Exhibit (d)(6)
THE WILLAMETTE FUNDS
on behalf of
WILLAMETTE VALUE FUND
SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT, effective commencing on ___________, 2001 among Willamette
Asset Managers, Inc. (the "Adviser"), The Bank of New York ("Sub-Adviser"), and
The Willamette Funds (the "Trust") on behalf of Willamette Value Fund (the
"Fund").
WHEREAS, the Trust is a Delaware business trust of the series type
organized under a Certificate of Trust dated _________________, 2001, (the
"Declaration") and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end, diversified management investment
company, and the Fund is a series of the Trust;
WHEREAS, the Trust and the Adviser wish to retain the Sub-Adviser to
render sub-investment advisory services to the Fund, and the Sub-Adviser is
willing to furnish such services to the Fund;
WHEREAS, the Sub-Adviser is a bank under the laws of the State of New
York, as defined in Section 202(a)(2) of the Investment Advisers Act of 1940, as
amended ("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed among the Adviser, the Trust and the Sub-Adviser
as follows:
1. Appointment. The Trust and the Adviser hereby appoint the Sub-Adviser
to act as sub-investment adviser to the Fund for the periods and on the terms
set forth in this Agreement. The Sub-Adviser accepts such appointment and agrees
to furnish the services herein set forth, for the compensation herein provided.
2. Sub-Investment Advisory Duties. Subject to the supervision of the
Adviser and the Trustees of the Trust, the Sub-Adviser will (a) provide a
program of continuous investment management for the Fund in accordance with the
Fund's investment objectives, policies and limitations as stated in the Fund's
prospectus and Statement of Additional Information included as part of the
Trust's Registration Statement filed with the Securities and Exchange
Commission, as they may be amended from time to time, copies of which shall be
provided to the Adviser and to the Sub-Adviser by the Trust; (b) make investment
decisions for the Fund; and (c) place orders to purchase and sell securities for
the Fund.
In performing its investment management services to the Fund hereunder,
the Sub-Adviser, in accordance with the directions of the Adviser, will provide
the Fund with ongoing investment guidance and policy direction, including oral
and written research, analysis, advice, statistical and economic data and
judgments regarding individual investments, general economic conditions and
trends and long-range investment policy. Subject to the Fund's investment
objective and policies, the Sub-Adviser will determine the securities,
instruments, repurchase agreements, options and other investments and techniques
that the Fund will purchase, sell, enter into or use, and will provide an
ongoing evaluation of the Fund's portfolio. The Sub-Adviser will determine what
portion of the Fund's portfolio shall be invested in securities and other
assets, and what portion if any, should be held uninvested.
The Sub-Adviser acknowledges that, pursuant to the Investment Advisory
Agreement between the Adviser and the Trust with respect to the Fund, the
Adviser is responsible for supervising the activities and performance of the
Sub-Adviser, for taking reasonable steps to assure that the Sub-Adviser complies
with the Fund's investment policies and procedures and with applicable legal
requirements, and for reporting to the Trustees of the Trust regarding these
matters. In this regard, the Sub-Adviser agrees to facilitate the Adviser's
implementation of its "Supervisory Procedures for Sub-Advisors" attached hereto
as Exhibit A.
The Sub-Adviser further agrees that, in performing its duties hereunder,
it will:
a. comply with the 1940 Act and all rules and regulations thereunder, the
Internal Revenue Code (the "Code") and all other applicable federal and state
laws and regulations, and with any applicable procedures adopted by the
Trustees;
b. use reasonable efforts to manage the Fund so that it will qualify, and
continue to qualify, as a regulated investment company under Subchapter M of the
Code and regulations issued thereunder;
c. place orders pursuant to its investment determinations for the Fund
directly with the issuer, or with any broker or dealer, in accordance with
applicable policies expressed in the Fund's prospectus and/or Statement of
Additional Information and in accordance with applicable legal requirements;
d. furnish to the Trust, the Adviser, or to the Fund's administrator,
BISYS Fund Services LP ("Administrator"), if so directed, whatever statistical
information the Trust, Adviser or Administrator may reasonably request with
respect to the Fund's assets or contemplated investments. In addition, the
Sub-Adviser will keep the Adviser, the Trust and the Trustees informed of
developments materially affecting the Fund's portfolio and shall, on the
Sub-Adviser's own initiative, furnish to the Adviser and the Trust from time to
time whatever information the Sub-Adviser believes appropriate for this purpose;
e. make available to the Adviser, the Administrator, and the Trust,
promptly upon their request, such copies of its investment records and ledgers
with respect to the Fund as may be required to assist the Adviser, the
Administrator and the Trust in their compliance with applicable laws and
regulations. The Sub-Adviser will furnish the Adviser and the Trustees with such
periodic and special reports regarding the Fund as they may reasonably request.
