Exhibit 5(c)
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the 31st day of May, 1997 by and between Xxxx Xxxxxx
InterCapital Inc., a Delaware corporation (herein referred to as the
"Investment Manager"), and TCW Funds Management, Inc. (herein referred to as
the "Sub-Adviser").
WHEREAS, Xxxx Xxxxxx Global Asset Allocation Fund (herein referred to as
the "Fund") is engaged in business as an open-end management investment
company and is registered as such under the Investment Company Act of 1940,
as amended (the "Act"); and
WHEREAS, the Investment Manager has entered into an Investment Management
Agreement with the Fund (the "Investment Management Agreement") wherein the
Investment Manager has agreed to provide investment management services to
the Fund; and
WHEREAS, the Sub-Adviser is registered as an investment adviser as under
the Investment Advisers Act of 1940 and engages in the business of acting as
an investment adviser; and
WHEREAS, the Investment Manager desires to retain the services of the
Sub-Adviser to render investment advisory services for the Fund in the manner
and on the terms and conditions hereinafter set forth; and
WHEREAS, the Sub-Adviser desires to be retained by the Investment Manager
to perform services on said terms and conditions:
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Subject to the supervision of the Fund, its officers and Trustees, and
the Investment Manager, and in accordance with the investment objectives,
policies and restrictions set forth in the then-current Registration
Statement relating to the Fund, and such investment objectives, policies and
restrictions from time to time prescribed by the Trustees of the Fund and
communicated by the Investment Manager to the Sub-Adviser, the Sub-Adviser
agrees to provide the Fund with investment advisory services with respect to
the Fund's investments; to obtain and evaluate such information and advice
relating to the economy, securities markets and securities as it deems
necessary or useful to discharge its duties hereunder; to continuously manage
the assets of the Fund in a manner consistent with the investment objective
and policies of the Fund; to make decisions as to foreign currency matters
and make determinations as to forward foreign exchange contracts and options
and futures contracts in foreign currencies; shall determine the securities
to be purchased, sold or otherwise disposed of by the Fund and the timing of
such purchases, sales and dispositions; to take such further action,
including the placing of purchase and sale orders on behalf of the Fund, as
it shall deem necessary or appropriate; to furnish to or place at the
disposal of the Fund and the Investment Manager such of the information,
evaluations, analyses and opinions formulated or obtained by it in the
discharge of its duties as the Fund and the Investment Manager may, from time
to time, reasonably request. The Investment Manager and the Sub-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 Fund and to consult
with each other.
2. The Sub-Adviser shall, at its own expense, maintain such staff and
employ or retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Sub-Adviser shall
be deemed to include persons employed or otherwise retained by the
Sub-Adviser to furnish statistical and other factual data, advice regarding
economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Investment Manager may desire. The Sub-Adviser shall maintain whatever
records as may be required to be maintained by it under the Act. All such
records so maintained shall be made available to the Fund, upon the request
of the Investment Manager or the Fund.
3. The Fund shall, from time to time, furnish or otherwise make available
to the Sub-Adviser such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as the
Sub-Adviser may reasonably require in order to discharge its duties and
obligations hereunder or to comply with any applicable law and regulations
and the investment objectives, policies and restrictions from time to time
prescribed by the Trustees of the Fund.
4. The Sub-Adviser shall bear the cost of rendering the investment
advisory services to be performed by it under this Agreement, and shall, at
its own expense, pay the compensation of the officers and employees, if any,
of the Fund, employed by the Sub-Adviser, and such clerical help and
bookkeeping services as the Sub-Adviser shall reasonably require in
performing its duties hereunder.
5. The Fund assumes and shall pay or cause to be paid all other expenses
of the Fund, including, without limitation: any fees paid to the Investment
Manager; fees pursuant to any plan of distribution that the Fund may adopt;
the charges and expenses of any registrar, any custodian, sub-custodian or
depository appointed by the Fund for the safekeeping of its cash, portfolio
securities and other property, and any stock transfer or dividend agent or
agents appointed by the Fund; brokers' commissions chargeable to the Fund in
connection with portfolio securities transactions to which the Fund is a
party; all taxes, including securities issuance and transfer taxes, and fees
payable by the Fund to federal, state or other governmental agencies or
pursuant to any foreign laws; the cost and expense of engraving or printing
certificates representing shares of the Fund; all costs and expenses in
connection with the registration and maintenance of registration of the Fund
and its shares with the Securities and Exchange Commission and various states
and other jurisdictions or pursuant to any foreign laws (including filing
fees and legal fees and disbursements of counsel); the cost and expense of
printing (including typesetting) and distributing prospectuses of the Fund
and supplements thereto to the Fund's shareholders; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any advisory board or committee who are not employees
of the Investment Manager or Sub-Adviser; all expenses incident to the
payment of any dividend, distribution, withdrawal or redemption whether in
shares or in cash; charges and expenses of any outside service used for
pricing of the Fund's shares; charges and expenses of legal counsel,
including counsel to the Trustees of the Fund who are not interested persons
(as defined in the Act) of the Fund, the Investment Manager or the
Sub-Adviser, and of independent accountants, in connection with any matter
relating to the Fund; membership dues of industry associations; interest
payable on Fund borrowings; postage; insurance premiums on property or
personnel (including officers and Trustees) of the Fund which inure to its
benefit; extraordinary expenses (including but not limited to legal claims
and liabilities and litigation costs and any indemnification related
thereto); and all other charges and costs of the Fund's operation unless
otherwise explicitly provided herein.
