Exhibit 23(d-12)
FORM OF SUB-ADVISORY AGREEMENT
PACIFIC CAPITAL SMALL CAP FUND
THIS AGREEMENT is made as of June 14, 2006 among Pacific Capital Funds
(the "Trust"), the Asset Management Group of Bank of Hawaii (the "Adviser"), and
Wellington Management Company, LLP (the "Sub-Adviser").
WHEREAS, the Trust is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, the Adviser has been appointed investment adviser to the
Trust's Pacific Capital Small Cap Fund (the "Fund");
WHEREAS, the Adviser desires to retain the Sub-Adviser to assist it in
the provision of a continuous investment program for a portion of the assets of
the Fund and the Sub-Adviser is willing to do so; and
WHEREAS, the Sub-Adviser is willing to furnish such services upon the
terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Adviser hereby appoints the Sub-Adviser to act as the
sub-adviser to the portion of the Fund's investment portfolio designated from
time to time by the Adviser by written notice to the Sub-Adviser (the
"Account"), as permitted by the Adviser's Advisory Agreement with the Trust
pertaining to the Fund. Intending to be legally bound, the Sub-Adviser accepts
such appointment and agrees to render the services herein set forth for the
compensation herein provided. The Adviser hereby acknowledges receipt of a copy
of Part II of the Sub-Adviser's Form ADV, as most recently filed with the
Securities and Exchange Commission.
2. Sub-Advisory Services. Subject to the supervision of the Trust's Board
of Trustees and the Adviser, the Sub-Adviser will assist the Adviser in
providing a continuous investment program with respect to the Account, including
investment research and management with respect to all securities and
investments and cash equivalents in the Account. The Sub-Adviser will provide
services under this Agreement in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Fund's prospectus and
resolutions of the Trust's Board of Trustees applicable to the Fund.
Without limiting the generality of the foregoing, the Sub-Adviser
further agrees that it will, with respect to the Account:
(a) determine from time to time what securities and other investments
will be purchased, retained or sold for the Account;
(b) place orders pursuant to its investment determinations for the
Account either directly with the issuer or with any broker or
dealer;
(c) not purchase shares of the Account for itself or for accounts
with respect to which it exercises sole investment discretion in
connection with such transactions except as permitted by the
Trust's Board of Trustees or by federal, state and local law;
(d) manage the Account's overall cash position;
(e) attend regular business and investment-related meetings with the
Trust's Board of Trustees and the Adviser if reasonably requested
to do so by the Trust and/or the Adviser;
(f) maintain books and records customarily maintained by sub-advisers
on behalf of their clients with respect to the securities
transactions for the Account, furnish to the Adviser and the
Trust's Board of Trustees such periodic and special reports as
they may reasonably request with respect to the Account, and
provide in advance to the Adviser all reports to the Board of
Trustees for examination and review within a reasonable time
prior to the Trust's Board meetings;
(g) for so long as the Sub-Adviser provides subadvisory services to
the Fund, if the Fund has a claim or potential claim in any
bankruptcy proceeding, class action securities litigation, or
other litigation or proceeding affecting securities held in the
Account, provide the Fund or its custodian with reasonable
assistance in support of the Fund's pursuit of such claim;
provided, however, that notwithstanding anything else to the
contrary in this Agreement, the Sub-Adviser shall not be required
to file claims or take any related actions on behalf of the Fund
in regards to class action settlements related to securities
currently or previously held in the Account nor shall it be
required to assist the Fund's custodian in the evaluation,
pursuit or settlement of such claims, but will provide all
information reasonably requested by the Adviser or the Fund
regarding the securities involved;
(h) furnish a copy of all amendments to Part II of its Form ADV to
the Adviser at least annually;
(i) make decisions with respect to the voting of securities in the
Account; provided, however, that the Adviser may instruct the
Sub-Adviser to discontinue such voting and the Adviser or its
designee shall take on such responsibility; and
(j) notify the Adviser of any changes in the membership of its
partnership at least annually.
