INVESTMENT SUBADVISORY AGREEMENT
between
THE CHASE MANHATTAN BANK, N.A.
AND ITS SUCCESSOR
and
CHASE ASSET MANAGEMENT (LONDON) LIMITED
AGREEMENT made as of the 14th day of July, 1996, by and between The
Chase Manhattan Bank, N.A., a national banking association and its successor,
The Chase Manhattan Bank, a New York State chartered bank (the "Adviser"), and
Chase Asset Management (London) Limited, an English corporation (the
"Sub-Adviser").
WHEREAS, the Adviser provides investment advisory services to the
series of Mutual Fund Variable Annuity Trust, a Massachusetts business trust
(the "Trust"), which is registered as an open-end, management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), pursuant
to an Investment Advisory Agreement dated May 6, 1996 (the "Advisory
Agreement"); and
WHEREAS, the Sub-Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish
investment subadvisory services in connection with the series of the Trust
listed on Schedule A (each, a "Fund" and collectively, the "Funds"), and the
Sub-Adviser represents that it is willing and possesses legal authority to so
furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment.
(a) General. The Adviser hereby appoints the Sub-Adviser to act as
investment subadviser to the Funds for the period 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.
(b) Employees of Affiliates. The Sub-Adviser may, in its
discretion, provide such services through its own employees or
the employees of one or more affiliated companies that are
qualified to act as an investment subadviser to the Funds
under applicable laws and are under the control of The Chase
Manhattan Corporation, the indirect parent of the Sub-Adviser;
provided that (i) all persons, when providing services
hereunder, are functioning as part of an organized group of
persons, and (ii) such organized group of persons is managed
at all times by authorized officers of the Sub-Adviser.
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2. Delivery of Documents. The Adviser has delivered to the Sub-Adviser
copies of each of the following documents along with all amendments thereto
through the date hereof, and will promptly deliver to it all future amendments
and supplements thereto, if any:
(a) the Trust's Declaration of Trust ;
(b) the By-Laws of the Trust;
(c) resolutions of the Board of Trustees of the Trust authorizing
the execution and delivery of the Advisory Agreement and this
Agreement;
(d) the most recent Post-Effective Amendment to the Trust's
Registration Statement under the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act, on Form N-1A as
filed with the Securities and Exchange Commission (the
"Commission");
(e) Notification of Registration of the Trust under the 1940 Act
on Form N-8A as filed with the Commission; and
(f) the Prospectuses and Statements of Additional Information of
the Funds.
3. Investment Advisory Services.
(a) Management of the Funds. The Sub-Adviser hereby undertakes to
act as investment subadviser to the Funds. The Sub-Adviser
shall regularly provide investment advice to the Funds and
continuously supervise the investment and reinvestment of
cash, securities and other property composing the assets of
the Funds and, in furtherance thereof, shall:
(i) obtain and evaluate pertinent economic, statistical
and financial data, as well as other significant
events and developments, which affect the economy
generally, the Funds' investment programs, and the
issuers of securities included in the Funds'
portfolios and the industries in which they engage,
or which may relate to securities or other
investments which the Sub-Adviser may deem desirable
for inclusion in a Fund's portfolio;
(ii) determine which issuers and securities shall be
included in the portfolio of each Fund;
(iii) furnish a continuous investment program for each
Fund;
(iv) in its discretion, and without prior consultation,
buy, sell, lend and otherwise trade any stocks, bonds
and other securities and investment instruments on
behalf of each Fund; and
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(v) take, on behalf of each Fund, all actions the
Sub-Adviser may deem necessary in order to carry into
effect such investment program and the Sub-Adviser's
functions as provided above, including the making of
appropriate periodic reports to the Adviser and the
Trust's Board of Trustees.
(b) Covenants. The Sub-Adviser shall carry out its investment
subadvisory responsibilities in a manner consistent with the
investment objectives, policies, and restrictions provided in:
(i) each Fund's Prospectus and Statement of Additional
Information as revised and in effect from time to time; (ii)
the Trust's Declaration of Trust, By-Laws or other governing
instruments, as amended from time to time; (iii) the 1940 Act;
(iv) other applicable laws; and (v) such other investment
policies, procedures and/or limitations as may be adopted by
the Trust or the Adviser with respect to a Fund and provided
to the Sub-Adviser in writing. The Sub-Adviser agrees to use
reasonable efforts to manage each Fund so that it will
qualify, and continue to qualify, as a regulated investment
company under Subchapter M of the Internal Revenue Code of
1986, as amended, and regulations issued thereunder (the
"Code"), except as may be authorized to the contrary by the
Trust's Board of Trustees. The management of the Funds by the
Sub-Adviser shall at all times be subject to the review of the
Adviser and the Trust's Board of Trustees.
(c) Books and Records. Pursuant to applicable law, the Sub-Adviser
shall keep each Fund's books and records required to be
maintained by, or on behalf of, the Funds with respect to
subadvisory services rendered hereunder. The Sub-Adviser
agrees that all records which it maintains for a Fund are the
property of the Fund and it will promptly surrender any of
such records to the Fund upon the Fund's request. The
Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records
of the Fund required to be preserved by such Rule.
(d) Reports, Evaluations and other services. The Sub-Adviser shall
furnish reports, evaluations, information or analyses to the
Adviser and the Trust with respect to the Funds and in
connection with the Sub-Adviser's services hereunder as the
Adviser and/or the Trust's Board of Trustees may request from
time to time or as the Sub-Adviser may otherwise deem to be
desirable. The Sub-Adviser shall make recommendations to the
Adviser and the Trust's Board of Trustees with respect to the
Trust's policies, and shall carry out such policies as are
adopted by the Board of Trustees. The Sub-Adviser may, subject
to review by the Adviser, furnish such other services as the
Sub-Adviser shall from time to time determine to be necessary
or useful to perform its obligations under this Agreement.
(e) Purchase and Sale of Securities. The Sub-Adviser shall place
all orders for the purchase and sale of portfolio securities
for each Fund with brokers or dealers selected by the
Sub-Adviser, which may include brokers or dealers affiliated
with the Adviser or the Sub-Adviser to the extent permitted by
the 1940 Act and the
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Trust's policies and procedures applicable to the Funds. The
Sub-Adviser shall use its best efforts to seek to execute
portfolio transactions at prices which, under the
circumstances, result in total costs or proceeds being the
most favorable to the Funds. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall
consider all factors it deems relevant, including the breadth
of the market in the security, the price of the security, the
financial condition and execution capability of the broker or
dealer, research services provided to the Sub-Adviser, and the
reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. In no event
shall the Sub-Adviser be under any duty to obtain the lowest
commission or the best net price for any Fund on any
particular transaction, nor shall the Sub-Adviser be under any
duty to execute any order in a fashion either preferential to
any Fund relative to other accounts managed by the Sub-Adviser
or otherwise materially adverse to such other accounts.
(f) Selection of Brokers or Dealers. In selecting brokers or
dealers qualified to execute a particular transaction, brokers
or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e)
of the Securities Exchange Act of 1934) to the Sub-Adviser,
the Funds, and/or the other accounts over which the
Sub-Adviser exercises investment discretion. The Sub-Adviser
is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a
portfolio transaction for a Fund which is in excess of the
amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub- Adviser
determines in good faith that the total commission is
reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the overall
responsibilities of the Sub-Adviser with respect to accounts
over which it exercises investment discretion. The Sub-Adviser
shall report to the Board of Trustees of the Trust regarding
overall commissions paid by the Funds and their reasonableness
in relation to their benefits to the Funds.
(g) Aggregation of Securities Transactions. In executing portfolio
transactions for a Fund, the Sub-Adviser may, to the extent
permitted by applicable laws and regulations, but shall not be
obligated to, aggregate the securities to be sold or purchased
with those of other Funds or its other clients if, in the
Sub-Adviser's reasonable judgment, such aggregation (i) will
result in an overall economic benefit to the Fund, taking into
consideration the advantageous selling or purchase price,
brokerage commission and other expenses, and trading
requirements, and (ii) is not inconsistent with the policies
set forth in the Trust's registration statement and the Fund's
Prospectus and Statement of Additional Information. In such
event, the Sub-Adviser will allocate the securities so
purchased or sold, and the expenses incurred in the
transaction, in an equitable manner, consistent with its
fiduciary obligations to the Fund and such other clients.
