XXXX XXXXXXX INSTITUTIONAL SERIES TRUST
Xxxx Xxxxxxx International Equity Fund
Interim Sub-Investment Management Contract
Dated December 14, 2000
XXXX XXXXXXX ADVISERS, INC.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
XXXX XXXXXXX INSTITUTIONAL SERIES TRUST
- Xxxx Xxxxxxx International Equity Fund
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
XXXXXXXX-XXXXXXXXX CAPITAL MANAGEMENT
000 Xxxx Xxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Interim Sub-Investment Management Contract
Ladies and Gentlemen:
Xxxx Xxxxxxx Institutional Series Trust (the "Trust") has been organized
as a business trust under the laws of The Commonwealth of Massachusetts to
engage in the business of an investment company. The Trust's shares of
beneficial interest may be classified into series, each series representing
the entire undivided interest in a separate portfolio of assets. Series may
be established or terminated from time to time by action of the Board of
Trustees of the Trust. As of the date hereof, the Trust has eleven series of
shares, representing interests in Xxxx Xxxxxxx Active Bond Xxxx, Xxxx Xxxxxxx
Dividend Performers Xxxx, Xxxx Xxxxxxx Independence Balanced Xxxx, Xxxx
Xxxxxxx Independence Diversified Core Equity Fund II, Xxxx Xxxxxxx Core Growth
Xxxx, Xxxx Xxxxxxx Independence Medium Capitalization Xxxx, Xxxx Xxxxxxx Core
Value Xxxx, Xxxx Xxxxxxx International Equity Xxxx, Xxxx Xxxxxxx Medium
Capitalization Growth Xxxx, Xxxx Xxxxxxx Small Capitalization Growth Fund, and
Xxxx Xxxxxxx Small Capitalization Value Fund.
The Board of Trustees of the Trust (the "Trustees") has selected Xxxx
Xxxxxxx Advisers, Inc. (the "Adviser") to provide overall investment advice
and management for the Xxxx Xxxxxxx International Equity Fund (the "Fund"),
and to provide certain other services, under the terms and conditions provided
in the Investment Management Contract, dated March 30, 1995, between the
Trust, the Fund and the Adviser (the "Investment Management Contract").
The Adviser and the Trustees have selected Xxxxxxxx-Xxxxxxxxx Capital
Management (the "Sub-Adviser") to provide the Adviser and the Fund with the
advice and services set forth below, and the Sub-Adviser 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 Sub-Adviser hereby represents and warrants that it is registered
as an investment adviser under the Investment Advisers Act of 1940, as
amended. Accordingly, the Trust, on behalf of the Fund, and the Adviser agree
with the Sub-Adviser as follows:
1. Delivery of Documents. The Trust has furnished the Sub-Adviser with
copies, properly certified or otherwise authenticated, of each of the
following:
(a) Declaration of Trust of the Trust, dated October 31, 1994, as
amended from time to time (the "Declaration of Trust");
(b) By-Laws of the Trust as in effect on the date hereof;
(c) Resolutions of the Trustees approving the form of this Agreement
by and among the Adviser, the Sub-Adviser and the Trust, on behalf of the
Fund;
(d) Resolutions of the Trustees selecting the Adviser as investment
adviser for the Fund and approving the form of the Investment Management
Contract;
(e) the Investment Management Contract;
(f) the Fund's portfolio compliance checklists;
(g) the Fund's current Registration Statement, including the Fund's
Prospectus and Statement of Additional Information; and
(h) the Fund's Code of Ethics.
The Trust will furnish to the Sub-Adviser from time to time copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.
