Exhibit No. 4(g)
SUB-ADVISORY CONTRACT
Contract made as of March 1, 2001 between XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC., a Delaware corporation ("Xxxxxxxx Xxxxxxxx"), and ALLIANCE
CAPITAL MANAGEMENT L.P., a Delaware limited partnership ("Sub-Adviser").
RECITALS
(1) Xxxxxxxx Xxxxxxxx has entered into an Investment Management and
Administration Contract, dated March 1, 2001 ("Management Agreement"), with
Xxxxxxxx Xxxxxxxx Series Trust ("Fund"), an open-end management investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act"), with respect to the series of the Trust designated as Balanced Portfolio,
Global Equity Portfolio, Global Income Portfolio, Growth Portfolio, Growth and
Income Portfolio, High Grade Fixed Income Portfolio, High Income Portfolio,
Small Cap Portfolio and Strategic Income Portfolio and to each such other series
as to which this Contract may apply (each, a "Series");
(2) Xxxxxxxx Xxxxxxxx wishes to retain the Sub-Adviser to furnish certain
investment advisory services to Xxxxxxxx Xxxxxxxx and each of the
above-referenced Series; and
(3) The Sub-Adviser is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, Xxxxxxxx Xxxxxxxx and the Sub-Adviser agree as follows with
respect to each Series:
1. APPOINTMENT. Xxxxxxxx Xxxxxxxx hereby appoints the Sub-Adviser as an
investment sub-adviser with respect to the Series for the period and on the
terms set forth in this Contract. The Sub-Adviser accepts that appointment and
agrees to render the services herein set forth, for the compensation herein
provided.
2. DUTIES AS SUB-ADVISER.
(a) Subject to the supervision and direction of the Fund's Board of
Trustees ("Board") and review by Xxxxxxxx Xxxxxxxx, and any written guidelines
adopted by the Board or Xxxxxxxx Xxxxxxxx, the Sub-Adviser will provide a
continuous investment program for all or a designated portion of the assets
("Segment") of the Series, including investment research and discretionary
management with respect to all securities and investments and cash equivalents
in the Series or Segment. The Sub-Adviser will determine from time to time what
investments will be purchased, retained or sold by the Series or Segment. The
Sub-Adviser will be responsible for placing purchase and sell orders for
investments and for other related transactions for the Series or Segment. The
Sub-Adviser will be responsible for voting proxies of issuers of securities held
by the Series or Segment. The Sub-Adviser understands that the Series' assets
need to be managed so as to permit it to (i) qualify or to continue to qualify
as a regulated investment company under Subchapter M of the Internal Revenue
Code, as amended ("Code") and (ii) continue to comply with the diversification
requirements imposed by Section 817(h) of the Code and the regulations
thereunder. The Sub-Adviser will provide services under this Contract in
accordance with the Series' investment objective, policies and restrictions as
stated in the Fund's currently effective
registration statement under the 1940 Act, and any amendments or supplements
thereto ("Registration Statement").
(b) The Sub-Adviser agrees that, in placing orders with brokers, it will
obtain the best net result in terms of price and execution; provided that, on
behalf of the Series, the Sub-Adviser may, in its discretion, use brokers that
provide the Sub-Adviser with research, analysis, advice and similar services to
execute portfolio transactions on behalf of the Series or Segment, and the
Sub-Adviser may pay to those brokers in return for brokerage and research
services a higher commission than may be charged by other brokers, subject to
the Sub-Adviser's determining in good faith that such commission is reasonable
in terms either of the particular transaction or of the overall responsibility
of the Sub-Adviser to the Series and its other clients and that the total
commissions paid by the Series or Segment will be reasonable in relation to the
benefits to the Series over the long term. In no instance will portfolio
securities be purchased from or sold to Xxxxxxxx Xxxxxxxx or the Sub-Adviser, or
any affiliated person thereof, except in accordance with the federal securities
laws and the rules and regulations thereunder. The Sub-Adviser may aggregate
sales and purchase orders with respect to the assets of the Series or Segment
with similar orders being made simultaneously for other accounts advised by the
Sub-Adviser or its affiliates. Whenever the Sub-Adviser simultaneously places
orders to purchase or sell the same security on behalf of the Series and one or
more other accounts advised by the Sub-Adviser, the orders will be allocated as
to price and amount among all such accounts in a manner believed to be equitable
over time to each account. Xxxxxxxx Xxxxxxxx recognizes that in some cases this
procedure may adversely affect the results obtained for the Series or Segment.