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4. Representations and Warranties.
(a) The Sub-Adviser hereby represents and warrants to the Adviser
as follows:
(i) The Sub-Adviser is a company duly organized and
validly existing under the laws of England and is
fully authorized to enter into this Agreement and
carry out its duties and obligations hereunder.
(ii) The Sub-Adviser is registered as an investment
adviser with the Commission under the Advisers Act,
and is registered or licensed as an investment
adviser under the laws of all applicable
jurisdictions. The Sub-Adviser shall maintain such
registrations or licenses in effect at all times
during the term of this Agreement.
(iii) The Sub-Adviser at all times shall provide its best
judgment and effort to the Adviser in carrying out
the Sub-Adviser's obligations hereunder.
(b) The Adviser hereby represents and warrants to the Sub-Adviser
as follows:
(i) The Adviser is a national banking association duly
organized and in good standing under the laws of the
United States of America and is fully authorized to
enter into this Agreement and carry out its duties
and obligations hereunder.
(ii) The Trust has been duly organized as a business trust
under the laws of the State of Massachusetts.
(iii) The Trust is registered as an investment company with
the Commission under the 1940 Act, and shares of the
each Fund are registered for offer and sale to the
public under the 1933 Act and all applicable state
securities laws where currently sold. Such
registrations will be kept in effect during the term
of this Agreement.
5. Compensation. (a) As compensation for the services which the
Sub-Adviser is to provide or cause to be provided pursuant to Paragraph 3, with
respect to each Fund, the Adviser shall pay to the Sub-Adviser (or cause to be
paid by the Trust directly to the Sub-Adviser) a fee, which shall be accrued
daily and paid in arrears on the first business day of each month, at an annual
rate set forth in Schedule A, as a percentage of the average daily net assets of
the Fund during the preceding month (computed in the manner set forth in the
Fund's most recent Prospectus and Statement of Additional Information). Average
daily net assets shall be based upon determinations of net assets made as of the
close of business on each business day
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throughout such month. The fee for any partial month shall be calculated on a
proportionate basis, based upon average daily net assets for such partial month.
(b) The Sub-Adviser shall have the right, but not the
obligation, to voluntarily waive any portion of the sub-advisory fee from time
to time. Any such voluntary waiver will be irrevocable and determined in advance
of rendering sub-investment advisory services by the Sub-Adviser, and shall be
in writing and signed by the parties hereto.
(c) If the aggregate expenses incurred by, or allocated to,
each Fund in any fiscal year shall exceed the lowest expense limitation, if
applicable to such 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 investment advisory fee, but not below zero, to the
extent of its share of such excess expenses; provided, however, there shall be
excluded from such expenses the amount of any interest, taxes, brokerage
commissions 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 of such expense limitations be applicable
at the end of the last business day of the month, that expense limitation which
results in the largest reduction in the Sub-Adviser's fee shall be applicable.
For the purposes of this paragraph, the Sub-Adviser's share of any excess
expenses shall be computed by multiplying such excess expenses by a fraction,
the numerator of which is the amount of the investment advisory fee which would
otherwise be payable to the Sub-Adviser for such fiscal year were it not for
this subsection 5(b) and the denominator of which is the sum of all investment
advisory and administrative fees which would otherwise be payable by the Fund
were it not for the expense limitation provisions of any investment advisory or
administrative agreement to which the Fund is a party.
6. Interested Persons. It is understood that, to the extent consistent
with applicable laws, the Trustees, officers and shareholders of the Trust or
the Adviser are or may be or become interested in the Sub-Adviser as directors,
officers or otherwise and that directors, officers and shareholders of the
Sub-Adviser are or may be or become similarly interested in the Trust or the
Adviser.
7. Expenses. The Sub-Adviser will pay all expenses incurred by it in
connection with its activities under this Agreement other than the cost of
securities (including brokerage commissions) purchased for or sold by the Funds.
