EXHIBIT 99.(D)(10)
HSBC INVESTOR PORTFOLIOS
SMALL CAP EQUITY PORTFOLIO
FORM OF SUB-ADVISORY AGREEMENT
AGREEMENT, effective commencing on January 7, 2003, between Westfield
Capital Management Company, LLC (the "Sub-adviser") and HSBC Asset Management
(Americas) Inc. (the "Manager").
WHEREAS, the Manager has been retained by HSBC Investor Portfolios, a
New York master trust (the " Trust") registered as an open-end diversified
investment management company under the Investment Company Act of 1940, as
amended (the "1940 Act"), to provide investment advisory services to Small Cap
Equity Portfolio (the "Portfolio") pursuant to an Investment Advisory Contract
and Supplement thereto dated December 31, 1999 and amended and restated March 1,
2001 (the "Advisory Agreement");
WHEREAS, the Trust's Board of Trustees, including a majority of the
Trustees who are not parties to this Agreement or "interested persons," as
defined in the 1940 Act, of any party to this Agreement, have approved the
appointment of the Sub-adviser to perform certain investment advisory services
for the Portfolio pursuant to this Sub-advisory Agreement and the Sub-adviser is
willing to perform such services for the Portfolio;
WHEREAS, the Sub-adviser is registered or exempt from registration as
an investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Manager and the Sub-adviser as
follows:
1. Appointment. The Manager hereby appoints the Sub-adviser to perform
advisory services to the Portfolio for the periods and on the terms set forth in
this Sub-advisory Agreement. The Sub-adviser accepts such appointment and agrees
to furnish the services herein set forth, for the compensation herein provided.
2. Investment Advisory Duties. Subject to the supervision of the Board
of Trustees of the Trust and the Manager, the Sub-adviser will, in coordination
with the Manager, (a) provide a program of continuous investment management for
the Portfolio in accordance with the Portfolio's investment objectives, policies
and limitations as stated in the Portfolio's Prospectus and Statement of
Additional Information included as part of the Trust's Registration Statement on
behalf of the Portfolio filed with the Securities and Exchange Commission, as
they may be amended from time to time, copies of which shall be provided to the
Sub-adviser by the Manager; (b) make investment decisions for the Portfolio; and
(c) place orders to purchase and sell securities for the Portfolio. In
particular, the Sub-adviser will be responsible for the market
timing of purchases and sales and for all yield enhancement strategies used in
managing the Portfolio.
In performing its investment management services to the Portfolio
hereunder, the Sub-adviser will provide the Portfolio with ongoing investment
guidance and policy direction. The Sub-adviser will determine the securities,
instruments, repurchase agreements, options and other investments and techniques
that the Portfolio will purchase, sell, enter into or use, and will provide an
ongoing evaluation of the Portfolio. The Sub-adviser will determine what portion
of the Portfolio shall be invested in securities and other assets.
The Sub-adviser further agrees that, in performing its duties
hereunder, it will:
(a) comply with the 1940 Act and all rules and regulations thereunder,
the Advisers Act, applicable sections of the Internal Revenue Code of 1986, as
amended (the "Code"), and all other applicable federal and state laws and
regulations, and with any applicable procedures adopted by the Trustees;
(b) manage the Portfolio so that it will qualify, and continue to
qualify (except where extraordinary circumstances dictate otherwise), as a
regulated investment company under Subchapter M of the Code and regulations
issued thereunder;
(c) place orders pursuant to its investment determinations for the
Portfolio directly with the issuer, or with any broker or dealer the Sub-adviser
may choose, in accordance with applicable policies expressed in the Portfolio's
Prospectus and/or Statement of Additional Information and in accordance with
applicable legal requirements;
(d) furnish to the Trust whatever statistical information the Trust may
reasonably request in writing with respect to the Portfolio's assets or
contemplated investments. In addition, the Sub-adviser will keep the Trust and
the Trustees informed of developments materially affecting the Portfolio and
shall, on the Sub-adviser's own initiative, furnish to the Trust from time to
time whatever information the Sub-adviser believes appropriate for this purpose;
(e) make available to the Manager and the Trust, promptly upon their
written request, such copies of its investment records and ledgers with respect
to the Portfolio as may be required to assist the Manager and the Trust in their
compliance with applicable laws and regulations. The Sub-adviser will furnish
the Trustees with such periodic and special reports regarding the Portfolio as
they may reasonably request in writing;
(f) immediately notify the Manager and the Trust in the event that the
Sub-adviser or any of its affiliates: (1) becomes aware that it is subject to a
statutory disqualification that prevents the Sub-adviser from serving as an
investment adviser pursuant to this Sub-advisory Agreement; or (2) becomes aware
that it is the subject of an administrative proceeding or enforcement action by
the SEC or other regulatory authority. The Sub-adviser further agrees to notify
the Trust and the Manager promptly if any statement regarding the Sub-adviser
contained in the Trust's
Registration Statement with respect to the Portfolio, or any amendment or
supplement thereto, becomes untrue or incomplete in any material respect.