2. Investment Services. The Sub-Adviser will use its best efforts to
provide to the Fund continuing and suitable investment advice with respect to
investments, consistent with the investment policies, objectives and
restrictions of the Fund as set forth in the Fund's Prospectus and Statement
of Additional Information. In the performance of the Sub-Adviser's duties
hereunder, subject always (x) to the provisions contained in the documents
delivered to the Sub-Adviser pursuant to Section 1, as each of the same may
from time to time be amended or supplemented, and (y) to the limitations set
forth in the Registration Statement of the Trust, on behalf of the Fund, as in
effect from time to time under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended (the "1940 Act"), the Sub-Adviser
will have investment discretion with respect to the Fund and will, at its own
expense:
(a) furnish the Adviser and the Fund with advice and recommendations,
consistent with the investment policies, objectives and restrictions of the
Fund as set forth in the Fund's Prospectus and Statement of Additional
Information, with respect to the purchase, holding and disposition of
portfolio securities including the purchase and sale of options;
(b) furnish the Adviser and the Fund with advice as to the manner in
which voting rights, subscription rights, rights to consent to corporate
action and any other rights pertaining to the Fund's assets shall be
exercised, the Fund having the responsibility to exercise such voting and
other rights;
(c) furnish the Adviser and the Fund with research, economic and
statistical data in connection with the Fund's investments and investment
policies;
(d) submit such reports relating to the valuation of the Fund's
securities as the Trustees may reasonably request;
(e) subject to prior consultation with the Adviser, engage in
negotiations relating to the Fund's investments with issuers, investment
banking firms, securities brokers or dealers and other institutions or
investors;
(f) The Sub-Adviser shall have full authority and discretion to select
brokers and dealers to execute portfolio transactions for the Fund and for the
selection of the markets on or in which the transaction will be executed. In
providing the Fund with investment management, it is recognized that the Sub-
Adviser will give primary consideration to securing the most favorable price
and efficient execution considering all circumstances. Within the framework
of this policy, the Sub-Adviser may consider the financial responsibility,
research and investment information and other research services and products
provided by brokers or dealers who may effect or be a party to any such
transaction or other transactions to which the Sub-Adviser's other clients may
be a party. It is understood that it is desirable for the Fund that the Sub-
Adviser have access to brokerage and research services and products and
security and economic analysis provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than broker-dealers that do not
provide such brokerage and research services. Therefore, in compliance with
Section 28(e) of the Securities Exchange Act of 1934 ("1934 Act"), the Sub-
Adviser is authorized to place orders for the purchase and sale of securities
for the Fund with such brokers, that provide brokerage and research products
and/or services that charge an amount of commission for effecting securities
transaction in excess of the amount of commission another broker would have
charged for effecting that transaction, provided the Sub-Adviser determines in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research products and/or services provided by such
broker viewed in terms of either that particular transaction or the overall
responsibilities of the Sub-Adviser for this or other advisory accounts,
subject to review by the Adviser from time to time with respect to the extent
and continuation of this practice. It is understood that the information,
services and products provided by such brokers may be useful to the Sub-
Adviser in connection with the Sub-Adviser's services to other clients;
(g) from time to time or at any time requested by the Adviser or the
Trustees, make reports to the Adviser or the Trust of the Sub-Adviser's
performance of the foregoing services;
(h) subject to the supervision of the Adviser, maintain all books and
records with respect to the Fund's securities transactions required by the
1940 Act, and preserve such records for the periods prescribed therefor by the
1940 Act (the Sub-Adviser agrees that such records are the property of the
Trust and copies will be surrendered to the Trust promptly upon request
therefor);
(i) give instructions to the Fund's custodian as to deliveries of
securities to and from such custodian and transfer of payment of cash for the
account of the Fund, and advise the Adviser on the same day such instructions
are given; and
(j) cooperate generally with the Fund 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, periodic statements, shareholder communications and proxy
materials furnished to holders of shares of the Fund, filings with state "blue
sky" authorities and with United States agencies responsible for tax matters,
and other reports and filings of like nature.
3. Expenses Paid by the Sub-Adviser. The Sub-Adviser 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 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 Fund Not Paid by the Sub-Adviser. The Sub-Adviser will
not be required to pay any expenses which this Agreement does not expressly
make payable by the Sub-Adviser. In particular, and without limiting the
generality of the foregoing but subject to the provisions of Section 3, the
Sub-Adviser will not be required to pay under this Agreement:
(a) the compensation and expenses of Trustees and of independent
advisers, independent contractors, consultants, managers and other agents
employed by the Trust or the Fund other than through the Sub-Adviser;
(b) legal, accounting and auditing fees and expenses of the Trust or
the Fund;
(c) the fees and disbursements of custodians and depositories of the
Trust or the Fund's assets, transfer agents, disbursing agents, plan agents
and registrars;
(d) taxes and governmental fees assessed against the Trust or the
Fund's assets and payable by the Trust or the Fund;
(e) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy materials to shareholders of the Trust or the Fund
except that the Sub-Adviser shall bear the costs of providing the information
referred to in Section 2(j) to the Adviser;
(f) brokers' commissions and underwriting fees; and
(g) the expense of periodic calculations of the net asset value of the
shares of the Fund.
