All American Term Trust Annual NSAR
For period ending January 31, 2001 Exhibit 77
Q.1
File number 8117352
INTERIM SUBADVISORY CONTRACT
Agreement made as of October 10, 2000 Contract between
XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC., a Delaware
corporation Xxxxxxxx Xxxxxxxx, and WELLINGTON
MANAGEMENT COMPANY, LLP, a Massachusetts limited
liability partnership SubAdviser
RECITALS
1 Xxxxxxxx Xxxxxxxx has entered into an Interim
Investment Management and Administration Agreement,
dated October 10, 2000 Management Agreement, with All
American Term Trust Inc., a closed end management
investment company registered under the Investment
Company Act of 1940, as amended 1940 Act Fund;
2 Xxxxxxxx Xxxxxxxx wishes to retain the SubAdviser
to furnish certain investment advisory services to
Xxxxxxxx Xxxxxxxx and the Fund; and
3 The SubAdviser is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained, Xxxxxxxx Xxxxxxxx and
the SubAdviser agree as follows:
1. Appointment. Xxxxxxxx Xxxxxxxx hereby appoints
the SubAdviser as an investment subadviser with respect
to the Fund for the period and on the terms set forth in
this Contract. The ub-Adviser accepts that appointment
and agrees to render the services herein set forth, for
the compensation herein provided.
2. Duties as SubAdviser.
a Subject to the supervision and direction of the Funds
Board of Directors Board and review by Xxxxxxxx Xxxxxxxx,
and any written guidelines adopted by the Board or Xxxxxxxx
Xxxxxxxx, the SubAdviser will provide a continuous
investment program for all or a designated portion of
the assets Segment of the Fund, including investment research
and discretionary management with respect to all securities
and investments and cash equivalents in the Fund or Segment.
The SubAdviser will determine from time to time what
investments will be purchased, retained or sold by the
Fund or Segment and what portion of the Fund or Segment
will be invested or held uninvested in cash. The SubAdviser
will be responsible for placing purchase and sell orders
for investments and for other related transactions for the
Fund or Segment. The SubAdviser will be responsible for
voting proxies of issuers of securities held by the Fund
or Segment. The SubAdviser understands that the Funds
assets need to be managed so as to permit it to qualify or
to continue to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code, as amended
Code. The SubAdviser will provide services under this
Contract in accordance with the Fund's investment
objective, policies and restrictions as stated in the
Funds currently effective registration statement under
the 1940 Act, and any amendments or supplements thereto
Registration Statement.
b The SubAdviser shall have full and complete
discretion to establish brokerage accounts with one or
more brokers, dealers or other financial intermediaries
as SubAdviser may select, including those which from
time to time may furnish to SubAdviser or its
affiliates statistical and investment research
information and other services. The SubAdviser agrees
that, in placing orders with brokers, it will obtain
the best net result in terms of price and execution
provided that, on behalf of the Fund, the SubAdviser
may, in its discretion, use brokers that provide the
SubAdviser with research, analysis, advice and similar
services to execute portfolio transactions on behalf of
the Fund or Segment, and the SubAdviser may pay to those
brokers in return for brokerage and research services a
higher commission than may be charged by other brokers,
subject to the SubAdvisers determining in good faith
that such commission is reasonable in terms either of
the particular transaction or of the overall
responsibility of the SubAdviser to the Fund and its
other clients and that the total commissions paid by the
Fund or Segment will be reasonable in relation to the
benefits to the Fund over the long term. In no instance
will portfolio securities be purchased from or sold to
Xxxxxxxx Xxxxxxxx or the Sub-Adviser, or any affiliated
person thereof, except in accordance with the federal
securities laws and the rules and regulations thereunder.
The SubAdviser may aggregate sales and purchase orders
with respect to the assets of the Fund or Segment with
similar orders being made simultaneously for other a
ccounts advised by the SubAdviser or its affiliates.
Whenever the SubAdviser simultaneously places orders
to purchase or sell the same security on behalf of the
Fund and one or more other accounts advised by the
SubAdviser, the orders will be allocated as to price
and amount among all such accounts in a manner
believed to be equitable over time to each account.
