FORM OF SUB-ADVISORY CONTRACT
XXXXX FARGO BANK, N.A.
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
___________, 1998
Xxxxx Capital Management
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
This will confirm the agreement by and among Xxxxx Fargo Bank, N.A. (the
"Adviser"), Life & Annuity Trust (the "Trust") on behalf of each Fund listed on
attached Appendix I, (each, a "Fund" and collectively, the "Funds"), and Xxxxx
Capital Management (the "Sub-Adviser") as follows:
1. The Trust is a registered open-end management investment company
currently consisting of four investment portfolios, but which may from time to
time consist of a greater or lesser number of investment portfolios. The Trust
proposes to engage in the business of investing and reinvesting the assets of
the Fund in the manner and in accordance with the investment objective and
restrictions specified in the Trust's currently effective Registration
Statement, as amended from time to time (the "Registration Statement"), filed by
the Trust under the Investment Company Act of 1940 (the "Act") and the
Securities Act of 1933. Copies of the Registration Statement have been
furnished to the Sub-Adviser. Any amendments to the Registration Statement
shall be furnished to the Sub-Adviser promptly.
2. The Trust has engaged the Adviser to manage the investing and
reinvesting of the assets of the Fund and to provide the advisory services
specified in the Advisory Contract between the Trust and the Adviser, dated
March 31, 1994, subject to the overall supervision of the Board of Trustees of
the Trust. Pursuant to an administration agreement between the Trust, on behalf
of the Fund, and an administrator (the "Administrator"), the Trust has engaged
the Administrator to provide the administrative services specified therein.
3. (a) The Adviser hereby employs the Sub-Adviser to perform for the
Fund certain advisory services and the Sub-Adviser hereby accepts such
employment. The Adviser shall retain the authority to establish and modify from
time to time the investment strategies and approaches to be followed by the Sub-
Adviser, subject, in all respects, to the supervision and direction of the
Trust's Board of Trustees and subject to compliance with the investment
objectives, policies and restrictions set forth in the Registration Statement.
(b) Subject to the overall supervision and control of the Adviser and
the Trust, the Sub-Adviser shall be responsible for investing and reinvesting
the Fund's assets consistent with the investment strategies and approaches
referenced in subparagraph (a), above. In this regard, the Sub-Adviser shall be
responsible for implementing and monitoring the performance of the investment
model employed with respect to the Fund, in accordance with the investment
objective, policies and restrictions set forth in the Registration Statement,
the Act and the provisions of the Internal Revenue Code of 1986 relating to
investment companies and shall furnish to the Adviser periodic reports on the
investment activity and performance of the Fund. The Sub-Adviser shall also
furnish such additional reports and information as the Adviser and the Trust's
Board of Trustees and officers shall reasonably request.
(c) The Sub-Adviser shall, at its expense, employ or associate with
itself such persons as the Sub-Adviser believes appropriate to assist it in
performing its obligations under this contract.
4. The Adviser shall be responsible for fees paid to the Sub-Adviser
for its services hereunder. The Sub-Adviser agrees that it shall have no claim
against the Trust or the Fund respecting compensation under this contract. In
consideration of the services to be rendered by the Sub-Adviser under this
contract, the Adviser shall pay the Sub-Adviser a fee on the first business day
of each calendar month, at the annual rate of 0.20% of the average daily value
(as determined on each day that such value is determined for the Fund at the
time set forth in the Registration Statement for determining net asset value per
share) of the first $500 million of the Fund's net assets for the preceding
month; 0.15% of the next $500 million of nets assets, and 0.10% of net assets
over $1 billion. If the fee payable to the Sub-Adviser pursuant to this
Paragraph 4 begins to accrue on a day after the first day of any month or if
this contract terminates before the end of any month, the fee for the period
from the effective date to the end of the month, or from the beginning of that
month to the termination date, shall be prorated according to the proportion
that such period bears to the full month in which the effectiveness or
termination occurs. For purposes of calculating the monthly fee, the value of a
Fund's net assets shall be computed in the manner specified in the Registration
Statement and the Trust's Declaration of Trust for the computation of the value
of a Fund's net assets in connection with the determination of the net asset
value of Fund shares.