5. Compensation of the Sub-Adviser. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Sub-Adviser as herein
provided for the Fund, the Adviser will pay the Sub-Adviser quarterly, in
arrears, a fee at the annual rate of 55% of the investment advisory fee.
The "average daily net assets" of the Fund shall be determined on the
basis set forth in the Fund's Prospectus or otherwise consistent with the 1940
Act and the regulations promulgated thereunder. The Sub-Adviser will receive
a pro rata portion of such fee for any periods in which the Sub-Adviser
advises the Fund less than a full quarter. The Fund shall not be liable to
the Sub-Adviser for the Sub-Adviser's compensation hereunder. Calculations of
the Sub-Adviser's fee will be based on average net asset values as provided by
the Adviser.
In addition to the foregoing, the Sub-Adviser may from time to time
agree not to impose all or a portion of its fee otherwise payable hereunder
(in advance of the time such fee or portion thereof would otherwise accrue)
and/or undertake to pay or reimburse the Fund for all or a portion of its
expenses not otherwise required to be borne or reimbursed by it. Any such fee
reduction or undertaking may be discontinued or modified by the Sub-Adviser at
any time.
6. Other Activities of the Sub-Adviser and Its Affiliates. Nothing herein
contained shall prevent the Sub-Adviser or any associate of the Sub-Adviser
from engaging in any other business or from acting as investment adviser or
investment manager for any other person or entity, understood that officers,
directors and employees of the Sub-Adviser or its affiliates may continue to
engage in providing portfolio management services and advice to other
investment companies, whether or not registered, to other investment advisory
clients of the Sub-Adviser or its affiliates and to said affiliates
themselves.
7. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither the Sub-
Adviser nor any of its investment management subsidiaries nor any of such
investment management subsidiaries' directors, officers or employees will act
as principal or agent or receive any commission, except as may be permitted by
the 1940 Act and rules and regulations promulgated thereunder. The Sub-
Adviser shall not knowingly recommend that the Fund purchase, sell or retain
securities of any issuer in which the Sub-Adviser has a financial interest
without obtaining prior approval of the Adviser prior to the execution of any
such transaction.
Nothing herein contained shall limit or restrict the Sub-Adviser 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 Fund
acknowledge the Sub-Adviser 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 hereunder. The Sub-Adviser shall have no obligation to acquire
with respect to the Fund, a position in any investment which the Sub-Adviser,
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 Sub-Adviser, it is not feasible or desirable to acquire a position in such
investment on behalf of the Fund. Nothing herein contained shall prevent the
Sub-Adviser 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.
8. No Partnership or Joint Venture. The Trust, the Fund, the Adviser and
the Sub-Adviser 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. Name of the Trust, the Fund and the Sub-Adviser. The Trust and the Fund
may use the name "Xxxx Xxxxxxx" or any name or names derived from or similar
to the names "Xxxx Xxxxxxx Advisers, Inc." or "Xxxx Xxxxxxx Life Insurance
Company" only for so long as this Agreement remains in effect. At such time
as this Agreement shall no longer be in effect, the Trust and the Fund will
(to the extent that they lawfully can) cease to use such a name or any other
name indicating that the Fund is advised by or otherwise connected with the
Adviser. The Fund acknowledges that it has adopted the name Xxxx Xxxxxxx
International Equity Fund through permission of Xxxx Xxxxxxx Life Insurance
Company, a Massachusetts insurance company, and agrees that Xxxx Xxxxxxx Life
Insurance Company reserves to itself and any successor to its business the
right to grant the nonexclusive right to use the name "Xxxx Xxxxxxx" or any
similar name or names to any other corporation or entity, including but not
limited to any investment company of which Xxxx Xxxxxxx Life Insurance Company
or any subsidiary or affiliate thereof shall be the investment adviser.
