EXHIBIT (D)(2)
Sub-Investment Advisory Agreement between CL Capital Management, Inc.
(CLCM) and J. & X. Xxxxxxxx & Co., Incorporated (Xxxxxxxx), dated May 1, 1995
SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of May, 1995 between CL Capital Management,
Inc. (the "Investment Advisor"), a Georgia corporation, and J&W Xxxxxxxx &
Company Incorporated (the "Sub-Investment Adviser"), a Delaware Corporation:
WITNESSETH:
WHEREAS, Canada Life of America Series Fund, Inc., a Maryland Corporation
(the "Fund") is engaged in business as a diversified open-end management
investment company and is registered as such under the Investment Company Act of
1940 (the "Investment Company Acts); and
WHEREAS, the Fund, a series type of investment company, issues separate
classes (or series) of stock, each of which represents a separate portfolio of
investments; and
WHEREAS, the Fund is currently comprised of six classes of stock
(together with any classes subsequently added, the "Series"), each of which
pursues its investment objectives through separate investment policies; and
WHEREAS, the Sub-Investment Adviser is engaged principally in the
business of rendering advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940; and
WHEREAS, the Fund has employed the Investment Adviser to act as
investment manager of the Fund as set forth in the Investment Advisory Agreement
between the Fund and the Investment Adviser dated May 1, 1995 (the "Investment
Advisory Agreement"); and
WHEREAS, the Fund and the Investment Adviser desire to retain the
Sub-Investment Adviser to render certain investment advisory services to the
International Series in the manner and on the terms hereinafter set forth;
NOW THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Investment Adviser and the Sub-Investment Adviser
hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-INVESTMENT ADVISOR
The Investment Adviser hereby employs the Sub-Investment Adviser to act
as the investment adviser of the Capital Series of the Fund, and to furnish the
investment advisory services described below, subject to the supervision of the
Board of Directors of the Fund and the Investment Adviser, for the period and on
the terms and conditions set forth in this Agreement. The Sub-Investment Adviser
herby accepts such employment and agrees during such period, at its own expense,
to render, or arrange for the rendering of, such services and to assume the
obligations herein set forth for the compensation provided for herein. The
Sub-Investment Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
shall in no way be deemed an agent of the Fund.
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The Sub-Investment Adviser, shall provide the Capital Series with such
investment research, advice and supervision as the latter may from time to time
consider necessary for the proper supervision of the assets of such Series,
shall furnish continuously an investment program for such Series, shall
determine from time to time which securities shall be purchased, sold or
exchanged, determine how voting and other rights with respect to the securities
of the Series shall be exercised, and what portions of the Series shall be held
in the various securities in which the Series invests or cash, and shall take
such steps as are necessary to implement any overall investment plan for such
Series, including providing or obtaining such services as may be necessary in
managing, acquiring or disposing of investments. The Sub-Investment Adviser's
services shall be subject always to the control and supervision of the Board of
Directors of the Fund and the Investment Adviser, the restrictions of the
Articles of Incorporation and By-Laws of the Fund, as amended from time to time,
the provisions of the Investment Company Act, the statements relating to the
investment objectives of the International Series, investment policies and
investment restrictions as the same are set forth in the currently effective
registration statement relating to the shares of the Fund under the Securities
Act of 1933, as amended and the Investment Company Act of 1940, as amended (the
"Registration Statement"), appropriate state insurance laws, and any applicable
provisions of the Internal Revenue Code of 1986. Should the Board of Directors
of the Fund at any time make any definite determination as to investment policy
and notify the Sub-Investment Adviser thereof in writing, the Sub-Investment
Adviser shall be bound by such determination for the period, if any, specified
in such notice or until similarly notified that such determination has been
revoked.
Investment Adviser acknowledges and agrees that it has sole
responsibility to ensure that Sub-Investment Adviser is properly informed of
such policies and restrictions applicable to the Series including without
limitation as are, (i) contained in the Fund's Prospectus, (ii) set forth in the
Internal Revenue Code of 1986, as amended, (iii) set forth pursuant to state
insurance laws.
Investment Adviser also acknowledges and agrees that it will be
responsible to provide Sub-Investment Adviser with all necessary compliance
reports to enable Sub-Investment Adviser to make purchases and sales for the
Series in accordance with the policies and restrictions to which the Series is
subject. Investment Adviser also agrees that it or the Fund is responsible to
provide or contract to provide accounting, custodial and any other
administrative services necessary to administer the business and other affairs
of the Fund.