Xxxxxxxx Xxxxxxxx recognizes that in some cases this
procedure may adversely affect the results obtained for
the Fund or Segment.
c The SubAdviser will maintain all books and
records required to be maintained pursuant to the 1940
Act and the rules and regulations promulgated thereunder
with respect to transactions by the SubAdviser on behalf of
the Fund or Segment, and will furnish the Board and
Xxxxxxxx Xxxxxxxx with such periodic and special
reports as the Board or Xxxxxxxx Xxxxxxxx reasonably
may request. In compliance with the requirements of
Rule 31a3 under the 1940 Act, the SubAdviser hereby
agrees that all records that it maintains for the Fund
are the property of the Fund, agrees to preserve for the
periods prescribed by Rule 31a2 under the 1940 Act any
records that it maintains for the Fund and that are
required to be maintained by Rule 31a1 under the
1940 Act, and further agrees to surrender promptly
to the Fund any records that it maintains for the
Fund upon request by the Fund. The SubAdviser will
be entitled to retain originals or copies of records
pursuant to the requirements of applicable laws or
regulations; provided that the SubAdviser will surrender
original records to the Fund if the 1940 Act requires
that the Fund have or maintain such original records.
d At such times as shall be reasonably requested by
the Board or Xxxxxxxx Xxxxxxxx, the Sub-Adviser will
provide the Board and Xxxxxxxx Xxxxxxxx with economic
and investment analyses and reports as well as quarterly
reports setting forth the performance of the Fund or Segment
and make available to the Board and Xxxxxxxx Xxxxxxxx any
economic, statistical and investment services that the
SubAdviser normally makes available to its other subadvisory
clients.
e In accordance with procedures adopted by the Board,
as amended from time to time, the SubAdviser is
responsible for assisting in the fair valuation of all
portfolio securities in the Fund or Segment and will use
its reasonable efforts to assist the custodian with
obtaining a price from one or more parties independent
of the SubAdviser for each portfolio security for which
the custodian does not obtain prices in the ordinary
course of business from an automated pricing service.
3. Further Duties. In all matters relating to the
performance of this Contract, the SubAdviser will act
in conformity with the Funds Articles of Incorporation,
ByLaws and Registration Statement and with the written
instructions and written directions of the Board and
Xxxxxxxx Xxxxxxxx; and will comply with the requirements
of the 1940 Act and the Investment Advisers Act of 1940, as
amended Advisers Act and the rules under each,
Subchapter M of the Internal Revenue Code Code, as
applicable to regulated investment companies; and all
other federal and state laws and regulations applicable
to the Fund. Xxxxxxxx Xxxxxxxx agrees to provide to the
SubAdviser copies of the Funds Articles of Incorporation,
ByLaws, Registration Statement, Prospectus and Statement
of Additional Information, written instructions,
directions and guidelines of the Board and Xxxxxxxx
Xxxxxxxx, and any amendments or supplements to any of
these materials as soon as practicable after such
materials become available; and further agrees to
identify to the SubAdviser in writing any brokerdealers
that are affiliated with Xxxxxxxx Xxxxxxxx other
than PaineWebber Incorporated and Xxxxxxxx Xxxxxxxx
itself.
During the term of this Contract,
Xxxxxxxx Xxxxxxxx agrees to furnish the
SubAdviser at its principal office all
Prospectuses, Statements of Additional
Information, proxy statements, reports to
shareholders, advertising and sales literature or
other materials prepared for distribution to
shareholders of the Fund or the public that
refer to the SubAdviser or its clients in any way,
prior to the use thereof, and the Adviser shall
not use any such materials if the SubAdviser
reasonably objects in writing within five
business days two business days if Xxxxxxxxxx
acknowledges receipt of the materials, or such
other period as may be mutually agreed, after
receipt thereof. The SubAdvisers right to object
to such materials is limited to the portions of
such materials that expressly relate to the
SubAdviser, its services and its clients.
Xxxxxxxx Xxxxxxxx agrees to use its reasonable best
efforts to ensure that materials prepared by
its employees or agents or its affiliates that
refer to the SubAdviser or its clients in any way
are consistent with those materials previously
approved by the SubAdviser as referenced in the
first sentence of this paragraph. Material submitted
for the SubAdvisers review may be furnished to
the SubAdviser by first class or overnight mail,
by facsimile or by electronic delivery.
4. Expenses. During the term of this Contract, the
SubAdviser will bear all expenses incurred by it in connection
with its services under this Contract. The SubAdviser shall
not be responsible for any expenses incurred by the Fund
or Xxxxxxxx Xxxxxxxx.
5. Compensation.
a For the services provided and the expenses assumed by the
SubAdviser pursuant to this Contract, Xxxxxxxx Xxxxxxx, not the
Fund, will pay to the SubAdviser a subadvisory fee, computed weekly
and paid monthly, at an annual rate of 0.30percent of the first 50
million of average weekly net assets of the Fund or Segment, 0.25
percent of the next 50 million of average weekly net assets of the
Fund or Segment and 0.15percent of all average weekly net assets
of the Fund or Segment at the level of 100 million and above
all computed in the manner specified in the Management Agreement.
