Exhibit (d)(xiv) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
SUBADVISORY AGREEMENT
This Subadvisory Agreement ("Agreement") is entered into as of December 8
2004, by and among the MTB Group of Funds, a Delaware statutory trust (the
"Trust"), MTB Investment Advisors, Inc., a Maryland corporation (the "Adviser"),
and LSV Asset Management (the "Subadviser").
RECITALS:
The Trust is an open-end investment management company registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), and has thirty-
four portfolios, including the MTB Mid Cap Stock Fund (the "Fund");
The Trust and the Adviser have entered into an advisory agreement dated as
of August 22, 2003 (the "Advisory Agreement") as amended, pursuant to which the
Adviser provides portfolio management services to the Fund and the other
portfolios of the Trust;
The Advisory Agreement contemplates that the Adviser may fulfill its
portfolio management responsibilities under the Advisory Agreement by engaging
one or more subadvisers; and
The Adviser and the Board of Trustees of the Trust ("Trustees" or "Board")
desire to retain the Subadviser to act as sub-investment manager of the Fund and
to provide certain other services, and the Subadviser desires to perform such
services under the terms and conditions hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the Trust, the Adviser and the Subadviser agree as
follows:
1. DELIVERY OF DOCUMENTS. The Trust and/or the Adviser has furnished the
Subadviser with copies, properly certified or otherwise authenticated, of each
of the following:
(a)The Trust's Agreement and Declaration of Trust ("Declaration of
Trust"), as in effect on the date hereof;
(b)By-Laws of the Trust as in effect on the date hereof;
(c)Resolutions of the Trustees selecting the Subadviser as the sub-
investment manager to the Fund and approving the form of this
Agreement;
(d)Resolutions of the Trustees selecting the Adviser as investment
adviser to the Fund and approving the form of the Investment
Advisory Agreement and resolutions adopted by the initial
shareholder of the Fund approving the form of the Investment
Advisory Agreement;
(e)The Advisory Agreement;
(f)The Trust's current registration statement on Form N-1A as filed
with the Securities and Exchange Commission ("SEC"), including the
Fund's current prospectus and statement of additional information
(collectively called the "Prospectus");
(g)All current written guidelines, policies and procedures of the
Trust, which are applicable to the Fund, the Adviser or the
Subadviser and have been approved by the Trustees of the Trust;
(h)The code of ethics of the Trust which has been approved by the Board
of Trustees of the Trust in accordance with Rule 17j-1 under the
1940 Act;
(i)The Adviser's most recent Form ADV as filed with the SEC and/or
provided to the Adviser's clients (which Form ADV includes, among
other things, a description of the Adviser's policies regarding
allocation of securities among clients with common investment
objectives, soft dollars and brokerage selection);
(j)Those provisions of the Adviser's Compliance Manual that apply to
the Fund;
(k)A copy of the Adviser's Proxy Voting Policies and Procedures; and
(l)The Trust's Anti-Money Laundering Policies and Procedures.
The Adviser will promptly furnish the Subadviser from time to time with
copies, properly certified or otherwise authenticated, of all amendments of or
supplements to any of the foregoing documents. The Adviser will also furnish
the Subadviser with copies of all the documents listed on Schedule 1 to this
Agreement, and shall promptly notify the Subadviser of any material change in
any of the Fund's investment objectives, investment strategies, investment
policies, investment restrictions, guidelines or procedures set forth in any of
the documents listed in Schedule 1. In addition, the Chief Compliance Officer
for the Trust and the Adviser shall provide the Subadviser with a certification
that they have adopted and approved a compliance program for the Trust adopted
in accordance with Rule 38a-1 under the 1940 Act and the compliance program for
the Adviser adopted in accordance with Rule 206(4)-7 under the Investment
Advisers Act of 1940, as amended ("Advisers Act"), respectively.
The Chief Compliance Officer for the Subadviser shall provide the Trust
and the Adviser with copies of the Subadviser's Compliance Policies and
Procedures, a summary of its compliance program, and a certification that the
Subadviser has adopted and approved a compliance program for the Subadviser in
accordance with Rule 206(4)-7 under the Advisers Act and such other information
as may be reasonably requested in order to permit the Board of Trustees of the
Trust to make such determinations with respect to the Subadviser's compliance
program as may be required under Rule 38a-1 under the 1940 Act. The Subadviser
has furnished the Adviser with a copy of the Subadviser's Form ADV most recently
filed with the SEC, (which Form ADV includes a description of the Subadviser's
policies regarding allocation of securities among clients with common investment
objectives, soft dollars and brokerage selection) and the code of ethics
established by the Subadviser pursuant to Rule 17j-1 under the 1940 Act
("Subadviser's Code of Ethics"). The Subadviser will promptly furnish the
Adviser with copies of any amendments to each of those documents, including any
revisions required by Rule 204A-1 under the Advisers Act. The Subadviser will
also provide the Adviser with the Subadviser's approved list of securities for
equity portfolios and list of affiliated persons, and any updates or revisions
thereto at least monthly.