The Sub-Investment Adviser shall take, on behalf of the International
Equity Series, all actions which it deems necessary to implement the investment
policies determined as provided above, and in particular to place all orders for
the purchase or sale of portfolio securities for the Series' account with
brokers or dealers selected by it, and to that end, the Sub-Investment Adviser
is authorized as the agent of the Fund to give instructions to the Custodian of
the Fund as to deliveries of securities and payments of cash for the account of
the International Series. In connection with the selection of such brokers or
dealers and the placing of such orders with respect to assets of the
International Series, the Sub-Investment Adviser is directed at all times to
seek to obtain best execution and price within the policy guidelines determined
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by the Board of Directors of the Fund and set forth in the Registration
Statement. Subject to this requirement and the provisions of the Investment
Company Act, the Securities Exchange Act of 1934, as amended, and other
applicable provisions of law, the Sub-Investment Adviser may select brokers or
dealers with which it or the Fund is affiliated.
In addition to seeking the best price and execution, the Sub-Investment
Adviser may also take into consideration research and statistical information
and wire and other quotation services provided to the Sub-Investment Adviser
which may justify brokerage commissions at a higher cost to the Series then may
result when allocating brokerages to other brokers on the basis of seeking best
price and execution. However, the Sub-Investment Adviser shall select only
brokers whose commissions it believes are reasonable. The Sub-Investment Adviser
will periodically evaluate the statistical data, research and other investment
services provided to it by brokers and dealers. Such services may be used by the
Sub-Investment Adviser in connection with the performance of its obligations
under this Agreement or in connection with other advisory or investment
operations.
ARTICLE II
SUB-INVESTMENT ADVISORY FEE
The payment of investment advisory fees and the allocation of charges and
expenses between the Fund and the Investment Adviser are set forth in the
Investment Advisory Agreement, and nothing in this Sub-Investment Advisory
Agreement shall change or affect that arrangement. The payment of investment
advisory fees and the apportionment of any expenses related to the services of
the Sub-Investment Adviser shall be the sole concern of the Investment Adviser
and the Sub-Investment Adviser and shall not be the responsibility of the Fund.
For the services rendered pursuant to this Agreement, Investment Adviser
will pay the Sub-Investment Adviser at the end of each calendar month, a fee,
calculated daily based upon the average daily value of the net assets of the
International Series of the Fund, as determined and computed in accordance with
the description of the determination of the net asset value contained in the
Registration Statement for the Fund, at the annual rate of 0.25%.
ARTICLE III
LIMITATION OF LIABILITY
Subject to Section 36 of the Investment Company Act of 1940, as amended,
the Sub-Investment Adviser 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 the management of the Fund, and the performance of its duties
hereunder except for (i) wilful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of reckless disregard of its
obligations and duties hereunder.
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ARTICLE IV
ACTIVITIES OF THE SUB-INVESTMENT ADVISER
The services of the Sub-Investment Adviser to the Capital Series are not
deemed to be exclusive, and the Sub-Investment Adviser is free to render
services to others.
It is agreed that the Sub-Investment Adviser may use any supplemental
investment research obtained for the benefit of the Capital Series in providing
investment advice to its other investment advisory accounts. The Sub-Investment
Adviser or its affiliates may use such information in managing their own
accounts. Conversely, such supplemental information obtained by the placement of
business for the Sub-Investment Adviser or other entities advised by the
Sub-Investment Adviser will be considered by and may be useful to the
Sub-Investment Adviser in carrying out its obligations to the International
Series.
Securities held by the Capital Series may also be held by separate
investment accounts or other mutual funds for which the Sub-Investment Adviser
may act as an adviser or by the Sub-Investment Adviser or its affiliates.
Because of different investment objectives or other factors, a particular
security may be bought by the Sub-Investment Adviser or its affiliates or for
one or more clients when one or more clients are selling the same security. If
purchases or sales of securities for the Capital Series or other entities for
which the Sub-Investment Adviser or its affiliates act as investment adviser or
for their advisory clients arise for consideration at or about the same time,
the Sub-Investment Adviser may make transactions in such securities, insofar as
feasible, for the respective entities and clients in a manner deemed equitable
to all. To the extent that transactions on behalf of more than one client of the
Sub-Investment Adviser during the same period may increase the demand for
securities being purchased or the supply of securities being sold, it is
recognized that there may be an adverse effect on price.
