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Exhibit (d)(11)
FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
THIS INVESTMENT SUB-ADVISORY AGREEMENT ("Agreement"), made this day of
September, 1999 by and between PROVIDENTMUTUAL INVESTMENT MANAGEMENT COMPANY, a
Pennsylvania corporation (the "Adviser"), and STATE STREET GLOBAL ADVISORS, A
DIVISION OF STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company
(the "Sub-Adviser").
Adviser and Sub-Adviser agree as follows:
1. Adviser hereby engages the services of Sub-Adviser in connection with
Adviser's management of the Equity 500 Index Portfolio (the "Portfolio") of
Market Street Fund, Inc. (the "Fund"). Pursuant to this Agreement and subject to
the oversight and supervision by Adviser and the officers and the board of
directors of the Fund, Sub-Adviser shall manage the investment and reinvestment
of that portion of the assets of the Portfolio (hereinafter, the "Portfolio
Segment") that the Adviser shall, from time to time, direct.
2. Sub-Adviser hereby accepts appointment by Adviser in the foregoing capacity
and agrees, at its own expense, to render the services set forth herein and to
provide the office space, furnishings, equipment and personnel required by it to
perform such services on the terms and for the compensation provided in this
Agreement.
3. In particular, Sub-Adviser shall furnish continuously an investment program
for the Portfolio Segment and shall determine from time to time in its
discretion the securities and other investments to be purchased or sold or
exchanged and what portions of the Portfolio Segment shall be held in various
securities, cash or other investments. In this connection, Sub-Adviser shall
provide Adviser and the officers and directors of the Fund with such reports and
documentation as the latter shall reasonably request regarding Sub-Adviser's
management of the Portfolio Segment assets.
4. Sub-Adviser shall carry out its responsibilities under this Agreement in
compliance with: (a) the Portfolio's investment objective, policies and
restrictions as set forth in the Fund's current registration statement, (b) such
policies or directives as the Fund's directors may from time to time establish
or issue and communicate to the Sub-Adviser in writing, and (c) applicable law
and related regulations. Adviser shall promptly notify Sub-Adviser in writing of
changes to (a) or (b) above and shall notify Sub-Adviser in writing of changes
to (c) above promptly after it becomes aware of such changes.
5. Sub-Adviser shall take all actions which it considers necessary to
implement the investment policies of the Portfolio as these relate to the
Portfolio Segment, and in particular, to place all orders for the purchase or
sale of securities or other investments for the Portfolio Segment with brokers
or dealers selected by it, and to that end, Sub-Adviser is authorized as the
agent of the Fund to give instructions to the Fund's custodian as to deliveries
of securities or other investments and payments of cash for the account of the
Portfolio. In connection with the selection of brokers or dealers and the
placing of purchase and sale orders with respect to
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investments of the Portfolio, Sub-Adviser is directed at all times to seek to
obtain best execution and price within the policy guidelines determined by the
Fund's board of directors and set forth in the Fund's current registration
statement.
To the extent permitted by the policy guidelines set forth in the
Fund's current registration statement, Sub-Adviser is authorized to consider,
in the selection of brokers and dealers to execute portfolio transactions, not
only the available prices and rates of brokerage commissions but also other
relevant factors which may include, without limitation, the execution
capabilities of such brokers and dealers, research, custody and other services
provided by such brokers and dealers which the Sub-Adviser believes will
enhance its general portfolio management capabilities, the size of the
transaction, the difficulty of execution, the operational facilities of such
brokers and dealers, the risk to such a broker or dealer of positioning a block
of securities, and the overall quality of brokerage and research services
provided by such brokers and dealers. In connection with the foregoing,
Sub-Adviser is specifically authorized to pay those brokers and dealers who
provide brokerage and research services to it, a higher commission than that
charged by other brokers and dealers if the Sub-Adviser determines in good
faith that the amount of such commission is reasonable in relation to the value
of such services in terms of either the particular transaction or in terms of
Sub-Adviser's overall responsibilities with respect to the Portfolio Segment and
to any other client accounts or portfolios which Sub-Adviser advises. The
execution of such transactions shall not be considered to represent an unlawful
breach of any duty created by this Agreement or otherwise.