f. immediately notify the Adviser and the Trust in the event that the
Sub-Adviser or any of its affiliates: (1) becomes aware that it is subject to a
statutory disqualification that prevents the Sub-Adviser from serving as
sub-investment adviser pursuant to this Agreement; or (2) becomes aware that it
is the subject of an administrative proceeding or enforcement action by the
Securities and Exchange Commission ("SEC") or other regulatory authority. The
Sub-Adviser further agrees to notify the Trust immediately of any material fact
known to the Sub-Adviser respecting or relating to the Sub-Adviser that is not
contained in the Trust's Registration Statement regarding the Fund, or any
amendment or supplement thereto, but that is required to be disclosed therein,
and of any statement contained therein that becomes untrue in any material
respect; and
g. in making investment decisions for the Fund, use no inside information
that may be in its possession, nor will the Sub-Adviser seek to obtain any such
information.
3. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this section 3, the Sub-Adviser shall pay the compensation and
expenses of all its directors, officers and employees who serve as officers and
executive employees of the Trust or Fund (including the Trust's or Fund's share
of payroll taxes), and the Sub-Adviser shall make available, without expense to
the Fund, the service of its directors, officers and employees who may be duly
elected officers of the Trust, subject to their individual consent to serve and
to any limitations imposed by law.
The Sub-Adviser shall not be required to pay any expenses of the Fund or
Trust other than those specifically allocated to the Sub-Adviser in this section
3. In particular, but without limiting the generality of the foregoing, the
Sub-Adviser shall not be responsible, except to the extent of the reasonable
compensation of such of the Trust's or Fund's employees as are officers or
employees of the Sub-Adviser whose services may be involved, for any expenses of
other series of the Trust or for the following expenses of the Fund or Trust:
organization and certain offering expenses of the Fund (including out-of-pocket
expenses, but not including the Sub-Adviser's overhead and employee costs); fees
payable to the Adviser and Sub-Adviser and to any other Fund advisers or
consultants; legal expenses; auditing and accounting expenses; interest
expenses; telephone, telex, facsimile, postage and other communications
expenses; taxes and governmental fees; fees, dues and expenses incurred by or
with respect to the Fund in connection with membership in investment company
trade organizations; cost of insurance relating to fidelity coverage for the
Trust's officers and employees; fees and expenses of the Fund's Administrator or
of any custodian, subcustodian, transfer agent, fund accounting agent,
registrar, or dividend disbursing agent of the Fund; payments for portfolio
pricing or valuation services to pricing agents, accountants, bankers and other
specialists, if any; expenses of preparing share certificates, if any; other
expenses in connection with the issuance, offering, distribution or sale of
securities issued by the Fund; expenses relating to investor and public
relations; expenses of registering shares of the Fund for sale and of compliance
with applicable state notice filing requirements; freight, insurance and other
charges in connection with the shipment of the Fund's portfolio securities;
brokerage commissions or other costs of acquiring or disposing of any portfolio
securities or other assets of the Fund, or of entering into other transactions
or engaging in any investment practices with respect to the Fund; expenses of
printing and distributing prospectuses, Statements of Additional Information,
reports, notices and dividends to shareholders; costs of stationery or other
office supplies; any litigation expenses; costs of shareholders' and other
meetings; the compensation and all expenses (specifically including travel
expenses relating to the Fund's business) of officers, Trustees and employees of
the Trust who are not "interested persons," as defined in Section 2(a)(19) of
the 1940 Act, of the Sub-Adviser; and travel expenses (or an appropriate portion
thereof) of officers or Trustees of the Trust who are officers, Trustees or
employees of the Sub-Adviser to the extent that such expenses relate to
attendance at meetings of the Board of Trustees of the Trust with respect to
matters concerning the Fund, or any committees thereof or advisers thereto.
