XXXX XXXXXXX TRUST
SUBADVISORY AGREEMENT
AGREEMENT made this 28th day of April, 2006, between Xxxx Xxxxxxx
Investment Management Services, LLC, a Delaware limited liability company (the
"Adviser"), and RiverSource Investments, LLC, a Minnesota limited liability
company (the "Subadviser"). In consideration of the mutual covenants contained
herein, the parties agree as follows:
1. APPOINTMENT OF SUBADVISER
The Subadviser undertakes to act as investment subadviser to, and, subject
to the supervision of the Trustees of Xxxx Xxxxxxx Trust (the "Trust") and the
terms of this Agreement, to manage the investment and reinvestment of the assets
of the Portfolios specified in Appendix A to this Agreement as it shall be
amended by the Adviser and the Subadviser from time to time (the "Portfolios").
The Subadviser will be an independent contractor and will have no authority to
act for or represent the Trust or Adviser in any way except as expressly
authorized in this Agreement or another writing by the Trust and Adviser.
2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST
a. Subject always to the direction and control of the Trustees of the Trust,
the Subadviser will manage the investments and determine the composition of
the assets of the Portfolios in accordance with the Portfolios'
registration statement, as amended. In fulfilling its obligations to manage
the investments and reinvestments of the assets of the Portfolios, the
Subadviser will:
i. obtain and evaluate pertinent economic, statistical, financial and
other information affecting the economy generally and individual
companies or industries the securities of which are included in the
Portfolios or are under consideration for inclusion in the Portfolios;
ii. formulate and implement a continuous investment program for each
Portfolio consistent with the investment objectives and related
investment policies for each such Portfolio as described in the
Trust's registration statement, as amended;
iii. take whatever steps are necessary to implement these investment
programs by the purchase and sale of securities including the placing
of orders for such purchases and sales;
iv. regularly report to the Trustees of the Trust with respect to the
implementation of these investment programs, as reasonably requested
by the Adviser or the Trustees of the Trust; and
v. provide assistance to the Trust's Custodian regarding the fair value
of securities held by the Portfolios for which market quotations are
not readily available, as reasonably requested by the Trust's
Custodian or the Adviser, provided that the
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Trust's Custodian and/or other service provider responsible for
valuing the securities held by the Portfolios in accordance with the
Portfolios' fair valuation procedures, and not Subadviser, shall be
responsible for determining the fair valuation of any such securities.
b. The Subadviser, at its expense, will furnish all necessary investment and
management facilities, including salaries of personnel required for it to
execute its duties faithfully and all other personnel and equipment
necessary for the efficient conduct of the investment affairs of the
Portfolios (excluding determination of net asset value and shareholder
accounting services) in accordance with its investment management
responsibilities under this Agreement.
c. The Subadviser will select brokers and dealers to effect all transactions
subject to the following conditions: The Subadviser will place all
necessary orders with brokers, dealers, or issuers, and will negotiate
brokerage commissions if applicable. The Subadviser is directed at all
times to seek to execute brokerage transactions for the Portfolios in
accordance with such policies or practices as may be established by the
Trustees and described in the Trust's registration statement as amended.
The Subadviser may pay a broker-dealer which provides research and
brokerage services a higher spread or commission for a particular
transaction than otherwise might have been charged by another
broker-dealer, if the Subadviser determines that the higher spread or
commission is reasonable in relation to the value of the brokerage and
research services that such broker-dealer provides, viewed in terms of
either the particular transaction or the Subadviser's overall
responsibilities with respect to accounts managed by the Subadviser. The
Subadviser may use for the benefit of the Subadviser's other clients, or
make available to companies affiliated with the Subadviser or to its
directors for the benefit of its clients, any such brokerage and research
services that the Subadviser obtains from brokers or dealers. Absent
negligence, bad faith or willful misconduct by the Subadviser, the
Subadviser shall not be responsible for any loss caused by any act or
omission of any broker-dealer; provided, however, that with respect to any
broker-dealer that has been selected by the Subadviser, the Subadviser has
acted prudently in such selection.
d. On occasions when the Subadviser deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other clients of the
Subadviser, the Subadviser to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be purchased or sold to attempt to obtain a more favorable
price or lower brokerage commissions and efficient execution. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Subadviser in the
manner the Subadviser considers to be the most equitable and consistent
with its fiduciary obligations to the Portfolio and to its other clients.
e. The Subadviser will maintain all accounts, books and records with respect
to the Portfolios as are required of an investment adviser of a registered
investment company pursuant to the Investment Company Act of 1940 (the
"Investment Company Act") and Investment Advisers Act of 1940 (the
"Investment Advisers Act") and the rules thereunder.
