SUBADVISORY AGREEMENT
THIS AGREEMENT is made and entered into as of January 31, 2003 between
STRONG CAPITAL MANAGEMENT, INC. (the "Adviser"), a Wisconsin corporation
registered under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and XXXXXX ASSET MANAGEMENT COMPANY (the "Subadviser"), a Delaware
corporation registered under the Advisers Act.
WITNESSETH:
WHEREAS, the Strong Stable Value Fund (the "Fund"), a series of the
Fund, Inc., a Wisconsin corporation, is registered with the U.S. Securities and
Exchange Commission (the "Commission") as a series fund of an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act");
WHEREAS, the Advisory Agreement permits the Adviser to delegate certain of
its duties under the Advisory Agreement to other investment advisers, subject to
the requirements of the Investment Company Act; and
WHEREAS, the Adviser desires to retain the Subadviser as subadviser for the
Fund to assist the Adviser in the management of the Fund's Investments (as
defined below) and the Subadviser desires to render such services.
NOW, THEREFORE, the Adviser and Subadviser do mutually agree and promise as
follows:
1. APPOINTMENT AS SUBADVISER. The Adviser hereby retains the Subadviser to
act as investment adviser for and to manage certain assets of the Fund subject
to the supervision of the Adviser and the Board of Directors of the Fund and
subject to the terms of this Agreement; and the Subadviser hereby accepts such
employment.
2. DUTIES OF SUBADVISER.
(a) INVESTMENTS. The Subadviser is hereby authorized and directed and
hereby agrees, subject to the stated investment policies and restrictions
of the Fund as set forth in the Fund's current prospectus and statement of
additional information as currently in effect and as supplemented or
amended from time to time (collectively referred to hereinafter as the
"Prospectus") and subject to the directions of the Adviser and the Fund's
Board of Directors, to solicit, structure, and negotiate book value
liquidity agreements with financial institutions acceptable to Subadviser
and the Adviser for the account of the Fund (hereinafter "Investments") and
to monitor on a continuous basis the terms of such Investments and the
creditworthiness of the issuers thereof.
(b) SECURITIES TRANSACTIONS. The Subadviser and any affiliated person
of the Subadviser will not purchase securities or other instruments from or
sell securities or other instruments to the Fund; PROVIDED, HOWEVER, the
Subadviser may purchase securities or other instruments from or sell
securities or other instruments to the Fund if such transaction is
permissible under applicable laws and regulations, including, without
limitation, the Investment Company Act and the Advisers Act and the rules
and regulations promulgated thereunder.
The Subadviser agrees to observe and comply with Rule 17j-1 under the
Investment Company Act and the Fund's Code of Ethics, as the same may be
amended from time to time (or, in the case of the Fund's Code of Ethics, to
adopt or have adopted a Code of Ethics that complies in all material
respects with the requirements of the Fund's Code of Ethics). The
Subadviser will make available to the Adviser or the Fund at any time upon
request, including facsimile without delay, during any business day any
reports required to be made by the Subadviser pursuant to Rule 17j-1 under
the Investment Company Act.
(c) BOOKS AND RECORDS. The Subadviser will maintain all books and
records required to be maintained pursuant to the Investment Company Act
and the rules and regulations promulgated thereunder with respect to
transactions made by it on behalf of the Fund and as agreed to from time to
time with the Adviser including, without limitation, the books and records
required by Subsections (b)(1), (5), (6), (7), (9), (10) and (11) and
Subsection (f) of Rule 31a-1 under the Investment Company Act and shall
timely furnish to the Adviser all information relating to the Subadviser's
services hereunder needed by the Adviser to keep such other books and
records of the Fund required by Rule 31a-1 under the Investment Company
Act. The Subadviser will also preserve all such books and records for the
periods prescribed in Rule 31a-2 under the Investment Company Act, and
agrees that such books and records shall remain the sole property of the
Fund and shall be immediately surrendered to the Fund upon request. The
Subadviser further agrees that all books and records maintained hereunder
shall be made available to the Fund or the Adviser at any time upon
request, including facsimile without delay, during any business day.
(d) INFORMATION CONCERNING INVESTMENTS AND SUBADVISER. From time to
time as the Adviser or the Fund may request, the Subadviser will furnish
the requesting party reports on portfolio transactions and reports on
Investments held in the portfolio, all in such detail as the Adviser or the
Fund may request. The Subadviser will also provide the Fund and the Adviser
on a regular basis with economic and investment analyses and reports or
other investment services normally available to institutional or other
clients of the Subadviser for which the Subadviser provides similar
advisory services.
