Exhibit 5(b)
FORM OF AMENDED AND RESTATED
SUB-MANAGEMENT AGREEMENT
ASSET ALLOCATION PORTFOLIOS
SUB-MANAGEMENT AGREEMENT, dated February 9, 1996, as amended and restated
as of __________ ___, 1997, by and between Citibank, N.A., a national banking
association (the "Adviser"), and Xxxxxx Xxxxxxxx & Xxxxxxxx, LLP, a limited
liability partnership (the "Subadviser").
W I T N E S S E T H:
WHEREAS, the Adviser has been retained by Asset Allocation Portfolios, a
New York trust (the "Trust"), to act as investment adviser to the Trust with
respect to the series of the Trust designated as Asset Allocation Portfolio 100,
Asset Allocation Portfolio 200, Asset Allocation Portfolio 300, Asset Allocation
Portfolio 400 and Asset Allocation Portfolio 500 (each individually a
"Portfolio" and collectively the "Portfolios"), and
WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act"), and
WHEREAS, the Adviser wishes to engage the Subadviser to provide certain
investment advisory services for the Portfolios, and the Subadviser is willing
to provide such investment advisory services for the Portfolios on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Appointment of the Subadviser. In accordance with and subject to
the Management Agreement between the Trust and the Adviser (the "Management
Agreement"), the Adviser hereby appoints the Subadviser to act as subadviser
with respect to each of the Portfolios for the period and on the terms set forth
in this Agreement. The Subadviser accepts such appointment and agrees to provide
an investment program with respect to the Portfolios for the compensation
provided by this Agreement.
2. Duties of the Subadviser. The Subadviser shall provide the Adviser
with such investment advice and supervision as the Adviser may from time to time
consider necessary for the proper supervision of such portion of each
Portfolio's investment assets as the Adviser may designate from time to time.
Notwithstanding any provision of this Agreement, the Adviser shall retain all
rights and ultimate responsibilities to supervise and, in its discretion,
conduct investment advisory activities relating to the Trust. The Subadviser
shall furnish continuously an investment program and shall determine from time
to time what securities shall be purchased, sold or exchanged and what portion
of the assets of a Portfolio allocated by the Adviser to the Subadviser shall be
held uninvested, subject always to the restrictions of the Trust's Declaration
of Trust, dated December 14, 1995, and By-laws, as each may be amended from time
to time (respectively, the "Declaration" and the "By-Laws"), the provisions of
the 1940 Act, the then-current Registration Statement of the Trust with respect
to that Portfolio, and subject, further, to the Subadviser notifying the Adviser
in advance of the Subadviser's intention to purchase any securities except
insofar as the requirement for such notification may be waived or limited by the
Adviser, it being understood that the Subadviser shall be responsible for
compliance with any restrictions imposed in writing by the Adviser from time to
time in order to facilitate compliance with the above-mentioned restrictions and
such other restrictions as the Adviser may determine. Further, the Adviser or
the Trustees of the Trust may at any time, upon written notice to the
Subadviser, suspend or restrict the right of the Subadviser to determine what
securities shall be purchased or sold on behalf of a Portfolio and what portion,
if any, of the assets of a Portfolio allocated by the Adviser to the Subadviser
shall be held uninvested. The Subadviser shall also, as requested, make
recommendations to the Adviser as to the manner in which proxies, voting rights,
rights to consent to corporate action and any other rights pertaining to a
Portfolio's portfolio securities shall be exercised. Should the Board of
Trustees of the Trust or the Adviser at any time, however, make any definite
determination as to investment policy applicable to a Portfolio and notify the
Subadviser thereof in writing, the Subadviser shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked.
The Subadviser shall take, on behalf of each Portfolio, all actions which
it deems necessary to implement the investment policies determined as provided
above, and in particular to place all orders for the purchase or sale of
securities for each Portfolio's account with the brokers or dealers selected by
it, and to that end the Subadviser is authorized as the agent of the Trust to
give instructions to the custodian and any subcustodian of a Portfolio as to
deliveries of securities and payments of cash for the account of that Portfolio.
The Subadviser will advise the Adviser on the same day it gives any such
instructions. In connection with the selection of such brokers or dealers and
the placing of such orders, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to a Portfolio and/or the other accounts
over which the Subadviser or its affiliates exercise investment discretion. The
Subadviser is authorized to pay a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio transaction for a
Portfolio which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the Subadviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either that
particular transaction or the overall responsibilities which the Subadviser and
its affiliates have with respect to accounts over which they exercise investment
discretion. The Trustees of the Trust shall periodically review the commissions
paid by each Portfolio to determine if the commissions paid over representative
periods of time were reasonable in relation to the benefits to the Portfolio. In
making purchases or sales of securities or other property for the account of a
Portfolio, the Subadviser may deal with itself or with the Trustees of the Trust
or the Trust's underwriter or distributor, to the extent such actions are
permitted by the 1940 Act. The Board of Trustees of the Trust, in its
discretion, may instruct the Subadviser to effect all or a portion of its
securities transactions with one or more brokers and/or dealers selected by the
Board of Trustees, if it determines that the use of such brokers and/or dealers
is in the best interest of the Trust.
3. Allocation of Charges and Expenses. The Subadviser shall furnish
at its own expense all necessary services, facilities and personnel in
connection with its responsibilities under Section 2 above. Except as provided
in the foregoing sentence, it is understood that the Trust will pay from the
assets of each Portfolio all of its own expenses allocable to that Portfolio
including, without limitation, organization costs of the Portfolio; compensation
of Trustees who are not "interested persons" of the Trust; governmental fees;
interest charges; loan commitment fees; taxes; membership dues in industry
associations allocable to the Trust; fees and expenses of independent auditors,
legal counsel and any transfer agent, distributor, registrar or dividend
disbursing agent of the Trust; expenses of issuing and redeeming beneficial
interests and servicing investor accounts; expenses of preparing, typesetting,
printing and mailing investor reports, notices, proxy statements and reports to
governmental officers and commissions and to investors in the Portfolio;
expenses connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Portfolio, including safekeeping of Portfolios and securities
and maintaining required books and accounts; expenses of calculating the net
asset value of the Portfolio (including but not limited to the fees of
independent pricing services); expenses of meetings of the Portfolio's
investors; expenses relating to the issuance of beneficial interests in the
Portfolio; and such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the Trust on
behalf of the Portfolio may be a party and the legal obligation which the Trust
may have to indemnify its Trustees and officers with respect thereto.
4. Compensation of the Subadviser. For the services to be rendered by
the Subadviser hereunder, the Adviser shall pay to the Subadviser out of the
management fee it receives from the Trust, and only to the extent thereof, an
investment subadvisory fee, accrued daily and paid monthly, at an annual rate
equal to the percentages specified below of the aggregate assets of all
Portfolios allocated to the Subadviser:
0.625% on the first $25 million;
0.375% on the next $75 million;
0.250% on the next $400 million; and
0.20% on assets in excess of $500 million.
If the Subadviser serves as investment subadviser for less than the whole of any
period specified in this Section 4, the compensation to the Subadviser shall be
prorated. Neither the Trust nor the Portfolios shall be liable to the Subadviser
for the compensation of the Subadviser.
5. Covenants of the Subadviser. The Subadviser agrees that it will
not deal with itself, or with the Trustees of the Trust or the Trust's principal
underwriter or distributor, as principals in making purchases or sales of
securities or other property for the account of a Portfolio, except as permitted
by the 1940 Act, will not take a long or short position in beneficial interests
of a Portfolio except as permitted by the Declaration, and will comply with all
other provisions of the Declaration and By-Laws and the then-current
Registration Statement applicable to each Portfolio relative to the Subadviser
and its partners, directors and officers.
6. Limitation of Liability of the Subadviser. The Subadviser shall
not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the execution of
securities transactions for a Portfolio, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Section 6, the term "Subadviser" shall include directors, officers, partners and
employees of the Subadviser as well as the Subadviser itself. The Trust, on
behalf of the Portfolios, is expressly made a third party beneficiary of this
Agreement, and may enforce any obligations of the Subadviser under this
Agreement and recover directly from the Subadviser for any liability the
Subadviser may have hereunder.
7. Activities of the Subadviser. The services of the Subadviser to
the Portfolios are not to be deemed to be exclusive, the Subadviser being free
to render investment advisory and/or other services to others, including
accounts or investment management companies with similar or identical investment
objectives to the Portfolios. It is understood that Trustees, officers, and
investors of the Trust or the Adviser are or may be or may become interested in
the Subadviser, as directors, officers, partners, employees, or otherwise and
that directors, officers, partners and employees of the Subadviser are or may
become similarly interested in the Trust or the Adviser and that the Subadviser
may be or may become interested in the Trust as an investor or otherwise.
8. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective as of the day and year first above written, and
shall govern the relations between the parties hereto thereafter and shall
remain in force until June 30, 1998, on which date it will terminate unless its
continuance after June 30, 1998 is "specifically approved at least annually" (a)
by the vote of a majority of the Trustees of the Trust who are not "interested
persons" of the Trust or of the Adviser or of the Subadviser at a meeting
specifically called for the purpose of voting on such approval, and (b) by the
Board of Trustees of the Trust or by "vote of a majority of the outstanding
voting securities" of each Portfolio.
This Agreement may be terminated as to any Portfolio at any time without
the payment of any penalty by (i) the Trustees, (ii) the "vote of a majority of
the outstanding voting securities" of that Portfolio, or (iii) the Adviser, in
each case on not more than 60 days' nor less than 30 days' written notice to the
other party. This Agreement may be terminated as to any Portfolio at any time
without the payment of any penalty by the Subadviser on not less than 90 days'
written notice to the Adviser. This Agreement shall automatically terminate in
the event of its "assignment." Termination of this Agreement as to any Portfolio
shall not terminate this Agreement as it applies to the remaining Portfolios.
This Agreement constitutes the entire agreement between the parties and
may be amended as to any Portfolio only if such amendment is approved by the
Subadviser and the "vote of a majority of the outstanding voting securities" of
that Portfolio (except for any such amendment as may be effected in the absence
of such approval without violating the 1940 Act). Amendment of any term of this
Agreement with respect to any single Portfolio shall not, without more, amend
such term with respect to any other Portfolio.
The terms "specifically approved at least annually," "vote of a majority
of the outstanding voting securities," "assignment," "affiliated person," and
"interested persons," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
9. Governing Law. This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of The
Commonwealth of Massachusetts provided, however, that nothing herein will be
construed in a manner inconsistent with the 1940 Act, the Investment Advisers
Act of 1940 or any rules or regulations of the Securities and Exchange
Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
CITIBANK, N.A. XXXXXX XXXXXXXX &
XXXXXXXX, LLP
By: By:
-------------------------- --------------------------
Title: Title:
----------------------- ------------------------
The foregoing is acknowledged:
The undersigned officer of the Trust has executed this Agreement not
individually but in his capacity as an officer of the Trust under the
Declaration. The Trust does not hereby undertake, on behalf of the Portfolios or
otherwise, any obligation to the Subadviser.
ASSET ALLOCATION PORTFOLIOS
on behalf of Asset Allocation Portfolio 100,
Asset Allocation Portfolio 200,
Asset Allocation Portfolio 300,
Asset Allocation Portfolio 400
and Asset Allocation Portfolio 500
By:
--------------------------
Title:
-----------------------
FORM OF AMENDED AND RESTATED
SUB-MANAGEMENT AGREEMENT
ASSET ALLOCATION PORTFOLIOS
SUB-MANAGEMENT AGREEMENT, dated February 9, 1996, as amended as restated
as of __________ ___, 1997, by and between Citibank, N.A., a national banking
association (the "Adviser"), and Pacific Investment Management Company, a
Delaware general partnership (the "Subadviser").
W I T N E S S E T H:
WHEREAS, the Adviser has been retained by Asset Allocation Portfolios, a
New York trust (the "Trust"), to act as investment adviser to the Trust with
respect to the series of the Trust designated as Asset Allocation Portfolio 100,
Asset Allocation Portfolio 200, Asset Allocation Portfolio 300, Asset Allocation
Portfolio 400 and Asset Allocation Portfolio 500 (each individually a
"Portfolio" and collectively the "Portfolios"), and
WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act"), and
WHEREAS, the Adviser wishes to engage the Subadviser to provide certain
investment advisory services for the Portfolios, and the Subadviser is willing
to provide such investment advisory services for the Portfolios on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Appointment of the Subadviser. In accordance with and subject to
the Management Agreement between the Trust and the Adviser (the "Management
Agreement"), the Adviser hereby appoints the Subadviser to act as subadviser
with respect to each of the Portfolios for the period and on the terms set forth
in this Agreement. The Subadviser accepts such appointment and agrees to provide
an investment program with respect to the Portfolios for the compensation
provided by this Agreement.
2. Duties of the Subadviser. The Subadviser shall provide the Adviser
with such investment advice and supervision as the Adviser may from time to time
consider necessary for the proper supervision of such portion of each
Portfolio's investment assets as the Adviser may designate from time to time.
Notwithstanding any provision of this Agreement, the Adviser shall retain all
rights and ultimate responsibilities to supervise and, in its discretion,
conduct investment advisory activities relating to the Trust. The Subadviser
shall furnish continuously an investment program and shall determine from time
to time what securities shall be purchased, sold or exchanged and what portion
of the assets of a Portfolio allocated by the Adviser to the Subadviser shall be
held uninvested, subject always to the restrictions of the Trust's Declaration
of Trust, dated December 14, 1995, and By-laws, as each may be amended from time
to time (respectively, the "Declaration" and the "By-Laws"), the provisions of
the 1940 Act, the then-current Registration Statement of the Trust with respect
to that Portfolio, it being understood that the Subadviser shall be responsible
for compliance after a reasonable implementation period with any restrictions
imposed in writing by the Adviser from time to time in order to facilitate
compliance with the above-mentioned restrictions and such other restrictions as
the Adviser may determine. Further, the Adviser or the Trustees of the Trust may
at any time, upon written notice to the Subadviser, suspend or restrict the
right of the Subadviser to determine what securities shall be purchased or sold
on behalf of a Portfolio and what portion, if any, of the assets of a Portfolio
allocated by the Adviser to the Subadviser shall be held uninvested. The
Subadviser shall also, as requested, make recommendations to the Adviser as to
the manner in which proxies, voting rights, rights to consent to corporate
action and any other rights pertaining to a Portfolio's portfolio securities
shall be exercised. Should the Board of Trustees of the Trust or the Adviser at
any time, however, make any definite determination as to investment policy
applicable to a Portfolio and notify the Subadviser thereof in writing, the
Subadviser shall be bound by such determination, following a reasonable
implementation period, for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked.
The Subadviser shall take, on behalf of each Portfolio, all actions which
it deems necessary to implement the investment policies determined as provided
above, and in particular to place all orders for the purchase or sale of
securities for each Portfolio's account with the brokers or dealers selected by
it, and to that end the Subadviser is authorized as the agent of the Trust to
give instructions to the custodian and any subcustodian of a Portfolio as to
deliveries of securities and payments of cash for the account of that Portfolio.
The Subadviser will advise the Adviser on the same day it gives any such
instructions. In connection with the selection of such brokers or dealers and
the placing of such orders, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to a Portfolio and/or the other accounts
over which the Subadviser or its affiliates exercise investment discretion. The
Subadviser is authorized to pay a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio transaction for a
Portfolio which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the Subadviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either that
particular transaction or the overall responsibilities which the Subadviser and
its affiliates have with respect to accounts over which they exercise investment
discretion. The Trustees of the Trust shall periodically review the commissions
paid by each Portfolio to determine if the commissions paid over representative
periods of time were reasonable in relation to the benefits to the Portfolio. In
making purchases or sales of securities or other property for the account of a
Portfolio, the Subadviser may deal with itself or with the Trustees of the Trust
or the Trust's underwriter or distributor to the extent such actions are
permitted by the 1940 Act. The Board of Trustees of the Trust, in its
discretion, may instruct the Subadviser to effect all or a portion of its
securities transactions with one or more brokers and/or dealers selected by the
Board of Trustees, if it determines that the use of such brokers and/or dealers
is in the best interest of the Trust. The Subadviser shall not be liable for any
actions or omissions of brokers and/or dealers selected by the Board of Trustees
or the Adviser.
