Exhibit 99.B(d)(11)
FORM OF
SUBADVISORY AGREEMENT
AGREEMENT made as of February 27, 2004 among ATLAS ADVISERS, INC., a
California corporation (the "Adviser"), ATLAS FUNDS, a Delaware statutory trust
(the "Trust"), on behalf of each series of the Trust listed in Appendix A
hereto, as amended from time to time (hereinafter referred to individually as a
"Fund" and collectively as the "Funds") and OPPENHEIMERFUNDS, INC., a Colorado
corporation (the "Subadviser").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission ("SEC") under the Investment Company Act of 1940, as amended (the
"1940 Act"), as an open-end management company and is authorized to issue
separate series, each of which offers a separate class of shares of capital
stock and each of which has its own investment objectives, policies and
limitations;
WHEREAS, the Trust has retained the Adviser to render investment
management and administrative services to the Funds;
WHEREAS, the Adviser and the Trust desire to retain the Subadviser to
furnish portfolio management services to the Funds in connection with the
Adviser's investment management activities on behalf of the Funds, and the
Subadviser is willing to furnish such services to the Adviser and the Trust;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Adviser, the Subadviser and the Trust
as follows:
1. APPOINTMENT. The Adviser and the Trust hereby appoint the
Subadviser to act as portfolio manager to each Fund listed in Appendix A
(collectively, the "Funds") on the terms set forth in this Agreement, as may be
amended in writing from time to time by the parties hereto. The Subadviser
accepts such appointment and agrees to furnish the services described herein,
for the compensation provided in the Fee Schedule attached hereto as Appendix B,
as may be amended in writing from time to time by the parties hereto.
2. REPRESENTATIONS OF THE TRUST. The Trust represents, warrants, and
agrees that:
A. The Trust is a statutory trust duly organized, validly
existing and in good standing under the laws of the state of Delaware.
B. The Adviser and Subadviser have been duly appointed by the
Board of Trustees of the Trust.
C. The Trust will deliver to the Subadviser a true and
complete copy of its Registration Statement filed with the SEC, as effective
from time to time, and such other documents or instruments governing the
investment objectives of the Funds and such other
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information as is necessary for the Subadviser to carry out its obligations
under this Agreement.
D. The Trust is currently in compliance and shall at all times
use its best efforts to ensure continued compliance with the requirements
imposed upon the Trust by the 1940 Act and applicable state laws.
3. REPRESENTATIONS OF THE SUBADVISER. The Subadviser represents,
warrants, and agrees that:
A. The Subadviser is a corporation duly organized, validly
existing and in good standing under the laws of the state of Colorado.
B. The Subadviser is registered as an "Investment Adviser"
under the Investment Advisers Act of 1940 ("Advisers Act") and under applicable
state laws and is currently in compliance and shall at all times use its best
efforts to ensure compliance with the requirements imposed upon the Subadviser
by the Advisers Act and applicable state laws and has provided its current Form
ADV to the Adviser.
C. The Subadviser has adopted a written code of ethics
complying with the requirements of Rule 17j under the 1940 Act, will provide the
Trust with a copy of the code of ethics and evidence of its adoption, and will
make such reports to the Trust as are required by Rule 17j-1 under the 1940 Act.
4. REPRESENTATIONS OF THE ADVISER. The Adviser represents, warrants,
and agrees that:
A. The Adviser is a corporation duly organized, validly
existing and in good standing under the laws of the state of California.
B. The Adviser is registered as an "Investment Adviser" under
the Advisers Act and under applicable state laws and is currently in compliance
and shall at all times use its best efforts to ensure compliance with the
requirements imposed upon the Adviser by the Advisers Act and applicable state
laws and has provided its current Form ADV to the Subadviser.
C. The Adviser has adopted a written code of ethics complying
with the requirements of Rule 17j under the 1940 Act, has provided the Trust
with a copy of the code of ethics and evidence of its adoption, and will make
such reports to the Trust as are required by Rule 17j-1 under the 1940 Act.
5. PORTFOLIO MANAGEMENT DUTIES.
A. Subject to the supervision of the Adviser and the Trust's
Board of Trustees, the Subadviser will provide a continuous investment program
for the portfolio of each Fund listed in Appendix A, including investment
management, with respect to all investments, cash and cash equivalents in the
portfolio. The Subadviser will determine from time to time what securities and
other investments will be purchased, retained or sold by a Fund and will place
orders
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for execution of such portfolio transactions in accordance with paragraph
C below to effect the investment decisions made. The Subadviser will provide the
services identified in this Agreement in accordance with each respective Fund's
investment objectives, policies and restrictions as stated in the Trust's
Registration Statement filed with the SEC, as effective from time to time, and
as interpreted by the Adviser and communicated to the Subadviser, on behalf of
the Trust, from time to time. The Adviser will be responsible for all other
services to be provided to each Fund that is identified in Appendix A hereto.