The Subadviser will make available its officers and employees to meet
with the Fund's Board of Directors at the Fund's principal place of
business on due notice to review the Investments of the Fund (quarterly by
telephone and annually through in-person presentations). The Subadviser
further agrees to inform the Fund and the Adviser on a current basis of
changes in investment strategy, tactics or key personnel with respect to
the Fund.
The Subadviser will also provide such information or perform such
additional acts as are customarily performed by a subadviser and may be
required for the Fund or the Adviser to comply with their respective
obligations under applicable laws, including, without limitation, the
Internal Revenue Code of 1986, as amended (the "Code"), the Investment
Company Act, the Advisers Act, the Securities Act of 1933, as amended (the
"Securities Act") and any state securities laws, and any rule or regulation
thereunder.
(e) CUSTODY ARRANGEMENTS. The Subadviser acknowledges receipt of the
Custodian and Remote Access Agreement for the Fund and agrees to comply at
all times with all requirements relating to such arrangements to the extent
applicable to the performance of the Subadviser's obligations under this
Agreement. The Subadviser shall provide the Adviser, and the Adviser shall
provide the Fund's custodian on each business day with information relating
to all transactions concerning the Fund's assets.
(f) COMPLIANCE WITH APPLICABLE LAWS AND GOVERNING DOCUMENTS. The
Subadviser agrees that in all matters relating to its performance under
this Agreement, the Subadviser and its directors, officers, partners,
employees and interested persons, will act in accordance with all
applicable laws, including, without limitation, the Investment Company Act,
the Advisers Act, the Code, the Commodity Exchange Act, as amended (the
"CEA") and state securities laws, and any rules and regulations promulgated
thereunder. The Subadviser further agrees to act in accordance with the
Fund's Articles of Incorporation, By-Laws, currently effective registration
statement under the Investment Company Act, including any amendments or
supplements thereto, and Notice of Eligibility under Rule 4.5 of the CEA,
if applicable, (collectively, "Governing Instruments and Regulatory
Filings") and any instructions or directions of the Fund, its Board of
Directors or the Adviser.
The Subadviser acknowledges receipt of the Fund's Governing
Instruments and Regulatory Filings. The Adviser hereby agrees to provide to
the Subadviser any amendments, supplements or other changes to the
Governing Instruments and Regulatory Filings as soon as practicable after
such materials become available and, upon receipt by the Subadviser, the
Subadviser will act in accordance with such amended, supplemented or
otherwise changed Governing Instruments and Regulatory Filings.
(g) FUND'S NAME; ADVISER'S NAME. The Subadviser agrees that it shall
have no rights of any kind relating to the Fund's name, "Strong Stable
Value Fund" or in the name "Strong" as it is used in connection with
investment products, services or otherwise, and that it shall make no use
of such names without the express written consent of the Fund or the
Adviser, as the case may be.
(h) VOTING OF PROXIES. The Adviser shall have sole responsibility to
vote, in accordance with the Adviser's Proxy Voting Policies in effect from
time to time, such proxies as may be necessary or advisable in connection
with any matters submitted to a vote of shareholders of securities held by
the Fund.
3. SERVICES NON-EXCLUSIVE. Nothing in this Agreement shall limit or
restrict the right of any of the Subadviser's directors, officers, or employees
to engage in any other business or to devote his or her time and attention in
part to the management or other aspects of any business, whether of a similar or
dissimilar nature, nor limit or restrict the Subadviser's right to engage in any
other business or to render services of any kind to any other corporation, firm,
individual or association.
4. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder, the
Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Fund or the Adviser in any way or
otherwise be deemed an agent of the Fund or the Adviser.
5. COMPENSATION. The Adviser shall pay to the Subadviser a fee for its
services hereunder (the "Subadvisory Fee") computed as follows, based on the net
asset value of the Fund:
(a) FEE RATE. The Subadvisory Fee shall be the annual rate of 0.10% of
the Fund's average daily net asset value.
(b) FEE WAIVERS AND REIMBURSEMENTS. To the extent that the Adviser
determines to waive all or any portion of its advisory fee for the purpose
of maintaining the Fund's daily income accrual for the benefit of
shareholders in excess of 0%, the Subadviser agrees that it will waive the
advisory fee that it would otherwise be entitled to receive under the terms
of this Agreement in the same proportion as the Adviser's fee waiver.