The Subadviser will also provide the Adviser and the Fund accountant with
a list and specimen signatures of the parties who are authorized to act on
behalf of the Subadviser and will promptly notify Adviser in writing of any
changes to that list.
2. INVESTMENT SERVICES. Subject to the supervision and review of the Adviser
and the Trustees, the Subadviser will manage the investments of the Fund on a
discretionary basis, including the purchase, retention and disposition of
securities, in a manner that is (a) consistent with the investment objectives,
investment strategies, investment policies and restrictions of the Fund as set
forth in the Fund's Prospectus, (b) in conformity with the 1940 Act, (c)
compliant with the requirements applicable to regulated investment companies
under the Internal Revenue Code of 1986, as amended, and (d) compliant with all
other applicable federal securities laws and regulations, instructions and
directions received by the Subadviser in writing from the Adviser or the Board
of Trustees, and all applicable provisions in the documents provided to the
Subadviser, pursuant to Section 1 above, as each of the documents may, from time
to time, be amended or supplemented.
The Subadviser will discharge its duties under this Agreement with the
care, skill, prudence, and diligence under the circumstances then prevailing
that a prudent person acting in the capacity of an investment adviser to a
registered investment Trust and familiar with such matters would use.
The Subadviser will, at its own expense, and subject to the oversight of
the Adviser and the Board of Trustees:
(a) Manage on a discretionary basis the Fund's investments and determine
from time to time which securities will be purchased, retained, sold
or loaned by the Fund, and what portion of the Fund's assets will be
invested or held uninvested as cash.
(b) Place orders with or through brokers, dealers or issuers in order to
effect or execute portfolio transactions for the Fund, subject at
all times to the Subadviser's duty to (i) use its best efforts to
obtain for the Fund the most favorable terms and best execution of
such portfolio transactions, (ii) comply with any policy with
respect to effecting or executing portfolio transactions for the
Fund, as set forth in the Fund's Prospectus, and (iii) comply with
any written policies and procedures of the Trust, as approved by the
Board of Trustees from time to time.
In using its best efforts to obtain for the Fund the most favorable
terms and best execution of portfolio securities, the Subadviser,
bearing in mind the Fund's best interests at all times, shall
consider all factors it deems relevant, including but not limited
to: the price and size of the transaction, the nature of the market
for the security, the amount of the commission, the timing of the
transaction, market prices and trends, the reputation, experience
and financial stability of the broker or dealer involved in the
transaction, and the quality of service rendered by the broker or
dealer in other transactions.
Subject to such policies and procedures as the Board of Trustees may
approve, the Subadviser may, to the extent authorized by Section
28(e) of the Securities Exchange Act of 1934, as amended, cause the
Fund to pay a broker or dealer that provided brokerage and research
services to the Adviser or the Subadviser an amount of commission
for effecting a portfolio transaction in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if the Subadviser determines, in good faith, that
such amount of commission is reasonable in relationship to the value
of such brokerage or research services provided viewed in terms of
that particular transaction or the Subadviser's overall
responsibilities to the Fund or its other advisory clients. To the
extent authorized by Section 28(e) and the Trust's Board of
Trustees, the Subadviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of such action.
(c) Submit such reports and information relating to the valuation of the
Fund's securities as the Adviser or the Board may reasonably
request.
(d) Maintain all accounts, books and records pertaining to the Fund
("Fund's Books and Records") as are required of an investment
adviser of a registered investment company pursuant to Section 31 of
the 1940 Act and the rules and regulations adopted thereunder and by
applicable provisions of the Advisers Act, including, without
limitation, a daily ledger of such assets and liabilities relating
to the Fund, and brokerage and other records of all portfolio
transactions for the Fund. The Fund's Books and Records shall be
available for inspection or duplication by the Adviser and the Trust
on any day that the Fund is open for business, upon reasonable
request, and shall be available for telecopying to the Adviser or
the Trust on any such business day.
(e) Adhere to the Adviser's Proxy Voting Policy when voting securities
held in the Fund's portfolio.
(f) From time to time, as the Adviser or the Trustees may reasonably
request, furnish the Adviser and to each of the Board members
reports of Fund's securities transactions and reports on securities
held in the Fund's portfolio, all in such detail as the Adviser or
the Trustees may reasonably request.
(g) Inform the Adviser and the Trustees of material or significant
changes in (i) investment strategy or policies that will be employed
in managing the Fund's investments or (ii) key investment or
executive officers of the Subadviser (including any change in the
personnel who manage the investments of the Fund.)
(h) Make its officers and employees available to meet with the Trustees
and the Adviser at such times and with such frequency as the
Trustees or the Adviser reasonably request, on due notice to the
Subadviser, but at least annually, to review the Fund's investments
in light of current and prospective market conditions.
