EXHIBIT 99d(10)
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the _____ day of _______, 2002 by and
between Xxxxxx Xxxxxxx Investment Management Inc., a Delaware Corporation
(herein referred to as the "Investment Manager"), and Xxxxxx Asset Management
Company, a Delaware corporation, (herein referred to as the "Sub- Advisor").
WHEREAS, The Universal Institutional Funds, Inc. (herein
referred to as the "Fund") is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and
WHEREAS, the Investment Manager has entered into an Investment
Management Agreement with the Fund (the "Investment Management Agreement")
wherein the Investment Manager has agreed to provide investment management
services to the various portfolios of the Fund; and
WHEREAS, the Sub-Advisor is registered as an investment
adviser under the Investment Advisers Act of 1940, and engages in the business
of acting as an investment adviser; and
WHEREAS, Investment Manager desires to retain the services of
the Sub- Advisor to render investment advisory services for the Capital
Preservation Portfolio of the Fund (the "Portfolio") in the manner and on the
terms and conditions hereinafter set forth; and
WHEREAS, the Sub-Advisor desires to be retained by the
Investment Manager to perform services on said terms and conditions:
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties hereto as herein set forth, the parties covenant and
agree as follows:
1. Subject to the supervision of the Fund, its officers and
Directors, and the Investment Manager, and in accordance with the investment
objectives, policies and restrictions of the Portfolio set forth in the Fund's
current Registration Statement on Form N-1A (the "Registration Statement") the
Sub-Advisor agrees to provide the Fund with investment advisory services with
respect to the Portfolio's investments in "Wrapper Agreements" as defined in the
Registration Statement. These services include, but are not limited to:
obtaining and evaluating such information and advice relating to Wrapper
Agreements as it deems necessary or useful to discharge its duties hereunder;
preparing bid specifications that enable prospective wrap providers to bid
effectively and competitively on the assets of the Portfolio; distributing the
bid specifications to those issuers known to the Sub-Advisor to be competitive
in the wrap providers market and who meet the Sub-Advisor's credit approval and
the credit standards set forth in the current Registration Statement; organizing
and completing the solicitation of bids for the provision of Wrapper Agreements
to the Portfolio; evaluating the proposed Wrapper Agreements to ensure that they
are the most suitable for the Portfolio (subject to the review of the Investment
Manager); selecting an issuer and form of contract that is most appropriate to
underwrite the Wrapper Agreement; periodically reviewing and modifying, as
necessary, existing Wrapper
Agreements to provide liquidity, improve credit quality, or improve terms;
monitoring on a monthly basis all Wrapper Agreements held in the Portfolio to
ensure that the interest is properly calculated and accrued, and to verify the
contract rate reset calculations in order to properly allocate gains and losses;
quarterly reporting; ongoing monitoring of creditworthiness; furnishing to, or
place at the disposal of, the Fund and Investment Manager such of the
information, evaluations, analyses and opinions formulated or obtained by it in
the discharge of its duties as the Fund and the Investment Manager may, from
time to time, reasonably request.
2. The Sub-Advisor shall, at its own expense, maintain such staff
and employ or retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the performance
of its obligations under this Agreement.
3. The Fund will, from time to time, furnish or otherwise make
available to the Sub-Advisor such financial reports, proxy statements and other
information relating to the business and affairs of the Portfolio as the
Sub-Advisor may reasonably require in order to discharge its duties and
obligations hereunder or to comply with any applicable law and regulations and
the investment objectives, policies and restrictions from time to time
prescribed by the Directors of the Fund.
4. The Sub-Advisor shall bear the cost of rendering the investment
advisory services to be performed by it under this Agreement, and shall, at its
own expense, pay the compensation of the officers and employees, if any, of the
Fund, employed by the Sub-Advisor, and such clerical help and bookkeeping
services as the Sub-Advisor shall reasonably require in performing its duties
hereunder. The Sub-Advisor may, as mutually agreed with the Investment Manager,
assume a portion of the fees paid by the Investment Manager to X.X. Xxxxxx
Investor Services Co., pursuant to a Sub-Administration Agreement related to the
Portfolio.
