EX-99.D(63) 5 dex99d63.htm FORM OF SUBADVISORY AGREEMENT
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT ("Agreement") is made this day of
, 2008, by and between Xxxx Xxxxx Partners Fund
Advisor, LLC, a Delaware limited liability company (the "Manager"), and
Batterymarch Financial Management, Inc., a Maryland corporation (the
"Subadviser").
WHEREAS, the Manager has been retained by Xxxx Xxxxx Partners
Equity Trust (the "Trust"), a registered management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act")
to provide investment advisory, management, and administrative services
to the Trust with respect to certain series of the Trust; and
WHEREAS, the Manager wishes to engage the Subadviser to provide
certain investment advisory services to the Trust with respect to the
series of the Trust designated in Schedule A annexed hereto (the
"Fund") and Subadviser is willing to furnish such services on the terms
and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed as follows:
1. In accordance with and subject to the Management Agreement
between the Trust and the Manager with respect to the Fund (the
"Management Agreement"), the Manager hereby appoints the Subadviser to
act as Subadviser with respect to the Fund for the period and on the
terms set forth in this Agreement. The Subadviser accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. The Manager shall cause the Subadviser to be kept fully informed
at all times with regard to the securities owned by the Fund, its funds
available, or to become available, for investment, and generally as to
the condition of the Fund"s affairs. The Manager shall furnish the
Subadviser with such other documents and information with regard to the
Fund"s affairs as the Subadviser may from time to time reasonably
request.
3. (a) Subject to the supervision of the Trust"s Board of Trustees
(the "Board") and the Manager, the Subadviser shall regularly provide
the Fund with respect to such portion of the Fund"s assets as shall be
allocated to the Subadviser by the Manager from time to time (the
"Allocated Assets") with investment research, advice, management and
supervision and shall furnish a continuous investment program for the
Allocated Assets consistent with the Fund"s investment objectives,
policies and restrictions, as stated in the Fund"s current Prospectus
and Statement of Additional Information. The Subadviser shall, with
respect to the Allocated Assets, determine from time to time what
securities and other investments will be purchased, retained, sold or
exchanged by the Fund and what portion of the Allocated Assets will be
held in the various securities and other investments in which the Fund
invests, and shall implement those decisions (including the execution
of investment documentation), all subject to the provisions of the
Trust"s Declaration of Trust and By-Laws (collectively, the "Governing
Documents"), the 1940 Act, and the applicable rules and regulations
promulgated thereunder by the Securities and Exchange Commission (the
"SEC") and interpretive guidance issued thereunder by the SEC staff and
any other applicable federal and state law, as well as the investment
objectives, policies and restrictions of the Fund referred to above,
and any other specific policies adopted by the Board and disclosed to
the Subadviser. The Subadviser is authorized as the agent of the Trust
to give instructions with respect to the Allocated Assets to the
custodian of the Fund and any sub-custodian or prime broker as to
deliveries of securities and other investments and payments of cash in
respect of securities transactions or cash margin calls for the account
of the Fund. Subject to applicable provisions of the 1940 Act, the
investment program to be provided hereunder may entail the investment
of all or substantially all of the assets of the Fund in one or more
investment companies. The Subadviser will place orders pursuant to its
investment determinations for the Fund either directly with the issuer
or with any broker or dealer, foreign currency dealer, futures
commission merchant or others selected by it. In connection with the
selection of such brokers or dealers and the placing of such orders,
subject to applicable law, brokers or dealers may be selected who also
provide brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) to the Fund and/or the other accounts over which the
Subadviser or its affiliates exercise investment discretion. The
Subadviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction if the Subadviser determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer. This
determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Subadviser and
its affiliates have with respect to
accounts over which they exercise investment discretion. The Board may
adopt policies and procedures that modify and restrict the Subadviser"s
authority regarding the execution of the Fund"s portfolio transactions
provided herein. The Subadviser shall exercise voting rights, rights to
consent to corporate action and any other rights pertaining to the
Allocated Assets subject to such direction as the Board may provide,
and shall perform such other functions of investment management and
supervision as may be directed by the Board. The Subadviser may execute
on behalf of the Fund certain agreements, instruments and documents in
connection with the services performed by it under this Agreement.
These may include, without limitation, brokerage agreements, clearing
agreements, account documentation, futures and options agreements, swap
agreements, other investment related agreements, and any other
agreements, documents or instruments the Subadviser believes are
appropriate or desirable in performing its duties under this Agreement.
