Exhibit No. 4(i)
SUB-ADVISORY CONTRACT
Agreement made as of November 2, 1998 ("Contract") between XXXXXXXX
XXXXXXXX ASSET MANAGEMENT INC., a Delaware corporation ("Xxxxxxxx Xxxxxxxx"),
and INVISTA CAPITAL MANAGEMENT, INC., an Iowa corporation ("Sub-Adviser").
RECITALS
--------
(1) Xxxxxxxx Xxxxxxxx has entered into an Investment Advisory and
Administration Agreement, dated November 2, 1998 ("Management Agreement"), with
Xxxxxxxx Xxxxxxxx Series Trust ("Trust"), an open-end management investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act");
(2) The Trust offers for public sale distinct series of shares of
beneficial interest, including a series of shares of the Trust known as Global
Growth Portfolio ("Portfolio");
(3) Under the Management Agreement, Xxxxxxxx Xxxxxxxx has agreed to
provide certain investment advisory and administrative services to the
Portfolio;
(4) The Management Agreement permits Xxxxxxxx Xxxxxxxx to delegate certain
of its duties as investment adviser thereunder to a sub-adviser;
(5) Xxxxxxxx Xxxxxxxx desires to allocate the portfolio investments of the
Portfolio between an international segment and a domestic segment, and to retain
the Sub-Adviser to furnish certain investment advisory services with respect to
the international segment of the investments of the Portfolio, and
(6) The Sub-Adviser is willing to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, Xxxxxxxx Xxxxxxxx and the Sub-Adviser agree as follows:
1. APPOINTMENT. Xxxxxxxx Xxxxxxxx hereby appoints the Sub-Adviser as an
investment sub-adviser with respect to the international segment of the
Portfolio's investments for the period and on the terms set forth in this
Contract. The Sub-Adviser accepts that appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. DUTIES AS SUB-ADVISER.
(a) Subject to the supervision and direction of the Trust's Board of
Trustees ("Board") and review by Xxxxxxxx Xxxxxxxx, and any written guidelines
adopted by the Board or Xxxxxxxx Xxxxxxxx, the Sub-Adviser will provide a
continuous investment program with respect to the international segment of the
Portfolio's investments, including investment research and management to all
securities and investments and cash equivalents in the Portfolio allocated by
Xxxxxxxx Xxxxxxxx to the international segment of the Portfolio's investments.
The Sub-Adviser will manage the Series' assets in cooperation with Xxxxxxxx
Xxxxxxxx so as to permit the Series (i) to continue to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code, as amended
("Code") and (ii) to continue to comply with the diversification requirements
imposed by Section 817(h) of the Code and the regulations thereunder and will
provide Xxxxxxxx Xxxxxxxx with such information as Xxxxxxxx Xxxxxxxx may from
time to time request to assure that the Series so qualifies or complies. The
Sub-Adviser will determine from time to time what investments will be purchased,
retained or sold by the Portfolio in the international segment of the
Portfolio's investments. The Sub-Adviser will be responsible for placing
purchase and sell orders for investments and for other related transactions with
respect to the international segment of the Portfolio's investments. The
Sub-Adviser will provide services under this Contract in accordance with the
Portfolio's investment objective, policies and restrictions as stated in the
Trust's currently effective registration statement under the 1940 Act, and any
amendments or supplements thereto ("Registration Statement").
(b) The Sub-Adviser agrees that, in placing orders with brokers, it will
obtain the best net result in terms of price and execution; provided that, on
behalf of the Portfolio, the Sub-Adviser may, in its discretion, use brokers who
provide the Sub-Adviser with research, analysis, advice and similar services to
execute portfolio transactions, and the Sub-Adviser may pay to those brokers in
return for brokerage and research services a higher commission than may be
charged by other brokers, subject to the Sub-Adviser's determining in good faith
that such commission is reasonable in terms either of the particular transaction
or of the overall responsibility of the Sub-Adviser to the Portfolio and its
other clients and that the total commissions paid by the Portfolio will be
reasonable in relation to the benefits to the Portfolio over the long term. In
no instance will portfolio securities be purchased from or sold to the
Sub-Adviser, or any affiliated person thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder. Whenever the
Sub-Adviser simultaneously places orders to purchase or sell the same security
on behalf of the Portfolio and one or more other accounts advised by the
Sub-Adviser, the orders will be allocated as to price and amount among all such
accounts in a manner believed to be equitable over time to each account.
Xxxxxxxx Xxxxxxxx recognizes that in some cases this procedure may adversely
affect the results obtained for the Portfolio.
(c) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to the 1940 Act and the rules and regulations promulgated
thereunder with respect to actions by the Sub-Adviser on behalf of the
Portfolio, and will furnish the Board and Xxxxxxxx Xxxxxxxx with such periodic
and special reports as the Board or Xxxxxxxx Xxxxxxxx reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-Adviser hereby agrees that all records that it maintains for the Portfolio
are the property of the Trust, agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records that it maintains for the Trust and
that are required to be maintained by Rule 31a-1 under the 1940 Act, and further
agrees to surrender promptly to the Trust any records that it maintains for the
Portfolio upon request by the Trust.
