EXHIBIT 99.22(d)(2)
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
SSGA FUNDS MANAGEMENT, INC.
AND
THE TUCKERMAN GROUP LLC
This Agreement is made as of this 1st day of September, 2001, between SSgA Funds
Management, Inc., a Massachusetts corporation (the "Adviser") and The Tuckerman
Group LLC, a Delaware limited liability company (the "Sub-Adviser").
WHEREAS, the Adviser is in the business of providing investment advisory
services; and
WHEREAS, the Sub-Adviser is in the business of providing investment advisory
services; and
WHEREAS, The SSgA Funds (the "Investment Company") is a Massachusetts business
trust that is an open-end, diversified management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), currently
consisting of multiple portfolio series, each having its own investment policy;
and
WHEREAS, the SSgA Tuckerman Active REIT Fund (the "Fund") is one portfolio
series of the Investment Company; and
WHEREAS, pursuant to the Investment Advisory Agreement between the Investment
Company and the Adviser, dated the 1st of May, 2001, the Adviser is required to
perform investment advisory services to the Investment Company; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to render investment
advisory services to the Investment Company with respect to the Fund, and the
Sub-Adviser is willing to render such services;
NOW, THEREFORE, in consideration of the mutual agreements contained herein, the
parties hereto agree as follows:
1. APPOINTMENT OF SUB-ADVISER. The Adviser hereby appoints the Sub-Adviser to
act as investment sub-adviser to the Fund for the period and on the terms set
forth in this Agreement. The Sub-Adviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided. The
Adviser warrants that the Sub-Adviser has been duly appointed to act hereunder.
2. ADVISORY DUTIES. The Sub-Adviser shall formulate and implement a continuous
investment program for the Fund, including the purchase, retention and
disposition of investments therefor, in accordance with the Fund's investment
objective and policies as
stated in the Investment Company's Registration Statement. The Sub-Adviser's
duties hereunder are subject to the following understandings:
(a) Subject to the supervision and control of the Adviser, the Sub-Adviser
shall provide supervision of investments, furnish a continuous investment
program for the Fund, determine from time to time what investments or securities
will be purchased, retained or sold by the Fund, and what portion of the assets
will be invested or held uninvested as cash;
(b) The Sub-Adviser, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Master Trust Agreement, By-Laws
and Registration Statement of the Investment Company and with the instructions
and directions of the Adviser, provided, however, the Sub-Adviser shall not be
responsible for acting contrary to any of the foregoing that are changed without
notice of such change to the Sub-Adviser; and the Sub-Adviser shall conform to
and comply with the applicable requirements of the 1940 Act and all other
applicable federal or state laws and regulations;
(c) The Sub-Adviser shall promptly communicate to the Adviser such
information relating to Fund transactions as the Adviser may reasonably request.
On occasions when the Sub-Adviser deems the purchase or sale of a security to be
in the best interest of the Fund as well as other clients, the Sub-Adviser, to
the extent permitted by applicable laws and regulations, may aggregate the
securities to be sold or purchased, provided that in the opinion of the
Sub-Adviser, all accounts are treated equitably and fairly. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transactions, shall be made by the Sub-Adviser in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Fund and to such other clients;
(d) The Sub-Adviser shall maintain books and records with respect to the
Investment Company's securities transactions and shall render to the Adviser
such periodic and special reports as the Adviser may reasonably request;
(e) The Sub-Adviser shall provide the Adviser with a list of all securities
transactions as reasonably requested by the Adviser;
(f) the investment advisory services of the Sub-Adviser with respect to the
Fund under this Agreement are not to be deemed exclusive, and the Sub-Adviser
shall be free to render similar services to others.