4. Compensation. As compensation for the services provided and expenses
assumed by the Sub-Adviser under this Agreement, the Adviser will pay to the
Sub-Adviser, out of the Adviser's own resources at no additional cost to the
Fund, at the end of each calendar month a sub-advisory fee computed daily at an
annual rate equal to the following amounts based on the Fund's average daily net
assets: (a) for that portion of the Fund's portfolio, generally 50% of the
Fund's assets, that is invested in the ten highest dividend yielding stocks in
the Dow Xxxxx Industrial Average, the annual fee rate is equal to the following
percentages of the Fund's average daily net assets -- 0.10% on assets up to
$50,000,000; 0.07% on assets from $50,000,001 to $100,000,000; 0.05% on assets
in excess of $100,000,000, with a minimum annual fee of $10,000 for this portion
of the Fund's portfolio; (b) for that portion of the Fund's portfolio, generally
50% of the Fund's assets, that is actively managed, the annual fee rate is equal
to 0.45%, with a minimum annual fee of $10,000 for this portion of the Fund's
portfolio. The "average daily net assets" of the Fund shall mean the average of
the values placed on the Fund's net assets as of 4:00 p.m. (New York time) on
each day on which the net asset value of the Fund is determined consistent with
the provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully
determines the value of its net assets as of some other time on each business
day, as of such other time. The value of net assets of the Fund shall always be
determined pursuant to the applicable provisions of the Declaration and the
Registration Statement. If, pursuant to such provisions, the determination of
net asset value is suspended for any particular business
day, then for the purposes of this section 4, the value of the net assets of the
Fund as last determined shall be deemed to be the value of its net assets as of
the close of the New York Stock Exchange, or as of such other time as the value
of the net assets of the Fund's portfolio may lawfully be determined, on that
day. If the determination of the net asset value of the shares of the Fund has
been so suspended for a period including any month end when the Sub-Adviser's
compensation is payable pursuant to this section, then the Sub-Adviser'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 Fund determines the value of the net assets of its
portfolio more than once on any day, then the last such determination thereof on
that day shall be deemed to be the sole determination thereof on that day for
the purposes of this section 4.
5. Books and Records. The Sub-Adviser agrees to maintain such books and
records with respect to its services to the Fund as are required by Section 31
under the 1940 Act, and rules adopted thereunder, and by other applicable legal
provisions, and to preserve such records for the periods and in the manner
required by that Section, and those rules and legal provisions. The Sub-Adviser
also agrees that records it maintains and preserves pursuant to Rules 31a-1 and
Rule 31a-2 under the 1940 Act and otherwise in connection with its services
hereunder are the property of the Trust and will be surrendered promptly to the
Trust upon its request. And the Sub-Adviser further agrees that it will furnish
to regulatory authorities having the requisite authority any information or
reports in connection with its services hereunder which may be requested in
order to determine whether the operations of the Fund are being conducted in
accordance with applicable laws and regulations.
6. Standard of Care and Limitation of Liability. The Sub-Adviser shall
exercise its best judgment in rendering the services provided by it under this
Agreement. The Sub-Adviser shall not be liable to the Adviser, the Trust, the
Fund or to any holder of the Fund's shares, for any error of judgment or mistake
of law or for any loss suffered by the Fund or the holders of the Fund's shares
in connection with the matters to which this Agreement relates, provided that
nothing in this Agreement shall be deemed to protect or purport to protect the
Sub-Adviser against any liability to the Adviser, the Trust, the Fund or to
holders of the Fund's shares to which the Sub-Adviser would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or by reason of the Sub-Adviser's reckless
disregard of its obligations and duties under this Agreement. As used in this
Section 6, the term "Sub-Adviser" shall include any officers, directors,
employees or other affiliates of the Sub-Adviser performing services with
respect to the Fund.
7. Services Not Exclusive. It is understood that the services of the
Sub-Adviser are not exclusive, and that nothing in this Agreement shall prevent
the Sub-Adviser from providing similar services to other investment companies or
to other series of investment companies, including the Trust (whether or not
their investment objectives and policies are similar to those of the Fund) or
from engaging in other activities, provided such other services and activities
do not, during the term of this Agreement, interfere in a material manner with
the Sub-Adviser's ability to meet its obligations to the Fund hereunder. When
the Sub-Adviser recommends the purchase or sale of a security for other
investment companies and other clients, and at the same time the Sub-Adviser
recommends the purchase or sale of the same security for the Fund, it is
understood that in light of its fiduciary duty to the Fund, such transactions
will be executed on a basis that is fair and equitable to the Fund. In
connection with purchases or sales of portfolio securities for the account of
the Fund, neither the Sub-Adviser nor any of its directors or officers (or
persons acting in similar capacities) or employees shall act as a principal or
agent or receive any commission. If the Sub-Adviser provides any advice to its
clients concerning the shares of the Fund, the Sub-Adviser shall act solely as
investment counsel for such clients and not in any way on behalf of the Trust or
the Fund.
