Exhibit d.d.1
THE XXXXXX & RYGEL INVESTMENT GROUP
SUB-ADVISORY AGREEMENT BY AND BETWEEN
XXXXXX & RYGEL AND WILSHIRE ASSOCIATES, INC.
This Sub-advisory Agreement is made as of June __, 2007, by and among The
Xxxxxx & Rygel Investment Group, a Massachusetts business trust (the "Trust"),
Xxxxxx & Rygel, a California corporation (the "Adviser"), and Wilshire
Associates Incorporated, a corporation organized under the laws of California
(the "Sub-adviser").
WHEREAS, the Adviser has by separate contract agreed to serve as the
investment adviser to the Payden Wilshire Longevity Fund 2010+, Payden Wilshire
Longevity Fund 2020+, Payden Wilshire Longevity Fund 2030+ and Payden Wilshire
Longevity Fund 2040+ (individually, a "Fund," and collectively, the "Funds"),
each an investment portfolio of Trust, which is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company consisting of one or more investment series of shares, each
having its own assets and investment policies;
WHEREAS, the Adviser desires to retain the Sub-adviser to perform certain
investment advisory services for the Trust with respect to each of the Funds,
and the Sub-adviser is willing to perform such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. SERVICES TO BE RENDERED BY THE SUB-ADVISER TO THE TRUST.
(a) Investment Program. Subject to the control and supervision of the
Board of Trustees of the Trust (the "Board") and the Adviser, the
Sub-adviser will continuously furnish to each of the Funds an investment
program for such portion, if any, of Fund assets that is allocated to it by
the Adviser from time to time. With respect to such assets, the Sub-adviser
will make investment decisions and will place all orders for the purchase
and sale of portfolio securities. In the performance of its duties, the
Sub-adviser will act in the best interests of each Fund and will comply
with (i) applicable laws and regulations, including, but not limited to,
the 1940 Act, (ii) the terms of this Agreement, (iii) the investment
objective, policies, and restrictions of the Fund as stated in the
then-current Registration Statement of the Trust, and (iv) such other
guidelines as the Board or Adviser may establish. The Adviser shall be
responsible for providing the Sub-adviser with current copies of the
materials specified in Subsections (a)(iii) and (iv) of this Section 1. At
such times as may be reasonably requested by the Board or the Adviser, the
Sub-adviser will provide them with economic and investment analysis and
reports, and make available to the Board any economical, statistical, or
investment services, normally available to similar investment company
clients of the Sub-adviser.
(b) Availability of Personnel. The Sub-adviser will make available to
the Board and the Adviser at reasonable times its portfolio managers and
other appropriate personnel in order to review investment policies of each
Fund and to consult with the Board and the Adviser regarding the investment
affairs of the Funds, including economic, statistical, and investment
matters relevant to the Sub-adviser's duties hereunder, and will provide
periodic reports to the Board and the Adviser relating to the portfolio
strategies it employs.
(c) Salaries and Facilities. The Sub-adviser will pay for all salaries
of personnel and facilities required for it to execute its duties under
this Agreement.
(d) Compliance Reports. The Sub-adviser will provide the Adviser with
reasonable compliance reports relating to its duties under this Agreement
as may be agreed to upon by such parties from time to time.
(e) Valuation. The Sub-adviser will provide the Trust's custodian with
market price information relating to the assets of each Fund at such times
as the parties hereto may agree upon from time to time.
(f) Books and Records. The Sub-adviser will maintain books and records
with respect to the securities transactions for each Fund, furnish to the
Adviser and the Board such periodic and special reports as they may request
with respect to a Fund, and to provide the Adviser all reports to the Board
for examination and review within a reasonable time prior to the Trust's
Board meetings.