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3. Covenants by the Sub-Adviser. The Sub-Adviser agrees with respect to the
services provided to the Fund that it will:
(a) conform with all the Investment Advisers Act of 1940, as amended
and the provisions of the 1940 Act, as amended which relate to
the subadvisory services it provides to the Fund;
(b) forward a report reflecting trade activity to the Adviser on the
first business day following the day of the trade; and
(c) treat confidentially and as proprietary information of the Trust
all records and other information relative to the Trust 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).
4. Services Not Exclusive. Except as provided herein, the services
furnished by the Sub-Adviser hereunder are deemed not to be exclusive, and
nothing in this Agreement shall prevent the Sub-Adviser from acting as
investment adviser or manager for any other person or persons, including other
management investment companies. The Trust and Adviser acknowledge and agree
that: (i) the Sub-Adviser acts as adviser to other clients and may publish or
give advice and take action with respect to any other client, which may differ
from the timing or nature of any action taken by the Sub-Adviser with respect to
the Account; (ii) the Sub-Adviser will not have any obligation to purchase or
sell, or to recommend for purchase or sale, by the Account any securities that
the Sub-Adviser, its partners, affiliates or employees may purchase or sell for
any other client or themselves if, in their reasonable opinion, such transaction
appears inadvisable for the Account; and (iii) transactions in a specific
security may not be accomplished for all clients at the same time at the same
price.
5. Portfolio Transactions. Investment decisions for the Account 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 Account and
such investment companies and accounts may, however, invest in the same
securities. When securities transactions of the Account and another investment
company or account are aggregated, 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 Account and such other investment
company or account. The Fund acknowledges that in some instances, this
investment procedure may adversely affect the price paid or received by the
Account or the size of the position obtained or sold by the Account. To the
extent permitted by law, the Sub-Adviser may aggregate the securities to be sold
or purchased for the Account with those to be sold or purchased for other
investment companies or accounts in order to obtain best execution.
The Sub-Adviser shall place orders for the purchase and sale of
portfolio securities and shall solicit broker-dealers to execute transactions in
accordance with the Fund's
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policies and restrictions regarding brokerage allocations. The Sub-Adviser shall
place orders pursuant to its investment determination for the Account either
directly with the issuer or with any broker or dealer selected by the
Sub-Adviser. In executing portfolio transactions and selecting brokers or
dealers, the Sub-Adviser shall use its reasonable best efforts to seek the most
favorable execution of orders, after taking into account all factors the
Sub-Adviser deems relevant, including, but not limited to, the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing basis.
Consistent with this obligation, the Sub-Adviser may, to the extent
permitted by law, purchase and sell portfolio securities to and from brokers and
dealers who provide brokerage and research services (within the meaning of
Section 28(e) of the Securities Exchange Act of 1934) to or for the benefit of
the Account and/or other accounts over which the Sub-Adviser or any of its
affiliates exercises investment discretion. The Sub-Adviser is authorized to pay
to a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Account which is in
excess of the amount of commission another broker or dealer would have charged
for effecting that transaction if the Sub-Adviser determines in good faith that
such commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Sub-Adviser's overall responsibilities to the
Account. In no instance will portfolio securities be purchased from or sold to
the Sub-Adviser, or the Fund's principal underwriter, or any affiliated person
thereof except as permitted by the 1940 Act or the rules of the Securities and
Exchange Commission thereunder; provided, however, that the Adviser must
identify its affiliated persons to the Sub-Adviser (excluding affiliated persons
of the Sub-Adviser), and the Sub-Adviser must identify its affiliated persons to
the Fund.
6. Books and Records. In compliance with the requirements of Rule 3la-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Sub-Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under the 1940 Act.
7. 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 costs associated with the execution of securities,
commodities or other investment transactions (including brokerage commissions
and other transaction charges, if any) purchased for the Account.
8. Compensation. For the services provided and the expenses assumed with
respect to the Account pursuant to this Agreement, the Sub-Adviser shall be
entitled to a fee, computed daily and payable quarterly directly from the Fund,
calculated at the annual rate of 0.70% on the first $150 million of the
Account's average daily net assets and 0.65% on average daily net assets in
excess of $150 million. In the event that this Agreement commences or terminates
during any portion of a year, the fee due to the Sub-Adviser shall be prorated
based upon the number of days the Agreement was in effect.