8. Duration and Termination. This Agreement shall continue until
___________, 2003, and thereafter shall continue automatically for successive
annual periods, provided such continuance is specifically approved at least
annually by (i) the Trustees or (ii) a vote of a "majority of the Fund's
outstanding voting securities" (as defined in the 1940 Act), provided that in
either event the continuance is
also approved by a majority of the Trustees who are not parties to this
Agreement or "interested persons" (as defined in the 0000 Xxx) of any party to
this Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. Notwithstanding the foregoing, this Agreement may be
terminated: (a) at any time without penalty by the Adviser or by the Fund upon
the vote of a majority of the Trustees or by vote of the majority of the Fund's
outstanding voting securities, upon sixty (60) days' written notice to the
Sub-Adviser or (b) by the Sub-Adviser at any time without penalty, upon sixty
(60) days' written notice to the Trust. This Agreement will also terminate
automatically in the event of its assignment (as defined in the 1940 Act).
9. 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
until approved by an affirmative vote of (i) a majority of the outstanding
voting securities of the Fund, and (ii) a majority of the Trustees, including a
majority of Trustees who are not interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, if such approval is required by applicable law.
10. Proxies. Unless the Trust or the Adviser gives written instructions to
the contrary, the Sub-Adviser shall vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Fund may be
invested. The Sub-Adviser shall use its best good faith judgment to vote such
proxies in a manner which best serves the interests of the Fund's shareholders.
11. Name Reservation. The Sub-Adviser acknowledges and agrees that the
Adviser has property rights relating to the use of the terms "Willamette,"
"Willamette Family of Funds," "Willamette Value Fund," "Willamette Small Cap
Growth Fund," "Willamette Technology Fund" and "Willamette Pharmaceutical and
Bio-Technology Fund" ("Willamette Names") and has permitted the use of the
Willamette Names by the Trust and its series. The Sub-Adviser agrees that,
unless otherwise authorized by the Adviser: (i) it will use the term
"Willamette" only as a component of the name of the Fund and for no other
purposes; (ii) it will not purport to grant to any third party any rights in any
Willamette Name; and (iii) the Adviser may use or grant to others the right to
use a Willamette Name, or any abbreviation thereof, as all or a portion of a
corporate or business name or for any commercial purpose, including a grant of
such right to any other investment company. Upon termination of this Agreement,
the Sub-Adviser shall, at the request of the Adviser, cease to use all
Willamette Names in any of its materials or in any manner except with the
consent of the Adviser, which shall not be unreasonably withheld. In the event
of any such request by the Adviser that use by the Sub-Adviser of a Willamette
Name shall cease and in the absence of any such consent, the Sub-Adviser shall
cause its officers, directors and employees to take any and all such actions
which the Adviser may reasonably request to effect such request.
12. Miscellaneous.
a. This Agreement shall be governed by the laws of the State of New York,
provided that nothing herein shall be construed in a manner inconsistent with
the 1940 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 or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected hereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
d. Nothing herein shall be construed as constituting the Sub-Adviser as an
agent of the Adviser, the Trust or the Fund.
e. The names "The Willamette Funds" and "Trustees of The Willamette Funds"
refer respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under an Agreement and
Certificate of Trust dated as of _________________, 2001 to which reference is
hereby made and a copy of which is on file at the office of the Secretary of
State of the State of Delaware and elsewhere as required by law, and to any and
all amendments thereto so filed or hereafter filed. The obligations of "The
Willamette Funds" entered into in the name or on behalf thereof, or in the name
or on behalf of any series or class of shares of the Trust, by any of the
Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders or
representatives of the Trust personally, but bind only the assets of the Trust,
and all persons dealing with any series or class of shares of the Trust must
look solely to the assets of the Trust belonging to such series or class for the
enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of ____________, 2001.
THE WILLAMETTE FUNDS
By:
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President
WILLAMETTE ASSET MANAGERS, Inc.
By:
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President
THE BANK OF NEW YORK
By:
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President