(i) Furnish to the Board members such information as may be requested by
them in writing and as reasonably necessary in order for the
Trustees to evaluate this Agreement or any proposed amendments to
this Agreement for the purpose of casting a vote pursuant to Section
12 or 13 hereof.
(j) Furnish to the Adviser such information as may be requested by the
Adviser and reasonably necessary in order for the Adviser to
evaluate this Agreement and the Subadviser's performance hereunder.
(k) The Subadviser will advise the Adviser, and, if instructed by the
Adviser, will advise the Fund's custodian on a prompt basis and Fund
accountant each day by electronic communication of each confirmed
purchase and sale of a security for the Fund. Such communication
with respect to each security purchased for or sold by the Fund
shall provide the following information: the name of the issuer; the
full description of the security including its class; the amount or
number of shares of the security purchased or sold; the market
price; commission paid; government charges; the gross or net price
of the security; the trade date; the settlement date; the identity
of the effecting broker or dealer and, if different, the identity of
the clearing broker.
(l) Cooperate generally with the Fund and the Adviser to provide
information requested by them in the possession of the Subadviser,
or reasonably available to it, necessary for the preparation of the
registration statement for the Fund and all periodic reports to be
filed by the Fund or the Adviser with the SEC, including but not
limited to, Form N-1A, semi-annual reports for the Fund on Form N-
SAR and Form N-CSR, proxy voting results on Form N-PX, portfolio
holdings on Form N-Q, shareholder communications regarding the Fund,
proxy materials furnished to holders of shares of the Fund, and
filings with state "blue sky" authorities and with United States
agencies responsible for tax matters regarding the Fund.
(m) Allow the Chief Compliance Officer of the Trust and the Adviser
and/or his/her delegate, representatives of the Adviser, internal or
external auditors of the Trust and Adviser, and regulators to visit
and audit Subadviser's operations relating to Subadviser's services
under this Agreement as may be reasonably requested, at reasonable
times and upon reasonable notice, but at least once annually.
(n) Deliver instructions or directions to the Adviser via such written
or oral reports as the Fund's custodian and fund accountant may
require. Subadviser shall instruct all brokers, dealers or other
persons executing orders with respect to the Fund to forward to the
Adviser copies of all brokerage or dealer confirmations promptly
after execution of all transactions.
(o) Comply with all requirements of Rule 17j-1 under the 1940 Act,
including the requirement to submit its Code of Ethics and any
material changes thereto to the Trustees for approval, and such
other requirements of Rule 204A-1 under the Advisers Act. The
Subadviser will submit any material change in its Code of Ethics to
the Trustees promptly after the adoption of such change. The
Subadviser will report at least quarterly any material violations of
its Code of Ethics or related procedures and any related sanctions
to the Trustees, and will provide a written report to the Trustees
at least annually in accordance with the requirements of Rule 17j-1
and any similar requirements as may be adopted by the SEC under the
Advisers Act. The Subadviser will also require that its "Access
Persons" (as such term is defined in Rule 17j-1 and Rule 204A-1)
provide the Subadviser with quarterly personal investment
transaction reports and initial and annual holdings reports, and
otherwise require such of those persons as is appropriate to be
subject to the Subadviser's Code of Ethics.
(p) Provide to the Adviser and the Trust a copy and summary of its
compliance program in accordance with Rule 206(4)-7 under the
Advisers Act, and any material changes thereto, at least annually.
3. EXPENSES PAID BY THE SUBADVISER. The Subadviser will pay the cost of
maintaining the staff and personnel necessary for it to perform its obligations
under this Agreement, the expenses of office rent, telephone, telecommunications
and other facilities it is obligated to provide in order to perform the services
specified in Section 2, and any other costs and expenses incurred by it in
connection with the performance of its duties hereunder.
4. EXPENSES OF THE FUND NOT PAID BY THE SUBADVISER. The Subadviser will not
be required to pay any expenses of the Fund or any other expenses that this
Agreement does not expressly state shall be payable by the Subadviser. In
particular, and without limiting the generality of the foregoing, the Subadviser
will not be required to pay under this Agreement:
(a)the compensation and expenses of Trustees and of independent
advisers, independent contractors, consultants, managers and other
agents employed by the Trust or the Fund other than through the
Subadviser;
(b)organization and offering expenses of the Fund (including out of
pocket expenses);
(c)legal, accounting and auditing fees and expenses of the Trust or the
Fund;
(d)the fees and disbursements of custodians and depositories of the
Trust or the Fund's assets, or any fees and expenses of the Fund's
administrator, transfer agents, disbursing agents, plan agents and
registrars;
(e)the Fund's interest expenses;
(f)taxes and governmental fees assessed against the Trust or the Fund's
assets and payable by the Trust or the Fund;
(g)dues and expenses of each of the Fund or the Adviser for its
respective membership in investment trade organizations;
(h)cost of insurance relating to fidelity bond coverage or directors
and officers/ errors and omissions coverage for the Fund or the
Adviser;
(i)the cost of preparing, printing and mailing Prospectuses, dividends,
distributions, reports, notices and proxy materials to shareholders
of the Trust or the Fund, except that the Subadviser shall bear the
costs of providing the information referred to in Section 2(l) to
the Adviser;
(j)brokers' commissions and underwriting fees;
(k)the payments for maintaining the Fund's books and records (other
than those books and records the Subadviser maintains in connection
with the performance or its duties under this Agreement) and any
expense associated with calculating the daily net asset value of the
shares of the Fund; and
(l)expenses of any shareholder meetings.