Xxxxxxxx Xxxxxxxx will provide the SubAdviser with a schedule
showing the manner in which the fee was computed. If the
SubAdviser is managing a Segment, its fees will be based on
the value of assets of the Fund within the SubAdvisers
Segment.
b The fee shall be accrued weekly and payable monthly to
the Subadviser on or before the last business day of the next
succeeding calendar month.
c If this Contract becomes effective or 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 such month to the date of
termination, as the case may be, shall be prorated
according to the proportion that such period bears
to the full month in which such effectiveness or
termination occurs.
6. Limitation of Liability.
a The SubAdviser shall not be liable for any
error of judgment or mistake of law or for any loss
suffered by the Fund, its shareholders or by Xxxxxxxx
Xxxxxxxx in connection with the matters to which this
Contract relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part
in the performance of its duties or from reckless
disregard by it of its obligations and duties under
this Contract.
b In no event will the SubAdviser have any
responsibilities for any portion of the Funds
investments not managed by the SubAdviser or for the
acts or omissions of any other subadviser to the Fund.
In particular, in the event the SubAdviser shall
manage only a portion of the Funds investments,
the SubAdviser shall have no responsibility for
the Funds being in violation of any applicable law
or regulation or investment policy or restriction
applicable to the Fund as a whole or for the Funds
failing to qualify as a regulated investment company
under the Code, if the securities and other
holdings of the Segment managed by the SubAdviser
are such that such Segment would not be in such
violation or fail to so qualify if such segment
were deemed a separate regulated investment company
under the Code
Nothing in this section shall be deemed a
limitation or waiver of any obligation or duty
that may not by law be limited or waived.
7. Representations of SubAdviser. The SubAdviser
represents, warrants and agrees as follows:
a The SubAdviser i is registered as an investment
adviser under the Advisers Act and will continue to be
so registered for so long as this Contract remains
in effect; ii is not prohibited by the 1940 Act or
the Advisers Act from performing the services
contemplated by this Contract; iii has met and will
seek to continue to meet for so long as this Contract
remains in effect, any other applicable federal or
state requirements, or the applicable requirements
of any regulatory or industry selfregulatory agency
necessary to be met in order to perform the services con
templated by this Contract; iv has the authority to enter
into and perform the services contemplated by this
Contract; and v will promptly notify Xxxxxxxx Xxxxxxxx
of the occurrence of any event that would disqualify the
SubAdviser from serving as an investment adviser of an
investment company pursuant to Section 9a of the 1940
Act or otherwise.
b The SubAdviser has adopted a written code of
ethics and appropriate procedures complying with the
requirements of Rule 17j1 under the 1940 Act and will
provide Xxxxxxxx Xxxxxxxx and the Board with a copy of
such code of ethics, together with evidence of its
adoption. Within fifteen days of the end of the
last calendar quarter of each year that this Contract is
in effect, the SubAdviser shall certify to Xxxxxxxx
Xxxxxxxx that the SubAdviser has complied with the
requirements of Rule 17j1 during the previous year
and that there has been no material violation of the
SubAdvisers code of ethics or, if such a violation has
occurred, that appropriate action was taken in response
to such violation. Xxxxxxxx Xxxxxxxx may request, and
the SubAdviser shall provide, nonconfidential information
which has been reported to the SubAdviser by personnel
performing services for the Fund as required by
Rule 17j1c1.
c The SubAdviser has provided Xxxxxxxx Xxxxxxxx with
a copy of its Form ADV, as most recently filed with the
Securities and Exchange Commission SEC and promptly
will furnish a copy of all amendments to Xxxxxxxx Xxxxxxxx
at least annually.
d The SubAdviser will notify Xxxxxxxx Xxxxxxxx of
any change of control of the SubAdviser, including any
change of its general partners or 25percent shareholders
or 25percent limited partners, as applicable, and
any changes in the key personnel who are either the
portfolio managers of the Fund or senior management
of the SubAdviser, in each case prior to, or promptly
after, such change.
e The SubAdviser agrees that neither it, nor any
of its affiliates, will in any way refer directly or
indirectly to its relationship with the Fund,
Xxxxxxxx Xxxxxxxx or any of their respective
affiliates in offering, marketing or other promotional
materials without the prior express written consent of
Xxxxxxxx Xxxxxxxx.