(c) METHOD OF COMPUTATION; PAYMENT. The Subadvisory Fee shall be
accrued for each calendar day the Subadviser renders subadvisory services
hereunder and the sum of the daily fee accruals shall be paid monthly to
the Subadviser as soon as practicable following the last day of each month,
by wire transfer if so requested by the Subadviser, but no later than eight
(8) calendar days thereafter. The daily fee accruals will be computed by
multiplying the fraction of one (1) over the number of calendar days in the
year by the annual rate as described in Subsection (a) of this Section 6
and multiplying the product by the net asset value of the Fund as
determined in accordance with the Prospectus as of the close of business on
the previous business day on which the Fund was open for business.
6. EXPENSES. The Subadviser shall bear all expenses incurred by it in
connection with its services under this Agreement and will, from time to time,
at its sole expense employ or associate itself with such persons as it believes
to be particularly fitted to assist it in the execution of its duties hereunder.
7. REPRESENTATIONS AND WARRANTIES OF SUBADVISER. The Subadviser represents
and warrants to the Adviser and the Fund as follows:
(a) The Subadviser is registered as an investment adviser under the
Advisers Act;
(b) The Subadviser has filed a notice of exemption pursuant to Rule
4.14 under the CEA with the Commodity Futures Trading Commission (the
"CFTC") and the National Futures Association (the "NFA"), if applicable;
(c) The Subadviser is a corporation duly organized and validly
existing under the laws of the State of Delaware with the power to own and
possess its assets and carry on its business as it is now being conducted;
(d) The execution, delivery and performance by the Subadviser of this
Agreement are within the Subadviser's powers and have been duly authorized
by all necessary action on the part of its shareholders, and no action by
or in respect of, or filing with, any governmental body, agency or official
is required on the part of the Subadviser for the execution, delivery and
performance by the Subadviser of this Agreement, and the execution,
delivery and performance by the Subadviser of this Agreement do not
contravene or constitute a default under (i) any provision of applicable
law, rule or regulation, (ii) the Subadviser's governing instruments, or
(iii) any agreement, judgment, injunction, order, decree or other
instrument binding upon the Subadviser;
(e) This Agreement is a valid and binding agreement of the Subadviser;
(f) The Subadviser and any affiliated person of the Subadviser have
not:
(i) within 10 years from the date hereof been convicted of any
felony or misdemeanor involving the purchase or sale of any securities
or arising out of the conduct as an underwriter, broker, dealer,
investment adviser, municipal securities dealer, government securities
broker, government securities dealer, transfer agent, or entity or
person required to be registered under the CEA, or as an affiliated
person, salesman, or employee of any investment company, bank,
insurance company, or entity or person required to be registered under
the CEA; or
(ii) by reason of any misconduct, been permanently or temporarily
enjoined by an order, judgment or decree of any court of competent
jurisdiction or other governmental authority from acting as an
underwriter, broker, dealer, investment adviser, municipal securities
dealer, government securities broker, government securities dealer,
transfer agent, or entity or person required to be registered under
the CEA, or an affiliated person, salesman, or employee of any
investment company, bank, insurance company, or entity or person
required to be registered under the CEA or from engaging in or
continuing any conduct or practice in connection with any such
activity or in connection with the purchase or sale of any security;
or
(iii) been a party to litigation or other adversarial proceedings
involving any former or current client that is material to the
Subadviser's business;
(g) The Form ADV of the Subadviser attached hereto as Exhibit A is a
true and complete copy of the form filed with the Commission and the
information contained therein is accurate and complete in all material
respects and does not omit to state any material fact necessary in order to
make the statements made, in light of the circumstances under which they
were made, not misleading;
(h) The Subadviser's Code of Ethics, attached hereto as Exhibit C has
been duly adopted by the Subadviser and meets the requirements of Rule
17j-1 under the Investment Company Act.