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f. The Subadviser shall vote proxies relating to the Portfolios' investment
securities in accordance with the Trust's proxy voting policies and
procedures, which provide that the Subadviser shall vote all proxies
relating to securities held by the Portfolios and, subject to the Trust's
policies and procedures, shall use proxy voting policies and procedures
adopted by the Subadviser in conformance with Rule 206(4)-6 under the
Investment Advisers Act. The Subadviser shall not be responsible for any
other corporate actions relating to the Portfolios, including
administrative filings, such as proofs of claims or claims in class
actions, but will promptly forward any materials related to such actions
received by the Subadviser to the Adviser. In addition, the Subadviser will
assist the Adviser or the Trust with respect to these matters by providing
historical transaction information as reasonably requested by the Trust's
custodian or the Adviser.
3. COMPENSATION OF SUBADVISER
The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.
4. LIABILITY OF SUBADVISER
Neither the Subadviser nor any of its directors, officers or employees
shall be liable to the Adviser or the Trust for any error of judgment or mistake
of law or for any loss suffered by the Adviser or Trust in connection with the
matters to which this Agreement relates except for losses resulting from willful
misfeasance, bad faith or negligence in the performance of, or from the reckless
disregard of, the duties of the Subadviser or any of its directors. Absent
negligence, willful misconduct or bad faith by them, each of the Subadviser, and
its respective directors, officers, employees and agents, shall be entitled to
rely upon any information or instructions furnished to it (or any of them as
individuals) by the Adviser which is believed in good faith to be accurate and
reliable. The Adviser understands and acknowledges that the Subadviser does not
guarantee to provide any particular rate of return, market value or performance
of any assets of the Portfolios. The federal securities laws impose liabilities
under certain circumstances on persons who act in good faith and, therefore,
nothing herein shall constitute a waiver of any right which the Adviser may have
under such laws or regulations.
5. CONFLICTS OF INTEREST
It is understood that trustees, officers, agents and shareholders of the
Trust are or may be interested in the Subadviser as trustees, officers, partners
or otherwise; that employees, agents and partners of the Subadviser are or may
be interested in the Trust as trustees, officers, shareholders or otherwise;
that the Subadviser may be interested in the Trust; and that the existence of
any such dual interest shall not affect the validity hereof or of any
transactions hereunder except as otherwise provided in the Agreement and
Declaration of Trust of the Trust or by specific provision of applicable law.
6. REGULATION
The Subadviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information, reports or
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other material which any such body by reason of this Agreement may request or
require pursuant to applicable laws and regulations.
7. DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective with respect to each Portfolio on the
later of (i) its execution and (ii) the date of the meeting of the Board of
Trustees of the Trust, at which meeting this Agreement is approved as described
below. The Agreement will continue in effect for a period more than two years
from the date of its execution only so long as such continuance is specifically
approved at least annually either by the Trustees of the Trust or by a majority
of the outstanding voting securities of each of the Portfolios, provided that in
either event such continuance shall also be approved by the vote of a majority
of the Trustees of the Trust who are not interested persons (as defined in the
Investment Company Act) of any party to this Agreement cast in person at a
meeting called for the purpose of voting on such approval. Any required
shareholder approval of the Agreement or of any continuance of the Agreement
shall be effective with respect to any Portfolio if a majority of the
outstanding voting securities of the series (as defined in Rule 18f-2(h) under
the Investment Company Act) of shares of that Portfolio votes to approve the
Agreement or its continuance, notwithstanding that the Agreement or its
continuance may not have been approved by a majority of the outstanding voting
securities of (a) any other Portfolio affected by the Agreement or (b) all the
portfolios of the Trust.
If any required shareholder approval of this Agreement or any continuance
of the Agreement is not obtained, the Subadviser will continue to act as
investment subadviser with respect to such Portfolio pending the required
approval of the Agreement or its continuance or of a new contract with the
Subadviser or a different adviser or subadviser or other definitive action;
provided, that the compensation received by the Subadviser in respect of such
Portfolio during such period is in compliance with Rule 15a-4 under the
Investment Company Act.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Adviser or Subadviser on sixty days' written notice to the Trust and the other
party. This Agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act) or in the event the Advisory Agreement between the Adviser and the Trust
terminates for any reason.