5. The Sub-Adviser shall give the Trust the benefit of the Sub-
Adviser's best judgment and efforts in rendering services under this contract.
As consideration and an inducement to the Sub-Adviser's undertaking to render
these services, the Trust and the Adviser agree that the Sub-Adviser shall not
be liable under this contract for any mistake in judgment or in any other event
whatsoever except for lack of good faith, provided that nothing in this contract
shall be deemed to protect or purport to protect the Sub-Adviser against any
liability to the Adviser, the Trust or its holders of interests of the Fund to
which the Sub-Adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of the Sub-
Adviser's duties under this contract or by reason of reckless disregard of its
obligations and duties hereunder.
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6. This contract shall become effective as of its execution date and
shall thereafter continue in effect, provided that this contract shall continue
in effect for a period of more than two years from the date hereof only so long
as the continuance is specifically approved at least annually (a) by the vote of
a majority of the Fund's outstanding voting securities (as defined in the Act)
or by the Trust's Board of Trustees and (b) by the vote, cast in person at a
meeting called for the purpose of continuing this Sub-Advisory Contract, of a
majority of the Trust's Trustees who are not parties to this contract or
"interested persons" (as defined in the Act) of any such party. This contract
may be terminated at any time by the Trust, without the payment of any penalty,
by a vote of a majority of the Fund's outstanding voting securities (as defined
in the Act) or by a vote of a majority of the Trust's entire Board of Trustees
on 60 days' written notice to the Sub-Adviser, or by the Sub-Adviser on 60 days'
written notice to the Trust. This contract shall terminate automatically in the
event of its assignment (as defined in the Act).
7. Except to the extent necessary to perform the Sub-Adviser's
obligations under this contract, nothing herein shall be deemed to limit or
restrict the right of the Sub-Adviser, or any affiliate of the Sub-Adviser, or
any employee of the Sub-Adviser, to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, firm, individual or association.
8. The Trust shall own and control all records generated on behalf of
the Trust as a result of services provided under this contract. In addition,
the Trust shall have the right to inspect, audit, and/or copy all records
pertaining to the performance of services under this contract.
9. This contract shall be governed by and construed in accordance with
the laws of the State of California.
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If the foregoing correctly sets forth the agreement by and among the
Adviser, the Trust and the Sub-Adviser, please so indicate by signing and
returning to the Trust the enclosed copy hereof.
Very truly yours,
XXXXX FARGO BANK, N.A.
By: ______________________________
Name: ____________________________
Title: ___________________________
By: ______________________________
Name: ____________________________
Title: ___________________________
AGREED to as of the date set forth above:
XXXXX CAPITAL MANAGEMENT
By: ______________________________
Name: ____________________________
Title: ___________________________
ACCEPTED as of the date
set forth above:
LIFE & ANNUITY TRUST
on behalf of each Fund listed on
attached Appendix I
By:
------------------------------
Xxxxxxx X. Xxxxx, Xx.
Chief Operating Officer
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APPENDIX I
Sub-advisory fees shall be paid monthly on the first business day of each
month, at the annual rates specified below of each fund's average daily value
(as determined on each day that such value is determined for the fund at the
time set forth in the prospectus for determining net asset value per share)
during the preceding month.
FUND INVESTMENT SUB-ADVISORY FEE
------------------------------------------- --------------------------------------------
Equity Value Fund 0.25% of the first $200 million in assets
0.20% of the next $200 million in assets
0.15% of all assets over $400 million
Growth Fund 0.25% of the first $200 million
0.20% of the next $200 million
0.15% of all assets over $400 million
Money Market Fund 0.05% of the first $960 million in assets
0.04% of all assets above $960 million
Strategic Growth Fund 0.25% of the first $200 million in assets
0.20% of the next $200 million in assets
0.15% of all assets over $400 million
Approved: April 30, 1998
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