EXHIBIT D(3)
XXXXXXX ASSET MANAGEMENT CORP.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
October 30, 2000
XXXXXXX INVESTORS TRUST, on behalf of
Xxxxxxx Money Market Fund and
Xxxxxxx U.S. Treasury Money Market Fund
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
XXXXX & XXXX ASSET MANAGEMENT, L. P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
SUBADVISORY AGREEMENT
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Dear Sirs:
Xxxxxxx Investors Trust (the "trust"), of which Xxxxxxx Money Market
Fund and Xxxxxxx U.S. Treasury Money Market Fund (the "funds") are series, has
been organized as a business trust under the laws of the State of Delaware to
engage in the business of an investment company. The trust's shares of
beneficial interest are currently divided into six series (including the funds),
each series representing the entire undivided interest in a separate portfolio
of assets.
The board of trustees of the trust (the "trustees") has selected
Xxxxxxx Asset Management Corp. (the "adviser") to provide overall investment
advice and management for the funds, and to provide certain other services,
under the terms and conditions provided in the investment advisory agreement,
dated as of the date hereof, between the trust, on behalf of the funds, and the
adviser (the "investment advisory agreement").
The adviser and the trustees have selected Xxxxx & Tang Asset
Management, L.P. (the "subadviser") to provide the adviser and the funds with
the advice and services set forth below, and the subadviser is willing to
provide such advice and services, subject to the review of the trustees and
overall supervision of the adviser, under the terms and conditions hereinafter
set forth. The subadviser hereby represents and warrants that it is registered
as an investment adviser under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"). Accordingly, the trust, on behalf of the funds, and the
adviser agree with the subadviser as follows:
1. DELIVERY OF DOCUMENTS. The trust has furnished the subadviser with
copies, properly certified or otherwise authenticated, of each of the
following:
(a) agreement and declaration of trust of the trust, dated August
20, 1998 (the "declaration of trust");
(b) by-laws of the trust as in effect on the date hereof;
(c) resolutions of the trustees selecting the subadviser as the
investment subadviser to the funds and approving this
subadvisory agreement (the "agreement");
(d) resolutions of the trustees selecting the adviser as
investment adviser to the funds and approving the investment
advisory agreement and resolutions adopted by the initial
shareholder of each fund approving the investment advisory
agreement;
(e) the adviser's investment advisory agreement;
(f) each fund's prospectus and statement of additional
information; and
(g) the trust's code of ethics.
The adviser will furnish the subadviser from time to time with
copies, properly certified or otherwise authenticated, of all
amendments of or supplements to the foregoing, if any.
2. INVESTMENT SERVICES. The subadviser will use its best efforts to
provide to the funds continuing and suitable investment advice with
respect to investments, subject always to the provisions of the trust's
declaration of trust and by-laws and the Investment Company Act of
1940, as amended (the "1940 Act"), and to the investment objective,
policies and restrictions (including, without limitation, the
requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code") for qualification as a registered investment
company) of each fund, as each of the same shall be from time to time
in effect as set forth in that fund's prospectus and statement of
additional information, or any investment guidelines or other
instructions received in writing from the adviser, and subject,
further, to such policies and instructions as the board of trustees may
from time to time establish and deliver to the subadviser. In the
performance of the subadviser's duties hereunder, subject always to the
provisions contained in the documents delivered to the subadviser
pursuant to Section 1 above, as from time to time amended or
supplemented, the subadviser will, at its own expense:
(a) furnish the adviser and the funds with advice and
recommendations, consistent with the investment policies,
objectives and restrictions of the funds as set forth above,
with respect to the purchase, holding and disposition of
portfolio securities and other permitted investments;
(b) furnish the adviser and the funds with advice in connection
with policy decisions to be made by the board of trustees or
any committee thereof about the funds' investments and, as
requested, furnish the funds, with research, economic and
statistical data in connection with the funds' investments and
investment policies;
(c) submit such reports relating to the valuation of the funds'
securities as the adviser may reasonably request;
(d) subject to prior consultation with the adviser, assist the
funds in any negotiations relating to the funds' investments
with issuers, investment banking firms, securities brokers or
dealers and other institutions or investors;
(e) consistent with the provisions of Section 7 of this agreement,
place orders for the purchase, sale or exchange of portfolio
securities for the funds' account with brokers or dealers
selected by the adviser or the subadviser, provided that in
connection with the placing of such orders and the selection
of such brokers or dealers the subadviser will seek to obtain
best price and execution, except as otherwise provided in the
prospectus and statement of additional information of the
funds;
(f) from time to time or at any time requested by the adviser or
the trustees, make reports to the adviser or the trustees, as
requested, of the subadviser's performance of the foregoing
services;
(g) subject to the supervision of the adviser, maintain and
preserve the records required by the 1940 Act to be maintained
by the subadviser (the subadviser agrees that such records are
the property of the trust and copies will be surrendered to
the trust promptly upon request therefor);
(h) give instructions to the custodian (including any
subcustodian) of the funds as to deliveries of securities to
and from such custodian and payments of cash for the account
of the funds, and advise the adviser on the same day such
instructions are given;
(i) cooperate generally with the funds and the adviser to provide
information necessary for the preparation of registration
statements and periodic reports to be filed with the
Securities and Exchange Commission, including Form N-1A,
semi-annual reports on Form N-SAR, periodic statements,
shareholder communications and proxy materials furnished to
holders of shares of the funds, filings with states and with
United States agencies responsible for tax matters, and other
reports and filings of like nature.