Sub-Adviser also is authorized to aggregate purchase and sale orders
for securities held (or to be held) in the Portfolio Segment with similar
orders being made on the same day for other client accounts or portfolios
managed by Sub-Adviser. When an order is so aggregated: (a) the actual prices
applicable to the aggregated transaction will be averaged and the Portfolio
Segment and each other account or portfolio participating in the aggregated
transaction shall be treated as having purchased or sold its portion of the
securities at such average price, and (b) all transaction costs incurred in
effecting the aggregated transaction shall be shared on a pro-rata basis among
the accounts or portfolios (including the Portfolio Segment) participating in
the transaction. Adviser recognizes that in some cases this procedure may
adversely affect the size of the position obtainable for the Portfolio Segment.
When recommending or effecting a transaction in a particular security
or investment for more than one client account or portfolio (including the
Portfolio Segment), Sub-Adviser may allocate such recommendations or
transactions among all accounts and portfolios for whom the recommendation is
made or transaction is effected on a basis that Sub-Adviser considers equitable.
6. Sub-Adviser's services under this Agreement are not exclusive.
Sub-Adviser may provide the same or similar services to other clients. Adviser
acknowledges that, except when transactions for multiple clients are
aggregated, transactions in a specific security or other investment may not be
recommended or executed at the same time or price for all client accounts or
portfolios (including the Portfolio Segment) for which that security or
investment is recommended or executed. This Agreement does not require
Sub-Adviser to give priority to the Portfolio Segment over other client
accounts or portfolios. Sub-Adviser shall for all purposes
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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
Adviser, the Fund or the Portfolio or otherwise be deemed agents of the
Adviser, the Fund or the Portfolio.
7. Sub-Adviser or an affiliated person of Sub-Adviser may act as broker for
the Portfolio in connection with the purchase or sale of securities or other
investments for the Portfolio, subject to: (a) the requirement that Sub-Adviser
seek to obtain best execution and price within the policy guidelines determined
by the Fund's board of directors and set forth in the Fund's current
registration statement, (b) the provisions of the Advisers Act, (c) the
provisions of the Securities Exchange Act of 1934, as amended, and (d) other
applicable provisions of law. Such brokerage services are not within the scope
of the duties of Sub-Adviser under this Agreement. Subject to the requirements
of applicable law and any procedures adopted by the Fund's board of directors,
Sub-Adviser or its affiliated persons may receive brokerage commissions, fees
or other remuneration from the Portfolio or the Fund for such services in
addition to Sub-Adviser's fees for services under this Agreement.
8. Nothing in this Agreement shall require Sub-Adviser to take or receive
physical possession of cash, securities or other investments of the Portfolio
Segment.
9. Sub-Adviser is registered with the U.S. Securities and Exchange Commission
under the Investment Advisers Act of 1940, as amended (the "Adviser's Act").
Sub-Advisers shall remain so registered throughout the term of this Agreement
and shall notify Adviser immediately if Sub-Adviser ceases to be so registered
as an investment adviser.
10. Sub-Adviser: (a) is duly organized and validly existing under the laws of
the Commonwealth of Massachusetts with the power to own and possess its assets
and carry on its business as it is now being conducted, (b) has the authority
to enter into and perform the services contemplated by this Agreement, (c) is
not prohibited by the Investment Company Act of 1940 (the "1940 Act") or the
Advisers Act from performing the services contemplated by this Agreement, (d)
has met, and will continue to seek to meet for the duration of this Agreement,
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 set forth in this Agreement, and (e)
will promptly notify Adviser of the occurrence of any event that would
disqualify it from serving as an investment adviser to an investment company
pursuant to Section 9(a) of the 1940 Act.
