SUB-ADVISORY AGREEMENT
AGREEMENT made as of the 6th day of July, 2001, by and between Xxxxxx
Xxxxxxx Investment Advisors Inc., a Delaware corporation (hereinafter called the
"Investment Manager"), and TCW Investment Management Company, a California
corporation (hereinafter called the "Sub-Advisor").
WHEREAS, Xxxxxx Xxxxxxx Select Dimensions Investment Series (hereinafter
called 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 (hereinafter called the "Investment Management Agreement") with the
Fund wherein the Investment Manager has agreed to provide investment management
services to the thirteen current Portfolios of the Fund and may provide such
services to other Portfolios subsequently established by the Fund; and
WHEREAS, the Sub-Advisor is registered as an investment adviser 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-Advisor to render investment advisory services for the North American
Government Securities Portfolio and the Emerging Markets Portfolio in the manner
and on the terms and conditions hereinafter set forth (these Portfolios together
with all other Portfolios subsequently established by the Fund with respect to
which the Fund will have retained the Investment Manager to render management
and investment advisory services under the Investment Management Agreement and
with respect to which the Investment Manager desires to retain the Sub-Advisor
to render investment advisory services in the manner and on the terms and
conditions hereinafter set forth being collectively referred to as the
"Sub-Advisory Portfolios"); and
WHEREAS, the Sub-Advisor 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-Advisor, the Sub-Advisor agrees to provide each
Sub-Advisory Portfolio with investment advisory services; to obtain and evaluate
such information and advice relating to the economy, securities and commodities
markets and securities or commodities as it deems necessary or useful to
discharge its duties hereunder; to continuously manage the assets of the
Sub-Advisory Portfolio in a manner consistent with the investment objective and
policies of the Sub-Advisory Portfolio; 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; to determine the securities
and commodities to be purchased or otherwise acquired, or sold or otherwise
disposed of, by the Sub-Advisory Portfolio and the timing of such purchases,
acquisitions, sales and dispositions; to take such further action, including the
placing of purchase and sale orders on behalf of the Sub-Advisory Portfolio, as
it shall deem necessary or appropriate; to furnish to or place at the disposal
of the Sub-Advisory Portfolio 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-Advisor
shall each make its officers and employees available to the other from time to
time at reasonable times to review investment policies of the Sub-Advisory
Portfolios and to consult with each other.
In the event the Fund establishes another Portfolio other than the current
Sub-Advisory Portfolios with respect to which the Investment Manager desires to
retain the Sub-Advisor to render investment advisory services hereunder, the
Investment Manager shall notify the Sub-Advisor in writing. If the Sub-Advisor
is willing to render such services, it shall notify the Investment Manager in
writing, whereupon such other Portfolio shall become a Sub-Advisory Portfolio
hereunder.
2.
The Sub-Advisor may, at its own expense, from time to time and in its
discretion, enter into a Secondary Sub-Advisory Agreement or Secondary
Sub-Advisory Agreements in respect of any of the Sub-Advisory Portfolios with a
Secondary Sub-Advisor or Secondary Sub-Advisors to assist it in making
determinations as to the securities and commodities to be purchased or otherwise
acquired, or sold or otherwise disposed of, by the Sub-Advisory Portfolio and
the timing of such purchases, acquisitions, sales and dispositions and to take
such further action, including the placing of purchase and sale orders on behalf
of the Sub-Advisory Portfolio, as the Secondary Sub-Advisor, in consultation
with the Sub-Advisor, shall deem necessary or appropriate; provided that the
Sub-Advisor shall be responsible for monitoring compliance by such Secondary
Sub-Advisor with the investment policies and restrictions of the Sub-Advisory
Portfolio and with such other limitations or directions as the Trustees of the
Fund may from time to time prescribe. Upon the termination of any such Secondary
Sub-Advisory Agreement, the Sub-Advisor may assume all of the duties that were
the responsibility of the Secondary Sub-Advisor under the Secondary Sub-Advisory
Agreement.
3.
The Sub-Advisor 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-Advisor shall be deemed to include
persons employed or otherwise retained by the Sub-Advisor 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-Advisor 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.
4.
The Fund will, from time to time, furnish or otherwise make available to
the Sub-Advisor such financial reports, proxy statements and other
information relating to the business and affairs of the Sub-Advisory Portfolios
as the Sub-Advisor 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.
5.
The Sub-Advisor 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-Advisor, and such clerical help and bookkeeping
services as the Sub-Advisor shall reasonably require in performing its duties
hereunder.
6.