B. Nothing in this Agreement shall in any way limit or
restrict the Subadviser or any of its directors, officers, stockholders or
employees from buying, selling or trading any securities for its or their own
account or the account of others for whom it or they may be acting, provided
that such activities will not adversely affect or otherwise impair the
performance by the Subadviser of its duties and obligations under this
Agreement.
C. Subject to any applicable regulatory restriction or
prohibition, the Subadviser shall have authority and discretion to select
brokers and dealers (hereinafter "broker-dealers") to execute portfolio
transactions for the Funds and for the selection of the markets on or in which
the transactions will be executed. In placing orders, the Subadviser may place
portfolio transactions with brokers on a commission basis or with primary market
makers on a net basis. It is understood that transactions with market makers
reflect the spread between the bid and asked prices. The Subadviser may make
purchases of underwritten issues which include an underwriting fee paid to the
underwriter.
The primary objective of the Subadviser in placing orders
for the purchase and sale of securities for a Fund shall be to obtain the "best
execution" (prompt and reliable execution at the most favorable security price
obtainable) taking into account such factors as price, commission, if any, size
of order, difficulty of execution and skill required of the executing broker or
dealer. The Subadviser shall have discretion, in the interests of each Fund, to
allocate brokerage on each Fund's portfolio transactions to broker-dealers
qualified to obtain best execution of such transactions who provide brokerage
and/or research services (as such services are defined Section 28(e)(3) of the
Securities Exchange Act of 1934) for any of the Funds. The term "research"
includes advice as to the value of securities; the advisability of investing in,
purchasing or selling securities; the availability of securities or purchasers
or sellers of securities; and furnishing analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio strategy
and the performance of accounts. Subject to such policies as the Adviser and the
Trust's Board of Trustees may determine, the Subadviser shall not be deemed to
have acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused a Fund to pay a broker for
effecting a portfolio investment transaction in excess of the amount of
commission another broker-dealer would have charged for effecting that
transaction if the Subadviser determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker-dealer, viewed in terms of either that
particular transaction or the Subadviser's overall responsibilities with respect
to the Fund. In reaching such determination, the Subadviser will not be required
to place or attempt to place a specific dollar value on the brokerage and/or
research services provided or being provided by such broker/dealer. The
Subadviser shall have no duty or obligation to seek advance competitive bidding
for the most favorable commission rate applicable to any particular portfolio
transactions or to select
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any broker-dealer on the basis of its purported or "posted" commission rate but
will, to the best of its ability, endeavor to be aware of the current level of
the charges of eligible broker-dealers and to minimize the expense incurred by
the Funds for effecting their portfolio transactions.
D. All transactions will be consummated by payment to or
delivery by the Trust's Custodian, or such depositories or agents as may be
designated by the Custodian, of all cash and/or securities due to or from a
Fund, and the Subadviser shall not have possession or custody thereof or any
responsibility or liability with respect thereto. The Subadviser shall advise
the Custodian and the Trust's daily of all investment orders placed by it with
broker-dealers pursuant to procedures agreed upon by the Subadviser and the
Trust. The Subadviser shall not be responsible for obtaining prices for any such
investment order, but will use its best efforts to direct the Custodian to
pricing sources and assist the Custodian in obtaining dealer quotes if so
requested by the Custodian. The Trust or its authorized agents, the Adviser and
Subadviser, shall issue to the Custodian such instructions as may be appropriate
in connection with the settlement of any transaction initiated by the
Subadviser. The Trust shall be responsible for all custodial arrangements and
the payment of all custodial charges and fees, and, upon transmitting to the
Custodian the investment orders placed by it with broker-dealers, the Subadviser
shall have no responsibility or liability with respect to custodial arrangements
or the acts, omissions or other conduct of the Custodian.
E. The Custodian shall, on a daily basis pursuant to
procedures and in a format agreed upon by the Subadviser and the Trust, provide
portfolio reports to the Subadviser that shall include a listing of all
portfolio investments of each Fund and its cash position.