In addition, the Fund and the Trust hereby consent to the reasonable use
of the name of the Fund in marketing/client materials developed and
distributed by or on behalf of Sub-Adviser. In addition, it is understood
that the name "Xxxxxxxx-Xxxxxxxxx" or the name of any of its affiliates, or
any derivative associated with those names, are the valuable property of the
Sub-Adviser and its affiliates and that the Fund, Trust and/or the Adviser
have the right to use such name(s) or derivative(s) in offering materials and
sales literature so long as this Agreement is in effect. Upon termination of
the Agreement, such authorization shall forthwith cease to be in effect.
10. Limitation of Liability of Sub-Adviser. The Sub-Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust or the Fund 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 Sub-Adviser's part in the performance of its
duties or from reckless disregard by it of its obligations and duties under
this Agreement. Any person, even though also employed by the Sub-Adviser, who
may be or become an employee of and paid by the Trust or the Fund shall be
deemed, when acting within the scope of his employment by the Trust or the
Fund, to be acting in such employment solely for the Trust or the Fund and not
as the Sub-Adviser's employee or agent.
11. Duration and Termination of this Agreement. This Agreement shall remain
in force until May 12, 2001. This Agreement may, on 60 days' written notice,
be terminated at any time without the payment of any penalty by the Trust or
the Fund by vote of a majority of the outstanding voting securities of the
Fund, by the Trustees, the Adviser or the Sub-Adviser. Termination of this
Agreement with respect to the Fund shall not be deemed to terminate or
otherwise invalidate any provisions of any contract between the Sub-Adviser
and any other series of the Trust. This Agreement shall automatically
terminate in the event of its assignment or upon termination of the Investment
Management Contract. In interpreting the provisions of this Section 11, the
definitions contained in Section 2(a) of the 1940 Act (particularly the
definitions of "assignment," "interested person" or "voting security"), shall
be applied.
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, and no amendment, transfer, assignment,
sale, hypothecation or pledge of this Agreement shall be effective until
approved by (a) the Trustees, including a majority of the Trustees who are not
interested persons of the Adviser, the Sub-Adviser, or (other than as Board
members) of the Trust or the Fund, cast in person at a meeting called for the
purpose of voting on such approval, and (b) a majority of the outstanding
voting securities of the Fund, as defined in the 1940 Act.
13. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts.
14. Severability. The provisions of this Agreement are independent of and
separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other
or others of them may be deemed invalid or unenforceable in whole or in part.
15. 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 Xxxx Xxxxxxx Institutional Series Trust
is the designation of the Trustees under the Declaration of Trust dated
October 31, 1994, as amended from time to time. The Declaration of Trust has
been filed with the Secretary of The Commonwealth of Massachusetts. The
obligations of the Trust and the Fund are not personally binding upon, nor
shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Fund, but only the Fund's
property shall be bound. The Trust or the Fund shall not be liable for the
obligations of any other series of the Trust. (b) Any information supplied by
the Sub-Adviser, which is not otherwise in the public domain, in connection
with the performance of its duties hereunder is to be regarded as confidential
and for use only by the Fund and/or its agents, and only in connection with
the Fund and its investments.
16. Xxxxxxxx-Xxxxxxxxx undertakes to promptly notify Fund of any change in
its general partner(s).
17. The Fund agrees to obtain and maintain insurance coverage satisfying any
insurance requirements under the 1940 Act, to carry errors and omissions
coverage in the amount of $10,000,000.
18. The Adviser has received from Sub-Adviser and reviewed the disclosure
statement or "brochure" required to be delivered pursuant to Rule 204-3 of the
Act (the "Brochure"), which Xxxxxxxx was received and reviewed by the Adviser
more than 48 hours prior to entering into this Agreement.
Yours very truly,
XXXX XXXXXXX INSTITUTIONAL SERIES TRUST
on behalf of Xxxx Xxxxxxx International
Equity Fund
By ________________________
President
The foregoing contract
is hereby agreed to as
of the date hereof.
XXXX XXXXXXX ADVISERS, INC.
By: ______________________
President
XXXXXXXX-XXXXXXXXX CAPITAL MANAGEMENT
By: ____________________________
Name:
Title:
s:\funds\institnl\International Equity Subinv Mgt with NicholasAppdec00
