EXHIBIT 23(d)(3)
XXXXX INTERNATIONAL SERIES, INC.
FIDUCIARY INTERNATIONAL, INC.
SUB-ADVISORY AGREEMENT
APRIL 10, 2001
Fiduciary International, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Sub-Advisory Agreement for Xxxxx International Total Return Fund,
An Authorized Series of Xxxxx International Series, Inc.
Gentlemen:
This is to confirm that Xxxxx Selected Advisers, L.P. ("DSA") is retaining you
as Investment Sub-Adviser for the portfolio of the International Total Return
Fund (the "Fund") of Xxxxx International Series, Inc. (the "Company").
This letter sets forth the terms and conditions of your retention. If they are
acceptable to you, please acknowledge in the space provided. Upon your
acceptance, the retention and the mutual obligations in respect thereto shall be
effective as provided herein. The terms and conditions are as follows:
1. Investment Services. You shall act as the Investment Sub-Adviser for the
Fund and will manage the investment and reinvestment of the assets of the
Fund subject to the supervision of the Board of Directors of the Company,
DSA, which serves as Adviser to the Company, and to any applicable
provisions as in effect from time to time of (a) the Articles of
Incorporation and Bylaws of the Company, (b) the prospectus, statement of
additional information, and other information set forth in the Fund's
registration documents under the Securities Act of 1933 (the "1933 Act")
and the Investment Company Act of 1940 (the "1940 Act"), including any
supplements thereto, and (c) the Investment Advisory agreement between DSA
and the Company (the "Investment Advisory Agreement") in respect to the
Fund and the Company's Code of Ethics. You acknowledge that you have
received copies of the above documents as in effect on the date of your
acceptance of this letter. The undersigned agrees that it will promptly
deliver to you any amendments, changes or additions of or to these
documents. Without limitation, you agree that all securities transactions
will conform to (a) the stated objectives and policies of the Fund, (b) the
brokerage policies set forth in the Investment Advisory Agreement (which
are hereby incorporated by reference herein) and the registration
documents, and (c) those investment and brokerage policies directed by the
Board of Directors of the Company or any committee thereof, that have been
provided to you.
2. Independent Contractor. You shall be an independent contractor. Unless
otherwise expressly provided or authorized hereunder, or by the Board of
Directors of Company, you have no authority to represent the Company or the
Fund in any way or otherwise be an agent of the Company or the Fund. You
shall also not represent or be the agent of the undersigned except as
expressly provided or authorized hereunder, or as authorized by the
undersigned in any other writing.
3. Reports and Records. You agree to provide DSA with any reasonable reports,
analyses or other documentation DSA requires to carry out its
responsibilities under its Investment Advisory Agreement with the Fund,
including those related to the placement of security transactions, its
administrative responsibilities, and its responsibility to monitor
compliance with stated investment objectives, policies and limitations and
the investment performance of the Fund. You agree, directly or through an
agent, to provide daily information with respect to the portfolio
transactions of the Fund to DSA. You agree to provide all documentation
reasonably required by DSA to maintain the Fund's accounting records in
accordance with the 1940 Act and the Investment Advisers Act of 1940 (the
"Advisers Act") and the regulations issued thereunder, and to preserve
copies of all documents and records related
to asset transactions, positions and valuations related to the Fund in the
manner and for the periods prescribed by such regulations. You agree that
all documents and records maintained by you with respect to the Fund,
exclusively relating to the Fund, are the property of the Company and will
be surrendered to DSA or the Company upon the request of either. You agree
to provide information and to allow inspection of such documents and
records at reasonable times by any authorized representative of DSA, the
Company's Board of Directors or any committee thereof, the Company's
independent public accountants, or appropriate regulatory authorities.
4. Make Personnel Available. You agree to make your personnel engaged in
activities on behalf of the Fund available at reasonable times for
consultations with DSA personnel and the Company's Board of Directors, or
any committee thereof, including attendance at their meetings, wherever
situated. Travel, meals and lodging expenses for such purposes shall be
reimbursed.
5. Facilities, Equipment, and Personnel. You agree to provide office
facilities, equipment and personnel for carrying out your duties hereunder
at your own expense except as specifically provided hereunder.
6. Non-Exclusive Agreement. It is agreed that your services are not to be
deemed exclusive and you shall be free to render similar or other services
to others.
7. Standard of Care and Liability.
(a) Neither DSA nor you, nor any officers, directors, employees, agents,
controlling persons, assigns or directors of the Company shall be
liable for any error of judgment or law, or for any loss suffered by
the Company or its shareholders in connection with the matters to which
this Agreement relates, except that no provision of this Agreement
shall be deemed to protect DSA or you against any liability to the
Company or its shareholders to which DSA or you might otherwise be
subject by reason of any willful misconduct, gross negligence, or
actions taken in bad faith in the discharge of your respective
obligations and performance of your respective duties under this
Agreement.