5. The Fund assumes and shall pay or cause to be paid all other
expenses of the Fund, including, without limitation: any fees paid to the
Investment Manager; fees pursuant to any plan of distribution that the Fund may
adopt; fees for services pursuant to an Administration Agreement; the charges
and expenses of any registrar, any custodian, sub-custodian or depository
appointed by the Fund for the safekeeping of its cash, portfolio securities and
other property, and any stock transfer or dividend agent or agents appointed by
the Fund; brokers' commissions chargeable to the Fund in connection with
portfolio securities transactions to which the Fund is a party; all taxes,
including securities issuance and transfer taxes, and fees payable by the Fund
to federal, state or other governmental agencies or pursuant to any foreign
laws; the cost and expense of engraving or printing certificates representing
shares of the Fund; all costs and expenses in connection with the registration
and maintenance of registration of the Fund and its shares with the Securities
and Exchange Commission and various states and other jurisdictions or pursuant
to any foreign laws (including filing fees and legal fees and disbursements of
counsel); the cost and expense of printing (including typesetting) and
distributing prospectuses of the Fund and supplements thereto to the Fund's
shareholders; all expenses of shareholders' and Directors' meetings and of
preparing, printing and mailing proxy statements and reports to shareholders;
fees and travel expenses of Directors or members of any advisory board or
committee who are not employees of the Investment Manager or Sub-Advisor; all
expenses incident to the payment of any dividend, distribution, withdrawal or
redemption
whether in shares or in cash; charges and expenses of any outside service used
for pricing of the Fund's shares; charges and expenses of legal counsel,
including counsel to the Directors of the Fund who are not interested persons
(as defined in the Act) of the Fund, the Investment Manager or the Sub-Advisor,
and of independent accountants, in connection with any matter relating to the
Fund; membership dues of industry associations; interest payable on Fund
borrowings; postage; insurance premiums on property or personnel (including
officers and Directors) of the Fund which inure to its benefit; extraordinary
expenses (including but not limited to legal claims and liabilities and
litigation costs and any indemnification related thereto); and all other charges
and costs of the Fund's operation unless otherwise explicitly provided herein.
6. For the services to be rendered, the facilities furnished,
and the expenses assumed by the Sub-Advisor, the Investment Manager shall pay to
the Sub-Advisor quarterly compensation calculated by applying a quarterly rate
based on the following annual percentage rates with respect to the average daily
net assets of the Portfolio for the quarter: .10% of the Portfolio's first $500
million in average daily net assets; .08% of the Portfolio's average daily net
assets from $500 million to $1 billion; and .06% of the average daily net assets
in excess of $1 billion. The Sub-Advisor may agree to voluntarily waive a
portion of such fee. The calculation of the fee payable to the Sub-Advisor
pursuant to this Agreement will be made, each month, at the time designated for
the monthly calculation of the fee payable to the Investment Manager pursuant to
the Investment Management Agreement. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last day of
a month, compensation for the part of the month this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fee as set
forth above.
7. The Sub-Advisor will use its best efforts in the
performance of investment activities on behalf of the Fund, but in the absence
of willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Sub-Advisor shall not be liable to the Investment
Manager or the Fund or any of its investors for any error of judgment or mistake
of law or for any act or omission by the Sub-Advisor or for any losses sustained
by the Fund or its investors.
8. It is understood that the Sub-Advisor and any affiliated
persons thereof or any persons controlled by or under common control with the
Sub-Advisor have and may have advisory, management service or other contracts
with other organizations and persons, and may have other interests and
businesses, and further may purchase, sell or trade any securities or
commodities for their own accounts or for the account of others for whom they
may be acting.
9. This Agreement shall remain in effect until ___________
and from year to year thereafter provided such continuance is approved at least
annually by the vote of holders of a majority, as defined in the Act, of the
outstanding voting securities of the Portfolio or by the Directors of the Fund,
provided, that in either event such continuance is also approved annually by the
vote of a majority of the Directors of the Fund who are not parties to this
Agreement or "interested persons" (as defined in the Act) of any such party,
which vote must be cast in person at a meeting called for the purpose of voting
on such approval; provided, however, that (a) the Fund may, at any time and
without the payment of any penalty, terminate this Agreement upon thirty days'
written notice to the Investment Manager and the Sub-Advisor, either by majority
vote of the Directors of the Fund or by the vote of a majority of the
outstanding voting securities of the Portfolio; (b) this Agreement shall
immediately terminate in the event of its assignment (within the meaning of the
Act) unless such automatic termination shall be prevented by an exemptive order
of the Securities and Exchange Commission; (c) this Agreement shall immediately
terminate in the event of the termination of the Investment Management
Agreement; (d) the Investment Manager may terminate this Agreement without
payment of penalty on thirty days' written notice to the Fund and the
Sub-Advisor; and (e) the Sub-Advisor may terminate this Agreement without the
payment of penalty on thirty days' written notice to the Fund and the Investment
Manager. Any notice under this Agreement shall be given in writing, addressed
and delivered, or mailed post-paid, to the other party at the principal office
of such party.
10. This Agreement may be amended by the parties without the vote or
consent of the shareholders of the Portfolio to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision hereof,
or if they deem it necessary to conform this Agreement to the requirements of
applicable federal laws or regulations, but neither the Fund, the Investment
Manager nor the Sub-Advisor shall be liable for failing to do so.
11. This Agreement shall be construed in accordance with the law of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Act, the latter shall control.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement on the day and year first above written in New York,
New York.
XXXXXX XXXXXXX INVESTMENT MANAGEMENT INC.
_______________________________________
By:
XXXXXX ASSET MANAGEMENT COMPANY
______________________________________
By:
Accepted and agreed to as of
the day and year first above written:
The Universal Institutional Funds, Inc.
__________________________
By:
