Exhibit (d)(18)
NEW ENGLAND ZENITH FUND
SUBADVISORY AGREEMENT
(CAPITAL GUARDIAN U.S. EQUITY SERIES)
This Subadvisory Agreement (this "Agreement") is entered into as of May 1,
2002 by and between MetLife Advisers, LLC, a Delaware limited liability company
(the "Manager"), and Capital Guardian Trust Company (the "Subadviser").
WHEREAS, the Manager has entered into an Advisory Agreement dated as of
May 1, 2002 (the "Advisory Agreement") with New England Zenith Fund (the
"Trust"), pursuant to which the Manager provides portfolio management and
administrative services to the Capital Guardian U.S. Equity Series of the Trust
(the "Series");
WHEREAS, the Advisory Agreement provides that the Manager may delegate any
or all of its portfolio management responsibilities under the Advisory Agreement
to one or more subadvisers;
WHEREAS, the Manager desires to retain the Subadviser to render portfolio
management services in the manner and on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the Manager and the Subadviser agree as follows:
1. Subadvisory Services.
a. The Subadviser shall, subject to the supervision of the Manager and
in cooperation with the Manager, as administrator, or with any other
administrator appointed by the Manager (the "Administrator"), manage the
investment and reinvestment of the assets of the Series. The Subadviser shall
invest and reinvest the assets of the Series in conformity with (1) the
investment objective, policies and restrictions of the Series set forth in the
Trust's prospectus and statement of additional information, as revised or
supplemented from time to time, relating to the Series (the "Prospectus"),
(2) any additional policies or guidelines established by the Manager or by the
Trust's trustees that have been furnished in writing to the Subadviser and
(3) the provisions of the Internal Revenue Code (the "Code") applicable to
"regulated investment companies" (as defined in Section 851 of the Code) and
"segregated asset accounts" (as defined in Section 817 of the Code), all as from
time to time in effect (collectively, the "Policies"), and with all applicable
provisions of law, including without limitation all applicable provisions of the
Investment Company Act of 1940 (the "1940 Act") the rules and regulations
thereunder and the interpretive opinions thereof of the staff of the Securities
and Exchange Commission ("SEC") ("SEC Positions"); provided, however, that the
Manager agrees to inform the Subadviser of any and all applicable state
insurance law restrictions that operate to limit or restrict the investments the
Series might otherwise make ("Insurance Restrictions"), and to inform the
Subadviser promptly of any changes in such Insurance Restrictions. Subject to
the foregoing, the Subadviser
is authorized, in its discretion and without prior consultation with the
Manager, to buy, sell, lend and otherwise trade in any stocks, bonds and other
securities and investment instruments on behalf of the Series, without regard to
the length of time the securities have been held and the resulting rate of
portfolio turnover or any tax considerations; and the majority or the whole of
the Series may be invested in such proportions of stocks, bonds, other
securities or investment instruments, or cash, as the Subadviser shall
determine. Notwithstanding the foregoing provisions of this Section 1.a,
however, the Subadviser shall, upon written instructions from the Manager,
effect such portfolio transactions for the Series as the Manager shall determine
are necessary in order for the Series to comply with the Policies.
b. The Subadviser shall furnish the Manager and the Administrator
daily, weekly, monthly, quarterly and/or annual reports concerning portfolio
transactions and the investment performance of the Series in such form as may be
mutually agreed upon, and agrees to review the Series and discuss the management
of the Series with representatives or agents of the Manager, the Administrator
or the Trust at their reasonable request. The Subadviser shall permit all books
and records with respect to the Series to be inspected and audited by the
Manager and the Administrator at all reasonable times during normal business
hours, upon reasonable notice. The Subadviser shall also provide the Manager,
the Administrator or the Trust with such other information and reports as may
reasonably be requested by the Manager, the Administrator or the Trust from time
to time, including without limitation all material as reasonably may be
requested by the Trustees of the Trust pursuant to Section 15(c) of the 1940
Act. The Subadviser shall furnish the Manager (which may also provide it to the
Trust's Board of Trustees) with copies of all material comments relevant to the
Series received from the SEC following routine or special SEC examinations or
inspections subject to any restrictions imposed by the SEC or other regulatory
authority on the dissemination of the SEC's comments.
c. The Subadviser shall provide to the Manager a copy of the
Subadviser's Form ADV, Part II as filed with the SEC and any amendments or
restatements thereof in the future and a list of the persons whom the Subadviser
wishes to have authorized to give written and/or oral instructions to custodians
of assets of the Series.
d. Provided that the Subadviser receives proxies in a timely manner,
the Subadviser shall use its good faith judgment in a manner which it reasonably
believes best serves the interest of the Series' shareholders to vote or abstain
from voting all proxies, in accordance with the Subadviser's proxy voting
policies and procedures, solicited by or with respect to the issuers of
securities in which assets of the Series are invested. The Manager shall take
all actions necessary to effect delivery of the proxy solicitations to the
Subadviser in a timely manner, including, but not limited to, effecting delivery
of any proxy solicitation received by a third party who may hold securities on
behalf of the Trust.
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2. Obligations of the Manager.
a. The Manager shall provide (or cause the Trust's custodian to
provide) information to the Subadviser in a timely manner regarding such matters
as the composition of assets in the Series, cash requirements and cash available
for investment in the Series, and all other information as may be reasonably
necessary for the Subadviser to perform its responsibilities hereunder.
b. The Manager has furnished the Subadviser a copy of the Prospectus
and agrees during the continuance of this Agreement to furnish the Subadviser
copies of any revisions or supplements thereto at, or, if practicable, before
the time the revisions or supplements become effective. The Manager agrees to
furnish the Subadviser with relevant sections of minutes of meetings of the
Trustees of the Trust applicable to the Series to the extent they may affect the
duties of the Subadviser, and with copies of any financial statements or reports
of the Trust with respect to the Series to its shareholders, and any further
materials or information which the Subadviser may reasonably request to enable
it to perform its functions under this Agreement, including, but not limited to,
timely information relating to any Insurance Restrictions.
3. Custodian. The Manager shall provide the Subadviser with a copy of the
Series' agreement with the custodian designated to hold the assets of the Series
(the "Custodian") and any modifications thereto (the "Custody Agreement"). The
assets of the Series shall be maintained in the custody of the Custodian
identified in, and in accordance with the terms and conditions of, the Custody
Agreement (or any sub-custodian properly appointed as provided in the Custody
Agreement). The Subadviser shall provide timely instructions directly to the
Trust's custodian, in the manner and form as required by the Trust's Custody
Agreement (including with respect to exchange offerings and other corporate
actions) necessary to effect the investment and reinvestment of the Series'
assets. Any assets added to the Series shall be delivered directly to the
Custodian. The Subadviser may reasonably rely without further inquiry upon any
information furnished to it by the Custodian hereunder, and shall not be
responsible for any errors or omissions arising from any inaccuracies in asset
information provided by the Custodian.
4. Expenses. Except for expenses specifically assumed or agreed to be paid
by the Subadviser pursuant hereto, the Subadviser shall not be liable for any
expenses of the Manager or the Trust including, without limitation, (a) interest
and taxes, (b) brokerage commissions and other costs in connection with the
purchase or sale of securities or other investment instruments with respect to
the Series, and (c) custodian fees and expenses. The Subadviser will pay its own
expenses incurred in furnishing the services to be provided by it pursuant to
this Agreement.
5. Purchase and Sale of Assets. Absent instructions from the Manager to the
contrary, the Subadviser shall place all orders for the purchase and sale of
securities for the Series with brokers or dealers selected by the Subadviser,
which may include brokers or dealers affiliated with the Subadviser, provided
such orders comply with Rule 17e-1 (or any successor or other relevant
regulations) under the 1940 Act in all respects. To the extent consistent with
applicable law and then-current SEC positions, purchase or sell orders for the
Series may be aggregated with contemporaneous purchase or sell orders of other
clients of the Subadviser.