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9. Standard of Care; Limitation of Liability. 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 and accounts, but shall not be liable for any action taken or omitted
by it in the performance of services rendered hereunder in the absence of its
bad faith, willful misconduct, gross negligence or reckless disregard of its
duties.
10. Reference to the Sub-Adviser. Neither the Adviser nor any of its
affiliates or agents shall make reference to or use the name of the Sub-Adviser
or any of its affiliates, or any of their clients, in any advertising or
promotional materials without the prior approval of the Sub-Adviser, which
approval shall not be unreasonably withheld or delayed; provided, however, that
no such approval shall be required for references in the Fund's registration
statement, shareholder reports and regulatory filings concerning the identity of
and services provided by the Sub-Adviser to the Fund; and provided further, that
such approval with respect to substantially identical advertising and
promotional materials shall be required only with respect to the first use of
such materials.
11. Duration and Termination. Unless sooner terminated, this Agreement
shall continue for a period of two years from the date first set forth above,
and thereafter shall continue automatically for successive annual periods,
provided such continuance is specifically approved at least annually by the
Trust's Board of Trustees or vote of the lesser of (a) 67 % of the shares of the
Fund represented at a meeting if holders of more than 50% of the outstanding
shares of the Fund are present in person or by proxy, or (b) more than 50% of
the outstanding shares of the Fund, provided that in either event its
continuance also is approved by a majority of the Trust's Trustees who are not
"interested persons "(as defined in the 0000 Xxx) of any party to this Agreement
(the "Disinterested Trustees"), by vote cast in person at a meeting called for
the purpose of voting on such approval. This Agreement is terminable at any time
without penalty, with respect to the Fund, on 60 days' notice, by the Adviser,
the Sub-Adviser or the Trust's Board of Trustees or by vote of the lesser of (a)
67% of the shares of the Fund represented at a meeting if holders of more than
50% of the outstanding shares of the Fund are present in person or by proxy, or
(b) more than 50% of the outstanding shares of the Fund. This Agreement will
terminate automatically in the event of its assignment (as defined in the 1940
Act).
12. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective until approved by the vote of (i) a majority of the outstanding voting
securities of the Fund, if required by the 1940 Act or the rules of the
Securities and Exchange Commission thereunder, and (ii) a majority of the
Disinterested Trustees cast in person at a meeting called for the purpose of
voting on such approval.
13. Notice. Any notice, advice or report to be given pursuant to this
Agreement shall be delivered or mailed:
To The Sub-Adviser at:
Wellington Management Company, LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
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Attention: Mutual Fund Group
With a copy to the Legal Services Group at the same address
To the Adviser at:
Asset Management Group of
Bank of Hawaii
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Chief Investment Officer
To the Trust at:
Pacific Capital Funds
c/o BISYS Fund Services
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: President
14. 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. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and shall be governed by the laws of the
Commonwealth of Massachusetts (without regard to conflict of law principles). 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.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. Personal Liability. The names "Pacific Capital Funds" and
"Trustees" refer respectively to the Trust created and to the Trustees, as
trustees but not individually or personally, acting from time to time under an
Agreement and Declaration of Trust dated as of October 30, 1992, as amended, to
which reference is hereby made and a copy of which is on file at the office of
the Secretary of State of The Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of "Pacific Capital Funds" entered into in the name or on
behalf hereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders or representatives of the Trust personally, but bind only
the assets of the Trust, and all persons dealing with any series of shares of
the Trust must look solely to the assets of the Trust belonging to such series
for the enforcement of any claims against the Trust.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
ASSET MANAGEMENT GROUP OF
BANK OF HAWAII
By: /s/ Jordan T. Ige
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Name: Jordan T. Ige
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Title: Senior Vice President
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WELLINGTON MANAGEMENT COMPANY, LLP
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
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Title: Senior Vice President
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PACIFIC CAPITAL FUNDS
By: /s/ Xxxxxxx X. Xxxxx, Xx.
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Name: Xxxxxxx X. Xxxxx, Xx.
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Title: President
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