Exhibit 4(G)
SUB-ADVISORY AGREEMENT
XXXXXXX CAPITAL MANAGEMENT, INC.
World Trade Center-Baltimore
28th Floor
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
This will confirm the agreement between XXXXXXX CAPITAL
MANAGEMENT, INC. (the "Investment Adviser") and you as follows:
1. GENERAL. The Xxxxxxx Funds, Inc., a Maryland corporation
(the "Corporation") is an open-end management investment company which has
multiple investment portfolios including, the DEM Multi-Manager Equity Fund (the
"Fund"). The Corporation proposes to engage in the business of investing and
reinvesting the assets of the Fund in the manner and in accordance with the
investment objectives, policies and limitations specified in the Corporation's
Prospectus and Statement of Additional Information (the "Prospectus") included
in the Corporation's Registration Statement pertaining to the Fund, as amended
and/or supplemented from time to time (the "Registration Statement"), filed
under the Investment Company Act of 1940, as amended (the "1940 Act"), and the
Securities Act of 1933, as amended. Copies of the Prospectus have been furnished
to you. Any amendments to the Prospectus shall be furnished to you promptly.
2. SUB-ADVISORY SERVICES. Subject to the supervision and
approval of the Corporation's Board of Directors and the Investment Adviser you
will provide investment management of that portion of the Fund's portfolio
allocated to you by the Investment Adviser in accordance with the Fund's
investment objectives, policies and limitations as stated in the Prospectus as
from time to time in effect. In connection therewith, you will obtain and
provide investment research and will supervise the Fund's investments and
conduct a continuous program of investment, evaluation and, if appropriate, sale
and reinvestment of the Fund's assets. You will place orders for the purchase
and sale of portfolio securities and will solicit brokers to execute
transactions, including The Xxxxxxx Co. or a broker that may be affiliated with
you or another sub-adviser of the Fund, in accordance with the policies and
restrictions regarding brokerage allocations of the Fund and the Corporation.
You will furnish to the Corporation and/or the Investment Adviser such
statistical information with respect to the investments which the Fund may hold
or contemplate purchasing as the Corporation or the Investment Adviser may
reasonably request. You acknowledge that this agreement does not require
Page 2
the Corporation or the Investment Adviser to allocate any specific percentage of
the Fund's assets to you at any time or for any specific period. You further
acknowledge that the Corporation or the Investment Adviser may at any time or
from time to time allocate you no assets at all.
3. ASSISTANCE. You may employ or contract with other persons
to assist you in the performance of this Agreement. The fees or other
compensation of such persons shall be paid by you and no obligation may be
incurred on behalf of the Corporation or the Investment Adviser to any such
person.
4. RECORD KEEPING AND OTHER INFORMATION. You will create and
maintain all records required of you pursuant to your duties hereunder in
accordance with all applicable laws, rules and regulations, including records
required by Section 31(a) of the 1940 Act. All such records will be the property
of the Corporation and will be available upon request of the Corporation for
inspection, copying and use by the Corporation and will be surrendered to the
Corporation upon demand of the Corporation. Where applicable, such records will
be maintained by you for the periods and in the places required by Rule 31a-2
under the 1940 Act. Upon termination of this Agreement, you will promptly
surrender all such records to the Corporation or such person as the Corporation
may designate.
5. FEES. In consideration of the sub-advisory services
rendered pursuant to this Agreement, the Investment Adviser will pay you on the
first business day of each month a fee at the annual rate of [ ]* of the
value of that portion of the Fund's average weekly net assets that is allocated
to you by the Investment Adviser during the preceding month. Net asset value
shall be computed in the manner, on such days and at such time or times as
described in the Prospectus from time to time. The fee for the period from the
date of the allocation of a portion of the Fund's portfolio to you to the end of
the first month thereafter shall be pro-rated according to the proportion which
such period bears to the full monthly period, and upon any termination of this
Agreement or if your allocation of the Fund's portfolio is reduced to nothing
before the end of any month, the fee for such part of a month shall be pro-rated
according to the proportion which such period bears to the full monthly period.
6. EXPENSES:
You will bear all expenses in connection with the performance
of your services under this Agreement.