3. EXECUTION AND ALLOCATION OF PORTFOLIO BROKERAGE COMMISSION. The Sub-Adviser,
subject to and in accordance with any directions which the Investment Company's
Board of Trustees may issue from time to time, shall place, in the name of the
Investment Company, orders for the execution of the securities transactions in
which the Fund is authorized to invest. When placing such orders, the
primary objective of the Sub-Adviser shall be to obtain the best net price and
execution for the Investment Company but this requirement shall not be deemed to
obligate the Sub-Adviser to place any order solely on the basis of obtaining the
lowest commission rate if the other standards set forth in this section have
been satisfied. The Investment Company recognizes that there are likely to be
many cases in which different brokers are equally able to provide such best
price and execution and that, in selection among such brokers with respect to
particular trades, it is desirable to choose those brokers who furnish
"brokerage and research services" (as defined in Section 29(e)(3) of the
Securities and Exchange Act of 1934) or statistical quotations and other
information to the Investment Company and/or the Sub-Adviser in accordance with
the standards set forth below. Moreover, to the extent that it continues to be
lawful to do so and so long as the Board determines as a matter of general
policy that the Investment Company will benefit, directly or indirectly, by
doing so, the Sub-Adviser may place orders with a broker who charges a
commission that another broker would have charged for effecting that
transaction, provided that the excess commission is reasonable in relation to
the value of brokerage and research services provided by that broker.
Accordingly, the Investment Company and the Sub-Adviser agree that the
Sub-Adviser shall select brokers for the execution of the Fund's securities
transactions from among:
a. Those brokers and dealers who provide brokerage and research services,
or statistical quotations and other information to the Investment Company,
specifically including the quotations necessary to determine the Investment
Company's net assets, in such amount of total brokerage as may reasonably be
required in light of such services.
b. Those brokers and dealers who provide brokerage and research services to
the Sub-Adviser and/or its affiliated corporations which relate directly to
portfolio securities, actual or potential, of the Investment Company, or which
place the Sub-Adviser in a better position to make decisions in connection with
the management of the Investment Company's assets, whether or not such data may
also be useful to the Sub-Adviser and its affiliates in managing other
portfolios or advising other clients, in such amount of total brokerage as may
reasonably be required.
c. Affiliated brokers of Adviser, when the Sub-Adviser has determined that
the Fund will receive competitive execution, price and commissions. The
Sub-Adviser shall render regular reports to the Investment Company, not more
frequently than quarterly, of how much total brokerage business has been placed
with affiliated brokers of Adviser, and the manner in which the allocation has
been accomplished.
The Sub-Adviser agrees that no investment decision will be made or influenced by
a desire to provide brokerage for allocation in accordance with the foregoing,
and that the right to make such allocation of brokerage shall not interfere with
the Sub-Adviser's primary duty to obtain the best net price and execution for
the Investment Company.
4. BOOKS AND RECORDS. The Sub-Adviser shall keep the Investment Company's books
and records required to be maintained by it pursuant to paragraph 2(d) hereof.
The Sub-Adviser agrees that all records which it maintains for the Investment
Company are
the property of the Investment Company and it shall surrender promptly to the
Investment Company any of such records upon the Investment Company's request.
The Sub-Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 of the Commission under the 1940 Act any such records as are required to
be maintained by Rule 31a-1(f) of the Commission under the 1940 Act. Nothing
herein shall prevent the Sub-Adviser from maintaining its own records as
required by law, which may be a duplication of the Investment Company's records.
5. REPORTS TO SUB-ADVISER. The Investment Company agrees to furnish the
Sub-Adviser at its principal office all prospectuses, proxy statements, reports
to stockholders, sales literature or other material prepared for distribution to
shareholders of the Investment Company or the public, which refer in any way to
the Sub-Adviser, ten (10) days prior to use thereof and not to use such material
if the Sub-Adviser should object thereto in writing within seven (7) days after
receipt of such material; provided, however, that the Sub-Adviser hereby
approves all uses of its name which merely refer in accurate terms to its
appointment as investment adviser hereunder, which, merely identifies the
Investment Company, or which are required by the Securities and Exchange
Commission or a state securities commission. In the event of termination of this
Agreement, the Investment Company shall, on written request of the Sub-Adviser,
forthwith delete any reference to the Sub-Adviser from any materials described
in the preceding sentence. The Investment Company shall furnish or otherwise
make available to the Sub-Adviser such other information relating to the
business affairs of the Investment Company as the Sub-Adviser at any time, or
from time to time, reasonably requests in order to discharge its obligations
hereunder.