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The Subadviser shall seek to obtain best execution of transactions for the
Series. However, the Subadviser may select brokers or dealers on the basis that
they provide brokerage, research or other services or products to the Series
and/or other accounts serviced by the Subadviser. Not all such services or
products need to be used by the Subadviser in managing the Series. The
Subadviser undertakes to use all reasonable care and diligence in its choice of
brokers and, in the event that any broker fails on the due date, or within such
reasonable period as the Subadviser may decide, to deliver any necessary
documents or, as the case may be, to pay any amount due, the Subadviser will, on
request, endeavor to pursue on behalf of the Trust all appropriate legal
remedies against such broker to recover such documents or amount due or
compensation in lieu thereof. The costs and expenses properly incurred by the
Subadviser in connection with the pursuit of such remedies shall be debited to
the Series, unless paid by the Manager.
6. Compensation of the Subadviser. As full compensation for all services
rendered, facilities furnished and expenses borne by the Subadviser hereunder,
the Manager shall pay the Subadviser compensation at the annual rate of 0.45% of
the first $100 million of the average daily net assets of the Series during the
Series' then-current fiscal year, 0.40% of the next $400 million of such assets,
0.35% of the next $500 million of such assets and 0.30% of such assets in excess
of $1 billion. Such compensation shall be payable monthly in arrears as the
Manager is paid by the Series pursuant to the Advisory Agreement. If the
Subadviser shall serve for less than the whole of any month or other agreed-upon
interval, the foregoing compensation shall be prorated. The Manager may from
time to time waive the compensation it is entitled to receive from the Trust;
however, any such waiver will have no effect on the Manager's obligation to pay
the Subadviser the compensation provided for herein.
7. Non-Exclusivity. The Manager agrees that the services of the Subadviser
are not to be deemed exclusive and that the Subadviser and its affiliates are
free to act as investment manager and provide other services to various
investment companies and other managed accounts, except as the Subadviser and
the Manager or the Administrator may otherwise agree from time to time in
writing before or after the date hereof. This Agreement shall not in any way
limit or restrict the Subadviser or any of its directors, officers, employees or
agents from buying, selling or trading any securities or other investment
instruments for its or their own account or for the account of others for whom
it or they may be acting, provided that such activities do not adversely affect
or otherwise impair the performance by the Subadviser of its duties and
obligations under this Agreement. The Manager recognizes and agrees that the
Subadviser may provide advice to or take action with respect to other clients,
which advice or action, including the timing and nature of such action, may
differ from or be identical to advice given or action taken with respect to the
Series. The Subadviser shall for all purposes hereof be deemed to be an
independent contractor and shall, unless otherwise provided or authorized, have
no authority to act for or represent the Trust or the Manager in any way or
otherwise be deemed an agent of the Trust or the Manager except in connection
with the investment management services provided by the Subadviser hereunder.
8. Responsibility for Diversification. Unless the Subadviser has sole
investment authority over all assets of the Trust, the Subadviser shall have no
responsibility for the manner in which the Trust assets, considered in the
aggregate, shall be diversified; provided, however, the Subadviser shall
diversify the assets of the Series to the extent necessary to minimize the risk
of large losses.
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9. Representations and Warranties. By entering into this Agreement, the
Subadviser represents and warrants that:
(i) it is a state-chartered trust company, authorized by the
California Department of Financial Institutions to carry on a trust banking
business;
(ii) it has full power and authority to enter into this Agreement, and
that the undersigned has full power and authority to execute this Agreement on
the Subadviser's behalf;
(iii) it is an Investment Adviser registered under the Investment
Advisers Act of 1940 (the "Advisers Act"); and
(iv) it has adopted and maintains a written code of ethics complying
with the requirements of Rule 17j-1 of the 1940 Act, and will provide the
Manager and/or the Trust, upon reasonable request, with copies of such code of
ethics as amended from time to time.
