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Exhibit 99d.2
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INTERNATIONAL CURRENCY FUND
Form of
SUB-ADVISER AGREEMENT
Sub-Adviser Agreement executed as of ______ ______ 1998 between STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust company (the "Adviser") and
STATE STREET GLOBAL ADVISORS UNITED KINGDOM, LTD. (the Sub-Adviser).
WITNESSETH
That in connection of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
Subject always to the control of the trustees (the "Trustees")
of International Currency Fund, a Delaware business trust (the "Trust"), the
Sub-adviser, at its expense, will furnish continuously an investment program for
the Initial Portfolios listed on Schedule A hereto (the "Initial Portfolios")
and such other funds as the Investment Company and the Adviser may agree upon
(collectively, the "Funds") and will make investment decisions on behalf of the
Funds and place all orders for the purchase and sale of portfolio securities and
all other investments. In the event that the Trust establishes one or more Funds
other than the Initial Portfolios with respect to which the Adviser desires to
retain the Sub-adviser to render investment advisory services hereunder, it
shall so notify the Sub-adviser in writing, indicating the advisory fee to be
payable with respect to the additional Fund. If the Sub-adviser is willing to
render such services, it shall so notify the Adviser in writing, whereupon such
Fund shall become a Fund hereunder. In such event a writing signed by both the
Adviser and the Sub-adviser shall be annexed hereto as a part hereof indicating
that such additional Fund has become a Fund hereunder and reflecting the
agreed-upon fee schedule for such Fund.
In the performance of its duties, the Sub-adviser (i) will comply with
the provisions of the Trust's Agreement and Declaration of Trust and By-laws,
including any amendments thereto (upon receipt of such amendments by the
Sub-adviser), and the investment objectives, policies and restrictions of the
Fund as set forth in its current Registration Statement (copies of which will be
supplied to the Sub-adviser upon filing with the Securities and Exchange
Commission), (ii) will use its best efforts to safeguard and promote the welfare
of each Fund, (iii) will comply with other policies which the Trustees or the
Adviser, as the case may be, may from time to time determine as promptly as
practicable after such policies have been communicated to the Sub-adviser in
writing, and (iv) shall exercise the same care and diligence expected of the
Trustees. The Sub-adviser and the Adviser shall each make its officers and
employees available to the other from time to time at reasonable times to review
investment policies of the Funds and to consult with each other regarding the
investment affairs of the Funds.
(a) The Sub-adviser, at its expense, will furnish all
necessary investment and management facilities,
including salaries of personnel, required for it to
execute its duties hereunder faithfully.
(b) In the selection of brokers, dealers or futures
commissions merchants (collectively, brokers) and the
placing of orders for the purchase and sale of
portfolio investments for the Funds, the Sub-adviser
shall seek to obtain for each Fund the
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most favorable price and execution available, except
to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research
services as described below. In using its best
efforts to obtain for each Fund the most favorable
price and execution available, the Sub-adviser,
bearing in mind the Fund's best interests at all
times, shall consider all factors it deems relevant,
including, by way of illustration, the price, the
size of the transaction, the nature of the market for
the security, the amount of the commission, the
timing of the transaction taking into account market
prices and trends, the reputation, experience and
financial stability of the broker involved and the
quality of service rendered by the broker in other
transactions. Subject to such policies as the
Trustees may determine and communicate to the
Sub-adviser in writing, the Sub-adviser 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 that provides brokerage and research services
to the Sub-adviser or any affiliated person of the
Sub-adviser an amount of commission for effecting a
portfolio investment transaction in excess of the
amount of commission another broker would have
charged for effecting that transaction, if the
Sub-adviser 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, viewed in terms of either that
particular transaction or the Sub-adviser's overall
responsibilities with respect to the Fund and to
other clients of the Sub- adviser and any affiliated
person of the Sub-adviser as to which the Sub-adviser
or any affiliated person of the Sub-adviser exercises
investment discretion.