5. REGISTRATION AS AN ADVISER. The Subadviser hereby represents and warrants
that it is registered with the SEC as an investment adviser, and covenants that
it intends to remain so registered for the duration of this Agreement.
Subadviser shall notify the Adviser immediately in the event that Subadviser
ceases to be registered with the SEC as an investment adviser under the Advisers
Act.
6. COMPENSATION OF THE SUBADVISER. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Subadviser as herein
provided for the Funds, the Adviser will pay the Subadviser an annual fee equal
to 0.50% on the value of the first $100 million of average daily net assets of
the Fund managed by the Subadviser, 0.40% on the value of the next $100 million
of average daily net assets of the Fund managed by the Subadviser, and 0.35% on
the value of the average daily net assets managed by the Subadviser in excess of
$200 million. Such fee shall accrue daily and be paid monthly. The "average
daily net assets" of the Fund shall be determined on the basis set forth in the
Fund's Prospectus or, if not described therein, on such basis as is consistent
with Rule 2a-4 and Rule 22c-1 under the 1940 Act and the regulations promulgated
thereunder. The Subadviser will receive a pro rata portion of such monthly fee
for any periods in which the Subadviser advises the Fund less than a full month.
The Subadviser understands and agrees that neither the Trust nor the Fund has
any liability for the payment of Subadviser's fee hereunder and that the payment
of fees owed to the Subadviser shall be the sole responsibility of the Adviser.
Calculations of the Subadviser's fee will be based on average net asset values
as provided to the Subadviser by the Adviser or the Trust.
Page 1 of 17
In addition to the foregoing, the Subadviser may from time to time agree
in writing not to impose all or a portion of its fee otherwise payable hereunder
(in advance of the time such fee or portion thereof would otherwise accrue)
and/or undertake to pay or reimburse the Fund for all or a portion of its
expenses not otherwise required to be borne or reimbursed by the Subadviser.
Any such fee reduction or undertaking may be discontinued or modified by the
Subadviser at any time.
7. OTHER ACTIVITIES OF THE SUBADVISER AND ITS AFFILIATES. It is understood
that the services under this Agreement are not exclusive and that nothing in
this Agreement shall prevent the Subadviser or any of its affiliates or
associates from engaging in any other business or from acting as investment
adviser or manager for any other person or entity or providing similar services
to any other person or entity, whether or not having investment policies or a
portfolio similar to the Fund. It is specifically understood that officers,
trustees/directors and employees of the Subadviser and those of its affiliates
may engage in providing portfolio management services and advice to other
investment advisory clients of the Subadviser or of its affiliates.
8. AVOIDANCE OF INCONSISTENT POSITION. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Subadviser nor any
of its trustees/directors, officers or employees will act as principal or agent
or receive any commission, except in compliance with applicable law and the
relevant policies and procedures of the Fund. The Subadviser shall not knowingly
recommend that the Fund purchase, sell or retain securities of any issuer in
which the Subadviser has a financial interest without obtaining prior approval
of the Adviser prior to the execution of any such transaction.
Nothing herein contained shall limit or restrict the Subadviser or any of
its officers, affiliates or employees from buying, selling or trading in any
securities for its or their own account or accounts. The Trust and Fund
acknowledge that the Subadviser and its officers, affiliates and employees, and
its other clients may at any time have, acquire, increase, decrease or dispose
of positions in investments which are at the same time being acquired or
disposed of by the Fund. The Subadviser shall have no obligation to acquire
with respect to the Fund, a position in any investment that the Subadviser, its
officers, affiliates or employees may acquire for its or their own accounts or
for the account of another client if, in the sole discretion of the Subadviser,
it is not feasible or desirable to acquire a position in such investment for
the Fund. Nothing herein contained shall prevent the Subadviser from purchasing
or recommending the purchase of a particular security for one or more funds or
clients while other funds or clients may be selling the same security. The
Subadviser expressly acknowledges and agrees, however, that in any of the above
described transactions, and in all cases, the Subadviser is obligated to fulfill
its fiduciary duty as Subadviser to the Fund and it shall require such of its
Access Persons as is appropriate to comply with the requirements of the
Subadviser's Code of Ethics.