By entering into this Agreement, the Manager represents and warrants that:
(i) it is registered as an investment adviser under the Advisers Act
and will continue to be so registered for as long as this Agreement remains in
effect, or else will immediately notify the Subadviser of the occurrence of any
event that would disqualify the Manager from serving as an investment advisor to
the Trust or any investment company pursuant to Section 9(a) of the 1940 Act or
otherwise;
(ii) it is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement, that it duly authorized
and empowered by the Trust to enter into this Agreement, and that the
undersigned has full power and authority to execute this Agreement on the
Manager's behalf;
(iii) it shall not transact in or remove from the Series any securities,
funds or other assets without first giving reasonable written notice to the
Subadviser or terminating this Agreement; and
(iv) it has received a copy of Part II of the Subadviser's Form ADV
(the "ADV"). The Manager understands that if it has received the ADV less than
48 hours prior to its entering into this Agreement, the Manager may terminate
the Agreement without penalty within 5 (five) business days after entering into
the Agreement.
10. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered in person or by any other method
in which evidence of receipt is obtained, including registered mail, facsimile
transmission, or reputable messenger or overnight delivery service, to the
parties at the following addresses or facsimile numbers (or at such other
address or number as each respective party may specify in the future):
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(a) if to the Subadviser, to:
Capital Guardian Trust Company
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile number: (000) 000-0000
Attention: Treasurer
(b) if to the Manager, to:
MetLife Advisers, LLC
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile number: (000) 000-0000
Attention: Xxxxxx X. Xxxx
Secretary
Each such notice or other communication shall be effective (i) if given by
facsimile, when such facsimile is transmitted to the number specified in this
section and the appropriate confirmation is received, and (ii) if given by any
other means, when delivered at the address specified in this section.
11. Liability and Indemnification. Except as may otherwise be provided by
the 1940 Act or other federal securities laws, neither the Subadviser nor any of
its officers, partners, managing directors, employees, affiliates or agents (for
the purposes of this Agreement brokers shall not be deemed as agents)(the
"Indemnified Parties") shall be subject to any liability to the Manager, the
Trust, the Series or any shareholder of the Series for any error of judgment, or
any loss arising out of any investment or other act or omission in the course
of, connected with, or arising out of any service to be rendered under this
Agreement, except by reason of willful misfeasance, bad faith or gross
negligence in the performance of any Indemnified Party's duties or by reason of
reckless disregard by any Indemnified Party of its obligations and duties. The
Manager shall hold harmless and indemnify the Subadviser for any loss,
liability, cost, damage or expense (including reasonable attorneys fees and
costs) arising (i) from any claim or demand by any past or present shareholder
of the Series that is not based upon the obligations of the Subadviser with
respect to the Series under this Agreement or (ii) resulting from the failure of
the Manager to inform the Subadviser of any applicable Insurance Restrictions or
any changes therein or of any policies and guidelines as established by the
Manager or the Trustees. The Subadviser agrees to indemnify the Manager for any
loss, liability, cost, damage or expense (including reasonable attorney's fees)
resulting from Subadviser's material misstatement or omission in the Series'
Prospectus with respect to disclosure of the Series' investment objectives,
policies and risks. The Manager acknowledges and agrees that the Subadviser
makes no representation or warranty, express or implied, that any level of
performance or investment results will be achieved by the Series or that the
Series will perform comparably with any standard or index, including other
clients of the Subadviser, whether public or private.