6. For the services to be rendered, the facilities furnished, and the
expenses assumed by the Sub-Adviser, the Investment Manager shall pay to the
Sub-Adviser monthly compensation equal to 30% of its monthly compensation
receivable pursuant to the Investment Management Agreement. Any subsequent
change in the Investment Management Agreement which has the effect of raising
or lowering the compensation of the Investment Manager will have the
concomitant effect of raising or lowering the fee payable to the Sub-Adviser
under this Agreement. In addition, if the Investment Manager has undertaken
in the Fund's Registration Statement as filed under the Act (the
"Registration Statement") or elsewhere to waive all or part of its fee under
the Investment Management Agreement, the Sub-Adviser's fee payable under this
Agreement will be proportionately waived in whole or in part. The calculation
of the fee payable to the Sub-Adviser pursuant to this Agreement will be
made, each month, at the time designated for the monthly calculation of the
fee payable to the Investment Manager pursuant to the Investment Management
Agreement. If this Agreement becomes effective subsequent to the first day of
a month or shall terminate before the last day of a month, compensation for
the part of the month this Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fee as set forth above. Subject
to the provisions of paragraph 7 hereof, payment of the Sub-Adviser's
compensation for the preceding month shall be made as promptly as possible
after completion of the computations contemplated by paragraph 7 hereof.
7. In the event the operating expenses of the Fund, including amounts
payable to the Investment Manager pursuant to the Investment Management
Agreement, for any fiscal year ending on a date on which this Agreement is in
effect, exceed the expense limitations applicable to the Fund imposed by
state securities laws or regulations thereunder, as such limitations may be
raised or lowered from time to time, the Sub-Adviser shall reduce its
advisory fee to the extent of 30% of such excess and, if required, pursuant
to any such laws or regulations, will reimburse the Investment Manager for
annual operating expenses in the amount of 30% of such excess of any expense
limitation that may be applicable, it being understood that the Investment
Manager has agreed to effect a reduction and reimbursement of 100% of such
excess in accordance with the terms of the
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Investment Management Agreement; provided, however, there shall be excluded
from such expenses the amount of any interest, taxes, brokerage commissions,
distribution fees and extraordinary expenses (including but not limited to
legal claims and liabilities and litigation costs and any indemnification
related thereto) paid or payable by the Fund. Such reduction, if any, shall
be computed and accrued daily, shall be settled on a monthly basis, and shall
be based upon the expense limitation applicable to the Fund as at the end of
the last business day of the month. Should two or more such expense
limitations be applicable as at the end of the last business day of the
month, that expense limitation which results in the largest reduction in the
Investment Manager's fee or the largest expense reimbursement shall be
applicable.
For purposes of this provision, should any applicable expense limitation
be based upon the gross income of the Fund, such gross income shall include,
but not be limited to, interest on debt securities in the Fund's portfolio
accrued to and including the last day of the Fund's fiscal year, and
dividends declared on equity securities in the Fund's portfolio, the record
dates for which fall on or prior to the last day of such fiscal year, but
shall not include gains from the sale of securities.
8. The Sub-Adviser will use its best efforts in the performance of
investment activities on behalf of the Fund, but in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Sub-Adviser shall not be liable to the Investment
Manager or the Fund or any of its investors for any error of judgment or
mistake of law or for any act or omission by the Sub-Adviser or for any
losses sustained by the Fund or its investors. The Sub-Adviser shall be
indemnified by the Fund as an agent of the Fund in accordance with the terms
of Section 4.8 of the Fund's By-Laws.
9. This Agreement shall remain in effect until April 30, 1999 and from
year to year thereafter provided such continuance is approved at least
annually by the vote of holders of a majority, as defined in the Act, of the
outstanding voting securities of the Fund or by the Trustees of the Fund;
provided, that in either event such continuance is also approved annually by
the vote of a majority of the Trustees of the Fund who are not parties to
this Agreement or "interested persons" (as defined in the Act) of any such
party, which vote must be cast in person at a meeting called for the purpose
of voting on such approval; provided, however, that (a) the Fund may, at any
time and without the payment of any penalty, terminate this Agreement upon
thirty days' written notice to the Investment Manager and the Sub-Adviser,
either by majority vote of the Trustees of the Fund or by the vote of a
majority of the outstanding voting securities of the Fund; (b) this Agreement
shall immediately terminate in the event of its assignment (within the
meaning of the Act) unless such automatic termination shall be prevented by
an exemptive order of the Securities and Exchange Commission; (c) this
Agreement shall immediately terminate in the event of the termination of the
Investment Management Agreement; (d) the Investment Manager may terminate
this Agreement without payment of penalty on thirty days' written notice to
the Fund and the Sub-Adviser and; (e) the Sub-Adviser may terminate this
Agreement without the payment of penalty on thirty days' written notice to
the Fund and the Investment Manager. Any notice under this Agreement shall be
given in writing, addressed and delivered, or mailed post-paid, to the other
party at the principal office of such party.
10. This Agreement may be amended by the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal laws or regulations, but neither the Fund,
the Investment Manager nor the Sub-Adviser shall be liable for failing to do
so.
11. This Agreement shall be construed in accordance with the law of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Act, the latter shall control.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in New York, New York.
XXXX XXXXXX INTERCAPITAL INC.
By: ..........................
Attest: .......................
TCW FUNDS MANAGEMENT, INC.
BY: ..........................
ATTEST: .......................
ACCEPTED AND AGREED TO AS OF
THE DAY AND YEAR FIRST ABOVE WRITTEN:
XXXX XXXXXX GLOBAL ASSET
ALLOCATION FUND
BY: ................................
ATTEST: .............................
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