When a security proposed to be purchased or sold for the Fund is also to
be purchased or sold for other accounts managed by the Subadviser at the same
time, the Subadviser shall make such purchase or sale on a pro-rata, rotating or
other fair and equitable basis so as to avoid any one account being preferred
over any other account. The Subadviser shall disclose to the Adviser and to the
Trustees the method used to allocate purchases and sales among the Subadviser's
investment advisory clients. It is further understood that the Subadviser may,
but shall not be obligated to, aggregate the orders for securities to be
purchased or sold.
9. NO PARTNERSHIP OR JOINT VENTURE. The Trust, the Fund, the Adviser and the
Subadviser are not partners of or joint venturers with each other and nothing
herein shall be construed so as to make them such partners or joint venturers or
impose any liability as such on any of them.
10. LIMITATION OF LIABILITY AND INDEMNIFICATION.
(a) In the absence of (i) willful misfeasance, bad faith, or gross
negligence on the part of the Subadviser or reckless disregard of
its duties, (ii) the failure to disclose to the Adviser a material
fact regarding the Subadviser or its investment advisory services as
they relate to the Fund; (iii) the failure to correct any untrue
statement of a material fact regarding the Subadviser made by the
Subadviser to the Adviser, or (iv) the reckless disregard by the
Subadviser of its obligations and duties under this Agreement, the
Subadviser shall not be subject to any liability to the Adviser, the
Trust or the Fund, any shareholder of the Fund, or to any person,
firm or organization, for any act or omission in the course of or in
connection with rendering its services under this Agreement.
Specifically, the Subadviser shall not be liable to the Adviser or
the Fund for any error of judgment or mistake of law, subject to the
limitations of Section 17(i) of the 1940 Act. Nothing herein,
however, shall derogate from the Subadviser's obligations under
federal and state securities laws. Any person, even though also
employed by the Subadviser, who may be or become an employee of and
paid by the Trust or the Fund shall be deemed, when acting within
the scope of his employment by the Trust or the Fund, to be acting
in such employment solely for the Trust or the Fund and not as the
Subadviser's employee or agent. Subadviser will maintain a
reasonable amount of fidelity bond insurance coverage and shall
provide evidence of such coverage upon request of Adviser.
(b) In the absence of (i) willful misfeasance, bad faith or gross
negligence on the part of the Adviser or reckless disregard of its
duties, (ii) the failure of the Adviser to disclose in the
Prospectus or any filing made with the SEC with respect to the
Trust, the Fund or the Adviser any material fact; (iii) the failure
by the Adviser to correct any untrue statement of a material fact
contained in the Prospectus or any other filing made with the SEC
regarding the Trust, the Fund or the Adviser; or (iv) the reckless
disregard by the Adviser of its obligations and duties under this
Agreement, Adviser shall not be subject to any liability to
Subadviser for any act or omission in the course of or in connection
with the Adviser's carrying out its duties and obligations under
this Agreement. Specifically, the Adviser shall not be liable to
the Subadviser for any error of judgment or mistake of law. Nothing
herein, however, shall derogate from the Adviser's obligations under
federal and state securities laws.
(c) Subadviser and Adviser shall each defend, indemnify and hold
harmless the other party and the other party's affiliates, officers,
trustees/directors, members, employees and agents, from and against
any claim, loss, liability, judgment, awards, settlements for which
prior approval of the indemnifying party is obtained, damages,
deficiency, penalty, cost or expense (including without limitation
reasonable attorneys' fees and disbursements for external counsel)
resulting from (i) the reckless disregard of the indemnifying
party's obligations and duties hereunder; (ii) willful misfeasance,
bad faith or gross negligence on the part of the indemnifying party,
its officers, trustees/directors, members, employees and agents with
respect to this Agreement or the Fund or (iii) the failure of the
indemnifying party to disclose any material fact or the failure of
the indemnifying party to correct any untrue statement of a material
fact whether such claim, loss, liability, damages, deficiency,
penalty, cost or expense was incurred or suffered directly or
indirectly.
(d) Adviser is liable to, and shall indemnify, the Fund and the Trust
for any acts and omissions of the Subadviser to the same extent the
Adviser, under the terms of the Advisory Agreement, is liable to,
and must indemnify the Fund and the Trust for the Adviser's acts and
omissions.
Page 2 of 17
(e) The indemnification provisions in Section 10 of the Agreement shall
survive the termination of this Agreement.
11. ASSIGNMENT AND AMENDMENT. This Agreement may not be assigned by the
Subadviser, and shall automatically terminate, without the payment of any
penalty, in the event: (a) of its assignment, including any change in control of
the Adviser or the Subadviser which is deemed to be an assignment under the 1940
Act, or (b) that the Advisory Agreement is assigned or terminates for any
reason. Trades that were placed prior to such termination will not be canceled;
however, no new trades will be placed after notice of such termination is
received. Termination of this Agreement shall not relieve the Adviser or the
Subadviser of any liability incurred hereunder.