6. PROXIES. Unless the Adviser or the Investment Company gives written
instructions to the contrary, the Sub-Adviser shall vote or not vote all proxies
solicited by or with respect to the issuers of securities in which assets of the
Fund may be invested. The Sub-Adviser shall use its best good faith judgment to
vote or not vote such proxies in a manner which best serves the interests of the
Investment Company's shareholders.
7. EXPENSES. During the term of this Agreement, the Sub-Adviser shall pay all of
its own expenses incurred by it in connection with its activities under this
Agreement and the Adviser and/or Fund of the Investment Company, as they may
agree from time to time, shall bear all expenses that are incurred in their
operations not specifically assumed by the Sub-Adviser.
Expenses borne by the Fund will include but not be limited to the following (or
the Fund's proportionate share of the following): (a) brokerage commissions
relating to securities purchased or sold by the Fund or any losses incurred in
connection therewith; (b) fees payable to and expenses incurred on behalf of the
Fund by the Investment Company's administrator; (c) expenses of organizing the
Investment Company and the Fund; (d) filing fees and expenses relating to the
registration and qualification of the Fund's shares and the Investment Company
under federal or state securities laws and maintaining such registrations and
qualifications; (e) fees and salaries payable to the Investment Company's
Trustees and officers who are not officers or employees of the
Investment Company's administrator, any investment adviser or underwriter of the
Investment Company; (f) taxes (including any income or franchise taxes) and
governmental fees; (g) costs of any liability, uncollectible items of deposit
and other insurance or fidelity bonds; (h) any costs, expenses or losses arising
out of any liability of or claim for damage or other relief asserted against the
Investment Company or the Fund for violation of any law; (i) legal, accounting
and auditing expenses, including legal fees of special counsel for the
independent Trustees; (j) charges of custodians, transfer agents and other
agents; (k) costs of preparing share certificates (if any); (l) expenses of
setting in type and printing Prospectuses and Statements of Additional
Information and supplements thereto for existing shareholders, reports and
statements to shareholders and proxy material; (m) any extraordinary expenses
(including fees and disbursements of counsel) incurred by the Investment Company
or the Fund; and (n) fees and other expenses incurred in connection with
membership in investment company organizations.
8. COMPENSATION OF THE SUB-ADVISER. For the services to be rendered by the
Sub-Adviser as provided in this Agreement the Adviser shall pay to the
Sub-Adviser such compensation as is designated in Exhibit A to this Agreement.
9. LIMITATION OF SUB-ADVISER'S LIABILITY; INDEMNIFICATION. In the absence of (a)
willful misfeasance, bad faith or gross negligence on the part of the
Sub-Adviser in performance of its obligations and duties hereunder, (b) reckless
disregard by the Sub-Adviser of its obligations and duties hereunder, or (c) a
loss resulting from a beach of fiduciary duty with respect to the receipt of
compensation for services (in which case, any award of damages shall be limited
to the period and the amount set forth in Section 36(b)(3) of the 1940 Act)
(each of which is hereby referred to as a "Culpable Act"), the Sub-Adviser shall
not be subject to any liability whatsoever to the Adviser or the Investment
Company, or to any shareholder of the Investment Company, for any error of
judgment, mistake of law or any other act or omission in the course of, or
connected with, rendering services hereunder including, without limitation, for
any losses that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of the Investment Company.
The Adviser shall indemnify the Sub-Adviser and its officers, directors,
employees, agents or legal representatives (collectively, "Related Persons") and
hold them harmless from and against any and all actions, suits or claims whether
groundless or meritorious and from and against any and all losses, damages,
costs, charges, reasonable counsel fees, payments, expenses and liabilities
(collectively, "Damages") arising directly or indirectly out of or in connection
with the performance of services by the Sub-Adviser or its Related Persons
hereunder to the extent such Damages result from any Culpable Act of the Adviser
or any Related Person of the Adviser.