It is agreed that, on occasions when the Sub-Investment Adviser deems the
purchase or sale of a security to be in the best interest of the Capital Series
as well as other accounts or companies, it may, to the extent permitted by
applicable laws or regulations, but will not be obligated to, aggregate the
securities to be sold or purchased for other accounts or companies in order to
obtain favourable execution and lower brokerage commissions. In that event,
allocation of the securities purchased or sold, as well as the expenses incurred
in the transaction, will be made by the Sub-Investment Adviser in the manner it
considers to be most equitable and consistent with its fiduciary obligations to
the Capital Series and to such other accounts or companies. It is recognized
that in some cases this procedure may adversely affect the size of the position
obtainable for the Capital Series.
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ARTICLE V
BOOKS AND RECORDS
The Sub-Investment Adviser agrees that all books and records which it
maintains for the Capital Series shall be made available, within five business
days of a written request, to the Fund's accountants or auditors during regular
business hours at the Sub-Investment Adviser's offices. The Fund or its
authorized representative shall have the right to copy any records in the
possession of the Sub-Investment Adviser which pertain to the Fund and as the
Fund shall require in accordance with applicable law. Such books, records,
information or reports shall be available to properly constitute governmental
authorities consistent with state and federal law and/or regulations. The
Sub-Investment Adviser shall keep confidential and shall not disclose or use any
records or information obtained pursuant to this Agreement except as expressly
required by state or federal law and/or regulations.
In the event of the termination of this Agreement, all such books, records, or
other information shall be returned to the Fund free from any claim or assertion
of rights by the Sub-Investment Adviser. The Fund shall make available to the
Sub-Investment Adviser on a reasonable basis all books and records which it
maintains for the International Series.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date first above written,
and shall continue in effect until the date of the first annual or special
meeting of shareholders of the Capital Series, but not later than sixteen months
after the effective date of the Securities Act of 1933 Registration Statement
for the International Series. Thereafter, this Agreement shall continue in
effect from year to year with respect to the International Series so long as
such continuance is specifically approved at least annually by (i) the Board of
Directors of the Fund, or by the vote of a majority of the outstanding voting
securities of the International Series, and (ii) a majority of those Directors
of the Fund who are not parties to this Agree or interested persons of any
such party cast in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Board of Directors of the Fund, or by vote of a majority of the
outstanding voting securities of the Capital Series, or by the Investment
Adviser, on sixty days written notice to the other party. This Agreement may be
terminated for "cause" at any time by the Board of Directors of the Fund.
"Cause" is defined and limited for this purpose to mean wilful misfeasance, bad
faith, or gross negligence by the Sub-Investment Adviser in the performance of
its duties or reckless disregard by it of its obligations and duties under this
Agreement. This Agreement shall automatically terminate in the event of its
assignment or in the event of the termination of the Investment Advisory
Agreement between the Fund and the Investment Adviser. This Agreement may be
terminated without penalty, by Sub-Investment Adviser on sixty days notice.
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ARTICLE VII
DEFINITIONS
The terms "assignment," "interested person," and "majority of the
outstanding voting securities," when used in this Agreement, shall have the
respective meanings specified under the Investment Company Act.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
When required by applicable law, this Agreement may be amended by the
parties only if such amendment is specifically approved by (i) the vote of a
majority of the outstanding voting securities shares of the International
Series, and (ii) a majority of those Directors of the Fund 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.
The Investment Adviser agrees to advise Sub-Investment Adviser
immediately:
(a) of any request by the SEC for amendments to the Prospectus or for
additional information.
(b) of the issuance by the SEC of any stop order suspending the
effectiveness of the Fund's Prospectus or the initiation of any proceedings for
that purpose.
(c) of the happening of any material event which makes untrue any
statement made in the Fund's Prospectus or which requires the making of a change
in either of them in order to make the statements therein not misleading, and
(d) of all action of the SEC with respect to any amendments to the
Fund's Prospectus.
(e) of the happening of any event relating to Investment Adviser which
would have a material effect on its business.
The Sub-Investment Adviser agrees to advise Investment Adviser
immediately:
(a) of the happening of any material event which makes untrue any
statement made in the Fund's Prospectus or which requires the making of a change
in either of them in order to make the statements therein not misleading, and
(b) of the happening of any event relating to Investment Adviser which
would have a material effect on its business.
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ARTICLE IX
GOVERNING LAW
This Agreement shall be construed and interpreted in accordance with the
laws of the State of New York, and the applicable provisions of the Investment
Company Act.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
CL CAPITAL MANAGEMENT, INC.
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
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Its: Vice President
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By: /s/ D.V. Rough
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D.V. Rough
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Its: Treasurer
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J & W XXXXXXXX & COMPANY INCORPORATED
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
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Its: Managing Director
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By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
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Its: Managing Director
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