6. EXPENSES. During the term of this Agreement, the Subadviser will
pay all expenses incurred by it or its staff in connection with rendering
portfolio management services under this Agreement. This does not include
expenses and costs of the Funds' operations payable by the Trust or the Adviser,
including, but not limited to, those for: interest and taxes; brokerage
commissions; custody, transfer agency, dividend disbursement, accounting,
pricing, legal and auditing services; insurance premiums for fidelity and other
coverage required for their operations; filing and registration of shares;
shareholder reports; meetings of the Trust's shareholders or trustees (except
those called solely to accommodate the Subadviser); printing and postage; office
facilities, stationery and supplies; the clerical, executive and administrative
costs incurred by the Adviser in overseeing or administering all of the above;
other direct administrative and service costs; and such extraordinary
non-recurring expenses as may arise, including litigation, affecting any of the
Funds.
7. COMPENSATION. For the services provided, the Adviser will pay the
Subadviser a fee, payable monthly based on the aggregate daily net assets of the
Funds, as provided in the Fee Schedule attached to this Agreement as Appendix B.
The "aggregate daily net assets" is defined as the aggregate of the values
placed on the net assets of all Funds as of 4:00 p.m. (New York time), on each
day on which the net asset value of the Funds' portfolios is determined
consistent with the provisions of Rule 22c-1 under the 1940 Act or, if the Trust
lawfully determines the net asset value of a Fund's portfolio as of some other
time on each business day, as of such time. The net asset value of each Fund's
portfolio shall be determined pursuant to the applicable provisions of the
Trust's current Registration Statement and the 1940 Act. If the determination of
net asset value for a Fund is suspended in conformity with the 1940 Act for any
particular business
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day, then the value of the net assets of such Fund's portfolio as last
determined shall be deemed to be the value of the net assets as of the close of
the New York Stock Exchange, or such other time as the net asset value of the
portfolio may lawfully be determined, on that day. If the Trust has suspended
the determination of the net asset value of a Fund's portfolio pursuant to the
Registration Statement and the 1940 Act for a period including such month, the
Subadviser's compensation payable at the end of such month shall be computed on
the basis of the value of the net assets of the Fund as last determined (whether
during or prior to such month). If the Trust determines the value of the net
assets of a Fund's portfolio more than once on any day, the last such
determination on that day shall be deemed to be the sole determination on that
day for the purposes of this Section 7.
8. BOOKS AND RECORDS.
A. The Subadviser will make available to the Adviser and the
Trust promptly upon request its records and ledgers with respect to and relating
to each Fund's securities transactions to assist the Adviser and the Trust in
compliance with the 1940 Act and the Advisers Act, and other applicable laws.
The Subadviser will furnish the Trust's Board of Trustees such periodic and
special reports on each Fund as the Adviser and the Trustees may reasonably
request.
B. In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Subadviser hereby agrees that all records which it maintains for
the Funds are the property of the Trust and further agrees to surrender promptly
to the Trust any of such records upon the Trust's request. The Subadviser
further agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act
and to preserve the records required by Rule 204-2 under the Advisers Act to the
extent necessary or appropriate to comply with the period specified in the Rule.
9. INDEMNIFICATION.
A. Absent the Adviser's or the Trust's gross negligence,
willful misconduct or bad faith in the performance of its duties, or reckless
disregard of its obligations and duties under this Agreement, the Subadviser
agrees to indemnify and hold harmless the Adviser, the Trust and their officers
and employees against any and all costs and liabilities (including legal and
other expenses) which the Adviser or the Trust may incur, arising out of the
Subadviser's (a) gross negligence, willful misconduct or bad faith in the
performance of its duties, or reckless disregard of its obligations and duties
under this Agreement, or (b) untrue statement or omission of a material fact
required in the Registration or Proxy Statements or other regulatory filing, if
such statement or omission was made in reliance upon information furnished in
writing by the Subadviser for inclusion in such regulatory filings.
B. Absent the Subadviser's gross negligence, willful
misconduct or bad faith in the performance of its duties, or reckless disregard
of its obligations and duties under this Agreement, the Adviser and the Trust
agree to indemnify and hold harmless the Subadviser and its officers and
employees against any and all costs and liabilities (including legal and other
expenses) which the Subadviser may incur, arising out of the Adviser's or the
Trust's (a) gross negligence, willful misconduct or bad faith in the performance
of its duties, or reckless disregard of its obligations and duties under this
Agreement, or (b) untrue statement or omission of a material fact
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required in the Registration or Proxy Statements or other regulatory filing,
unless such statement or omission was made in reliance upon information
furnished in writing by the Subadviser for inclusion in such regulatory filings.