8. PROVISION OF CERTAIN INFORMATION
a. The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:
i. the Subadviser fails to be registered as an investment adviser under
the Investment Advisers Act or under the laws of any jurisdiction in
which the Subadviser is required to be registered as an investment
adviser in order to perform its obligations under this Agreement;
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ii. the Subadviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry or investigation, at law or in equity,
before or by any court, public board or body, involving the affairs of
the Trust; and
iii. any change in actual control or management of the Subadviser or the
portfolio manager of any Portfolio.
b. The Adviser will promptly notify the Adviser in writing if the Adviser is
served or otherwise receives notice of any action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any court,
public board or body, involving the affairs of the Portfolios.
c. The Adviser will provide the Subadviser with the Trust's current Prospectus
and Statement of Additional information and any amendments thereto on a
timely basis, including reasonable advance notice of any investment
guideline changes. The Adviser will provide the Subadviser such other
information relating to the Portfolios and to the services to be provided
by the Subadviser under this agreement as the Adviser and Subadviser
mutually agree is necessary or appropriate.
9. SERVICES TO OTHER CLIENTS
The Adviser understands, and has advised the Trust's Board of Trustees,
that the Subadviser now acts, or may in the future act, as an investment adviser
to fiduciary and other managed accounts and as investment adviser or subadviser
to other investment companies. Further, the Adviser understands, and has advised
the Trust's Board of Trustees that the Subadviser and its affiliates may give
advice and take action for its accounts, including investment companies, which
differs from advice given on the timing or nature of action taken for the
Portfolio. The Subadviser is not obligated to initiate transactions for a
Portfolio in any security which the Subadviser, its partners, affiliates or
employees may purchase or sell for their own accounts or other clients.
10. CONSULTATION WITH SUBADVISERS TO OTHER TRUST PORTFOLIOS
As required by Rule 17a-10 under the Investment Company Act of 1940, the
Subadviser is prohibited from consulting with the entities listed below
concerning transactions for a Portfolio in securities or other assets:
1. other subadvisers to a Portfolio;
2. other subadvisers to a Trust portfolio;
3. other subadvisers to a portfolio under common control with the
Portfolio.
The Adviser agrees to furnish a list of any such subadvisers to the
Subadviser, and to advise the Subadviser of any changes to the list. The Adviser
shall make a good faith effort to ensure that the advisory contracts of each
such subadviser contain the same prohibitions as this Section 10.
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11. AMENDMENTS TO THE AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the Trustees of the Trust and
by the vote of a majority of the Trustees of the Trust who are not interested
persons of any party to this Agreement cast in person at a meeting called for
the purpose of voting on such approval. Any required shareholder approval shall
be effective with respect to any Portfolio if a majority of the outstanding
voting securities of that Portfolio vote to approve the amendment,
notwithstanding that the amendment may not have been approved by a majority of
the outstanding voting securities of (a) any other Portfolio affected by the
amendment or (b) all the portfolios of the Trust.
12. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties.
13. HEADINGS
The headings in the sections of this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
14. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or
applicable party in person or by registered mail or a private mail or delivery
service providing the sender with notice of receipt. Notice shall be deemed
given on the date delivered or mailed in accordance with this paragraph.
15. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, insofar as is possible, as
if such portion had never been contained herein.
16. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of The Commonwealth of Massachusetts, or any of the
applicable provisions of the Investment Company Act. To the extent that the laws
of The Commonwealth of Massachusetts, or any of the provisions in this
Agreement, conflict with applicable provisions of the Investment Company Act,
the latter shall control.
17. LIMITATION OF LIABILITY
The Agreement and Declaration of Trust dated September 28, 1988, a copy of
which, together with all amendments thereto (the "Declaration"), is on file in
the office of the Secretary of The Commonwealth of Massachusetts, provides that
the name "Xxxx Xxxxxxx Trust" refers to the Trustees under the Declaration
collectively as Trustees, but not as individuals or personally; and no Trustee,
shareholder, officer, employee or agent of the Trust shall be held to any
personal
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liability, nor shall resort be had to their private property, for the
satisfaction of any obligation or claim, in connection with the affairs of the
Trust or any portfolio thereof, but only the assets belonging to the Trust, or
to the particular Portfolio with respect to which such obligation or claim
arose, shall be liable.