In the performance of its duties hereunder, the subadviser is and
will be an independent contractor and unless otherwise expressly
provided or authorized will have no authority to act for or represent
the funds or trust in any way or otherwise be deemed to be an agent of
the funds, the trust or of the adviser.
3. EXPENSES PAID BY THE SUBADVISER. The subadviser will pay the cost of
maintaining the staff and personnel necessary for it to perform its
obligations under this agreement, the expenses of office rent,
telephone, telecommunications and other facilities that it is obligated
to provide in order to perform the services specified in Section 2, and
any other expenses incurred by it in connection with the performance of
its duties hereunder.
4. EXPENSES OF THE FUNDS NOT PAID BY THE SUBADVISER. The subadviser will
not be required to pay any expenses which this agreement does not
expressly state will be payable by the subadviser. In particular, and
without limiting the generality of the foregoing but subject to the
provisions of Section 3, the subadviser will not be required to pay any
fund expense or to reimburse the adviser for any such expense that the
adviser is required to pay.
5. COMPENSATION OF THE SUBADVISER. The adviser will pay the subadviser, as
compensation for services and expenses assumed hereunder, fees as set
forth in Schedule I. Subadvisory fees payable hereunder will be
computed daily and paid monthly in arrears. If this agreement is
effective subsequent to the first day of the month, or if this
agreement is terminated, the fees provided in this section will be
computed on the basis of the number of days in the month for which this
agreement is in effect, subject to a pro rata adjustment based on the
number of days elapsed in the current month as a percentage of the
total number of days in such month. The subadviser understands and
agrees that neither the trust nor the funds have any liability for the
subadviser's fees hereunder. Calculations of the subadviser's fees will
be based on average net asset values as provided by the adviser.
6. OTHER ACTIVITIES OF THE SUBADVISER AND ITS AFFILIATES. Nothing herein
contained will prevent the subadviser or any of its affiliates or
associates from engaging in any other business or from acting as
investment adviser or investment manager for any other person or
entity, whether or not having investment policies or a portfolio
similar to either fund. It is specifically understood that officers,
directors and employees of the subadviser and its affiliates may engage
in providing portfolio management services and advice to other
investment advisory clients of the subadviser or of its affiliates.
7. AVOIDANCE OF INCONSISTENT POSITION. In connection with purchases or
sales of portfolio securities for the account of the funds, neither the
subadviser nor any of its directors, officers or employees will act as
principal or agent or receive any commission. The subadviser will not
knowingly recommend that either fund purchase, sell or retain
securities of any issuer in which the subadviser has a financial
interest without obtaining prior approval of the adviser prior to the
execution of any such transaction. The subadviser will provide
quarterly compliance reports to a designated representative of the
adviser reporting any violation of the subadviser's code of ethics.
8. NO PARTNERSHIP OR JOINT VENTURE. The trust, the funds, the adviser and
the subadviser are not partners of or joint venturers with each other
and nothing herein shall be construed so as to make them such partners
or joint venturers or impose any liability as such on any of them.
9. LIMITATION OF LIABILITY OF THE SUBADVISER. The subadviser will not be
liable for any error of judgment or mistake of law or for any loss
suffered by the trust, the funds or the adviser in connection with the
matters to which this agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the subadviser's
part in the performance of its duties or from reckless disregard by it
of its obligations and duties under this agreement.