(c) The Sub-adviser shall not be obligated to pay any
expenses of or for the Trust or of or for a Fund not
expressly assumed by the Sub-adviser pursuant to this
Section 1.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, partner, director, officer or
employee of, or be otherwise interested in, the Sub-adviser, and in any person
controlling, controlled by or under common control with the Sub-adviser, and
that the Sub- adviser and any person controlling, controlled by or under common
control with the Sub-adviser may have an interest in the Trust. It is also
understood that the Sub-adviser and persons controlling, controlled by or under
common control with the Sub-adviser have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE ADVISER TO THE SUB-ADVISER
The Adviser will pay to the Sub-adviser as compensation for the
Sub-adviser's services rendered, for the facilities furnished and for the
expenses borne by the Sub-adviser pursuant to Section 1, a fee, computed and
paid monthly at the annual rate (based on the number of days elapsed through the
end of the month) set forth on Schedule B hereto. Such fee shall be payable for
each month within ten (10) business days after the end of such month. If the
Sub-adviser shall serve for less than the whole of a month, the foregoing
compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS
AGREEMENT
This Agreement shall automatically terminate as to a Fund, without the
payment of any penalty, in the event of its assignment or in the event that the
Investment Advisory Agreement dated as of September 22, 1998 between the Adviser
and the Trust, with respect to that Fund, shall have terminated for
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any reason, and the Adviser shall provide notice of any such termination of the
Investment Advisory Agreement to the Sub-adviser; and this Agreement shall not
be amended as to a Fund unless such amendment be approved by the affirmative
vote of a majority of the outstanding shares of that Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees who are not interested persons of the Trust or of the
Adviser or of the Sub-adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as to a Fund as
follows:
(a) The Trust may at any time terminate this Agreement
with respect to a Fund by written notice delivered or
mailed by registered mail, postage prepaid, to the
Adviser and the Sub-adviser, or
(b) If (i) the Trustees or the shareholders of the Trust
by the affirmative vote of a majority of the
outstanding shares of a Fund, and (ii) a majority of
the Trustees who are not interested persons of the
Trust or of the Adviser or of the Sub-adviser, by
vote cast in person at a meeting called for the
purpose of voting on such approval, do not
specifically approve at least annually the
continuance of this Agreement, then this Agreement
shall automatically terminate at the close of
business on the second anniversary of its execution,
or upon the expiration of one year from the effective
date of the last such continuance, whichever is
later; provided, however, that if the continuance of
this Agreement is submitted to the shareholders of a
Fund for their approval and such shareholders fail to
approve such continuance of this Agreement as
provided herein, the Sub-adviser may continue to
serve hereunder in a manner consistent with the
Investment Company Act of 1940, as amended (the 1940
Act), and the rules and regulations thereunder, or
(c) The Adviser may at any time terminate this Agreement
by not less than 60 days' written notice delivered or
mailed by registered mail, postage prepaid, to the
Sub- adviser, and the Sub-adviser may at any time
terminate this Agreement by not less than 60 day's
written notice delivered or mailed by registered
mail, postage prepaid, to the Adviser.
Action by the Trust under paragraph (a) above may be taken either (i)
by vote of a majority of the Trustees, or (ii) by the affirmative vote of a
majority of the outstanding shares of the applicable Fund.
Termination of this Agreement pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN INFORMATION
The Sub-adviser shall promptly notify the Adviser in writing of the
occurrence of any of the following events: (a) the Sub-adviser shall fail to be
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended from time to time, and under the laws of any jurisdiction in which
the Sub-adviser is required to be registered as an investment adviser in order
to perform its obligations under this Agreement or any other agreement
concerning the provision of investment advisory services to the Trust, (b) the
Sub-adviser shall have been served or otherwise have notice of any action,
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suit, proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust, (c) there
is a change in control of the Sub-adviser or any parent of the Sub-adviser
within the meaning of the 1940 Act or (d) there is a material adverse change in
the business or financial position of the Sub-adviser.
7. CERTAIN DEFINITIONS
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of a
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Agreement, the terms affiliated person,
control, interested person and assignment shall have their respective meanings
defined in the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission under the 1940 Act; the term specifically approve at least annually
shall be construed in a manner consistent with the 1940 Act and the rules and
regulations thereunder; and the term brokerage and research services shall have
the meaning given in the 1934 Act and the rules and regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER
In the absence of wilful misfeasance, bad faith or gross negligence on
the part of the Sub-adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-adviser shall not be subject to any liability to the Adviser,
to the Trust, to any Fund, or to any shareholder, officer, director or Trustee
thereof, for any act or omission in the course of, or connected with, rendering
services hereunder.
9. EXERCISE OF VOTING RIGHTS
Except with the agreement or on the specific instructions of the
Trustees or the Adviser, the Sub- adviser shall not exercise or procure the
exercise of any voting right attaching to investments of a Fund.
10. NOTICES
All notices, requests and consents shall be in writing and shall be
personally delivered or mailed by registered mail, postage prepaid, to the other
party at such address as may be furnished in writing by such party.
11. APPLICABLE LAW AND LIABILITIES
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF STATE STREET BANK AND TRUST COMPANY and STATE STREET
GLOBAL ADVISORS UNITED KINGDOM, LTD. have each caused this instrument to be
signed in duplicate on its behalf by its duly authorized representative, as of
the day and year first above written.
STATE STREET BANK AND TRUST
COMPANY
By:
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Name:
Title:
STATE STREET GLOBAL ADVISORS
UNITED KINGDOM, LTD.
By:
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Name:
Title:
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SCHEDULE A
INITIAL PORTFOLIOS
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Pound Sterling Portfolio
Euro Portfolio
U.S. Dollar Portfolio
Candian Dollar Portfolio
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SCHEDULE B
FEE SCHEDULE
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For the services to be provided by the Sub-adviser hereunder, the Adviser
agrees to pay the Sub-adviser a monthly fee with respect to each Initial
Portfolio as soon as practical after the last day of each calendar month, which
fee shall be equal to one half of the net fee paid for that month by the Initial
Portfolio to the Adviser pursuant to the investment advisory agreement between
the Trust and the Adviser, commencing as of the date on which this Agreement
becomes effective with respect to such Portfolio.
In case of commencement or termination of this Agreement with respect to
any Portfolio during any calendar month, the fee with respect to such Portfolio
for that month shall be reduced proportionately based upon the number of
calendar days during which this agreement is in effect with respect to such
Portfolio, and the fee shall be computed based upon the average daily net asset
value of such Portfolio during such period.
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