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12. Effective Date and Termination. This Agreement shall become effective
on the date first written above, and
a. unless otherwise terminated, this Agreement shall continue in
effect until August 30, 2003, and from year to year thereafter so long as such
continuance is specifically approved at least annually (i) by the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the Series, and (ii) by vote of a majority of the trustees of the
Trust who are not interested persons of the Trust, the Manager or the
Subadviser, cast in person at a meeting called for the purpose of voting on such
approval;
b. this Agreement may at any time be terminated on sixty days'
written notice to the Subadviser either by vote of the Board of Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the
Series, subject to the Trust's obligation to fulfill all transactions authorized
prior to such termination;
c. this Agreement shall automatically terminate in the event of its
assignment or upon the termination of the Advisory Agreement;
d. this Agreement may be terminated by the Subadviser on sixty days'
written notice to the Manager and the Trust, or, if approved by the Board of
Trustees of the Trust, by the Manager on sixty days' written notice to the
Subadviser; and
Termination of this Agreement pursuant to this Section 12 shall be without
the payment of any penalty. In the event of termination of this Agreement, all
compensation due to the Subadviser through the date of termination will be
calculated on a pro rata basis through the date of termination and paid on the
first business day after the next succeeding month end.
13. Amendment. This Agreement may be amended at any time by mutual consent
of the Manager and the Subadviser, provided that, if required by law (as may be
modified by any exemptions received by the Manager), such amendment shall also
have been approved by vote of a majority of the outstanding voting securities of
the Series and by vote of a majority of the trustees of the Trust who are not
interested persons of the Trust, the Manager or the Subadviser, cast in person
at a meeting called for the purpose of voting on such approval.
14. Certain Definitions. For the purpose of this Agreement, the terms "vote
of a majority of the outstanding voting securities," "interested person,"
"affiliated person" and "assignment" shall have their respective meanings
defined in the 1940 Act, subject, however, to such exemptions as may be granted
by the SEC under the 1940 Act.
15. General.
a. The Subadviser may perform its services through any employee,
officer or agent of the Subadviser, and the Manager shall not be entitled to the
advice, recommendation or judgment of any specific person; provided, however,
that the persons identified in the Prospectus of the Series shall perform the
portfolio management duties described therein until the Subadviser notifies the
Manager that one or more other employees, officers or agents of the
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Subadviser, identified in such notice, shall assume such duties as of a specific
date. The Subadviser shall use commercially reasonable efforts to inform the
Manager of any such events enough time prior to the event taking effect such
that time allows the Manager sufficient time to prepare and file any necessary
supplement to the Prospectus.
b. If any term or provision of this Agreement or the application
thereof to any person or circumstances is held to be invalid or unenforceable to
any extent, the remainder of this Agreement or the application of such provision
to other persons or circumstances shall not be affected thereby and shall be
enforced to the fullest extent permitted by law.
c. This Agreement shall be governed by and interpreted in accordance
with the laws of The Commonwealth of Massachusetts.
16. Use of Name. It is understood that the name "Capital Guardian",
"Capital Guardian Trust Company," and any of the other names of the Subadviser
or the Subadviser's affiliates, and any derivative or logo or trade or service
xxxx thereof (collectively, the "Names and Trademarks"), associated with that
name are the valuable property of the Subadviser and the Subadviser's
affiliates, and that the Trust has the right to include such name as a part of
the name of its series only so long as this Agreement shall continue. Upon
termination of this Agreement the Trust shall forthwith cease to use such Names
and Trademarks.
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Manager agrees that it will review with the Subadviser any advertisement, sales
literature or notice prior to its use or publication that makes reference to the
Names and/or Trademarks, so that the Subadviser may review the context in which
the Names and/or Trademarks are being referred to, it being agreed that the
Subadviser shall have no responsibility to ensure the adequacy of the form or
content of such materials for the purposes of the 1940 Act or other applicable
laws or regulations. If the Manager or the Trust makes any unauthorized use of,
or reference to, the Names or the Trademarks the Manager acknowledges that the
Subadviser shall suffer irreparable harm for which monetary damages may not be
completely adequate, and therefore the Subadviser may also be entitled to
injunctive relief.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates
written below.
METLIFE ADVISERS, LLC
By:
------------------------------------------
Xxxx X. Xxxxxxx, Xx.
Senior Vice President
Date:________________________________________
CAPITAL GUARDIAN TRUST COMPANY
By:
-----------------------------------------
Xxxxxxx X. Xxxx
Vice President
Date:_______________________________________
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