(d) At such times as shall be reasonably requested by the Board or
Xxxxxxxx Xxxxxxxx, the Sub-Adviser will provide the Board and Xxxxxxxx Xxxxxxxx
with economic and investment analyses and reports as well as quarterly reports
2
setting forth the performance of the international segment of the Portfolio's
investments and make available to the Board and Xxxxxxxx Xxxxxxxx any economic,
statistical and investment services that the Sub-Adviser normally makes
available to its institutional or other customers.
(e) In accordance with procedures adopted by the Board, as amended from
time to time, the Sub-Adviser is responsible for assisting in the fair valuation
of all portfolio securities and will use its reasonable efforts to arrange for
the provision of a price(s) from a party(ies) independent of the Sub-Adviser for
each portfolio security for which the custodian does not obtain prices in the
ordinary course of business from an automated pricing service.
3. FURTHER DUTIES. In all matters relating to the performance of this
Contract, the Sub-Adviser will act in conformity with the Trust's Declaration of
Trust, By-Laws and Registration Statement and with the written instructions and
written directions of the Board and Xxxxxxxx Xxxxxxxx; and will comply with the
requirements of the 1940 Act and the Investment Advisers Act of 1940, as amended
("Advisers Act") and the rules under each, and all other federal and state laws
and regulations applicable to the Trust and the Portfolio. Xxxxxxxx Xxxxxxxx
agrees to provide to the Sub-Adviser copies of the Trust's Declaration of Trust,
By-Laws, Registration Statement, written instructions and directions of the
Board and Xxxxxxxx Xxxxxxxx, and any amendments or supplements to any of these
materials as soon as practicable after such materials become available; and
further agrees to identify to the Sub-Adviser in writing any broker-dealers that
are affiliated with Xxxxxxxx Xxxxxxxx (other than PaineWebber Incorporated and
Xxxxxxxx Xxxxxxxx itself).
4. EXPENSES. During the term of this Contract, the Sub-Adviser will bear
all expenses incurred by it in connection with its services under this Contract.
5. COMPENSATION.
(a) For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Contract, Xxxxxxxx Xxxxxxxx, not the Portfolio, will pay
Invista a sub-advisory fee, computed daily and paid monthly, at an annual rate
of 0.29% of the Portfolio's average daily net assets allocated to its
management. Under this fee arrangement, Invista will receive fees based on the
value of portfolio assets under its management as these assets have been
allocated to it by Xxxxxxxx Xxxxxxxx.
(b) The fee shall be accrued daily and payable monthly to the Sub-Adviser
on or before the last business day of the next succeeding calendar month.
(c) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be pro-rated according to the proportion that such period bears to the
full month in which such effectiveness or termination occurs.
3
6. LIMITATION OF LIABILITY. The Sub-Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Portfolio,
the Trust, its shareholders or by Xxxxxxxx Xxxxxxxx in connection with the
matters to which this Contract relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Contract. Nothing in this paragraph shall be deemed a limitation or waiver of
any obligation or duty that may not by law be limited or waived.
7. REPRESENTATIONS OF SUB-ADVISER. The Sub-Adviser represents, warrants
and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Contract
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Contract; (iii) has met and
will seek to continue to meet for so long as this Contract remains in effect,
any other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency necessary to
be met in order to perform the services contemplated by this Contract; (iv) has
the authority to enter into and perform the services contemplated by this
Contract; and (v) will promptly notify Xxxxxxxx Xxxxxxxx of the occurrence of
any event that would disqualify the Sub-Adviser from serving as an investment
adviser of an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
(b) The Sub-Adviser has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and will provide Xxxxxxxx
Xxxxxxxx and the Board with a copy of such code of ethics, together with
evidence of its adoption. Within forty-five days of the end of the last calendar
quarter of each year that this Contract is in effect, the president or a
vice-president of the Sub-Adviser shall certify to Xxxxxxxx Xxxxxxxx that the
Sub-Adviser has complied with the requirements of Rule 17j-1 during the previous
year and that there has been no violation of the Sub-Adviser's code of ethics
or, if such a violation has occurred, that appropriate action was taken in
response to such violation. Upon the written request of Xxxxxxxx Xxxxxxxx, the
Sub-Adviser shall permit Xxxxxxxx Xxxxxxxx, its employees or its agents to
examine the reports required to be made to the Sub-Adviser by Rule 17j-1(c)(1)
and all other records relevant to the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided Xxxxxxxx Xxxxxxxx with a copy of its Form
ADV, which as of the date of this Agreement is its Form ADV as most recently
filed with the Securities and Exchange Commission ("SEC") and promptly will
furnish a copy of all amendments to Xxxxxxxx Xxxxxxxx at least annually.