The terms of this Agreement shall not be changed unless such change is
agreed to in writing by the parties hereto and is approved by the affirmative
vote of a majority of the Trustees of the Trust voting in person, including a
majority of the Trustees who are not interested persons of the Trust, the
Adviser or the Subadviser, at a meeting called for the purpose of voting on such
change, and (to the extent required by the 0000 Xxx) unless also approved at a
meeting by the affirmative vote of the majority of outstanding voting securities
of the Fund.
12. DURATION AND TERMINATION. This Agreement shall become effective as of the
date first above written and shall remain in full force and effect for a period
of two years from such date, and thereafter for successive periods of one year
(provided such continuance is approved at least annually in conformity with the
requirements of Section 15 of the 0000 Xxx) unless the Agreement is terminated
automatically as set forth in Section 11 hereof or until terminated as follows:
(a) The Trust or the Adviser may at any time terminate this Agreement,
without payment of any penalty, by not more than 60 days' prior
written notice delivered or mailed by registered mail, postage
prepaid, or by nationally recognized overnight delivery service,
receipt requested, to the Subadviser. Action of the Trust under
this subsection may be taken either by (i) vote of its Trustees, or
(ii) the affirmative vote of the outstanding voting securities of
the Fund; or
(b) The Subadviser may at any time terminate this Agreement by not less
than one hundred twenty (120) days' prior written notice delivered
or mailed by registered mail, postage prepaid, or by nationally
recognized overnight delivery service, receipt requested, to the
Adviser.
Termination of this Agreement pursuant to this Section shall be without
payment of any penalty.
Fees payable to Subadviser for services rendered under this Agreement will
be prorated to the date of termination of the Agreement.
In the event of termination of this Agreement for any reason, the
Subadviser shall, immediately upon receiving notice of termination or a receipt
acknowledging delivery of a notice of termination to Adviser, or such later date
as may be specified in such notice, cease all activity on behalf of the Fund and
with respect to any of its assets, except as expressly directed by the Adviser,
and except for the settlement of securities transactions already entered into
for the account of the Fund. In addition, the Subadviser shall deliver copies
of the Fund's Books and Records to the Adviser upon request by such means and in
accordance with such schedule as the Adviser shall reasonably direct and shall
otherwise cooperate, as reasonably directed by the Adviser, in the transition of
Fund investment management to any successor to the Subadviser, including the
Adviser; provided however that the Subadviser shall be permitted to retain at
its own expense a separate copy of such records for its own protection and may
not disclose such information to other parties unless required to comply with
any law, rule, regulation or order of a court or government authority.
13. APPROVAL OF AGREEMENT. The parties hereto acknowledge and agree that the
obligations of the Trust, the Adviser, and the Subadviser under this Agreement
shall be subject to the following condition precedent: this Agreement shall have
been approved by the vote of a majority of the Trustees, who are not interested
persons of the Trust, the Adviser or the Subadviser, at a meeting called for the
purpose of voting on such approval.
14. MISCELLANEOUS.
(a) The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. The
obligations of the Trust and the Fund are not personally binding
upon, nor shall resort be had to be private property of, any of the
Trustees, shareholders, officers, employees or agents of the Trust
or the Fund, but only the Fund's property shall be bound. The Trust
or the Fund shall not be liable for the obligations of any other
series of the Trust.
(b) Any information supplied by the Trust or the Adviser to the
Subadviser in connection with the performance of the Subadviser's
duties hereunder, or learned by the Subadviser as a result of its
position as Subadviser to the Fund, which information is not
otherwise in the public domain, is to be regarded as confidential
information for use by the Subadviser only in connection with the
performance of its duties hereunder. Any such information in the
hands of the Subadviser may be disclosed as necessary to comply with
any law, rule, regulation or order of a court or government
authority.
(c) Any information supplied by the Subadviser to the Trust or the
Adviser in connection with the performance of the Subadviser's
duties under this Agreement or learned by the Trust or the Adviser
as a result of the services provided by the Subadviser under this
Agreement, which information is not otherwise in the public domain,
is to be regarded as confidential information for use by the
Adviser, the Fund and/or its agents only in connection with the Fund
and its investments. Any such information in the hands of either
party may be disclosed as necessary to comply with any law, rule,
regulation or order of a court or government authority.
(d) The Subadviser agrees to submit any proposed sales literature
(including advertisements, whether in paper, electronic or Internet
medium) for the Trust, the Fund, the Subadviser or for any of its
affiliates which mentions the Trust, the Fund or Adviser (other than
the use of the Fund's name in a list of clients of the Subadviser),
to the Adviser and to the Fund's distributor for review and filing
with the appropriate regulatory authority prior to public release of
any such sales literature; provided, however, that nothing herein
shall be construed so as to create any obligation or duty on the
part of the Subadviser to produce sales literature for the Trust or
the Fund.