18. CONFIDENTIALITY OF TRUST PORTFOLIO HOLDINGS
The Subadviser agrees to treat Trust portfolio holdings as confidential
information in accordance with the Trust's "Policy Regarding Disclosure of
Portfolio Holdings," as such policy may be amended from time to time, and to
prohibit its employees from trading on any such confidential information. The
Adviser agrees to furnish the Subadviser with a copy of any such portfolio
holdings disclosure policy it has adopted and that remains in effect from time
to time.
All information and advice furnished by the Subadviser to the Adviser under
this Agreement shall be confidential and shall not be disclosed to third
parties, except as required by law, permitted by the Trust's Policy Regarding
Disclosure of Portfolio Holdings or authorized in writing by the Subadviser, as
applicable. All information furnished by the Adviser to the Subadviser and its
affiliates under this Agreement shall be confidential and shall not be disclosed
to any unaffiliated third party, except as required by law, permitted by the
Trust's Policy Regarding Disclosure of Portfolio Holdings, authorized in writing
by the Adviser, or where it is necessary to provide services to the Adviser or
the Portfolios in connection with this Agreement, as applicable. The Sub-Adviser
may share information provided by the Adviser with the Subadviser's affiliates
in accordance with the Subadviser's privacy policies in effect from time to
time, as communicated in writing by Subadviser to Adviser and not otherwise
objected to by Adviser, or in accordance with the Trust's Policy Regarding
Disclosure of Portfolio Holdings, as applicable.
19. COMPLIANCE
Upon execution of this Agreement, the Subadviser shall provide the Adviser
with a summary of the Subadviser's written policies and procedures relating to
the Subadviser's management of the Portfolios ("Compliance Policies") as
required by Rule 206(4)-7 under the Investment Advisers Act. Throughout the term
of this Agreement, the Subadviser shall promptly submit to the Adviser: (i)
notification of any material changes to the Compliance Policies, (ii)
notification of the commencement of a regulatory examination of the Subadviser
relating to the Subadviser's management of the Portfolios and documentation
describing the results of any such examination, (iii) documentation describing
the results of the Subadviser's assessment regarding testing of the Compliance
Policies, and (iv) notification of any material compliance matter (as defined in
Rule 38a-1 under the Investment Company Act) that relates to the services
provided by the Subadviser to the Trust including but not limited to any
material violation of the Compliance Policies or of the Subadviser's code of
ethics and/or related code. Throughout the term of this Agreement, the
Subadviser shall provide the Adviser with any certifications, information and
access to personnel and resources in order to allow the Adviser to test the
Compliance Policies of the Subadviser, as the Adviser may reasonably request to
enable the Trust to comply with Rule 38a-1 under the Investment Company Act.
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20. REPRESENTATIONS, WARRANTIES AND COVENANTS
a. The Adviser represents, warrants and covenants that:
i. The Adviser: (i) is not prohibited by the Investment Company Act or
the Investment Advisers Act from performing the services contemplated
by this Agreement; (ii) has appointed a Chief Compliance Officer under
Rule 206(4)-7 of the Investment Advisers Act; (iii) has adopted
written policies and procedures that are reasonably designed to
prevent violations of the Investment Advisers Act from occurring; and
(iv) has the authority to enter into and perform the services
contemplated by this Agreement.
ii. The (i) the Trustees of the Trust have approved the appointment of the
Subadviser pursuant to this Agreement; and (ii) the person executing
this Agreement on behalf of the Adviser is authorized to do so.
b. The Subadviser represents, warrants and covenants that:
i. The Subadviser: (i); is not prohibited by the Investment Company Act
or the Investment Advisers Act from performing the services
contemplated by this Agreement; (ii) has appointed a Chief Compliance
Officer under Rule 206(4)-7 of the Investment Advisers Act; (iii) has
adopted written policies and procedures that are reasonably designed
to prevent violations of the Investment Advisers Act from occurring;
(iv) has the authority to enter into and perform the services
contemplated by this Agreement; and (v) will promptly notify the
Adviser of the occurrence of any event that would disqualify the
Subadviser from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the 1940 Act or otherwise.
ii. The person executing this Agreement on behalf of the Subadviser is
authorized to do so.
c. The Adviser or Subadviser will promptly notify the other in writing if any
of their respective representations or warranties made in this Agreement
change or become untrue for any reason.