(d) The Sub-Adviser will notify Xxxxxxxx Xxxxxxxx of any change of control
of the Sub-Adviser, including any change of its general partners or 25%
shareholders, as applicable, and any changes in the key personnel who are either
the portfolio manager(s) of the Portfolio or senior management of the
Sub-Adviser, in each case prior to, or promptly after, such change.
(e) The Sub-Adviser agrees that neither it, nor any of its affiliates,
will in any way refer directly or indirectly to its relationship with the Trust,
the Portfolio, Xxxxxxxx Xxxxxxxx or any of their respective affiliates in
4
offering, marketing or other promotional materials without the express written
consent of Xxxxxxxx Xxxxxxxx.
8. SERVICES NOT EXCLUSIVE. The services furnished by Invista hereunder are
not to be deemed exclusive and Invista shall be free to furnish similar services
to others so long as its services under this Contract are not impaired thereby
or unless otherwise agreed to by the parties hereunder in writing. Nothing in
this Contract shall limit or restrict the right of any director, officer or
employee of Invista, who may also be a Trustee, officer or employee of the
Trust, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.
9. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date first above
written, provided that this Contract shall not take effect unless it has first
been approved: (i) by a vote of a majority of those trustees of the Trust who
are not parties to this Contract or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on such approval, and
(ii) by vote of a majority of the Portfolio's outstanding securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from its effective date. Thereafter, if not
terminated, this Contract shall continue automatically for successive periods of
twelve months each, provided that such continuance is specifically approved at
least annually: (i) by a vote of a majority of those trustees of the Trust who
are not parties to this Contract or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on such approval, and
(ii) by the Board or by vote of a majority of the outstanding voting securities
of the Portfolio.
(c) Notwithstanding the foregoing, this Contract may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Portfolio on 60 days'
written notice to the Sub-Adviser. This Contract may also be terminated, without
the payment of any penalty, by Xxxxxxxx Xxxxxxxx: (i) upon 120 days' written
notice to the Sub-Adviser; (ii) upon material breach by the Sub-Adviser of any
representations and warranties set forth in Paragraph 7 of this Contract, if
such breach has not been cured within a 20 day period after notice of such
breach; or (iii) immediately if, in the reasonable judgment of Xxxxxxxx
Xxxxxxxx, the Sub-Adviser becomes unable to discharge its duties and obligations
under this Contract, including circumstances such as financial insolvency of the
Sub-Adviser or other circumstances that could adversely affect the Portfolio.
The Sub-Adviser may terminate this Contract at any time, without the payment of
any penalty, on 120 days written notice to Xxxxxxxx Xxxxxxxx. This Contract will
terminate automatically in the event of its assignment or upon termination of
the Advisory Contract as it relates to the Portfolio.
10. AMENDMENT OF THIS CONTRACT. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Contract shall be
effective until approved (i) by a vote of a majority of those trustees of the
5
Trust who are not parties to this Contract or interested persons of any such
party, and (ii) by a vote of a majority of the Portfolio's outstanding voting
securities (unless in the case of (ii), the Trust receives an SEC order or
no-action letter permitting it to modify the Contract without such vote).
11. GOVERNING LAW. This Contract shall be construed in accordance with the
1940 Act and the laws of the State of Delaware, without giving effect to the
conflicts of laws principles thereof. To the extent that the applicable laws of
the State of Delaware conflict with the applicable provisions of the 1940 Act,
the latter shall control.
12. MISCELLANEOUS. The captions in this Contract 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. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
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 exemption as may be granted by the SEC by any
rule, regulation or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Contract is made less
restrictive by a rule, regulation or order of the SEC, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order. This Contract may be signed in counterpart.
13. NOTICES. Any notice herein required is to be in writing and is deemed
to have been given to the Sub-Adviser or Xxxxxxxx Xxxxxxxx upon receipt of the
same at their respective addresses set forth below. All written notices required
or permitted to be given under this Contract will be delivered by personal
service, by postage mail - return receipt requested or by facsimile machine or a
similar means of same day delivery which provides evidence of receipt (with a
confirming copy by mail as set forth herein). All notices provided to Xxxxxxxx
Xxxxxxxx will be sent to the attention of Xxxxxxxx X. Xxxxxxxxx, General
Counsel. All notices provided to the Sub-Adviser will be sent to the attention
of Xxxxxx X. Xxxxxxx, Compliance Officer.
[rest of page left intentionally blank]
6
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attest:
By: /s/ By: /s/ Xxxxxx X. X'Xxxxxxx
-------------------------- -----------------------------
Name: Name: Xxxxxx X. X'Xxxxxxx
Title: Title: Senior Vice President
INVISTA CAPITAL MANAGEMENT,
INC.
1900 Hub Tower
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Attest:
By: /s/ Xxxx Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
-------------------------- -----------------------------
Name: Xxxx Xxxxxxxxxx Name: Xxxxx X. Xxxxxx
Title: Relationship Manager Title: President