(b) Notwithstanding Section 7(a) of this Agreement, DSA agrees to indemnify
and hold harmless you and any affiliated person (except the Company),
and each person, if any, who, within the meaning of Section 15 of the
1933 Act controls ("Controlling Person") you (all of such persons being
referred to as "Sub-Adviser Indemnified Persons") against any and all
losses, claims, damages, liabilities (excluding salary charges of your
employees, officers or partners), or litigation (including legal and
other) expenses to which a Sub-Adviser Indemnified Person may become
subject under the 1933 Act, the 1940 Act, the Advisers Act, any other
statute, common law or otherwise, arising out of DSA's responsibilities
to the Company which (1) may be based upon any untrue statement or
alleged untrue statement of a material fact supplied by or which is the
responsibility of DSA and contained in the Registration Statement or
prospectus or statement of additional information covering shares of
the Fund, or any amendment thereof or any supplement thereto, or the
omission or alleged omission or failure to state therein a material
fact known or which should have been known to DSA and was required to
be stated therein or necessary to make the statements therein not
misleading, unless such statement or omission was made in reliance upon
information furnished to DSA or the Company or to any person affiliated
with DSA by a Sub-Adviser Indemnified Person, in writing, for inclusion
in the Registration Statement or prospectus or statement of additional
information; or (2) may be based upon a failure by DSA to comply with,
or a breach of, any provision of this Agreement or any other agreement
with the Fund; or (3) may be based upon misfeasance or negligence by
DSA in the discharge of its duties and performance of its obligations
under this Agreement or any other agreement with the Fund; provided,
however, that in no case shall the indemnity in favor of the
Sub-Adviser Indemnified Person be deemed to protect such person against
any liability to which any such person would otherwise be subject by
reason of any misfeasance or negligence in the discharge of its
obligations and the performance of its duties under this Agreement.
(c) Notwithstanding Section 7(a) of this Agreement, you agree to indemnify
and hold harmless DSA, any person affiliated with DSA (except the
Company), and each person, if any, who, within the meaning of the 1933
Act controls ("Controlling Person") DSA (all of such persons being
referred to as "Adviser Indemnified Persons") against any and all
losses, claims, damages, liabilities (excluding salary charges of
employees, officers or partners of DSA), or litigation (including legal
and other) expenses to which an Adviser Indemnified Person
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may become subject under the 1933 Act, the 1940 Act, the Advisers Act,
any other statute, common law or otherwise, arising out of your
responsibilities as a sub-investment adviser to the Fund which (1) may
be based upon any untrue statement or alleged untrue statement of a
material fact supplied by you for inclusion in the Registration
Statement or prospectus or statement of additional information
covering shares of the Fund, or any amendment thereof or any
supplement thereto, or, with respect to a material fact supplied by
you for inclusion in the Registration Statement or prospectus or
statement of additional information, the omission or alleged omission
or failure to state therein a material fact known or which should have
been known to you and was required to be stated therein or necessary
to make the statements therein not misleading, unless such statement
or omission was made in reliance upon information furnished to you, or
the Company, or to any person affiliated with you or the Company by an
Adviser Indemnified Person; or (2) may be based upon a failure by you
to comply with, or a breach of, any provision of this Agreement or any
other agreement with the Fund; or (3) may be based upon misfeasance or
negligence by you in the discharge of your duties and performance of
your obligations under this Agreement or any other agreement with the
Fund; provided, however, that in no case shall the indemnity in favor
of the Adviser Indemnified Person be deemed to protect such person
against any liability to which any such person would otherwise be
subject by reason of any misfeasance or negligence in the discharge of
its obligations and the performance of its duties under this
Agreement.