8. Non-Exclusive Services; Limitation of Sub-Adviser's Liability. The
services of the Sub-Adviser hereunder are not to be deemed exclusive, and the
Sub-Adviser may render
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similar services to others and engage in other activities. The Sub-Adviser and
its affiliates may enter into other agreements with the Funds, the Trust or the
Adviser for providing additional services to the Funds, the Trust or the Adviser
which are not covered by this Agreement, and to receive additional compensation
for such services. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Sub-Adviser, or a breach of fiduciary duty with respect to receipt of
compensation, neither the Sub-Adviser nor any of its directors, officers,
shareholders, agents, or employees shall be liable or responsible to the
Adviser, the Trust, the Funds or to any shareholder of the Funds for any error
of judgment or mistake of law or for any act or omission in the course of, or
connected with, rendering services hereunder or for any loss suffered by the
Adviser, the Trust, a Fund, or any shareholder of a Fund in connection with the
performance of this Agreement.
9. Effective Date; Modifications; Termination. This Agreement shall
become effective on the date hereof (the "Effective Date") provided that it
shall have been approved by a majority of the outstanding voting securities of
each Fund, in accordance with the requirements of the 1940 Act, or such later
date as may be agreed by the parties following such shareholder approval.
(a) This Agreement shall continue in force for two years from the
Effective Date and shall continue in effect from year to year
thereafter as to each Fund for successive annual periods,
provided such continuance is specifically approved at least
annually (i) by a vote of the majority of the Trustees of the
Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by a vote
of the Board of Trustees of the Trust or a majority of the
outstanding voting securities of the Fund.
(b) The modification of any of the non-material terms of this
Agreement may be approved by a vote of a majority of those
Trustees of the Trust 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.
(c) Notwithstanding the foregoing provisions of this Paragraph 9,
either party hereto may terminate this Agreement as to any
Fund(s) at any time on sixty (60) days' prior written notice
to the other, without payment of any penalty. A termination of
the Sub-Adviser may be effected as to any particular Fund by
the Adviser, by a vote of the Trust's Board of Trustees, or by
vote of a majority of the outstanding voting securities of the
Fund. This Agreement shall terminate automatically in the
event of its assignment.
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10. Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment," "control," and "interested
persons," when used herein, shall have the respective meanings specified in the
1940 Act. References in this Agreement to the 1940 Act and the Advisers Act
shall be construed as references to such laws as now in effect or as hereafter
amended, and shall be understood as inclusive of any applicable rules,
interpretations and/or orders adopted or issued thereunder by the Commission.
11. Independent Contractor. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Board of Trustees of the Trust
from time to time, have no authority to act for or represent a Fund in any way
or otherwise be deemed an agent of a Fund.
12. Structure of Agreement. The Adviser and Sub-Adviser are entering
into this Agreement with regard to the respective Funds severally and not
jointly. The responsibilities and benefits set forth in this Agreement shall be
deemed to be effective as between the Adviser and Sub-Adviser in connection with
each Fund severally and not jointly. This Agreement is intended to govern only
the relationships between the Adviser, on the one hand, and the Sub-Adviser, on
the other hand, and is not intended to and shall not govern (i) the relationship
between the Adviser or Sub-Adviser and any Fund, or (ii) the relationships among
the respective Funds.
13. Governing Law. 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 the Advisers Act.
14. Severability. 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 thereby and, to this extent, the provisions
of this Agreement shall be deemed to be severable.
15. Notices. Notices of any kind to be given to the Adviser hereunder
by the Sub-Adviser shall be in writing and shall be duly given if mailed or
delivered to the Adviser at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such
other address or to such individual as shall be so specified by the Adviser to
the Sub-Adviser. Notices of any kind to be given to the Sub-Adviser hereunder by
the Adviser shall be in writing and shall be duly given if mailed or delivered
to the Sub-Adviser at Xxxxxxx Xxxxx, 00 Xxxxxx Xxxxxx, Xxxxxx X0X 0XX or at such
other address or to such individual as shall be so specified by the Sub-Adviser
to the Adviser. Notices shall be effective upon delivery.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
written above.
CHASE ASSET MANAGEMENT THE CHASE MANHATTAN BANK, N.A.
(LONDON) LIMITED
By: ___________________________ By:___________________________
Name: Name:
Title: Title:
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Schedule A to the Investment Sub-Advisory Agreement
between The Chase Manhattan Bank and its successor and
Chase Asset Management (London) Limited
Fund: Fee:
1. International Equity Portfolio 0.40%