(g) Executing Portfolio Transactions. The Sub-adviser will place
orders pursuant to its investment determinations for each Fund either
directly with the issuer or through other brokers. In the selection of
brokers and the placement of orders for the purchase and sale of portfolio
investments for each Fund, the Sub-adviser shall use its best efforts to
obtain for the Fund the most favorable price and execution available. In
using its best efforts to obtain the most favorable price and execution
available, the Sub-adviser, bearing in mind the Fund's best interests as
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 involved and the quality
of service rendered by the broker in other transactions. In no instance
will portfolio securities of a Fund be purchased from or sold to the
Sub-adviser or any affiliated person of the Sub-adviser. The Trust agrees
that any entity or person associated with the Adviser or the Sub-adviser
which is a member of a national securities exchange is authorized to effect
any transaction on such exchange for the account of the Trust which is
permitted by Section 11(a) of the Securities Exchange Act of 1934, as
amended, and the Trust consents to the retention of compensation for such
transactions.
Investment decisions for each Fund shall be made by the Sub-adviser
independently from those for any other investment companies and accounts
advised or managed by the Sub-adviser. The Funds and such investment
companies and accounts may, however, invest in the same securities. When a
purchase or sale of the same security is made at substantially the same
time on behalf of a Fund and/or another investment company or account, the
transaction will be averaged as to price, and available investments
allocated as to amount, in a manner which the Sub-adviser believes to be
equitable to the Fund and such other investment company or account. Each
Fund acknowledges that in some instances, this investment procedure may
adversely affect the price paid or received by the Fund or the size of the
position obtained or sold by the Fund. To the extent permitted by law, the
Sub-adviser may aggregate the securities to be sold or purchased for a Fund
with those to be sold or purchased for other investment companies or
accounts in order to obtain best execution. Each Fund and the Adviser
understand that the Sub-adviser may give advice and take action with
respect to any of its other clients which may differ from the timing or
nature of action taken by the Sub-adviser, with respect to a Fund.
2. COVENANTS BY THE SUB-ADVISER. The Sub-adviser agrees with respect to the
services provided to the Funds that it will:
(a) conform with all rules and regulations of the U.S. Securities and
Exchange Commission;
(b) telecopy or provide by electronic means, trade information to the
Adviser on the first business day following the trade and cause broker
confirmations to be sent directly to the Adviser;
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(c) treat confidentially and as proprietary information of the Trust
all records and other information relative to the Trust and prior, present or
potential shareholders, and not use such records and information for any purpose
other than performance of its responsibilities and duties hereunder (except
after prior notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld and will be deemed
granted where the Sub-adviser may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Trust);
(d) notify the Adviser and the Trust immediately upon detection of (i)
any material failure to manage the Funds in accordance with their investment
objectives and policies or any applicable law; or (ii) any material breach of
any of a Fund's or the Sub-adviser's policies, guidelines or procedures. The
Sub-adviser agrees to correct any such failure promptly and to take any action
that the Board may reasonably request in connection with any such breach;
(e) upon request, provide the Adviser and/or the officers of the Trust
with supporting certifications which pertain to services being provided by the
Sub-adviser hereunder, in connection with any filings and certifications made
pursuant to the Xxxxxxxx-Xxxxx Act of 2002; and
(f) promptly notify the Adviser and the Trust in the event (i) the
Sub-Adviser is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation at law, or in equity, before or by any
court, public board, or body, involving the affairs of the Trust or a Fund
(excluding class action suits in which a Fund is a member of the plaintiff class
by reason of the Fund's ownership of shares in the defendant) or the compliance
by the Sub-adviser with federal or state securities laws; (ii) an actual change
in control of the Sub-adviser resulting in an assignment has occurred or is
otherwise proposed to occur; (iii) the Sub-adviser shall fail to be registered
as an investment adviser under the Investment Advisers Act of 1940, as amended,
or under the laws of any jurisdiction in which the Sub-adviser is required to be
registered as an investment adviser in order to perform its obligations under
this Agreement; or (iv) any event occurs that might affect the ability of the
Sub-adviser to provide the services provided for under this Agreement.