10. SERVICES NOT EXCLUSIVE. It is understood that the services of the
Subadviser are not exclusive, and nothing in this Agreement shall prevent the
Subadviser from providing similar services to other investment companies
(whether or not their investment objectives and policies are similar to those of
a Fund) or from engaging in other activities. When the Subadviser recommends the
purchase or sale of a security for other investment companies and other clients,
and at the same time the Subadviser recommends the purchase or sale of the same
security for one or more Funds, it is understood that such transactions will be
executed on a basis that is fair and equitable to each Fund.
11. CONFIDENTIAL RELATIONSHIP. Any information and advice furnished by
any party to this agreement to the other parties shall be treated as
confidential and shall not be disclosed to third parties without the written
consent of the other party. Notwithstanding the foregoing, the Subadviser may
disclose the total return earned by the Fund(s) and may include such total
return and related items in the calculation of composite performance information
without prior approval by the Adviser.
12. DURATION. The initial term of this Agreement, with respect to each
Fund, shall begin on February 27, 2004, which term shall continue for two (2)
years from the Effective Date and continue on an annual basis thereafter if
approved for each Fund each year by (a) the vote of a majority of the entire
Board of Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Fund (as defined in the 1940 Act), and by (b) the vote
of a majority of those Trustees of the Trust who are not parties to this
Agreement or interested persons (as such term is defined in the 0000 Xxx) of any
such party, cast in person at a meeting called for the purpose of voting on such
approval.
13. TERMINATION. This Agreement may be terminated at any time without
payment of any penalty by (a) the Adviser, upon sixty (60) days' written notice
to the Subadviser and the Trust (which notice may be waived by the Subadviser
and the Trust), (b) the Trust, on behalf of any one or more of the Funds, upon
the vote of a majority of the Trust's Board of Trustees or a majority of the
outstanding voting securities of such Fund, upon sixty (60) days' written notice
to the Adviser and the Subadviser, or (c) the Subadviser, upon one hundred
twenty (120) days' written notice to the Adviser and the Trust (which notice may
be waived by the Adviser and the Trust). Termination of this Agreement with
respect to a Fund shall not effect the continuing applicability of this
Agreement with respect to other Funds. This Agreement shall automatically
terminate in the event of its assignment (as such term is defined in the 1940
Act). Termination of this Agreement shall not affect the right of the Subadviser
to receive payments of any unpaid balance of the compensation described in
Section 7 earned prior to such termination.
14. AMENDMENTS. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought and no amendment of this Agreement shall be effective with
respect to a Fund until approved by a vote of a majority of
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the outstanding voting securities of such Fund, if such approval is required by
applicable law.
15. USE OF NAME. It is understood that the name "OppenheimerFunds,
Inc." or any derivative thereof or logo associated with that name is the
valuable property of the Subadviser and its affiliates and that the Trust and
each Fund have the right to use such name (or derivative or logo) in offering
and sales materials so long as the Subadviser is portfolio manager to such Fund
and provided the Subadviser shall have reviewed and approved in writing such
use, which approval may not be unreasonably withheld. Upon termination of this
Agreement, the Trust shall promptly cease to use such name.
16. MISCELLANEOUS.
A. This Agreement shall be governed by the laws of the State
of California, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act or rules or orders of the SEC
thereunder.
B. The captions of this Agreement are included for convenience
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
C. If any provision of this Agreement shall be held invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and the provisions of this Agreement shall be
deemed to be severable.
D. Any notice under this Agreement shall be in writing
addressed and delivered or mailed, postage prepaid, to the other party at the
address below or at such other address as such other party may designate
hereunder for the receipt of such notice:
If to the Adviser or the Trust: Atlas Advisers, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. X'Xxxxxxx
Vice President and
Chief Legal Counsel
If to the Subadviser: OppenheimerFunds, Inc.
2 World Financial Center
000 Xxxxxxx Xxxxxx - 11th Floor
New York, New York 10080
Attention: Xxxxx Xxxxxxxxxx
Vice President and
Associate Counsel
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
ATLAS ADVISERS, INC.
By:
-------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
ATLAS FUNDS
By:
-------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
OPPENHEIMERFUNDS, INC.
By:
-------------------------------------
Xxxxxxx X. XxXxxxxx
President and Chief Executive Officer
OFI Institutional Asset Management, Inc.
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APPENDIX A
SUBADVISORY AGREEMENT
OPPENHEIMERFUNDS, INC.
DATED: MARCH 1, 2005
The provisions of the Subadvisory Agreement among ATLAS ADVISERS, INC.,
ATLAS Funds (the "Trust") and OppenheimerFunds, Inc. apply to the following
series of the Trust:
1. Atlas Growth Opportunities Fund
2. Atlas Global Growth Fund
3. Atlas Strategic Income Fund
4. Atlas U.S. Government and Mortgage Securities Fund
IN WITNESS WHEREOF, the parties hereto have agreed that this Appendix A
shall become part of the Subadvisory Agreement as of March 1, 2005.