In performing its duties under this Agreement, the Sub-adviser shall
manage and invest the Portfolio's assets in accordance with the Portfolio's
investment objectives, policies and restrictions as well as applicable federal
and state securities laws, based upon instructions as may be provided to the
Sub-adviser by the Manager, the Portfolio's administrator, accountant, custodian
or other agent designated by the Manager as responsible for testing compliance
of the Portfolio (the "Compliance Agent"). The Sub-adviser further agrees to
manage and invest the Portfolio's assets in accordance with instructions as may
be provided to the Sub-adviser from time to time by the Manager or the
Compliance Agent in an effort to ensure that the Portfolio meets and maintains,
so long as required by the Code, the requirements for qualification as a
regulated investment company under Subchapter M of the Code and regulations
issued thereunder.
In fulfilling its obligations under this Agreement, the Sub-adviser
shall be entitled to reasonably rely on and act in accordance with instructions
provided by the Manager or Compliance Agent.
3. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this Section 3, the Sub-adviser shall pay the compensation and
expenses of all its directors, partners, officers and employees, if any, who
serve as officers and executive employees of the Trust (including the
Portfolio's share of payroll taxes), and the Sub-adviser shall make available,
without expense to the Portfolio, the service of its directors, partners,
officers and employees, if any, who may be duly elected officers of the Trust,
subject to their individual consent to serve and to any limitations imposed by
law.
The Sub-adviser shall not be required to pay any expenses of the
Portfolio other than those specifically allocated to the Sub-adviser in this
Section 3. In particular, but without limiting the generality of the foregoing,
the Sub-adviser shall not be responsible, except to the extent of the reasonable
compensation of such of the Trust's employees as are officers or employees of
the Sub-adviser whose services may be involved, for the following expenses of
the Portfolio: organization and offering expenses of the Portfolio (including
out-of-pocket expenses); fees payable to any other Portfolio advisers or
consultants; legal expenses; auditing and accounting expenses; interest
expenses; telephone, telex, facsimile, postage and other communications
expenses; taxes and governmental fees; dues and expenses incurred by or with
respect to the Portfolio in connection with membership in investment company
trade organizations; cost of insurance relating to fidelity coverage for the
Trust's officers and employees; fees and expenses of any custodian,
subcustodian, transfer agent, registrar, or dividend disbursing agent of the
Portfolio; payments for maintaining the Portfolio's financial books and records
and calculating the daily net asset value of the Portfolio's shares; other
payments for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; expenses relating to
investor and public relations; expenses of registering and qualifying shares of
the Portfolio for sale (if any); freight, insurance and other
charges in connection with the shipment of the portfolio securities of the
Portfolio; brokerage commissions or other costs of acquiring or disposing of any
portfolio securities or other assets of the Portfolio, or of entering into other
transactions or engaging in any investment practices with respect to the
Portfolio; expenses of printing and distributing prospectuses, Statements of
Additional Information, reports, notices and dividends to stockholders; costs of
stationery; litigation expenses; costs of stockholders' and other meetings; the
compensation and all expenses (specifically including travel expenses relating
to the Portfolio's business) of officers, trustees and employees of the Trust
who are not interested persons of the Sub-adviser; and travel expenses (or an
appropriate portion thereof) of officers or trustees of the Trust who are
officers, directors or employees of the Sub-adviser to the extent that such
expenses relate to attendance at meetings of the Board of Trustees of the Trust
or any committees thereof or advisers thereto.
4. Compensation. As compensation for the services provided and expenses
assumed by the Sub-adviser under this Agreement, the Trust will pay the
Sub-adviser within 21 calendar days after the end of each calendar quarter an
advisory fee computed daily based on the Portfolio's average daily net assets,
equal on an annual basis to 0.55% of the average net assets. The initial payment
of compensation to the Sub-adviser shall be calculated from and including
January 20, 2003. The "average daily net assets" of the Portfolio shall mean the
average of the values attributed to the Portfolio's net assets as of 4:00 p.m.