10. DURATION AND TERMINATION OF THIS AGREEMENT. This agreement will remain
in effect until September 30, 2002 and from year to year thereafter,
but only so long as such continuance is specifically approved at least
annually in accordance with the requirements of the 1940 Act as now in
effect or as amended, subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission by any rule,
regulation, order or interpretive position. This agreement may, on 60
days' written notice, be terminated at any time without the payment of
any penalty by either fund as to that fund by vote of a majority of the
outstanding voting securities of each fund or by the board of trustees
or by the adviser or by the subadviser. Termination of this agreement
with respect to one fund will not be deemed to terminate or otherwise
invalidate this agreement as to the other fund, or any provisions of
any contract between the adviser or subadviser and any other series of
the trust. This agreement will automatically terminate in the event of
its assignment or upon the termination of the adviser's investment
advisory agreement. In interpreting the provisions of this Section 10,
the definitions contained in Section 2(a) of the 1940 Act (including
the definitions of "assignment," "interested person" and "voting
security"),will apply.
11. AMENDMENT OF THIS AGREEMENT. No provision of this agreement may be
changed or waived orally, but only by an instrument in writing signed
by the party against which enforcement of the change or waiver is
sought. No amendment, transfer, assignment, sale, hypothecation or
pledge of this agreement shall be effective until approved in
accordance with the requirements of the 1940 Act as now in effect or as
amended, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission by any rule, regulation, order or
interpretive position.
12. MISCELLANEOUS.
(a) The captions in this agreement are included for convenience of
reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect. This agreement may be executed simultaneously 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. The name Xxxxxxx Investors Trust is the
designation of the trustees under the declaration of trust,
dated August 20, 1998 and the declaration of trust has been
filed with the Secretary of State of the State of Delaware.
The obligations of the trust and the funds are not personally
binding upon, nor will resort be had to the private property
of, any of the trustees, shareholders, officers, employees or
agents of the trust or the funds, but only the funds' property
shall be bound. The funds will not be liable for the
obligations of any other series of the trust.
(b) Nothing herein contained will limit or restrict the subadviser
or any of its officers, affiliates or employees from buying,
selling or trading in any securities for its or their own
account or accounts. The trust and funds acknowledge that the
subadviser and its officers, affiliates and employees, and its
other clients may at any time have, acquire, increase,
decrease or dispose of positions in investments which are at
the same time being acquired or disposed of by the funds. The
subadviser will have no obligation to acquire for the funds a
position in any investment which the subadviser, its officers,
affiliates or employees may acquire for its or their own
accounts or for the account of another client if, in the sole
discretion of the subadviser, it is not feasible or desirable
to acquire a position in such investment for the funds.
Nothing herein contained will prevent the subadviser from
purchasing or recommending the purchase of a particular
security for one or more funds or clients while other funds or
clients may be selling the same security.
(c) Any information supplied by the subadviser, which is not
otherwise in the public domain, in connection with the
performance of its duties hereunder is confidential and may be
used only by the funds and/or its agents, and only in
connection with the funds and its investments.
(d) GOVERNING LAW. This agreement shall be governed by the
substantive law of the State of New York and the applicable
provisions of the 1940 Act.
Yours very truly,
XXXXXXX ASSET MANAGEMENT CORP.
By: /S/ XXXXXXX XXXXX
-----------------
Its: Executive Vice President
The foregoing agreement is hereby
agreed to as of the date thereof.
XXXXXXX INVESTORS TRUST
on behalf of Xxxxxxx Money Market Fund and
Xxxxxxx U.S. Treasury Money Market Fund
By: /S/ XXXXXXX XXXXX
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Its: Executive Vice President
XXXXX & TANG ASSET MANAGEMENT L.P.
By: Xxxxx & Xxxx Asset Management, Inc.
Its: General Partner
By: /S/ XXXXXXX DESANCTUS
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Its: Chief Financial Officer
SCHEDULE I
ANNUAL FEE RATE A PERCENTAGE OF
FUND ASSETS UNDER MANAGEMENT AVERAGE DAILY NET ASSETS
---- ----------------------- -------------------------------
Xxxxxxx Money Market Less than $100 million 0.15%
Fund $100 million but less than $150 million 0.10%
$150 million or more 0.05%
Xxxxxxx U.S. Treasury Less than $100 million 0.15%
Money Market Fund $100 million but less than $150 million 0.10%
$150 million or more 0.05%
The average net asset value for the month will be based on the net
asset value used in determining the price at which each fund's shares are sold,
repurchased or redeemed on each day of the month.
If this agreement becomes effective as to the funds subsequent to the
first day of a month, or terminates before the last day of a month, your
compensation for such fraction of the month will be determined by applying the
foregoing percentages to the average daily net asset value of the funds during
such fraction of a month and in the proportion that such fraction of a month
bears to the entire month.