Subject to the Sub-Adviser's obligations to seek best execution,
Xxxxxxxx Xxxxxxxx agrees that the Sub-Adviser, in its sole discretion, may place
transactions on behalf of the Series and the Fund with Xxxxxxx X. Xxxxxxxxx &
Co., LLC ("SCB LLC"), an affiliate of the Sub-Adviser, or any other
broker-dealer deemed to be an affiliate of the Sub-Adviser (together with SCB
LLC, the "Affiliated Broker-Dealers") so long as such transactions are effected
in conformity with the requirements (including any applicable exemptions and
administrative interpretations set forth in Part II of the Sub-Adviser's Form
ADV Registration Statement ("Form ADV") on file with the Securities and Exchange
Commission ("SEC")) of Section 11(a)(1)(H) of the Securities Exchange Act of
1934. In all such dealings, the Affiliated Broker-Dealers shall be authorized
and entitled to retain any commissions, remuneration or profits which may be
made in such transactions and shall not be liable to account for the same to
Xxxxxxxx Xxxxxxxx, the Series or the Fund.
Xxxxxxxx Xxxxxxxx further authorizes the Sub-Adviser and its
Affiliated Broker-Dealers to execute agency cross transactions (the "Cross
Transactions") on behalf of the Series and the Fund. Cross Transactions are
transactions which may be effected by the Affiliated Broker-Dealers acting for
both the Series or the Fund and the counterparty to the transaction. Cross
Transactions enable the Sub-Adviser to purchase or sell a block of securities
for the Series or the Fund at a set price and possibly avoid an unfavorable
price movement that may be created through entrance into the market with such
purchase or sale order. As such, the Sub-Adviser believes that Cross
Transactions can provide meaningful benefits for the Series and the Fund and its
clients generally. Xxxxxxxx Xxxxxxxx, the Series and the Fund should be aware,
however, that in a Cross Transaction an Affiliated Broker-Dealer will be
receiving commissions from both
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sides of the trade and, therefore, there is a potentially conflicting division
of loyalties and responsibilities.
(c) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to Rule 31a-1(b)(ii)(3), (5), (6), (7), (9) and (10) under
the 1940 Act and the rules and regulations promulgated thereunder with respect
to transactions by the Sub-Adviser on behalf of the Series or Segment, and will
furnish the Board and Xxxxxxxx Xxxxxxxx with such periodic and special reports
as the Board or Xxxxxxxx Xxxxxxxx reasonably may request. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Sub-Adviser hereby agrees
that all records that it maintains for the Series are the property of the Fund,
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
any records that it maintains for the Fund and that are required to be
maintained by Rule 31a-1 under the 1940 Act, and further agrees to surrender
promptly to the Fund any records that it maintains for the Series upon request
by the Fund.
(d) At such times as shall be reasonably requested by the Board or
Xxxxxxxx Xxxxxxxx, the Sub-Adviser will provide the Board and Xxxxxxxx Xxxxxxxx
with economic and investment analyses and reports as well as quarterly reports
setting forth the performance of the Series or Segment and make available to the
Board and Xxxxxxxx Xxxxxxxx any economic, statistical and investment services
that the Sub-Adviser normally makes available to its institutional or other
customers.
(e) In accordance with procedures adopted by the Board, as amended from
time to time, the Sub-Adviser is responsible for assisting in the fair valuation
of all portfolio securities in the Series or Segment and will use its reasonable
efforts to arrange for the provision of a price from one or more parties
independent of the Sub-Adviser for each portfolio security for which the
custodian does not obtain prices in the ordinary course of business from an
automated pricing service.
3. FURTHER DUTIES. In all matters relating to the performance of this
Contract, the Sub-Adviser will act in conformity with the Fund's Declaration of
Trust, By-Laws and Registration Statement and with the written instructions and
written directions of the Board and Xxxxxxxx Xxxxxxxx; and will comply with the
requirements of the 1940 Act and the Investment Advisers Act of 1940, as amended
("Advisers Act") and the rules under each; Subchapter M of the Code, as
applicable to regulated investment companies; and all other federal and state
laws and regulations applicable to the Fund and the Series. Xxxxxxxx Xxxxxxxx
agrees to provide to the Sub-Adviser copies of the Fund's Declaration of Trust,
By-Laws, Registration Statement, written instructions and directions of the
Board and Xxxxxxxx Xxxxxxxx, and any amendments or supplements to any of these
materials as soon as practicable after such materials become available; and
further agrees to identify to the Sub-Adviser in writing any broker-dealers that
are affiliated with Xxxxxxxx Xxxxxxxx (other than PaineWebber Incorporated and
Xxxxxxxx Xxxxxxxx itself).
4. EXPENSES. During the term of this Contract, the Sub-Adviser will bear
all expenses incurred by it in connection with its services under this Contract.
The Sub-Adviser shall not be responsible for any expenses incurred by the Fund,
the Series or Xxxxxxxx Xxxxxxxx.
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5. COMPENSATION.