(New York time) on each day on which the net asset value of the Portfolio is
determined consistent with the provisions of Rule 22c-1 under the 1940 Act or,
if the Portfolio lawfully determines the value of its net assets as of some
other time on each business day, as of such other time. The value of net assets
of the Portfolio shall always be determined pursuant to the applicable
provisions of the Trust's Declaration of Trust, as amended, and Registration
Statement. If, pursuant to such provisions, the determination of net asset value
is suspended for any particular business day, then for the purposes of this
Section 4, the value of the net assets of the Portfolio as last determined shall
be deemed to be the value of its net assets as of the close of regular trading
on the New York Stock Exchange, or as of such other time as the value of the net
assets of the Portfolio's portfolio may lawfully be determined, on that day. If
the determination of the net asset value of the shares of the Portfolio has been
so suspended for a period including any quarter end when the Sub-adviser's
compensation is payable pursuant to this Section, then the Sub-adviser's
compensation payable at the end of such quarter shall be computed on the basis
of the value of the net assets of the Portfolio as last determined (whether
during or prior to such quarter). If the Portfolio determines the value of the
net assets of its portfolio more than once on any day, then the last such
determination thereof on that day shall be deemed to be the sole determination
thereof on that day for the purposes of this Section 4. In the event that this
Agreement is terminated pursuant to Section 10 hereof, the Sub-adviser shall be
entitled to a pro rata portion of the fee under this Section 4 through and
including the date upon which the Agreement is terminated and the Sub-adviser
ceases to provide investment advisory services to the Portfolio hereunder.
5. Books and Records. The Sub-adviser agrees to maintain such books and
records with respect to its services to the Portfolio as are required by Section
31 under the 1940 Act, and rules adopted thereunder, and by other applicable
legal provisions, including the Investment Advisers Act of 1940 and the
Securities and Exchange Act of 1934, and to preserve such records
for the periods and in the manner required by that Section, and those rules and
legal provisions. The Manager shall maintain all books and other records not
related to the Portfolio's transactions. The Sub-adviser also agrees that
records it maintains and preserves pursuant to Rules 31a-1 and Rule 31a-2 under
the 1940 Act and otherwise in connection with its services hereunder are the
joint property of the Portfolio and the Sub-adviser and a copy will be provided
promptly to the Portfolio upon its written request. The Sub-adviser further
agrees that it will furnish to regulatory authorities having the requisite
authority any information or reports in connection with its services hereunder
which may be requested in order to determine whether the operations of the
Portfolio are being conducted in accordance with applicable laws and
regulations.
6. Standard of Care and Limitation of Liability. The Sub-adviser shall
exercise its best judgment in rendering the services provided by it under this
Sub-advisory Agreement. The Sub-adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Portfolio or the
holders of the Portfolio's shares in connection with the matters to which this
Sub-advisory Agreement relate, provided that nothing in this Sub-advisory
Agreement shall be deemed to protect or purport to protect the Sub-adviser
against any liability to the Portfolio or to holders of the Portfolio's shares
to which the Sub-adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or by reason of the Sub-adviser's reckless disregard of its obligations
and duties under this Sub-advisory Agreement. As used in this Section 6, the
term "Sub-adviser" shall include any officers, directors, partners, employees,
agents or other affiliates of the Sub-adviser performing services for the
Portfolio.
7. Indemnification.
(a) The Sub-adviser hereby agrees to indemnify and hold harmless the
Manager from any controversies, claims, suits, losses, liabilities, judgments,
awards or settlements, and costs or expenses, including reasonable legal fees,
directly or proximately caused by, the investment decisions rendered by the
Sub-adviser in bad faith in a grossly negligent manner inconsistent with the
Portfolio's stated investment objectives, guidelines and restrictions, any
intentional failure of the Sub-adviser to fulfill any of its other obligations
under this Sub-advisory Agreement, any willful omission to disclose material
facts, by the Sub-adviser to the Portfolio or the Manager or any willful
violation of applicable law by the Sub-adviser. The Sub-adviser also agrees to
indemnify and hold harmless the Manager with respect to any reasonable losses
incurred as the result of grossly negligent errors made by the Sub-adviser in
transmitting orders to any broker for execution.
(b) The Manager hereby agrees to indemnify and hold harmless the
Sub-adviser from any controversies, claims, suits, losses, liabilities,
judgments, awards or settlements, and costs or expenses, including reasonable
legal fees, caused by, or in any related to, its failure to fulfill any of its
obligations under this Sub-advisory Agreement.
(c) If any party seeks indemnification under this Agreement (an
"indemnified party"), it shall notify the other party (the "indemnifying party")
in writing of the assertion of any third party claim or action and shall deliver
all copies of materials received in connection with the matter to the
indemnifying party. The indemnifying party shall have the right to control the
defense of any such claim or action with counsel of its own choosing, and the
indemnified party shall cooperate fully with the indemnifying party in the
defense or settlement of any matter that is covered by paragraphs (a) or (b)
above, subject to reimbursement by the indemnifying party for expenses incurred
by the indemnified party in connection with the indemnifying party's
participation in the defense.