11. Adviser: (a) is duly organized and validly existing under the laws of the
Commonwealth of Pennsylvania with the power to own and possess its assets and
carry on its business as it is now being conducted, (b) has the authority to
enter into and perform the services contemplated by this Agreement, (c) is not
prohibited by the 1940 Act or the Advisers Act from performing the services
contemplated by this Agreement, (d) has met, and will continue to seek to meet
for the duration of this Agreement, 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
set forth in this Agreement, and (e) will promptly notify Sub-Adviser of the
occurrence of any event that would disqualify it from serving as an investment
adviser to an investment company pursuant to Section 9(a) of the 1940 Act.
Adviser represents that the Fund
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is (and during the term of this Agreement, will remain) registered as an
open-end management investment company under the 1940 Act and that the shares of
the Fund's stock representing an interest in the Portfolio are (and during the
term of this Agreement will remain) registered under the Securities Act of 1933
and under any applicable state securities laws.
12. Sub-Adviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide Adviser and the
Fund with a copy of that code, together with evidence of its adoption. Within 20
days of the end of each calendar quarter during which this Agreement remains in
effect, the president or a vice president of Sub-Adviser shall certify to
Adviser or the Fund that Sub-Adviser has complied with the requirements of Rule
17j-1 during the previous quarter and that there have been no violations of
Sub-Adviser's code of ethics or, if such a violation has occurred, that
appropriate action has been taken in response to such violation. Upon written
request of Adviser or the Fund, Sub-Adviser shall permit representatives of
Adviser or the Fund to examine the reports (or summaries of the reports)
required to be made to Sub-Adviser by Rule 17j-1(c)(1) and other records
evidencing enforcement of the code of ethics.
13. For the services rendered, the facilities furnished and the expenses
assumed by Sub-Adviser, Adviser shall pay Sub-Adviser at the end of each month a
fee based on the average daily net assets of the Portfolio Segment at the
following annual rates:
0.24% on all assets
Sub-Adviser's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Portfolio Segment shall be determined in the manner and on the dates set
forth in the current prospectus of the Fund, and, on days on which the net
assets are not so determined, the net asset value computation to be used shall
be as determined on the immediately preceding day on which the net assets were
determined. In the event of termination of this Agreement, all compensation due
through the date of termination will be calculated on a pro-rated basis through
the date of termination and paid within thirty business days of the date of
termination.
During any period when the determination of net asset value is suspended,
the net asset value of the Portfolio as of the last business day prior to such
suspension shall for this purpose be deemed to be the net asset value at the
close of each succeeding business day until it is again determined.
14. Sub-Adviser hereby undertakes and agrees to maintain, in the form and for
the period required by Rule 31 a-2 under the 1940 Act, all records relating to
the Portfolio Segment's investments that are required to be maintained by the
Fund pursuant to the requirements of paragraphs (b)(5), (b)(6), (b)(7), (b)(9),
(b)(10) and (f) of Rule 31a-1 under the 1940 Act.
Sub-Adviser agrees that all books and records which it maintains for the
Portfolio or the Fund are the property of the Fund and further agrees to
surrender promptly to the Adviser or the Fund any such books, records or
information upon the Adviser's or the Fund's request (provided, however, that
Sub-Adviser may retain copies of such records). All such books and records shall
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be made available, within five business days of a written request, to the Fund's
accountants or auditors during regular business hours at Sub-Adviser's offices.
Adviser and the Fund or either of their authorized representative shall have the
right to copy any records in the possession of Sub-Adviser which pertain to the
Portfolio or the Fund. Such books, records, information or reports shall be
made available to properly authorized government representatives consistent
with state and 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 Adviser or the Fund.
15. Sub-Adviser agrees that it will not disclose or use any records or
confidential information obtained pursuant to this Agreement in any manner
whatsoever except as authorized in this Agreement or specifically by Adviser or
the Fund, or if such disclosure is required by federal or state regulatory
authorities.