(d) Neither DSA nor you shall be liable under this Section with respect to
any claim made against an Indemnified Person unless such Indemnified
Person shall have notified the indemnifying party in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Person (or such Indemnified Person shall have received
notice of such service on any designated agent), but failure to notify
the indemnifying party of any such claim shall not relieve the
indemnifying party from any liability which it may have to the
Indemnified Person against whom such action is brought otherwise than
on account of this section. In case any such action is brought against
the Indemnified Person, the indemnifying party will be entitled to
participate, at its own expense, in the defense thereof or, after
notice to the Indemnified Person, to assume the defense thereof, with
counsel satisfactory to the Indemnified Person. If the indemnifying
party assumes the defense and the selection of counsel by the
indemnifying party to represent both the Indemnified Person and the
indemnifying party would result in a conflict of interest and would
not, in the reasonable judgment of the Indemnified Person, adequately
represent the interests of the Indemnified Person, the indemnifying
party will, at its own expense, assume the defense with counsel to the
indemnifying party and, also at its own expense, with separate counsel
to the Indemnified Person which counsel shall be satisfactory to the
indemnifying party and the Indemnified Person. The Indemnified Person
will bear the fees and expenses of any additional counsel retained by
it, and the indemnifying party shall not be liable to the Indemnified
Person under this Agreement for any legal or other expenses
subsequently incurred by the Indemnified Person independently in
connection with the defense thereof other than reasonable costs of
investigation. The indemnifying party shall not have the right to
compromise or settle the litigation without the prior written consent
of the Indemnified Person of the compromise or settlement results, or
may result, in a finding of wrongdoing on the part of the Indemnified
Person.
8. Compensation. DSA shall pay you a portion of the fee it receives from the
Company with respect to the Fund under the Investment Advisory Agreement
based upon the attached fee schedule, and shall reimburse expenses
expressly approved for reimbursement by DSA. You agree that neither the
Company nor the Fund is responsible or paying your sub-advisory fees.
Payment for your services and reimbursement of expenses approved by DSA
shall be made monthly. From time to time, with your express written
approval, DSA may waive any part or all of the fees due to it under the
Investment Advisory Agreement for the period specified in such writing.
Such approval shall constitute a waiver by you of your portion of the
waived fees.
8. Effective Date. This Agreement shall become effective on the later of (i)
the effective date of the corporate reorganization of Fiduciary Trust
Company International and Franklin Resources, Inc. , or (ii) the first
business day after the date of the corporate reorganization when this
Agreement shall have been approved in accordance with the 1940 Act. Unless
sooner terminated as hereunder provided, it shall initially remain in
effect for a period of two years. Thereafter, subject to the termination
provisions herein, this Agreement shall continue in force from year to year
thereafter, but only as long as such continuance is specifically approved,
at least annually, in the manner required by the 1940 Act; provided,
however, that if the continuation of this Agreement is not approved,
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you may continue to serve in the manner and to the extent permitted by the
1940 Act and the rules and regulations thereunder.
Franklin Resources, Inc. (operating as Franklin Xxxxxxxxx Investments) and
Fiduciary Trust Company International (Fiduciary International, Inc.'s
corporate parent) have announced the signing of a definitive agreement
under which Franklin Resources will acquire Fiduciary Trust Company
International in an all-stock transaction. This corporate reorganization,
which is subject to shareholder and regulatory approvals and other
customary closing conditions, is expected to be completed in the first
quarter of calendar 2001.
10. Termination. This Agreement shall automatically terminate immediately in
the event of its assignment (except as otherwise permitted by the 1940 Act
or rules thereunder) or in the event of the termination of the Investment
Advisory Agreement. This Agreement may be terminated without penalty at any
time (a) upon sixty (60) days' written notice to you by DSA, or upon such
sixty (60) days' written notice to you by the Company pursuant to action by
the Board of Directors of the Company, or by the vote of a majority of the
outstanding voting securities of the Fund, or (b) upon sixty (60) or more
days' written notice by you to DSA and the Company. The terms "assignment"
and "vote of a majority of the outstanding voting securities" shall have
the meaning set forth in the 1940 Act and the rules and regulations
thereunder. Termination of this Agreement shall not affect your right to
receive payments of the unpaid balance of the compensation earned and
reimbursable expenses incurred prior to such termination.
11. Severability. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
shall not be thereby affected.
12. Choice of Law. This Agreement shall be construed according to the laws of
the State of New York. It may be executed in counterparts each of which
shall be deemed an original and all of which together shall constitute one
and the same agreement.
Yours very truly,
Xxxxx Selected Advisers, L.P., by
Xxxxx Investments, LLC, General Partner
-------------------------------
ACCEPTED AND APPROVED this _______ day of _________________, _______.
Fiduciary International, Inc.
By
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SUB-ADVISORY FEE SCHEDULE FOR
FIDUCIARY INTERNATIONAL, INC.
A monthly fee as of the last day of each month in each year based upon the
average daily value of net assets during a month for which the monthly fee is
calculated as follows:
Value of Average Daily Net
Assets of the Total Return
Monthly Rate Fund During the Month
------------ ---------------------
1/12 of 0.50% of First $250 Million
1/12 of 0.45% of Next $250 Million
1/12 of 0.40% of Amount in excess of $500 Million
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