8. Services Not Exclusive. It is understood that the services of the
Sub-adviser are not exclusive, and that nothing in this Sub-advisory Agreement
shall prevent the Sub-adviser from providing similar services to other
individuals, institutions or investment companies (whether or not their
investment objectives and policies are similar to those of the Portfolio) or
from engaging in other activities, provided such other services and activities
do not, during the term of this Sub-advisory Agreement, interfere in a material
manner with the Sub-adviser's ability to meet its obligations to the Trust and
the Portfolio hereunder. When the Sub-adviser recommends the purchase or sale of
a security for other investment companies and other clients, and at the same
time the Sub-adviser recommends the purchase or sale of the same security for
the Portfolio, the Sub-adviser may, but shall not be obligated to, aggregate the
orders for securities to be purchased or sold. It is understood that in light of
its fiduciary duty to the Portfolio, such transactions will be executed on a
basis that is fair and equitable to the Portfolio. In connection with purchases
or sales of portfolio securities for the account of the Portfolio, neither the
Sub-adviser nor any of its directors, partners, officers or employees shall act
as a principal or agent or receive any commission.
9. Documentation. The Trust shall provide the Sub-adviser with the
following documents, as requested by the Sub-adviser:
(a) the Trust's registration statement relating to the Portfolio, and
any amendments thereto;
(b) the current Declaration of Trust and By-laws (and any amendments
thereto) of the Trust;
(c) resolutions of the Board of Trustees of the Trust authorizing the
appointment of the Sub-adviser to serve as Sub-adviser and approving this
Sub-advisory Agreement; and
(d) the Trust's Notification of Registration on Form N-8A.
10. Duration and Termination. This Sub-advisory Agreement shall
continue for an initial term of two years from the date set forth above, unless
sooner terminated as provided herein. Notwithstanding the foregoing, this
Sub-advisory Agreement may be terminated: (a) at any time without penalty upon
thirty (30) days' written notice to the Sub-adviser by the Portfolio
upon the vote of a majority of the Trustees or upon the vote of a majority of
the Portfolio's outstanding voting securities, (b) at any time without penalty
upon thirty (30) days' written notice to the Sub-adviser by the Manager, or (c)
by the Sub-adviser upon thirty (30) days' written notice to the Trust or the
Manager. Anything to the contrary herein notwithstanding, any termination
carried out pursuant to this Section 10(c) shall be without penalty and,
further, the compensation schedule set forth in Section 4 hereof shall apply to
the service of the Sub-adviser beyond the end of the notice period provided in
this Section 10(c). This Sub-advisory Agreement will also terminate
automatically in the event of its assignment (as defined in the 0000 Xxx) or the
assignment or termination of the Advisory Agreement.
11. Amendments. No provision of this Sub-advisory Agreement may be
changed, waived, discharged or terminated orally, unless by an instrument in
writing signed by both parties, and no amendment of this Sub-advisory Agreement
shall be effective until approved by an affirmative vote of (i) a majority of
the outstanding voting securities of the Portfolio, and (ii) a majority of the
Trustees of the Portfolio, including a majority of Trustees who are not
interested persons of any party to this Sub-advisory Agreement, cast in person
at a meeting called for the purpose of voting on such approval, if such approval
is required by applicable law.
12. Notices. Any notice or other communication required or permitted to
be given hereunder shall be given in writing and mailed, faxed or delivered to
the other party at its address as follows:
If to the Manager:
HSBC Asset Management (Americas) Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
If to the Sub-adviser:
Westfield Capital Management Company, LLC
Xxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxx
Any party may specify a different or additional address for notice by
sending a written notice to the other at the address above, or at that or those
last given hereunder.
13. Miscellaneous.
(a) This Sub-advisory Agreement shall be governed by the laws of the
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with
the 1940 Act, the Advisers Act, or rules or orders of the SEC thereunder.
Exclusive original jurisdiction to any claim, action or dispute between the
parties arising out of this Agreement shall be solely in state or federal
district courts sitting in the Commonwealth of Massachusetts.
(b) The captions of this Sub-advisory Agreement are included for
convenience only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
(c) If any provision of this Sub-advisory Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Sub-advisory Agreement shall not be affected hereby and, to this extent,
the provisions of this Sub-advisory Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting the Sub-adviser,
or any of its directors, officers or employees, an agent of the Manager or the
Portfolio, nor the Manager, or any of its directors, officers or employees, an
agent of the Sub-adviser.
(e) This Sub-advisory Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but counterparts
shall, together, constitute only one Sub-advisory Agreement.
(f) The undersigned officer of the Portfolio has executed this
Sub-advisory Agreement not individually, but as an officer under the Portfolio's
Declaration of Trust, and the obligations of this Sub-advisory Agreement are not
binding upon the Portfolio's Trustees, its officers, or shareholders in the
Portfolio individually, but bind only the Portfolio Trust estate.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of January 7, 2003.
WESTFIELD CAPITAL MANAGEMENT COMPANY, LLC
By ______________________________
Name:
Title:
HSBC ASSET MANAGEMENT (AMERICAS) INC.
By ______________________________
Name:
Title:
