SUBADVISORY CONTRACT
AGREEMENT made as of the 1st day of November 1997, by and among CLEARWATER
INVESTMENT TRUST, a Massachusetts business trust (the "Trust"), CLEARWATER
MANAGEMENT CO., INC., a Minnesota corporation (the "Manager"), and PARAMETRIC
PORTFOLIO ASSOCIATES (the "Subadviser").
W I T N E S S E T H:
WHEREAS, the Manager desires to utilize the services of the Subadviser as
financial counsel with respect to the Clearwater Growth Fund (the "Fund"), a
separate series of the Trust; and
WHEREAS, the Subadviser is willing to perform such services on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and benefits
herein contained, it is agreed as follows:
1. The Subadviser's Services. The Subadviser will serve the Manager as
financial counsel with respect to the Fund which is under the management of the
Manager pursuant to the Management Contract dated May 1, 1994 between the
Manager and the Trust. Subject to the supervision of the Manager, the investment
policies and restrictions applicable to the Fund as set forth in the
registration statement of the Trust filed with the Securities and Exchange
Commission and such resolutions as from time to time may be adopted by the
Trust's Trustees and furnished to the Subadviser, the Subadviser is hereby
authorized and directed and hereby agrees to develop, recommend and implement
such investment program and strategy for the Fund as may from time to time in
the circumstances appear most appropriate to the achievement of the investment
objectives of the Fund as stated in the aforesaid registration statement, to
provide research and analysis relative to the investment program and investments
of the Fund, to determine what securities should be purchased and sold and what
portion of the assets of the Fund should be held in cash or cash equivalents or
other assets and to monitor on a continuing basis the performance of the
portfolio securities of the Fund. In addition, the Subadviser will place orders
for the purchase and sale of portfolio securities and will advise the Manager
and the custodian for the Fund on a prompt basis of each purchase and sale of a
portfolio security specifying the name of the issuer, the description and amount
or number of shares of the security purchased, the market price, commission and
gross or net price, trade date, settlement date and identity of the effecting
broker or dealer. From time to time as the Trustees of the Trust or the Manager
may reasonably request, the Subadviser will furnish to the Trust's officers and
to each of its Trustees reports on portfolio transactions and reports on issues
of securities held by the Fund, all in such detail as any such Trustee or the
Manager may reasonably request. The Subadviser also will inform the Trust's
officers and Trustees on a current basis of changes in investment strategy or
tactics. The Subadviser will make its officers and employees available to meet
with the Trust's officers and Trustees and the Manager's officers and Directors
at least quarterly on due notice to review the investments and investment
program of the Fund in the light of current and prospective economic and market
conditions.
2. Avoidance of Inconsistent Position.
(a) In connection with purchases and sales of portfolio securities for the
account of the Fund, the Subadviser will not act as a principal or agent or
receive any commission except as permitted by the Investment Company Act of
1940, as amended (the "1940 Act"). The Subadviser shall arrange for the placing
of all orders for the purchase and sale of portfolio securities for the Fund's
account with brokers or dealers selected by the Subadviser. In the selection of
such brokers or dealers and the placing of such orders, the Subadviser is
directed at all times to seek for the Fund the most favorable execution and net
price available except as otherwise described herein. It is understood that it
is desirable for the Fund that the Subadviser have access to supplemental
investment and market research and security and economic analyses provided by
brokers who may execute brokerage transactions at a higher cost to the Fund than
may result when allocating brokerage to other brokers on the basis of seeking
the most favorable price and efficient execution. Therefore, the Subadviser is
authorized to place orders for the purchase and sale of securities for the Fund
with such brokers consistent with the requirements of Section 28(e) of the
Securities Exchange Act of 1934, subject to review by the Trust's Trustees from
time to time with respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers may be useful to the
Subadviser in connection with its services (and the services of the Subadviser's
affiliates) to other clients.
(b) On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients, the
Subadviser, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased in order to obtain the best
execution and lower brokerage commissions, if any. In such event, allocation of
the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Subadviser in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Fund and to
such clients.
3. Other Agreements, etc. It is understood that any of the shareholders,
Trustees, officers and employees of the Trust may be a shareholder, director,
officer or employee of, or be otherwise interested in, the Subadviser, any
interested person (as defined in the 0000 Xxx) of the Subadviser, any
organization in which the Subadviser may have an interest or any organization
which may have an interest in the Subadviser and that the Subadviser, any such
interested person or any such organization may have an interest in the Trust. It
is also understood that the Subadviser, the Manager and the Trust may have
advisory, management, service or other contracts with other individuals or
entities, and may have other interests and businesses. When a security proposed
to be purchased or sold for the Trust is also to be purchased or sold for other
accounts managed by the Subadviser at the same time, the Subadviser shall make
such purchases or sales on a pro rata, rotating or other equitable basis so as
to avoid any one account being preferred over any other account.
4. Subadviser's Compensation. The Manager shall pay to the Subadviser for
its services hereunder a fee at the annual rate of 0.15% of the Fund's net
assets under the Subadviser's management. Such fee shall be calculated and
accrued on a monthly basis as a percentage of the Fund's month end net assets
under the Subadviser's management, and shall be payable quarterly after the end
of each calendar quarter on or before the 15th day of January, April, July and
October of each year with respect to the preceding quarter. If this Contract
shall be effective for only a portion of a calendar quarter, the aforesaid fee
shall be prorated for that portion of such calendar quarter during which this
Contract is in effect.
5. Assignment and Amendment. This Contract shall automatically terminate,
without the payment of any penalty, in the event of its assignment (as defined
in the 0000 Xxx) or in the event of the termination of the Management Contract
between the Trust and the Manager insofar as it applies to the Fund; provided,
that such termination shall not relieve either party of any liability incurred
hereunder. The terms of this Contract shall not be changed unless such change is
approved in accordance with the requirements of the 1940 Act, and as such
requirements may be modified by rule, regulation or order of the Securities and
Exchange Commission (the "SEC").
6. Effective Period and Termination of this Contract.
(a) This Contract shall become effective on the date hereof and shall
remain in full force and effect until two years from the date hereof and from
year to year thereafter, but only so long as its continuance is approved
annually in accordance with the requirements of the 1940 Act, and as such
requirements may be modified by rule, regulation or order of the SEC, subject to
the respective rights of the Trust, the Manager and the Subadviser to terminate
this Contract as provided in paragraphs (b) and (c) hereof.
(b) The Trust or the Manager may at any time terminate this Contract by not
more than sixty (60) days' nor less than thirty (30) days' written notice given
to the Subadviser.
(c) The Subadviser may at any time terminate this Contract by not less than
one hundred twenty (120) days' written notice given to the Trust and the
Manager.
7. Complete Agreement. This Contract states the entire agreement of the
parties hereto, and is intended to be the complete and exclusive statement of
the terms hereof. It may not be added to or changed orally, and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with Section 5 hereof and the applicable requirements of the 1940
Act.
8. Nonliability of the Subadviser. In the absence of willful misfeasance,
bad faith or gross negligence on the part of the Subadviser, or of reckless
disregard of its obligations and duties hereunder, the Subadviser shall not be
subject to any liability to the Manager or the Trust, to any shareholder of the
Fund, or to any person, firm or organization, for any act or omission in the
course of, or connected with, rendering services hereunder. Nothing herein,
however, shall derogate from the Subadviser's obligations under applicable
federal and state securities laws.
9. Limitation of Liability of the Trustees, Officers and Shareholders. A
copy of the Declaration of Trust of the Trust is on file with the Secretary of
State of The Commonwealth of Massachusetts, and notice is hereby given that this
Contract is executed on behalf of the Trustees of the Trust as Trustees and not
individually and that the obligations under this Contract are not binding upon
any of the Trustees, officers or shareholders of the Trust but are binding only
upon the assets and property of the Fund.
10. Notices. Any notice, instruction, request or other communications
required or contemplated by this Contract shall be in writing and shall be duly
given when deposited by first class mail, postage prepaid, addressed to (or
delivered by hand with confirmation to) the Trust, the Manager or the Subadviser
at the applicable address set forth below:
If to Subadviser:
Parametric Portfolio Associates
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000-0000
If to Trust:
Clearwater Investment Trust
0000 Xxxxx Xxxxxxxx Xxxx Xxxxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
If to Manager:
Clearwater Management Co., Inc.
0000 Xxxxx Xxxxxxxx Xxxx Xxxxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
11. Disclosure Statement. The Manager and the Trust acknowledge receipt of
the Subadviser's written disclosure statement required by Rule 204-3 under the
Investment Advisers Act of 1940 not less than 48 hours prior to entering into
this Contract.
12. Governing Law. This Contract and all performance hereunder shall be
governed by, interpreted, construed and enforced in accordance with the laws of
the State of Minnesota.
13. Any term or provision of this Contract which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Contract or affecting
the validity or enforceability of any of the terms or provisions of this
Contract in any other jurisdiction.
14. This Contract may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their duly authorized officers and as of the day and year first
written above.
CLEARWATER INVESTMENT TRUST
By: /s/Xxxxxxxxx X. Xxxxxxxxxxxx
Name: Xxxxxxxxx X. Xxxxxxxxxxxx
Title: Chairman
CLEARWATER MANAGEMENT CO., INC.
By: /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Chairman
PARAMETRIC PORTFOLIO ASSOCIATES
By: /s/Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Managing Director