7. LIABILITY. You shall exercise your best judgment in
rendering the services to be provided to the Fund. The Investment Adviser agrees
as an inducement to you and to others who may assist you in providing services
to the Fund that you and such other persons shall not be liable for any error of
judgment or mistake of law or for any
* Fee information redacted pursuant to Order under Section 6(c) of the
Investment Company Act, Rule 18f-2 under the Act, and certain disclosure
requirements, Investment Company Act Release No. 42002, September 8, 1999
Page 3
loss suffered by the Investment Adviser, the Fund or the Corporation, and the
Investment Adviser agrees to indemnify and hold harmless you and such other
persons against and from any claims, liabilities, actions, suits, proceedings,
judgments or damages (and expenses incurred in connection therewith, including
the reasonable cost of investigating or defending same, including, but not
limited to attorneys' fees) arising out of any such error of judgment or mistake
of law or loss; provided, however, that the Investment Adviser's obligation with
respect to such claims, liabilities, actions, suits, proceedings, judgments or
damages (and expenses incurred in connection therewith, including the reasonable
cost of investigating or defending same, including, but not limited to
attorneys' fees) arising out of any such error of judgment or mistake of law or
loss shall be limited to the amount of "assets belonging to" (as such expression
is defined in the Corporation's charter) the Fund and further provided that
nothing herein shall be deemed to protect or purport to protect you or any other
such person against any liability to the Corporation, its security holders or
the Investment Adviser to which you or they would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of
duties hereunder, or by reason of reckless disregard of the obligations and
duties hereunder.
8. OTHER ACCOUNTS. The Corporation and the Investment Adviser
understand that you and other persons with whom you contract to provide the
services hereunder may from time to time act as investment adviser to one or
more other investment companies and fiduciary or other managed accounts, and the
Corporation and the Investment Adviser have no objection to your or their so
acting. When purchase or sale of securities of the same issuer is suitable for
the investment objectives of two or more companies or accounts managed by you or
such other persons which have available funds for investment, the available
securities will be allocated in a manner believed by you and such other persons
to be equitable to the Fund and any other account. It is recognized that in some
cases this procedure may adversely affect the price paid or received by the Fund
or the size of the position obtainable for or disposed of by the Fund.
In addition, it is understood that you and the persons with
whom you contract to assist in the performance of your duties hereunder will not
devote their full time to such service and nothing contained herein shall be
deemed to limit or restrict your or their right to engage in and devote time and
attention to similar or other businesses.
9. TERM. This Agreement shall continue until December 29, 1999
and thereafter shall continue automatically for successive annual periods ending
on the anniversary of such date, provided such continuance is specifically
approved at least annually by the Corporation's Board of Directors or a 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 Corporation's Directors who are not "interested persons"
Page 4
(as defined in the 0000 Xxx) of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable without penalty, on 60 days' notice, by the Investment
Adviser, by you, by the Corporation's Board of Directors 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). This Agreement will terminate immediately and
automatically in the event of the termination of the Investment Advisory and
Administrative Services Agreement between the Investment Adviser and the
Corporation, on behalf of the Fund.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
XXXXXXX CAPITAL MANAGEMENT, INC.
By:
----------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
Accepted:
By:
-----------------------------
Name:
Title:
APPENDIX 1
------------------------------------------------------- -----------------------------------------------------
Name and Address of Sub-Advisor Date of Agreement
------------------------------------------------------- -----------------------------------------------------
Charter Financial Group, Inc. March 31, 1999
0000 X Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
------------------------------------------------------- -----------------------------------------------------
CIC Asset Management, Inc. March 31, 1999
000 X. 0xx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
------------------------------------------------------- -----------------------------------------------------
Xxxx-Xxxxxx Capital Investments, Inc. March 31, 1999
0000 Xxxxxxxxxx Xxxxxx Xxxxxxx
Xxxxx000
Xxxxxxxx, XX 00000
------------------------------------------------------- -----------------------------------------------------
EverGreen Capital Management, Inc. March 31, 1999
00000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
------------------------------------------------------- -----------------------------------------------------
GLOBALT, Inc. March 31, 1999
0000 Xxxxxxxxx Xxxx, XX
Xxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
------------------------------------------------------- -----------------------------------------------------
Xxxx Xxx Capital Group, Inc. March 31, 1999
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
------------------------------------------------------- -----------------------------------------------------
The Kenwood Group, Inc. March 31, 1999
00 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
------------------------------------------------------- -----------------------------------------------------
Union Heritage Capital Management, Inc. March 31, 1999
0000 Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxx, XX 00000
------------------------------------------------------- -----------------------------------------------------
Xxxxxxxxxx Capital Partners LLC March 31, 1999
1270 Avenue of the Americas, Xxxxx 000
Xxx Xxxx, X.X. 00000
------------------------------------------------------- -----------------------------------------------------
Xxxxxxxxxxx Capital, Inc. March 31, 1999
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
------------------------------------------------------- -----------------------------------------------------