(a) For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Contract, Xxxxxxxx Xxxxxxxx, not the Series, will pay to the
Sub-Adviser a sub-advisory fee, computed daily and paid monthly, at an annual
rate as set forth in Schedule A hereto of the average daily net assets of the
Series or Segment (computed in the manner specified in the Management Agreement)
and will provide the Sub-Adviser with a schedule showing the manner in which the
fee was computed. If the Sub-Adviser is managing a Segment, its fees will be
based on the value of assets of the Series within the Sub-Adviser's Segment.
(b) The fee shall be accrued daily and payable monthly to the Sub-Adviser
on or before the last business day of the next succeeding calendar month.
(c) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion that such period bears to the full
month in which such effectiveness or termination occurs.
6. LIMITATION OF LIABILITY.
(a) The Sub-Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Series, the Fund, its
shareholders or by Xxxxxxxx Xxxxxxxx in connection with the matters to which
this Contract relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Contract.
(b) In no event will the Sub-Adviser have any responsibilities for any
other series of the Fund, for any portion of the Series' investments not managed
by the Sub-Adviser or for the acts or omissions of any other sub-adviser to the
Fund or Series.
In particular, in the event the Sub-Adviser shall manage only a
portion of the Series' investments, the Sub-Adviser shall have no responsibility
for the Series' being in violation of any applicable law or regulation or
investment policy or restriction applicable to the Series as a whole or for the
Series' failing to qualify as a regulated investment company under the Code or
failing to comply with the diversification requirements imposed by Section
817(h) and the regulations thereunder, if the securities and other holdings of
the Segment managed by the Sub-Adviser are such that such Segment would not be
in such violation or fail to so qualify or comply if such segment were deemed a
separate series of the Fund or a separate "regulated investment company" under
the Code.
Nothing in this section shall be deemed a limitation or waiver of any
obligation or duty that may not by law be limited or waived.
7. REPRESENTATIONS OF SUB-ADVISER. The Sub-Adviser represents, warrants
and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Contract
remains in effect; (ii) is not
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prohibited by the 1940 Act or the Advisers Act from performing the services
contemplated by this Contract; (iii) has met and will seek to continue to meet
for so long as this Contract remains in effect, any other applicable federal or
state requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency necessary to be met in order to perform the services
contemplated by this Contract; (iv) has the authority to enter into and perform
the services contemplated by this Contract; and (v) will promptly notify
Xxxxxxxx Xxxxxxxx of the occurrence of any event that would disqualify the
Sub-Adviser from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.
(b) The Sub-Adviser has adopted a written code of ethics and appropriate
procedures complying with the requirements of Rule 17j-1 under the 1940 Act and
will provide Xxxxxxxx Xxxxxxxx and the Board with a copy of such code of ethics,
together with evidence of its adoption. Within fifteen days of the end of the
last calendar quarter of each year that this Contract is in effect, a duly
authorized officer of the Sub-Adviser shall certify to Xxxxxxxx Xxxxxxxx that
the Sub-Adviser has complied with the requirements of Rule 17j-1 during the
previous year and that there has been no material violation of the Sub-Adviser's
code of ethics or, if such a violation has occurred, that appropriate action was
taken in response to such violation. Upon the written request of Xxxxxxxx
Xxxxxxxx, the Sub-Adviser shall permit Xxxxxxxx Xxxxxxxx, its employees or its
agents to examine the reports required to be made by the Sub-Adviser pursuant to
Rule 17j-1 and all other records relevant to the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided Xxxxxxxx Xxxxxxxx with a copy of its Form
ADV, as most recently filed with the SEC and promptly will furnish a copy of all
amendments to Xxxxxxxx Xxxxxxxx at least annually.
(d) The Sub-Adviser will notify Xxxxxxxx Xxxxxxxx of any change of control
of the Sub-Adviser, including any change of its general partners or 25%
shareholders or 25% limited partners, as applicable, and any changes in the key
personnel who are either the portfolio manager(s) of the Series or senior
management of the Sub-Adviser, in each case prior to, or promptly after, such
change.
(e) Xxxxxxxx Xxxxxxxx and the Sub-Adviser agree that neither of them,
nor any of their affiliates, will in any way refer directly or indirectly to
their relationship with one another or any of their respective affiliates in
offering, marketing or other promotional materials without the prior express
written consent of the other, which consent will be promptly provided and not
unreasonably withheld.
8. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-Adviser
hereunder are not to be deemed exclusive and the Sub-Adviser shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby or unless otherwise agreed to by the parties hereunder
in writing. Nothing in this Contract shall limit or restrict the right of any
trustee, director, officer or employee of the Sub-Adviser, who may also be a
Trustee, officer or employee of the Fund, to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any other business, whether of a similar nature or a dissimilar nature.