Sub-Adviser may disclose the investment performance of the Portfolio and
the Portfolio Segment, provided that such disclosure does not reveal the
identity of the Adviser, the Portfolio or the Fund. Sub-Adviser may, however,
disclose that Adviser, the Fund and the Portfolio are its clients, provided that
such disclosure does not reveal the investment performance or the composition of
the Portfolio Segment.
16. In the absence of willful misfeasance, bad faith or gross negligence on
the part of Sub-Adviser or its officers, directors or employees, or reckless
disregard by Sub-Adviser of its duties under this Agreement (together,
"disabling conduct"), Sub-Adviser shall not be liable to Adviser, the Portfolio,
the Fund or to any shareholder of the Portfolio for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security, except
to the extent otherwise provided in Section 36(b) of the 1940 Act concerning
loss resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services.
17. Sub-Adviser agrees to indemnify and defend Adviser, its officers,
directors, partners, employees and any person who controls Adviser for any loss
or expense (including attorney's fees) arising out of any claim, demand,
action, suit or proceeding arising out of any actual or alleged material
misstatement or omission in the Fund's registration statement, any proxy
statement, or communication to current or prospective investors in the
Portfolio relating to disclosure about Sub-Adviser provided to Adviser by
Sub-Adviser.
18. Adviser agrees to indemnify and defend Sub-Adviser, it officers,
directors, partners, employees and any person who controls Adviser for any loss
or expense (including attorney's fees) arising out of any claim, demand, action,
suit or proceeding arising out of any actual or alleged material misstatement or
omission in the Fund's registration statement, any proxy statement, or other
communication to current or prospective investors in the Portfolio (other than a
misstatement or omission relating to disclosure about Sub-Adviser provided to
Adviser or the Fund by Sub-Adviser.
19. This Agreement shall not become effective unless and until it is approved
by the board of directors of the Fund, including a majority of directors who
are not parties to this Agreement or interested persons of any such party to
this Agreement, and, to the extent required by law, a
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majority of the outstanding shares of the class of the Fund's stock
representing an interest in the Portfolio. This Agreement shall come into full
force and effect on the date which it is so approved. This Agreement shall
continue in effect for two years and shall thereafter continue in effect from
year to year so long as such continuance is specifically approved at least
annually by (a) the board of directors of the Fund, or by the vote of a
majority of the outstanding shares of the class of stock representing an
interest in the Portfolio, and (b) a majority of those directors 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.
20. This Agreement may be terminated at any time without the payment of any
penalty, by the Fund's board of directors, or by vote of a majority of the
outstanding shares of the class of stock representing an interest in the
Portfolio on sixty days written notice to the Adviser and Sub-Adviser, or by
the Adviser, or by the Sub-Adviser, on sixty days written notice to the other.
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 Adviser and the Fund regarding the Adviser's management of the Portfolio.
21. This Agreement may be amended by the parties only if such amendment is
specifically approved by (a) a majority of those directors 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, if required by
applicable law, (b) the vote of a majority of outstanding shares of the class
of the Fund's stock representing an interest in the Portfolio.
22. The terms "assignment", "affiliated person" and "interested person", when
used in this Agreement, shall have the respective meanings specified in the
1940 Act. The term "majority of the outstanding shares of the class" means the
lesser of (a) 67% or more of the shares of such class present at a meeting if
more than 50% of such shares are present or represented by proxy or (b) more
than 50% of the shares of such class.
23. This Agreement shall be construed in accordance with laws of the
Commonwealth of Pennsylvania, and applicable provisions of the Advisers Act and
1940 Act.
24. 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.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
Providentmutual Investment Management Company
By: _________________________________________
Name: Xxxxxx Xxxxxxxxxx
Title: Vice President
ATTEST:
________________________
State Street Global Advisors, a division of State
Street Bank and Trust Company
By: __________________________________________
Name: ________________________________________
Title: _______________________________________
ATTEST:
________________________
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