8. Services Not Exclusive. The services furnished
by the SubAdviser hereunder are not to be deemed exclusive
and the SubAdviser shall be free to furnish similar services
to others so long as its services under this Contract are not
impaired thereby or unless otherwise agreed to by the parties
hereunder in writing. The services to be furnished by the
SubAdviser under this Contract may be furnished through the
medium of any of the SubAdvisers partners, officers or
employees. Nothing in this Contract shall limit or
restrict the right of any partner, officer or employee of
the Subadviser, who may also be a director, officer or
employee of the Fund, to engage in any other business or to
devote his or her time and attention in part to the management
or other aspects of any other business, whether of a similar
nature or a dissimilar nature.
9. Duration and Termination.
a This Contract shall become effective upon the day
and year first written above, provided that this Contract has
been approved for the Fund by a vote of a majority of those
Directors of the Fund who are not parties to this Contract or
interested persons of any such party Independent Directors
cast at a meeting called for the purpose of voting on such
approval and in which the Directors may participate by any
means of communication that allows all Directors participating
to hear each other simultaneously during the meeting.
b Unless sooner terminated as provided herein, this
Contract shall continue in effect for a period of 150 days
after the day and year first above written.
c Notwithstanding the foregoing, with respect to
the Fund, this Contract may be terminated at any time,
without the payment of any penalty, by vote of the Board
or by a vote of a majority of the outstanding voting
securities of the Fund on ten days written notice to
the SubAdviser and may be terminated by the SubAdviser
at any time, without the payment of any penalty, on
sixty days written notice to Xxxxxxxx Xxxxxxxx.
The Contract may also be terminated, without payment
of penalty, by Xxxxxxxx Xxxxxxxx i upon material
breach by the SubAdviser of any of the representations
and warranties set forth in Paragraph 7 of this
Contract, if such breach shall not have been cured
within a 20 day period after notice of such breach
or ii if, in the reasonable judgment of Xxxxxxxx
Xxxxxxxx, the SubAdviser becomes unable to discharge
its duties and obligations under this Contract,
including circumstances such as financial insolvency
of the SubAdviser or other circumstances that could
adversely affect the Fund.
10. Amendment of this Contract. No provision
of this Contract may be changed, waived, discharged or
terminated orally, but only by an instrument in
writing signed by the party against whom enforcement
of the change, waiver, discharge or termination is
sought. No amendment of this Contract as to the Fund
shall be effective until approved by vote of the
Independent Directors or a majority of the Funds
outstanding voting securities.
11. Governing Law. This contract shall be
construed in accordance with the 1940 Act and the
laws of the State of New York, without giving effect
to the conflicts of laws principles thereof. To the
extent that the applicable laws of the State of New York
conflict with the applicable provisions of the 1940 Act,
the latter shall control.
12. Miscellaneous. The captions in this Contract
are included for convenience of reference only and
in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
If any provision of this Contract shall be held or made
invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall
inure to the benefit of the parties hereto and their
respective successors. As used in this Contract, the
terms majority of the outstanding voting securities,
affiliated person,interested person,assignment,broker,
investment adviser, net assets, sale, sell and security
shall have the same meaning as such terms have in
the 1940 Act, subject to such exemption as may be
granted by the SEC by any rule, regulation or order.
Where the effect of a requirement of the federal
securities laws reflected in any provision of this
Contract is made less restrictive by a rule, regulation
or order of the SEC, whether of special or general
application, such provision shall be deemed to
incorporate the effect of such rule, regulation or
order. This Contract may be signed in counterpart.
13. Notices. Any notice herein required is to be
in writing and is deemed to have been given to the
SubAdviser or Xxxxxxxx Xxxxxxxx upon receipt of the same
at their respective addresses set forth below. All
written notices required or permitted to be given under
this Contract will be delivered by personal service, by
postage mail return receipt requested or by facsimile
machine or a similar means of same day delivery which
provides evidence of receipt with a confirming copy by
mail as set forth herein. All notices provided to
Xxxxxxxx Xxxxxxxx will be sent to the attention of
Xxxxxx X. XXxxxxxx, Deputy General Counsel. All
notices provided to the SubAdviser will be sent to
the attention of Regulatory Affairs.
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be executed by their duly authorized
signatories as of the date and year first above written.
Attest:
XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 000000000
By: s Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: First Vice President
By: s Xxxxxx X. XXxxxxxx
Name: Xxxxxx X. XXxxxxxx
Title: Deputy General Counsel
Attest:
WELLINGTON MANAGEMENT
COMPANY, LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
By: s Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
By: s Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
4
DC 407734.1