(b) The Fund hereby authorizes any entity or person associated with
the Subadviser which is a member of a national securities exchange to
effect any transaction on the exchange for the account of the Fund
which is permitted by Section 11(a) of the Exchange Act and Rule 11a2-
2(T) thereunder, and the Fund hereby consents to the retention of
compensation for such transactions in accordance with Rule 11a2-
2(T)(a)(2)(iv). Notwithstanding the foregoing, the Subadviser agrees
that it will not deal with itself, or with members of the Board or any
principal underwriter of the Fund, as principals or agents in making
purchases or sales of securities or other property for the account of
the Fund, nor will it purchase any securities from an underwriting or
selling group in which the Subadviser or its affiliates is
participating, or arrange for purchases and sales of securities between
the Fund and another account advised by the Subadviser or its
affiliates, except in each case as permitted by the 1940 Act and in
accordance with such policies and procedures as may be adopted by the
Fund from time to time, and will comply with all other provisions of
the Governing Documents and the Fund"s then-current Prospectus and
Statement of Additional Information relative to the Subadviser and its
directors and officers.
4. The Subadviser may delegate to any other one or more companies
that the Subadviser controls, is controlled by, or is under common
control with, or to specified employees of any such companies, certain
of the Subadviser"s duties under this Agreement, provided in each case
the Subadviser will supervise the activities of each such entity or
employees thereof, that such delegation will not relieve the Subadviser
of any of its duties or obligations under this Agreement and provided
further that any such arrangements are entered into in accordance with
and meet all applicable requirements of the 1940 Act.
5. The Subadviser agrees that it will keep records relating to its
services hereunder in accordance with all applicable laws, and in
compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Subadviser hereby agrees that any records that it maintains for the
Fund are the property of the Fund, and further agrees to surrender
promptly to the Fund any of such records upon the Fund"s request. The
Subadviser further agrees to arrange for the preservation of the
records required to be maintained by Rule 31a-1 under the 1940 Act for
the periods prescribed by Rule 31a-2 under the 1940 Act.
6. (a) The Subadviser, at its expense, shall supply the Board, the
officers of the Trust, and the Manager with all information and reports
reasonably required by them and reasonably available to the Subadviser
relating to the services provided by the Subadviser hereunder.
(b) The Subadviser shall bear all expenses, and shall furnish all
necessary services, facilities and personnel, in connection with its
responsibilities under this Agreement. Other than as herein
specifically indicated, the Subadviser shall not be responsible for the
Fund"s expenses, including, without limitation, advisory fees;
distribution fees; interest; taxes; governmental fees; voluntary
assessments and other expenses incurred in connection with membership
in investment company organizations; organization costs of the Fund;
the cost (including brokerage commissions, transaction fees or charges,
if any) in connection with the purchase or sale of the Fund"s
securities and other investments and any losses in connection
therewith; fees and expenses of custodians, transfer agents,
registrars, independent pricing vendors or other agents; legal
expenses; loan commitment fees; expenses relating to share
certificates; expenses relating to the issuing and redemption or
repurchase of the Fund"s shares and servicing shareholder accounts;
expenses of registering and qualifying the Fund"s shares for sale under
applicable federal and state law; expenses of preparing, setting in
print, printing and distributing prospectuses and statements of
additional information and any supplements thereto, reports, proxy
statements, notices and dividends to the Fund"s shareholders; costs of
stationery; website costs; costs of meetings of the Board or any
committee thereof, meetings of shareholders and other meetings of the
Fund; Board fees; audit fees; travel expenses of officers, members of
the Board and employees of the Fund, if any; and the Fund"s pro rata
portion of premiums on any fidelity bond and
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other insurance covering the Fund and its officers, Board members and
employees; litigation expenses and any non-recurring or extraordinary
expenses as may arise, including, without limitation, those relating to
actions, suits or proceedings to which the Fund is a party and the
legal obligation which the Fund may have to indemnify the Fund"s Board
members and officers with respect thereto.
7. No member of the Board, officer or employee of the Trust or Fund
shall receive from the Trust or Fund any salary or other compensation
as such member of the Board, officer or employee while he is at the
same time a director, officer, or employee of the Subadviser or any
affiliated company of the Subadviser, except as the Board may decide.
This paragraph shall not apply to Board members, executive committee
members, consultants and other persons who are not regular members of
the Subadviser"s or any affiliated company"s staff.
8. As compensation for the services performed by the Subadviser,
including the services of any consultants retained by the Subadviser,
the Manager shall pay the Subadviser out of the management fee it
receives with respect to the Fund, and only to the extent thereof, as
promptly as possible after the last day of each month, a fee, computed
daily at an annual rate set forth on Schedule A annexed hereto. The
first payment of the fee shall be made as promptly as possible at the
end of the month succeeding the effective date of this Agreement, and
shall constitute a full payment of the fee due the Subadviser for all
services prior to that date. If this Agreement is terminated as of any
date not the last day of a month, such fee shall be paid as promptly as
possible after such date of termination, shall be based on the average
daily net assets of the Fund or, if less, the portion thereof
comprising the Allocated Assets in that period from the beginning of
such month to such date of termination, and shall be that proportion of
such average daily net assets as the number of business days in such
period bears to the number of business days in such month. The average
daily net assets of the Fund or the portion thereof comprising the
Allocated Assets shall in all cases be based only on business days and
be computed as of the time of the regular close of business of the New
York Stock Exchange, or such other time as may be determined by the
Board.
