EXHIBIT 99.B5
SUB-ADVISORY CONTRACT
XXXXX FARGO BANK, N.A.
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
May 1, 1998
Xxxxx Capital Management
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
This will confirm the agreement by and among Xxxxx Fargo Bank, N.A. (the
"Advisor"), Life & Annuity Trust (the "Trust"), on behalf of each Fund listed on
attached Appendix I, (each, a "Fund" and collectively, the "Funds") and Xxxxx
Capital Management (the "Sub-Advisor") as follows:
1. The Trust is a registered open-end management investment company
currently consisting of a number of investment portfolios, but which may from
time to time consist of a greater or lesser number of investment portfolios. The
Trust proposes to engage in the business of investing and reinvesting the assets
of the Funds in the manner and in accordance with the investment objective and
restrictions specified in the Trust's Registration Statement, as amended from
time to time (the "Registration Statement"), filed by the Trust under the
Investment Company Act of 1940 (the "Act") and the Securities Act of 1933.
Copies of the Registration Statement have been furnished to the Advisor. Any
amendments to the Registration Statement shall be furnished to the Advisor
promptly.
2. The Trust has engaged the Advisor to manage the investing and
reinvesting of the Funds' assets and to provide the advisory services specified
elsewhere in the Advisory Contract between the Trust and the Advisor, subject to
the overall supervision of the Board of Trustees of the Trust. Pursuant to
Administration and Co-Administration Agreements between and among the Trust, on
behalf of the Funds, and the administrator and co-administrator (the
"Administrators"), the Trust has engaged the Administrators to provide the
administration services specified therein.
3. (a) The Advisor hereby employs the Sub-Advisor to perform for the Funds
certain advisory services and the Sub-Advisor hereby accepts such employment.
The Advisor shall retain the authority to establish and modify, from time to
time, the investment strategies and approaches followed by the Sub-Advisor,
subject, in all respects, to the supervision and direction of the Trust's Board
of Trustees and subject to compliance with the investment objective, policies
and restrictions set forth in the Registration Statement.
(b) Subject to the overall supervision and control of the Advisor and the
Trust, the Sub-Advisor shall be responsible for investing and reinvesting the
Funds' assets in a manner consistent with the investment strategies and
approaches referenced in subparagraph (a), above. In this regard, the Sub-
Advisor, in accordance with the investment objective, policies and restrictions
set forth in the Registration Statement, shall be responsible for implementing
and monitoring the performance of the investment model employed with respect to
a Fund and shall furnish to the Advisor periodic reports on the investment
activity and performance of the Funds. The Sub-Advisor shall also furnish such
additional reports and information as the Advisor and the Trust's Board of
Trustees and officers shall reasonably request.
(c) The Sub-Advisor shall, at its expense, employ or associate with
itself such persons as the Sub-Advisor believes appropriate to assist it in
performing its obligations under this contract.
4. The Advisor shall be responsible for the fees paid to the Sub-Advisor
for its services thereunder. The Sub-Advisor agrees that it shall have no claim
against the Trust or the Fund respecting compensation under this contract. In
consideration of the services to be rendered by the Sub-Advisor under this
contract, the Advisor shall pay the Sub-Advisor monthly fees at the rates
specified on Appendix 1 hereto. If the fee payable to the Sub-Advisor pursuant
to this Paragraph 4 begins to accrue on a day after the first day of any month
or if this contract 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
that month to the termination date, shall be prorated according to the
proportion that such period bears to the full month in which the effectiveness
or termination occurs. For purposes of calculating the monthly fee, the value of
a Fund's net assets shall be computed in the manner specified in the
Registration Statement for the computation of the value of such Fund's net
assets in connection with the determination of the net asset value of Fund
shares.
5. The Sub-Advisor shall give the Trust the benefit of the Sub-Advisor's
best judgment and efforts in rendering services under this contract. As
consideration and as an inducement to the Sub-Advisor's undertaking to render
these services, the Trust and the Advisor agree that the Sub-Advisor shall not
be liable under this contract for any mistake in judgment or in any other event
whatsoever except for lack of good faith, provided that nothing in this contract
shall be deemed to protect or purport to protect the Sub-Advisor against any
liability to the Advisor, the Trust or its shareholders to which the Sub-Advisor
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Sub-Advisor's duties under this contract or
by reason of reckless disregard of its obligations and duties thereunder.
6. This contract shall become effective as of its execution date and shall
thereafter continue in effect, provided that this contract shall continue in
effect for a period of more than two years from the date hereof only so long as
the continuance is specifically approved at least annually (a) by the vote of a
majority of a Fund's outstanding voting securities (as defined in the Act) or by
the Trust's Board of Trustees and (b) by the vote, cast in person at a meeting
called specifically for the purpose of continuing this Sub-Advisory Contract, of
a majority of the Trust's Trustees who are not parties to this contract or
"interested persons" (as defined in the
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Act) of any such party. This contract may be terminated, upon 60 days' written
notice to the Sub-Advisor, by the Trust, without the payment of any penalty, by
a vote of a majority of such Fund's outstanding voting securities (as defined in
the Act) or by a vote of a majority of the Trust's entire Board of Trustees. The
Sub-Advisor may terminate this contract on 60 days' written notice to the Trust.
This contract shall terminate automatically in the event of its assignment (as
defined in the Act).
7. Except to the extent necessary to perform the Sub-Advisor's obligations
under this contract, nothing herein shall be deemed to limit or restrict the
right of the Sub-Advisor, or any affiliate of the Sub-Advisor, or any employee
of the Sub-Advisor, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
8. This contract shall be governed by and construed in accordance with the
laws of the State of California.
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If the foregoing correctly sets forth the agreement by and among the Trust,
the Advisor and the Sub-Advisor, please so indicate by signing and returning to
the Trust the enclosed copy hereof.
Very truly yours,
XXXXX FARGO BANK, N.A.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
By: /a/ Xxxxxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Vice President
AGREED to as of the date set forth above:
XXXXX CAPITAL MANAGEMENT, INC.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Executive Vice President
ACCEPTED as of the date
set forth above:
LIFE & ANNUITY TRUST,
on behalf of each Fund listed on
attached Appendix I
By: /s/ Xxxxxxx X. Xxxxx, Xx.
---------------------------
Xxxxxxx X. Xxxxx, Xx.
Chief Operating Officer
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APPENDIX I
Sub-advisory fees shall be paid monthly on the first business day of each
month, at the annual rates specified below of each Fund's average daily value
(as determined on each day that such value is determined for the Fund at the
time set forth in the Prospectus for determining net asset value per share)
during the preceding month.
FUND FEE (PER FUND)
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Equity Value Fund 0.25% of the first $200 million in assets
Growth Fund 0.20% of the next $200 million in assets
Strategic Growth Fund 0.15% of all assets over $400 million
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Money Market Fund 0.05% of the first $960 million in assets
0.04% of all assets above $960 million
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Corporate Bond Fund 0.15% of the first $400 million in assets
0.125% of the next $400 million in assets
0.10% of all assets over $800 million
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Approved: April 30, 1998
Approved as amended: July 30, 1998 to include the Corporate Bond Fund
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