The Sub-Adviser shall indemnify the Adviser and its Related Persons from and
against any Damages arising directly or indirectly out of or in connection with
the performance of services by the Adviser or its Related Persons under this
Agreement or the Advisory Agreement, in each case, to the extent such Damages
result from any Culpable Act of the Sub-Adviser or any of its Related Persons.
10. DURATION AND TERMINATION.
(a) This Agreement shall become effective with respect to the Fund on the
date hereof. This Agreement, unless sooner terminated as provided herein, shall
continue for the Fund for two years following the effective date of this
Agreement with respect to the Fund, or the date of the first annual or special
meeting of the shareholders of the Fund following such effective date, if
approved by a majority of the outstanding voting securities of the Fund (as
defined in the 1940 Act), and thereafter shall continue automatically for
periods of one year so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Board of
Trustees of the Investment Company who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of any such party, cast in
person at a meeting called for the purpose of voting such approval, and (b) by
the Board of Trustees of the Investment Company or by vote of a majority of the
outstanding voting securities of the Fund.
(b) This Agreement may be terminated by the Investment Company at any time,
without the payment of any penalty, by vote of a majority of those members of
the Board of Trustees who are not "interested persons" (as defined in the 0000
Xxx) of the Adviser or the Investment Company or by the majority vote of either
the entire Board of Trustees of the Investment Company or by vote of a majority
of the outstanding voting securities of the Fund on 60 days' written notice to
the Sub-Adviser. This Agreement may be terminated by the Adviser on 90 days'
written notice to the Sub-Adviser. This Agreement may also be terminated by the
Sub-Adviser on 90 days' written notice to the Adviser and the Investment
Company. This Agreement will automatically and immediately terminate in the
event of its assignment (as defined in the 1940 Act).
11. CHOICE OF LAW. This Agreement shall be construed in accordance with the laws
of the Commonwealth of Massachusetts and any applicable federal law.
12. LIMITATION OF LIABILITY. The Master Trust Agreement dated October 3, 1987,
as amended from time to time, establishing the Investment Company, which is
hereby referred to and a copy of which is on file with the Secretary of The
Commonwealth of Massachusetts, provides that the name SSgA Funds means the
Trustees from time to time serving (as Trustees but not personally) under said
Master Trust Agreement. It is expressly acknowledged and agreed that the
obligations of the Investment Company hereunder shall not be binding upon any of
the Shareholders, Trustees, officers, employees or agents of the Investment
Company, personally, but shall bind only the trust property of the Investment
Company, as provided in its Master Trust Agreement. The execution and delivery
of this Agreement have been authorized by the Trustees of the Investment Company
and signed by an officer of the Investment Company, acting as such, and neither
such authorization by such Trustees nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind
only the trust property of the Investment Company as provided in its Master
Trust Agreement.
IN WITNESS WHEREOF, the due execution hereof as of the date first above written.
Attest: SSGA FUNDS MANAGEMENT, INC.
By: By: /s/ Xxxxxxx X. Xxxx, Xx.
----------------- ---------------------------
Name: Xxxxxxx X. Xxxx, Xx.
Title: President
Attest: THE TUCKERMAN GROUP, LLC
By:/s/ Xxxxxx XxXxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President and CEO
Acknowledged and agreed to as of the date first set forth above with respect to
the Investment Company's obligations under this Agreement.
THE SSGA FUNDS
By: /s/ Xxxx X. Xxxxxxxx
--------------------
Name: Xxxx X. Xxxxxxxx
Title: President
EXHIBIT "A"
As consideration for the Sub-Adviser's services to the Fund, the Sub-Adviser
shall receive from the Adviser an annual advisory fee, accrued daily at the rate
of 1/365th of the applicable advisory fee rate and payable monthly on the first
business day of each month, of the following annual percentages of the Fund's
average daily net assets during the month:
SSgA Tuckerman Active REIT Fund 0.325%*
*Provided, however, that in accordance with the terms of the Investment Advisory
Agreement between the Adviser and the Investment Company, to the extent that the
Adviser waives all or a portion of the advisory fee that it receives with
respect to the Fund, Adviser shall only pay to Sub-Advisor 50% of the advisory
fee that the Adviser receives with respect to the Fund.