3. EXPENSES. During the term of this Agreement, the Sub-adviser shall pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other investments
(including brokerage commissions and other transaction charges, if any)
purchased for a Fund.
4. PURCHASING SHARES OF THE FUNDS. The Sub-adviser shall not purchase
shares of the Funds for itself or for accounts with respect to which it
exercises investment discretion in connection with such transactions except as
permitted by the Board or by federal, state and local law.
5. BOOKS AND RECORDS. Pursuant to Rule 31a-3 under the 1940 Act, the
Sub-adviser agrees that: (a) all records it maintains for the Trust are the
property of the Trust; (b) it will surrender promptly to the Trust or the
Adviser any such records upon the Trust's or Adviser's request; (c) it will
maintain for the Trust the records that the Trust is required to maintain
pursuant to Rule 31a-1 insofar as such records relate to the investment affairs
of the Fund; and (d) it will preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records it maintains for the Trust.
6. OTHER AGREEMENTS. The Sub-adviser and persons controlled by or under
common control with the Sub-adviser have and may have advisory, management
service or other agreements with other organizations and persons, and may have
other interests and businesses. Nothing in this Agreement is intended to
preclude such other business relationships.
7. COMPENSATION. The Trust will pay to the Adviser as compensation for the
Adviser's services rendered to each Fund an advisory fee (the "Advisory Fee") as
set forth in Exhibit 1 to this
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Agreement. In addition, the Trust will pay the Adviser an administration fee for
each Fund at the annual rate of 0.12% of the average daily net assets of the
Fund. Separately, the Trust will pay to the Sub-adviser as compensation for the
Sub-adviser's services rendered to each Fund pursuant to this Agreement an
Advisory Fee as set forth in Exhibit 1 to this Agreement. Such fees shall be
paid within 15 business days of the end of each month. If the Sub-adviser shall
serve for less than the whole of a month, the compensation as specified shall be
prorated.
8. AMENDMENT OF AGREEMENT. This Agreement shall not be materially amended
unless the Adviser and Sub-adviser mutually agree to such amendment, and such
amendment is approved by the affirmative vote of a majority of the outstanding
shares of each Fund, if required by the 1940 Act, and by the vote, cast in
person at a meeting called for the purpose of voting on such approval, of a
majority of the members of the Board who are not interested persons of the
Trust, the Adviser or the Sub-adviser (the "Independent Trustees"). The
Sub-adviser agrees to notify the Adviser of any anticipated change in control of
the Sub-adviser within a reasonable time prior to such change.
9. DURATION AND TERMINATION OF THE AGREEMENT. This Agreement shall become
effective with respect to each Fund upon its execution; provided, however, that
this Agreement shall not become effective unless it first has been approved by a
vote of the Independent Trustees, cast in person at a meeting called for the
purpose of voting on such approval. This Agreement shall remain in full force
and effect with respect to each Fund continuously thereafter as follows:
(a) By vote of a majority of the (i) Independent Trustees, or (ii)
outstanding voting shares of a Fund, the Trust may at any time terminate
this Agreement with respect to the Fund without the payment of penalty, by
providing not more than 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Adviser and the Sub-adviser.
(b) This Agreement will terminate automatically with respect to each
Fund without payment of any penalty, unless, within two years after its
initial effectiveness and at least annually thereafter, the continuance of
the Agreement is specifically approved by (i) the Board or the shareholders
of the Fund by the affirmative vote of a majority of the outstanding shares
of the Fund, and (ii) a majority of the Independent Trustees, by vote cast
in person at a meeting called for the purpose of voting on such approval.
If the continuance of this Agreement is submitted to the shareholders of
the Fund for their approval and such shareholders fail to approve such
continuance as provided herein, the Sub-adviser may continue to serve
hereunder in a manner consistent with the 1940 Act and the rules and
regulations thereunder.