8. REPRESENTATIONS AND WARRANTIES OF ADVISER. The Adviser represents and
warrants to the Subadviser as follows:
(a) The Adviser is registered as an investment adviser under the
Advisers Act;
(b) The Adviser has filed a notice of exemption pursuant to Rule 4.14
under the CEA with the CFTC and the NFA;
(c) The Adviser is a corporation duly organized and validly existing
under the laws of the State of Wisconsin with the power to own and possess
its assets and carry on its business as it is now being conducted;
(d) The execution, delivery and performance by the Adviser of this
Agreement, including the appointment of the Subadviser to act on behalf of
the Adviser and the Fund, are within the Adviser's powers and have been
duly authorized by all necessary action on the part of its shareholders and
the Fund, and no action by or in respect of, or filing with, any
governmental body, agency or official is required on the part of the
Adviser for the execution, delivery and performance by the Adviser of this
Agreement, and the execution, delivery and performance by the Adviser of
this Agreement do not contravene or constitute a default under (i) any
provision of applicable law, rule or regulation, (ii) the Adviser's
governing instruments, or (iii) any agreement, judgment, injunction, order,
decree or other instrument binding upon the Adviser;
(e) This Agreement is a valid and binding agreement of the Adviser;
(f) The Adviser and any affiliated person of the Adviser have not:
(i) within 10 years from the date hereof been convicted of any
felony or misdemeanor involving the purchase or sale of any securities
or arising out of the conduct as an underwriter, broker, dealer,
investment adviser, municipal securities dealer, government securities
broker, government securities dealer, transfer agent, or entity or
person required to be registered under the CEA, or as an affiliated
person, salesman, or employee of any investment company, bank,
insurance company, or entity or person required to be registered under
the CEA; or
(ii) by reason of any misconduct, been permanently or temporarily
enjoined by an order, judgment or decree of any court of competent
jurisdiction or other governmental authority from acting as an
underwriter, broker, dealer, investment adviser, municipal securities
dealer, government securities broker, government securities dealer,
transfer agent, or entity or person required to be registered under
the CEA, or an affiliated person, salesman, or employee of any
investment company, bank, insurance company, or entity or person
required to be registered under the CEA or from engaging in or
continuing any conduct or practice in connection with any such
activity or in connection with the purchase or sale of any security;
or
(iii) been a party to litigation or other adversarial proceedings
involving any former or current client that is material to the
Adviser's business;
(g) The Form ADV of the Adviser attached hereto as Exhibit D is a true
and complete copy of the form filed with the Commission and the information
contained therein is accurate and complete in all material respects and
does not omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they were made,
not misleading;
(h) The Adviser acknowledges that it received a copy of the
Subadviser's Form ADV at least 48 hours prior to the execution of this
Agreement.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; DUTY TO UPDATE INFORMATION.
All representations and warranties made by the Subadviser and the Adviser
pursuant to Sections 7 and 8 hereof shall survive for the duration of this
Agreement and the parties hereto shall immediately notify, but in no event later
than five (5) business days, each other in writing upon becoming aware that any
of the foregoing representations and warranties are no longer true. In addition,
the Subadviser will deliver to the Adviser and the Fund copies of any
amendments, supplements or updates to any of the information provided to the
Adviser and attached as exhibits hereto within fifteen (15) days after becoming
available. Within forty-five (45) days after the end of each calendar year
during the term hereof, the Subadviser shall certify to the Adviser that it has
complied with the requirements of Rule 17j-1 under the Investment Company Act
with regard to its duties hereunder during the prior year and that there has
been no violation of the Subadviser's Code of Ethics with respect to the Fund or
in respect of any matter or circumstance that is material to the performance of
the Subadviser's duties hereunder or, if such violation has occurred, that
appropriate action was taken in response to such violation.
10. LIABILITY AND INDEMNIFICATION.
(a) LIABILITY. In the absence of willful misfeasance, bad faith or
negligence on the part of the Subadviser or a breach of its duties
hereunder, the Subadviser shall not be subject to any liability to the
Adviser or the Fund or any of the Fund's shareholders, and, in the absence
of willful misfeasance, bad faith or negligence on the part of the Adviser
or a breach of its duties hereunder, the Adviser shall not be subject to
any liability to the Subadviser, for any act or omission in the case of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of Investments; PROVIDED,
HOWEVER, that nothing herein shall relieve the Adviser and the Subadviser
from any of their obligations under applicable law, including, without
limitation, the federal and state securities laws and the CEA.
(b) INDEMNIFICATION. The Subadviser shall indemnify the Adviser and
the Fund, and their respective officers and directors, for any liability
and expenses, including attorneys' fees, which may be sustained as a result
of the Subadviser's willful misfeasance, bad faith, negligence, breach of
its duties hereunder or violation of applicable law, including, without
limitation, the federal and state securities laws or the CEA. The Adviser
shall indemnify the Subadviser and its officers and directors, for any
liability and expenses, including attorneys' fees, which may be sustained
as a result of the Adviser's willful misfeasance, bad faith, negligence,
breach of its duties hereunder or violation of applicable law, including,
without limitation, the federal and state securities laws or the CEA.
11. DURATION AND TERMINATION.
(a) DURATION. This Agreement shall be submitted for approval by
shareholders of the Fund at the first meeting of shareholders of the Fund
following the effective date of its Registration Statement on Form N-1A
covering the initial offering of shares of the Fund. This Agreement shall
continue in effect for a period of two years from the date hereof, subject
thereafter to being continued in force and effect from year to year if
specifically approved each year by either (i) the Board of Directors of the
Fund, or (ii) by the affirmative vote of a majority of the Fund's
outstanding voting securities. In addition to the foregoing, each renewal
of this Agreement must be approved by the vote of a majority of the Fund's
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. Prior to voting on the renewal of this Agreement,
the Board of Directors of the Fund may request and evaluate, and the
Subadviser shall furnish, such information as may reasonably be necessary
to enable the Fund's Board of Directors to evaluate the terms of this
Agreement.