ATLAS ADVISERS, INC. OPPENHEIMERFUNDS, INC.
By: By:
---------------------------- ------------------------------------
Xxxxxxx X. Xxxxxx Xxxxxxx X. XxXxxxxx
Senior Vice President President and Chief Executive Officer
OFI Institutional Asset Management, Inc.
ATLAS FUNDS
By:
----------------------------
X. Xxxxxxxx Key
President and Chief Operating Officer
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APPENDIX B
SUBADVISORY AGREEMENT
OPPENHEIMERFUNDS, INC.
FEE SCHEDULE
DATED: MARCH 1, 2005
For all Funds identified in Appendix A
ANNUAL FEE - ATLAS GROWTH OPPORTUNITIES FUND
The subadvisory fee payable monthly to OppenheimerFunds, Inc.
("Xxxxxxxxxxx," formerly Xxxxxxxxxxx Management Corporation) for services
rendered to the Atlas Growth Opportunities Fund is computed on the aggregate net
assets of the Fund, as of the close of business each day, at the annual rate of
0.30% of the first $50 million of net assets and 0.25% of net assets in excess
of $50 million.
If the average annual net assets of the Fund is less than $8,333,333 (as
calculated in 12 month intervals), then an additional subadvisory fee shall be
paid equal to 0.30% multiplied by the amount by which $8,333,333 exceeds the
Fund's average annual net assets for such 12 month period.
ANNUAL FEE - ATLAS GLOBAL GROWTH FUND
The subadvisory fee payable monthly to Xxxxxxxxxxx for services rendered
to the Atlas Global Growth Fund is computed on the net assets of the Fund as of
the close of business each day, at the annual rate of 0.35% of the first $50
million of net assets, 0.30% of net assets above $50 million up to $100 million
and 0.25% of net assets in excess of $100 million.
With respect to the Atlas Global Growth Fund, the subadvisory fee will be
no less than $25,000 annually. The monthly billing amount will be calculated by
applying the appropriate percentage to the average daily net assets for the
month, without regard to any minimum. At the end of each twelve month billing
period, if the prior twelve monthly payments do not equal or exceed $25,000,
Xxxxxxxxxxx will be paid the amount necessary to satisfy the minimum annual fee.
ANNUAL FEE - ATLAS STRATEGIC INCOME FUND
The subadvisory fee payable monthly to Xxxxxxxxxxx for services rendered
to the Atlas Strategic Income Fund is computed on the net assets of the Fund as
of the close of business each day, at the annual rate of 0.30% of the first $100
million of net assets and 0.25% of net assets in excess of $100 million.
The subadvisory fee will be no less than $25,000 annually. The monthly
billing amount will be calculated by applying the appropriate percentage to the
average daily net assets for the month, without regard to any minimum. At the
end of each twelve month billing period, if the prior twelve monthly payments do
not equal or exceed $25,000, Xxxxxxxxxxx will be paid the amount necessary to
satisfy the minimum annual fee.
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ANNUAL FEE - ATLAS U.S. GOVERNMENT AND MORTGAGE SECURITIES FUND
The subadvisory fee payable monthly to Xxxxxxxxxxx for services rendered
to the Atlas U.S. Government and Mortgage Securities Fund is computed on the net
assets of the Fund as of the close of business each day, at the annual rate of
0.30% of the first $50 million of net assets, 0.20% on the next $50 million of
net assets, and 0.12% of net assets in excess of $100 million.
The subadvisory fee will be no less than $25,000 annually. The monthly
billing amount will be calculated by applying the appropriate percentage to the
average daily net assets for the month, without regard to any minimum. At the
end of each twelve month billing period, if the prior twelve monthly payments do
not equal or exceed $25,000, Xxxxxxxxxxx will be paid the amount necessary to
satisfy the minimum annual fee.
IN WITNESS WHEREOF, the parties hereto have agreed that this Appendix B
shall become part of the Subadvisory Agreement as of March 1, 2005.
ATLAS ADVISERS, INC. OPPENHEIMERFUNDS, INC.
By: By:
--------------------------- ---------------------------------
Xxxxxxx X. Xxxxxx Xxxxxxx X. XxXxxxxx
Senior Vice President President and Chief Executive Officer
OFI Institutional Asset Management, Inc.
ATLAS FUNDS
By:
-------------------------------
X. Xxxxxxxx Key
President and Chief
Operating Officer
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