(e) The Trust and the Adviser agree to submit any proposed sales
literature that mentions the Subadviser (other than identifying the
Subadviser as subadviser to the Fund) to the Subadviser for review
prior to use and the Subadviser agrees to promptly review such
materials by a reasonable and appropriate deadline. The Trust
agrees to cause the Adviser and the Trust's distributor to promptly
review all such sales literature for compliance with relevant
requirements, to promptly advise the Subadviser of any deficiencies
contained in such sales literature, and to promptly file complying
sales literature with the relevant regulatory authorities.
(f) All notices, consents, waivers and other communications under this
Agreement must be in writing and, other than notices governed by
Section 12 above, will be deemed to have been duly given when (i)
delivered by hand (with written confirmation of receipt), (ii) sent
by telecopier, provided that receipt is confirmed by return telecopy
and a copy is sent by overnight mail via a nationally recognized
overnight delivery service (receipt requested); (iii) when received
by the addressee, if sent via a nationally recognized overnight
delivery service (receipt requested) or U.S. mail (postage prepaid),
in each case to the appropriate address and telecopier number set
forth below (or to such other address and telecopier number as a
party may designate by notice to the other parties):
Subadviser: LSV Asset Management
0 X. Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxx
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Adviser: MTB Investment Advisors, Inc.
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: President
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Trust: MTB Group of Funds
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Secretary
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
(g) For purposes of this Agreement: (i) "affirmative vote of a majority
of the outstanding voting securities of the Fund" means the
affirmative vote, at an annual meeting or a special meeting of the
shareholders of the Fund, duly called and held, (A) of 67% or more
of the shares of the 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 more than 50% of the
outstanding shares of the Fund entitled to vote at such meeting,
whichever is less; and (ii) "interested person" and "assignment"
shall have the respective meanings as set forth in the 1940 Act,
subject, however, to such exemptions as may be granted by the SEC
under the 1940 Act.
(h) This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the 1940 Act.
(i) The provisions of this Agreement are independent of and separable
from each other and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be deemed invalid or unenforceable
in whole or in part.
(j) Subadviser agrees to maintain the security and confidentiality of
nonpublic personal information ("NPI") of Fund customers and
consumers, as those terms are defined in Xxxxxxxxxx X-X, 00 XXX Part
248. Subadviser agrees to use and redisclose such NPI for the
limited purposes of processing and servicing transactions; for
specific law enforcement and miscellaneous purposes; and to service
providers or in connection with joint marketing arrangements
directed by the Fund, in each instance in furtherance of fulfilling
Subadviser's obligations under this Agreement and consistent with
the exceptions provided in 17 CFR Sections 248.14, 248.15 and
248.13, respectively.
(k) Any question of interpretation of any term or section of this
Agreement having a counterpart in or otherwise derived from a term
or provision of the 1940 Act or Advisers Act shall be resolved by
reference to such term or provision of the 1940 Act or Advisers Act
and interpretation thereof, if any, by the United States courts or,
in the absence of any controlling decision of any such court, by
rules, regulations or orders of the SEC validly issued pursuant to
the 1940 Act or Advisers Act. In addition, where the effect of a
requirement of the 1940 Act or Advisers Act reflected in any
provision of this Agreement is relaxed by 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.
(l) In the event the Subadviser may deem it advantageous to the Fund to
place portfolio securities trades for the Fund through (a) a broker-
dealer affiliate of the subadviser to another portfolio of the
Trust; or (b) a broker-dealer affiliate of the subadviser to a
discrete portion of the Fund, the Subadviser may engage in such
trades under Rule 17a-10 under the 1940 Act without complying with
certain provisions of Rule 17e-1 of the Investment Company Act of
1940, provided that Subadviser does not consult with any entity
which subadvises any other portfolio of the Trust, or any portion of
any such portfolio ("Another Subadvised Fund"), concerning
transactions for the Fund or Another Subadvised Fund.
(m) Each of the Adviser and Subadviser represents and warrants to the
other that it has a business continuity plan designed to restore
services as promptly as practical as a result of work stoppage,
power or other mechanical failure, natural disaster, governmental
action, communication disruption or other impossibility of
performance.
15. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF THE
TRUST. The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an authorized officer of the
Trust, acting as such, and neither such authorization by such Trustees nor
such execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of them
personally, and the obligations of this Agreement are not binding upon any
of the Trustees or shareholders of the Trust, but bind only the
appropriate property of the Fund, or Class, as provided in the Declaration
of Trust.
Page 3 of 17
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
on their behalf by their duly authorized officers as of the date first above
written.