3. Allocation of Charges and Expenses. The Subadviser shall furnish
at its own expense all necessary services, facilities and personnel in
connection with its responsibilities under Section 2 above. Except as provided
in the foregoing sentence, it is understood that the Trust will pay from the
assets of each Portfolio all of its own expenses allocable to that Portfolio
including, without limitation, organization costs of the Portfolio; compensation
of Trustees who are not "interested persons" of the Trust; governmental fees;
interest charges; loan commitment fees; taxes; membership dues in industry
associations allocable to the Trust; fees and expenses of independent auditors,
legal counsel and any transfer agent, distributor, registrar or dividend
disbursing agent of the Trust; expenses of issuing and redeeming beneficial
interests and servicing investor accounts; expenses of preparing, typesetting,
printing and mailing investor reports, notices, proxy statements and reports to
governmental officers and commissions and to investors in the Portfolio;
expenses connected with the execution, recording and settlement of security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Portfolio, including safekeeping of Portfolios and securities
and maintaining required books and accounts; expenses of calculating the net
asset value of the Portfolio (including but not limited to the fees of
independent pricing services); expenses of meetings of the Portfolio's
investors; expenses relating to the issuance of beneficial interests in the
Portfolio; and such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the Trust on
behalf of the Portfolio may be a party and the legal obligation which the Trust
may have to indemnify its Trustees and officers, its Subadvisers and their
employees with respect thereto.
4. Compensation of the Subadviser. For the services to be rendered by
the Subadviser hereunder, the Adviser shall pay to the Subadviser an investment
subadvisory fee, accrued daily and paid monthly, at an annual rate equal to the
percentages specified below of the aggregate assets of all Portfolios allocated
to the Subadviser:
0.35% on the first $200 million;
0.30% on remaining assets.
If the Subadviser serves as investment subadviser for less than the whole of any
period specified in this Section 4, the compensation to the Subadviser shall be
prorated. Neither the Trust nor the Portfolios shall be liable to the Subadviser
for the compensation of the Subadviser.
5. Covenants of the Subadviser. The Subadviser agrees that it will
not deal with itself, or with the Trustees of the Trust or the Trust's principal
underwriter or distributor, as principals in making purchases or sales of
securities or other property for the account of a Portfolio, except as permitted
by the 1940 Act, will not take a long or short position in beneficial interests
of a Portfolio except as permitted by the Declaration, and will comply with all
other provisions of the Declaration and By-Laws and the then-current
Registration Statement applicable to each Portfolio relative to the Subadviser
and its partners, directors and officers.
6. Limitation of Liability of the Subadviser. The Subadviser shall
not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the execution of
securities transactions for a Portfolio including, without limitation, acts or
omissions of any brokers, dealers and custodians, except for willful
misfeasance, bad faith or gross negligence in the performance of Subadviser's
duties, or by reason of reckless disregard of its obligations and duties
hereunder. As used in this Section 6, the term "Subadviser" shall include
directors, officers, partners and employees of the Subadviser as well as the
Subadviser itself. The Trust, on behalf of the Portfolios, is expressly made a
third party beneficiary of this Agreement, and may enforce any obligations of
the Subadviser under this Agreement and recover directly from the Subadviser for
any liability the Subadviser may have hereunder.
7. Activities of the Subadviser. The services of the Subadviser to
the Portfolios are not to be deemed to be exclusive, the Subadviser being free
to render investment advisory and/or other services to others, including
accounts or investment management companies with similar or identical investment
objectives to the Portfolios. It is understood that Trustees, officers, and
investors of the Trust or the Adviser are or may be or may become interested in
the Subadviser, as directors, officers, partners, employees, or otherwise and
that directors, officers, partners and employees of the Subadviser are or may
become similarly interested in the Trust or the Adviser and that the Subadviser
may be or may become interested in the Trust as an investor or otherwise.
8. Aggregation of Orders. The Subadviser may aggregate sales and
purchase orders of securities with similar orders being made simultaneously for
other accounts managed by the Subadviser or with accounts of the affiliates of
the Subadviser, if in the Subadviser's reasonable judgment such aggregation
shall result in an overall economic benefit to the relevant Portfolio, taking
into consideration the advantageous selling or purchase price, brokerage
commission and other expenses. In accounting for such aggregated order price,
commission and other expenses shall be averaged on a per bond or share basis
daily. Adviser acknowledges that the determination of such economic benefit to
the relevant Portfolio by the Subadviser is subjective and represents the
Subadviser's evaluation that the relevant Portfolio is benefited by relatively
better purchase or sales prices, lower commission expenses and beneficial timing
of transactions or a combination of these and other factors.