(b) TERMINATION. Notwithstanding whatever may be provided herein to
the contrary, this Agreement may be terminated at any time, without payment
of any penalty:
(i) By vote of a majority of the Board of Directors of the Fund,
or by vote of a majority of the outstanding voting securities of the
Fund, or by the Adviser, in each case, upon sixty (60) days' written
notice to the Subadviser;
(ii) By the Adviser upon breach by the Subadviser of any
representation or warranty contained in Section 9 hereof, which shall
not have been cured during the notice period, upon twenty (20) days
written notice;
(iii) By the Adviser immediately upon written notice to the
Subadviser if the Subadviser becomes unable to discharge its duties
and obligations under this Agreement; or
(iv) By the Subadviser upon 180 days written notice to the
Adviser and the Fund.
This Agreement shall not be assigned (as such term is defined in the Investment
Company Act) without the prior written consent of the parties hereto. This
Agreement shall terminate automatically in the event of its assignment without
such consent or upon the termination of the Advisory Agreement.
12. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to the
Advisory Agreement and shall oversee and review the Subadviser's performance of
its duties under this Agreement. Nothing contained in this Agreement shall
obligate the Adviser to provide any funding or other support for the purpose of
directly or indirectly promoting investments in the Fund.
13. AMENDMENT. This Agreement may be amended by mutual consent of the
parties, provided that the terms of each such amendment shall be approved by the
Board of Directors of the Fund or by a vote of a majority of the outstanding
voting securities of the Fund. If such amendment is proposed in order to comply
with the recommendations or requirements of the Commission or state regulatory
bodies or other governmental authority, or to expressly obtain any advantage
under federal or state or non-U.S. laws, the Adviser shall notify the Subadviser
of the form of amendment which it deems necessary or advisable and the reasons
therefor, and if the Subadviser declines to assent to such amendment, the
Adviser may terminate this Agreement forthwith.
14. CONFIDENTIALITY. Subject to the duties of the Adviser, the Fund and the
Subadviser to comply with applicable law, including any demand of any regulatory
or taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Fund and the actions of the
Subadviser, the Adviser and the Fund in respect thereof.
15. NOTICE. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other party, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Adviser:
Strong Capital Management, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxx 00000
Attention: Legal Department
Facsimile: (000) 000-0000
(b) If to the Subadviser:
Xxxxxx Asset Management Company
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Legal Department
Facsimile: (000) 000-0000
(c) If to the Fund:
Strong Stable Value Fund
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxx 00000
Attention: Legal Department
Facsimile: (000) 000-0000
16. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Wisconsin and the
Subadviser consents to the exclusive jurisdiction of courts, both federal and
state, and venue in Wisconsin, with respect to any dispute arising under or in
connection with this Agreement.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall together constitute one and the same
instrument.
18. CAPTIONS. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
19. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision or applicable law, the remainder of the Agreement
shall not be affected adversely and shall remain in full force and effect.
20. CERTAIN DEFINITIONS.
(a) "BUSINESS DAY." As used herein, business day means any customary
business day in the United States on which the New York Stock Exchange is
open.
(b) MISCELLANEOUS. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the Investment Company Act shall be resolved by
reference to such term or provision of the Investment company Act and to
interpretations thereof, if any, by the U.S. courts or, in the absence of
any controlling decisions of any such court, by rules, regulation or order
of the Commission validly issued pursuant to the Investment Company Act.
Specifically, as used herein, "investment company," "affiliated person,"
"interested person," "assignment," "broker," "dealer" and "affirmative vote
of the majority of the Fund's outstanding voting securities" shall all have
such meaning as such terms have in the Investment Company Act. The term
"investment adviser" shall have such meaning as such term has in the
Advisers Act and the Investment Company Act, and in the event of a conflict
between such Acts, the most expansive definition shall control. In
addition, where the effect of a requirement of the Investment Company Act
reflected in any provision of this Agreement is relaxed by a rule,
regulation or order of the 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 parties hereto have executed this Agreement on
the day and year first written above.
STRONG CAPITAL MANAGEMENT, INC.
By:
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Name:
Title:
Attest:
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XXXXXX ASSET MANAGEMENT COMPANY
By:
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Name:
Title:
Attest:
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