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9. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the day and year first
written above, provided that this Contract has been approved for the Series by a
vote of (i) a majority of those Trustees of the Fund who are not parties to this
Contract or interested persons of any such party ("Independent Trustees") cast
at a meeting called for the purpose of voting on such approval and (ii) a
majority of the Series' outstanding voting securities unless, in the case of
(ii), the Fund complies with the terms of any SEC exemptive order or rule
permitting it to enter into the Contract without such vote.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from its effective date. Thereafter, if not
terminated, this Contract shall continue automatically for successive periods of
twelve months each, provided that such continuance is specifically approved at
least annually: (i) by a vote of a majority of Independent Trustees, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by the Board or by vote of a majority of the outstanding voting securities of
the Series.
(c) Notwithstanding the foregoing, with respect to the Series, this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Series on sixty days' written notice to the Sub-Adviser and
may be terminated by the Sub-Adviser at any time, without the payment of any
penalty, on sixty days' written notice to Xxxxxxxx Xxxxxxxx. The Contract may
also be terminated, without payment of penalty, by Xxxxxxxx Xxxxxxxx (i) upon
material breach by the Sub-Adviser of any of the representations and warranties
set forth in Paragraph 7 of this Contract, if such breach shall not have been
cured within a 20-day period after notice of such breach or (ii) if, in the
reasonable judgment of Xxxxxxxx Xxxxxxxx, the Sub-Adviser becomes unable to
discharge its duties and obligations under this Contract, including
circumstances such as financial insolvency of the Sub-Adviser or other
circumstances that could adversely affect the Series. This Contract will
terminate automatically in the event of its assignment or upon termination of
the Management Agreement as it relates to the Series.
10. AMENDMENT OF THIS CONTRACT. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Contract as to the
Series shall be effective until approved by vote of (i) the Independent Trustees
and (ii) a majority of the Series' outstanding voting securities unless, in the
case of (ii), the Fund complies with the terms of any SEC exemptive order or
rule permitting it to modify the Contract without such vote.
11. GOVERNING LAW. This Contract shall be construed in accordance with the
1940 Act and the laws of the State of New York, without giving effect to the
conflicts of laws principles thereof. To the extent that the applicable laws of
the State of New York conflict with the applicable provisions of the 1940 Act,
the latter shall control.
12. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court
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decision, statute, rule or otherwise, the remainder of this Contract shall not
be affected thereby. This Contract shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Contract, the terms "majority of the outstanding voting securities," "affiliated
person," "interested person," "assignment," "broker," "investment adviser," "net
assets," "sale," "sell" and "security" shall have the same meaning as such terms
have in the 1940 Act, subject to such exemption as may be granted by the SEC by
any rule, regulation or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Contract is made less
restrictive by a rule, regulation or order of the SEC, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order. This Contract may be signed in counterpart.
13. NOTICES. Any notice herein required is to be in writing and is deemed
to have been given to the Sub-Adviser or Xxxxxxxx Xxxxxxxx upon receipt of the
same at their respective addresses set forth below. All written notices required
or permitted to be given under this Contract will be delivered by personal
service, by postage mail - return receipt requested or by facsimile machine or a
similar means of same day delivery which provides evidence of receipt (with a
confirming copy by mail as set forth herein). All notices provided to Xxxxxxxx
Xxxxxxxx will be sent to the attention of Xxxxxx X. X'Xxxxxxx, Deputy General
Counsel. All notices provided to the Sub-Adviser will be sent to the attention
of Xxxx X. Xxxxxx, Senior Vice President and Counsel.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC.
00 Xxxx 00xx Xxxxxx
Xxxxxx: Xxx Xxxx, Xxx Xxxx 00000-0000
By: /s/ Xxxxxx XxXxxxxx By: /s/ Xxxxxx X. X'Xxxxxxx
----------------------------- -----------------------------
Name: Xxxxxx XxXxxxxx Name: Xxxxxx X. X'Xxxxxxx
Title: Assistant Vice President Title: Senior Vice President
ALLIANCE CAPITAL MANAGEMENT L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attest:
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxx X. Xxxxxx
----------------------------- -----------------------------
Name: Xxxxxxx Xxxxxxxx Name: Xxxx X. Xxxxxx
Title: Vice President and Counsel Title: Assistant Secretary
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SCHEDULE A
ANNUAL RATE OF SUB-ADVISORY FEE AS A
SERIES PERCENTAGE OF AVERAGE DAILY NET ASSETS
------- --------------------------------------
Balanced Portfolio 0.375%
Global Equity Portfolio 0.375%
Global Income Portfolio 0.375%
Growth Portfolio 0.375%
Growth and Income Portfolio 0.350%
High Grade Fixed Income Portfolio 0.250%
High Income Portfolio 0.250%
Small Cap Portfolio 0.500%
Strategic Income Portfolio 0.375%
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