9. All notices provided for in this Agreement shall be sent to:
If to the Subadviser:
Pacific Investment Management Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx and Xxxx Xxxxxx
If to the Adviser:
Citibank Global Asset Management
Citibank, N.A.
000 X. 00xx Xxxxxx, 0xx Xxxxx, Xxxx 6
New York, New York 10043
Attention: Xxxxxx Xxxxx
10. Special Termination Rights. Notwithstanding anything in this Agreement
to the contrary, the Adviser may terminate this Agreement without penalty within
five (5) days of its execution of this Agreement by giving written notice to
such effect to the Subadviser within such five (5) day period.
11. Delivery of Part II of Form ADV. Concurrently with execution of this
Agreement, the Subadviser is delivering to the Adviser a copy of Part II of its
Form ADV, as amended, on file with the Securities and Exchange Commission. The
Adviser hereby acknowledges receipt of such copy.
12. Delivery of CFTC Disclosure Document. Upon the solicitation of the
Adviser, the Subadviser delivered to the Adviser a copy of its Disclosure
Document, dated January 25, 1996, on file with the Commodity Futures Trading
Commission. The Adviser hereby acknowledges receipt of such copy.
13. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written, and shall
govern the relations between the parties hereto thereafter and shall remain in
force until June 30, 1998, on which date it will terminate unless its
continuance after June 30, 1998 is "specifically approved at least annually" (a)
by the vote of a majority of the Trustees of the Trust who are not "interested
persons" of the Trust or of the Adviser or of the Subadviser at a meeting
specifically called for the purpose of voting on such approval, and (b) by the
Board of Trustees of the Trust or by "vote of a majority of the outstanding
voting securities" of each Portfolio.
This Agreement may be terminated as to any Portfolio at any time without
the payment of any penalty by (i) the Trustees, (ii) the "vote of a majority of
the outstanding voting securities" of that Portfolio, or (iii) the Adviser, in
each case on not more than 60 days' nor less than 30 days' written notice to the
other party. This Agreement may be terminated as to any Portfolio at any time
without the payment of any penalty by the Subadviser on not less than 90 days'
written notice to the Adviser. This Agreement shall automatically terminate in
the event of its "assignment." Termination of this Agreement as to any Portfolio
shall not terminate this Agreement as it applies to the remaining Portfolios.
This Agreement constitutes the entire agreement between the parties and
may be amended as to any Portfolio only if such amendment is approved by the
Subadviser and the "vote of a majority of the outstanding voting securities" of
that Portfolio (except for any such amendment as may be effected in the absence
of such approval without violating the 1940 Act). Amendment of any term of this
Agreement with respect to any single Portfolio shall not, without more, amend
such term with respect to any other Portfolio.
The terms "specifically approved at least annually," "vote of a majority
of the outstanding voting securities," "assignment," "affiliated person," and
"interested persons," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
14. Governing Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts provided, however, that nothing herein will be construed in a
manner inconsistent with the 1940 Act, the Investment Advisers Act of 1940 or
any rules or regulations of the Securities and Exchange Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
CITIBANK, N.A. PACIFIC INVESTMENT
MANAGEMENT COMPANY
By: By:
-------------------------- --------------------------
Title: Title:
----------------------- -----------------------
The foregoing is acknowledged:
The undersigned officer of the Trust has executed this Agreement not
individually but in his capacity as an officer of the Trust under the
Declaration. The Trust does not hereby undertake, on behalf of the Portfolios or
otherwise, any obligation to the Subadviser.
ASSET ALLOCATION PORTFOLIOS
on behalf of Asset Allocation Portfolio 100,
Asset Allocation Portfolio 200,
Asset Allocation Portfolio 300,
Asset Allocation Portfolio 400
and Asset Allocation Portfolio 500
By:
--------------------------
Title:
-----------------------