21. ACKNOWLEDGMENTS OF ADVISER
The Adviser understands and acknowledges that:
a. The Subadviser shall have no responsibility under this Agreement for such
other assets or assets over which the Subadviser has no discretionary
investment management authority pursuant to this Agreement.
b. The Adviser has received a copy of Part II of the Subadviser's Form ADV or
other brochure meeting the requirements of Rule 204-3 under the Investment
Advisers Act ("Subadviser Disclosure Brochure").
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22. CUSTODY
The Subadviser shall not act as custodian for the Trust and shall not take
possession of any assets of the Portfolios. The Subadviser shall give notice and
directions with respect to transactions in a manner that shall be agreed upon
with the Trust's custodian. Absent negligence, bad faith, or willful misconduct
by the Subadviser, the Subadviser shall not be responsible for any loss caused
by any act or omission of the Trust's custodian.
23. MARKET DATA.
The Subadviser may provide the Adviser or the Trustees of the Trust with
third party market data relating to securities and securities markets. While the
Subadviser believes that such data is accurate, complete and timely, the
Subadviser does not guarantee the accuracy, completeness, or timeliness of such
information nor does it imply any warranty of any kind regarding the market
data.
24. USE OF NAME
The Adviser agrees that the Subadviser may identify the Adviser, the Trust
or the Portfolios by name in the Subadviser's current client list. Such list may
be used with third parties.
25. COUNTERPARTS
This Agreement may be executed in multiple counterparts, each of which
shall be an original and all of which, when taken together, shall constitute one
and the same Agreement.
(THE REMAINDER OF THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.
XXXX XXXXXXX INVESTMENT MANAGEMENT
SERVICES, LLC
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
Executive Vice President and
Chief Financial Officer
RIVERSOURCE INVESTMENTS, LLC
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
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APPENDIX A
The Subadviser shall serve as investment subadviser for each Portfolio of
the Trust listed below. The Adviser will pay the Subadviser, as full
compensation for all services provided under this Agreement with respect to each
Portfolio, the fee computed separately for such Portfolio at an annual rate as
follows (the "Subadviser Fee"):
FIRST NEXT NEXT EXCESS OVER
$250 MILLION $250 MILLION $500 MILLION $1BILLION
OF AGGREGATE OF AGGREGATE OF AGGREGATE OF AGGREGATE
PORTFOLIO NET ASSETS* NET ASSETS* NET ASSETS* NET ASSETS*
--------- ------------ ------------ ------------ ------------
Mid Cap Value Equity Trust
* The term Aggregate Net Assets includes the net assets of a Portfolio of the
Fund. It also includes with respect to each Portfolio the net assets of one
or more other portfolios as indicated below, but in each case only for the
period during which the Subadviser for the Portfolio also serves as the
subadviser for the other portfolio(s). For purposes of determining
Aggregate Net Assets and calculating the Subadviser Fee, the net assets of
the Portfolio and each other portfolio of the Fund are determined as of the
close of business on the previous business day of the Fund, and the net
assets of each portfolio of each other fund are determined as of the close
of business on the previous business day of that fund.
Fund Portfolio(s) Other Portfolio(s)
----------------- ------------------
Mid Cap Value Equity Trust -- Mid Cap Value Equity Fund, a series of Xxxx Xxxxxxx Funds II
The Subadviser Fee for a Portfolio shall be based on the applicable annual
fee rate for the Portfolio which for each day shall be equal to (i) the sum of
the amounts determined by applying the annual percentage rates in the table to
the applicable portions of Aggregate Net Assets divided by (ii) Aggregate Net
Assets (the "Applicable Annual Fee Rate"). The Subadviser Fee for each Portfolio
shall be accrued for each calendar day, and the sum of the daily fee accruals
shall be paid monthly to the Subadviser within 30 calendar days of the end of
each month. The daily fee accruals will be computed by multiplying the fraction
of one over the number of calendar days in the year by the Applicable Annual Fee
Rate, and multiplying this product by the net assets of the Portfolio. The
Adviser shall provide Subadviser with such information as Subadviser may
reasonably request supporting the calculation of the fees paid to it hereunder.
Fees shall be paid either by wire transfer or check, as directed by Subadviser.
If, with respect to any Portfolio, this Agreement becomes effective or
terminates, or if the manner of determining the Applicable Annual Fee Rate
changes, before the end of any month, the fee (if any) for the period from the
effective date to the end of such month or from the beginning of such month to
the date of termination or from the beginning of such month to the date such
change, as the case may be, shall be prorated according to the proportion which
such period bears to the full month in which such effectiveness or termination
or change occurs.
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