(c) The Adviser may at any time terminate this Agreement with respect
to each Fund without the payment of any penalty by not less than 60 days'
written notice delivered or mailed by registered mail, postage prepaid, to
the Sub-adviser and the Trust, and the Sub-adviser may at any time without
the payment of any penalty, terminate this Agreement with respect to each
Fund by not less than 90 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Adviser and the Trust.
(d) This Agreement shall terminate automatically and immediately with
respect to each Fund without the payment of any penalty, in the event of
its assignment or if the Investment Management Agreement between the
Adviser and the Trust with respect to each Fund shall terminate for any
reason.
(e) This Agreement shall terminate automatically and immediately with
respect to a Fund unless approved by an affirmative vote of a majority of
the outstanding Shares of the Fund within 120 days after the date first set
forth above.
Upon termination of this Agreement, the duties of the Adviser delegated to the
Sub-adviser under this Agreement automatically shall revert to the Adviser.
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10. NOTICE. Any notice, advice or report to be given pursuant to this
Agreement shall be delivered or mailed:
To The Sub-adviser at:
Wilshire Associates Incorporated
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000-0000
Attention: President
To the Adviser at:
Xxxxxx & Rygel
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: President
To the Trust at:
The Xxxxxx & Rygel Investment Group
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: President
11. DEFINITIONS. For the purposes of this Agreement, the terms "vote of a
majority of the outstanding shares," "affiliated person," "control," "interested
person," and "assignment" shall have their respective meanings as defined in the
1940 Act and the rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act; and references to annual approvals by the Board shall be construed in
a manner consistent with the 1940 Act and the rules and regulations thereunder.
12. STANDARD OF CARE; LIABILITY OF THE SUB-ADVISER. The Sub-adviser shall
exercise due care and diligence and use the same skill and care in providing its
services hereunder as it uses in providing services to other investment
companies or accounts. In the absence of its willful misfeasance, bad faith,
negligence, or disregard of its obligations and duties hereunder, the
Sub-adviser shall not be subject to any liability to the Adviser, the Trust or
their directors, trustees, officers, or shareholders, for any act or omission in
the course of, or connected with, rendering services hereunder. However, the
Sub-adviser shall indemnify and hold harmless such parties from any and all
claims, losses, expenses, obligations and liabilities (including reasonable
attorneys fees) which arise or result from Sub-adviser's willful misfeasance,
bad faith, negligence, or disregard of its obligations and duties hereunder.
13. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of California, without giving effect to the conflicts of laws
principles thereof, and in accordance with the 1940 Act. To the extent that the
applicable laws of the State of California conflict with the applicable
provisions of the 1940 Act, the latter shall control.
14. 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. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors.
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15. MISCELLANEOUS. The captions in this agreement 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. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
agreement is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF, The Xxxxxx & Rygel Investment Group, Xxxxxx & Rygel,
and Wilshire Associates Incorporated, have each caused this instrument to be
signed in duplicate on its behalf by its duly authorized representative, all as
of the day and year first above written.
Attest: THE XXXXXX & RYGEL INVESTMENT GROUP
By: By:
--------------------------------- ------------------------------------
Secretary President
Attest: XXXXXX & RYGEL
By: By:
--------------------------------- ------------------------------------
Secretary President
Attest: WILSHIRE ASSOCIATES INCORPORATED
By: By:
--------------------------------- ------------------------------------
Secretary President
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EXHIBIT 1
ADVISER COMPENSATION
ASSET BASED FEE
0.10% on average daily net assets in the P&R Separate Account portion of the
Fund
SUB-ADVISER COMPENSATION
FIXED FEE
$150,000 Program Establishment Fee (start-up costs amortized over the first 5
years)
ASSET BASED FEE
0.15% on the first $500 million of average daily net assets of the Fund
0.12% on the next $500 million of average daily net assets of the Fund
0.10% thereafter
(minimum $150,000 per year)
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