MTB GROUP OF FUNDS
By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
MTB INVESTMENT ADVISORS, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President
LSV ASSET MANAGEMENT
By: /s/ Xxxxxxxx Xxxxxxxx
Name: Xxxxxxxx Xxxxxxxx
Title: Chief Operating Officer
Page 4 of 17
SCHEDULE 1
Custody Agreement between the Trust and the Fund's custodian ("Custodian"),
including information as to:
The Fund's nominee
The federal tax identification numbers of the Fund and its nominee
All routing, bank participant and account numbers and other information
necessary to provide proper instructions for transfer and delivery
of securities to the Fund's account at the Custodian
Name, address, telephone and Fax number of the Custodian's employees
responsible for the Fund's accounts
The Fund's pricing service and contact persons
All applicable procedures and guidelines adopted by the Board of Trustees or the
Adviser regarding management of the Fund, including but not limited to:
Transactions with affiliated persons
Guidelines for Determining Fair Value of Securities
Net Asset Value Correction Policies and Procedures
Evaluating the liquidity of securities
Segregation of liquid assets in connections with firm commitments and
standby commitments
Derivative contracts and securities
Repurchase Agreement Guidelines
Rule 10f-3 (relating to affiliated underwriting syndicates)
Rule 17a-7 (relating to interfund transactions)
Rule 17e-1 (relating to transactions with affiliated brokers) and
Procedures for cash sweep investments in money market funds
Monitoring portfolio compliance
Subadviser supervision
Daily review of pricing
Any master agreements that the Trust has entered into on behalf of the Fund,
including:
Master Repurchase Agreement
Master Foreign Exchange Netting Agreements
Master Swap Agreements
Form of Securities Lending Agency Agreement
Other agreements that the Trust has entered into on behalf of the Fund,
including:
Investment Advisory Agreement
Other relevant documents, including:
CFTC Rule 4.5 letter
Page 5 of 17
LSV ASSET MANAGEMENT
December 8, 2004
MTB Investment Advisors, Inc.
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Re: Subadvisory Relationship
Ladies and Gentlemen:
As you know, LSV Asset Management ("LSV") currently subadvises the value
equity portion of the MTB Small Cap Stock Fund (the "Small Cap Fund").
Commencing on December 8, 2004, LSV will also subadvise the value equity portion
of the MTB Mid Cap Stock Fund (the "Mid Cap Fund").
LSV will voluntarily implement a waiver of a portion of the subadvisory
compensation it receives from MTB Investment Advisors, Inc. ("MTBIA") for
managing the assets of the Small Cap Fund and Mid Cap Fund. The fee waiver will
be calculated based on the total subadvisory fee LSV receives from MTBIA for
managing these two funds and will reduce proportionately the subadvisory fee for
each Fund based on assets under LSV management.
The amount of the waiver for each Fund will be calculated monthly as
follows:
(a) calculate a "Base Fee Rate," expressed as a percentage, for the Mid
Cap Fund by multiplying the rate (the "Base Rate") provided in the Fund's
subadvisory contract by the aggregate average daily net assets of the Mid Cap
Fund managed by LSV (the "LSV Mid Cap Assets");
(b) calculate a "Combined Fee Rate," expressed as a percentage, by
multiplying the Base Rate applicable to the Mid Cap Fund by the total of the
aggregate average daily net assets of the Small Cap Fund and Mid Cap Fund
managed by LSV (the "Combined LSV Assets");
(c) subtract the Combined Fee Rate from the Base Fee Rate for the Mid
Cap Fund (the resulting amount, the "Fee Reduction Percentage");
(d) multiplying the Fee Reduction Percentage by the LSV Mid Cap Assets
(the result, the "Fee Reduction Amount");
(e) multiply the Fee Reduction Amount by a ratio, the numerator of which
is the average daily net assets of the Small Cap Fund managed by LSV and the
denominator of which is the Combined LSV Assets (the "Small Cap Fee Reduction");
(f) multiply the Fee Reduction Amount by a ratio, the numerator of which
is the LSV Mid Cap Assets and the denominator of which is the Combined LSV
Assets (the "Mid Cap Fee Reduction");
(g) subtract the Small Cap Fee Reduction from the Base Rate calculated
under the Small Cap Fund subadvisory agreement; the difference is the amount of
the advisory fee after giving effect to the voluntary waiver; and
(h) subtract the Mid Cap Fee Reduction from the Base Rate calculated
under the Mid Cap Fund subadvisory agreement, the difference is the amount of
the advisory fee after giving effect to the voluntary waiver.
LSV understands that the amount of the waiver will be applied against each
monthly fee invoice.
We look forward to our expanded relationship with the MTB Funds and MTBIA.
Sincerely,
LSV ASSET MANAGEMENT
By: /s/ Xxxxxxxx Xxxxxxxx
Name: Xxxxxxxx Xxxxxxxx
Title: Chief Operating Officer
Page 6 of 17
