXXX INVESTMENT TRUST
ON BEHALF OF XXXXXX XXXXXXXX TOTAL RETURN BOND FUND
By:
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Secretary
Attest:
---------------------------
XXXXXX XXXXXXXX CAPITAL MANAGEMENT INCORPORATED
By:
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
Attest:
---------------------------
XXXXXX XXXXXXXX INVESTMENT SERVICES LIMITED
By:
-------------------------------
Name: Xxxxxxx X. X. Xxxxxx
Title: Chief Executive Officer
Attest:
---------------------------
SCHEDULE A
TO THE
SUBADVISORY AGREEMENT
BETWEEN
XXXXXX XXXXXXXX INVESTMENT TRUST (THE "TRUST"),
ON BEHALF OF XXXXXX XXXXXXXX TOTAL RETURN BOND FUND
AND
XXXXXX XXXXXXXX CAPITAL MANAGEMENT
AND
XXXXXX XXXXXXXX INVESTMENT SERVICES LIMITED
The Adviser shall pay the Subadviser compensation at the following annual rates:
Portfolio Fee
--------- ---
Xxxxxx Xxxxxxxx Total Return Bond Fund 0.08% of the average daily net assets
of the Portfolio, unless reduced, on a
pro rata basis, by any fee waiver then
in effect