9. The Subadviser assumes no responsibility under this Agreement
other than to render the services called for hereunder, in good faith,
and shall not be liable for any error of judgment or mistake of law, or
for any loss arising out of any investment or for any act or omission
in the execution of securities transactions for the Fund, provided that
nothing in this Agreement shall protect the Subadviser against any
liability to the Manager or the Fund to which the Subadviser would
otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties hereunder. As used in
this Section 9, the term "Subadviser" shall include any affiliates of
the Subadviser performing services for the Trust or the Fund
contemplated hereby and the partners, shareholders, directors, officers
and employees of the Subadviser and such affiliates.
10. Nothing in this Agreement shall limit or restrict the right of
any director, officer, or employee of the Subadviser who may also be a
Board member, officer, or employee of the Trust or the Fund, to engage
in any other business or to devote his time and attention in part to
the management or other aspects of any other business, whether of a
similar nature or a dissimilar nature, nor to limit or restrict the
right of the Subadviser to engage in any other business or to render
services of any kind, including investment advisory and management
services, to any other fund, firm, individual or association. If the
purchase or sale of securities consistent with the investment policies
of the Fund or one or more other accounts of the Subadviser is
considered at or about the same time, transactions in such securities
will be allocated among the accounts in a manner deemed equitable by
the Subadviser. Such transactions may be combined, in accordance with
applicable laws and regulations, and consistent with the Subadviser"s
policies and procedures as presented to the Board from time to time.
11. For the purposes of this Agreement, the Fund"s "net assets"
shall be determined as provided in the Fund"s then-current Prospectus
and Statement of Additional Information and the terms "assignment,"
"interested person," and "majority of the outstanding voting
securities" shall have the meanings given to them by Section 2(a) of
the 1940 Act, subject to such exemptions as may be granted by the SEC
by any rule, regulation or order.
12. This Agreement will become effective with respect to the Fund
on the date set forth opposite the Fund"s name on Schedule A annexed
hereto, provided that it shall have been approved by the Trust"s Board
and, if so required by the 1940 Act, by the shareholders of the Fund in
accordance with the requirements of the 1940 Act and, unless sooner
terminated as provided herein, will continue in effect through
, 2010. Thereafter, if not terminated, this
Agreement shall continue in effect with respect to the Fund, so long as
such continuance is specifically approved at least annually (i) by the
Board or (ii) by a vote of a majority of the outstanding voting
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securities of the Fund, provided that in either event the continuance
is also approved by a majority of the Board members who are not
interested persons of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval.
13. This Agreement is terminable with respect to the Fund without
penalty by the Board or by vote of a majority of the outstanding voting
securities of the Fund, in each case on not more than 60 days" nor less
than 30 days" written notice to the Subadviser, or by the Subadviser
upon not less than 90 days" written notice to the Fund and the Manager,
and will be terminated upon the mutual written consent of the Manager
and the Subadviser. This Agreement shall terminate automatically in the
event of its assignment by the Subadviser and shall not be assignable
by the Manager without the consent of the Subadviser.
14. The Subadviser agrees that for any claim by it against the Fund
in connection with this Agreement or the services rendered under this
Agreement, it shall look only to assets of the Fund for satisfaction
and that it shall have no claim against the assets of any other
portfolios of the Trust.
15. 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, and no material amendment of the
Agreement shall be effective until approved, if so required by the 1940
Act, by vote of the holders of a majority of the Fund"s outstanding
voting securities.
16. This Agreement, and any supplemental terms contained on Annex I
hereto, if applicable, embodies the entire agreement and understanding
between the parties hereto, and supersedes all prior agreements and
understandings relating to the subject matter hereof. Should any part
of this Agreement be held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding on and shall inure to
the benefit of the parties hereto and their respective successors.
17. This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of New
York.
[signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers thereunto duly authorized.
XXXX XXXXX PARTNERS FUND
ADVISOR, LLC
By:
Name:
Title:
BATTERYMARCH FINANCIAL
MANAGEMENT, INC.
By:
Name:
Title:
The foregoing is acknowledged:
The undersigned officer of the Trust has executed this Agreement
not individually but in his/her capacity as an officer of the Trust.
The Trust does not hereby undertake, on behalf of the Fund or
otherwise, any obligation to the Subadviser.
XXXX XXXXX PARTNERS EQUITY
TRUST
By:
Name:
Title:
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ANNEX I
Not applicable.
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SCHEDULE A
Xxxx Xxxxx Partners U.S. Large Cap Equity Fund
Date:
, 2008
Fee:
The sub-advisory fee will be 70% of the management fee paid to Xxxx
Xxxxx Partners Fund Advisor, LLC, net of expense waivers and
reimbursements.
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