The Fund, on behalf of each Sub-Advisory Portfolio, assumes and shall pay
or cause to be paid all other expenses of the Sub-Advisory Portfolio,
including, without limitation: any fees paid to the Investment Manager; the
charges and expenses of any registrar, any custodian, sub-custodian or
depository appointed by the Fund for the safekeeping of the Sub-Advisory
Portfolio's cash, portfolio securities and other property, and any stock
transfer or dividend agent or agents appointed by the Fund; brokers' commissions
chargeable to the Sub-Advisory Portfolio in connection with portfolio securities
transactions to which the Sub-Advisory Portfolio is a party; all taxes,
including securities issuance and transfer taxes, and fees payable by the
Sub-Advisory Portfolio to federal, state or other governmental agencies or
pursuant to any foreign laws; the cost and expense of engraving or printing
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certificates representing shares of the Sub-Advisory Portfolio; all costs and
expenses in connection with the registration and maintenance of registration of
the Sub-Advisory Portfolio 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 Sub-Advisory Portfolio'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-Advisor; 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 Sub-Advisory Portfolio'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-Advisor, and of independent auditors, in connection with any
matter relating to the Sub-Advisory Portfolio; membership dues of industry
associations; interest payable on Sub-Advisory Portfolio borrowings; postage;
insurance premiums on property or personnel (including officers and Trustees) of
the Sub-Advisory Portfolio 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
Sub-Advisory Portfolio's operation unless otherwise explicitly provided herein.
7.
For the services to be rendered, the facilities furnished, and the
expenses assumed by the Sub-Advisor, the Investment Manager shall pay to
the Sub-Advisor monthly compensation equal to 40% of its monthly compensation
receivable pursuant to the Investment Management Agreement in respect of the
North American Government Securities Portfolio and the Emerging Markets
Portfolio. 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 fees payable to the
Sub-Advisor under this Agreement. In addition, if the Investment Manager has
undertaken in the Fund's Registration Statement as filed under the Act or
elsewhere to waive all or part of its fees under the Investment Management
Agreement, the Sub-Advisor's fees payable under this Agreement will be
proportionately waived in whole or in part. The calculation of the fees payable
to the Sub-Advisor pursuant to this Agreement will be made, each month, at the
time designated for the monthly calculation of the fees 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 fees as set forth above. Subject to the provisions of
paragraph 8 hereof, payment of the Sub-Advisor's compensation for the preceding
month shall be made as promptly as possible after completion of the computations
contemplated by paragraph 8 hereof.
8.
In the event the operating expenses of either the North American
Government Securities Portfolio or the Emerging Markets Portfolio,
including amounts payable to the Investment Manager pursuant to the Investment
Management Agreement in respect of any of these Sub-Advisory Portfolios, for any
fiscal year ending on a date on which this Agreement is in effect, exceed 2.5%
of the average daily net assets of the Sub-Advisory Portfolio up to
$30 million, 2.0% of the next $70 million and 1.5% of the average daily net
assets of the Sub-Advisory Portfolio in excess of $100 million (the "expense
limitation"), the Sub-Advisor shall reduce its advisory fee to the extent of 40%
of such excess and will reimburse the Investment Manager for annual operating
expenses in the amount of 40% of such excess of the expense limitation, up to
the amount of the Sub-Advisor's fee which would otherwise be payable under this
Agreement for that year, it being understood that the Investment Manager has
agreed to effect a reduction and reimbursement of 100% of such excess, up to the
amount of its management fee in respect of the Sub-Advisory Portfolio which
otherwise would be payable for that year, in accordance with the terms of the
Investment Management Agreement; provided, however, there shall be excluded from
such expenses the
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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 Sub-Advisory
Portfolio. 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 Sub-Advisory Portfolio as at the end of the last business day
of the month.
9.
The Sub-Advisor will use its best efforts in the performance of
investment activities on behalf of the Sub-Advisory Portfolios, but in
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations hereunder, the Sub-Advisor 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-Advisor or for
any losses sustained by the Sub-Advisory Portfolios or their investors.
10.
It is understood that any of the shareholders, Trustees, officers and
employees of the Fund may be a shareholder, director, officer or employee
of, or be otherwise interested in, the Sub-Advisor, and in any person controlled
by or under common control or affiliated with the Sub-Advisor, and that the
Sub-Advisor and any person controlled by or under common control or affiliated
with the Sub-Advisor may have an interest in the Fund. It is also understood
that the Sub-Advisor and any affiliated persons thereof or any persons
controlled by or under common control with the Sub-Advisor have and may have
advisory, management service or other contracts with other organizations and
persons, and may have other interests and businesses, and further may purchase,
sell or trade any securities or commodities for their own accounts or for the
account of others for whom they may be acting. Nothing contained in this
Agreement shall limit or restrict the Sub-Advisor or any affiliated person
thereof from so acting or engaging in any other business.
11.
This Agreement shall remain in effect until April 30, 2002 and from year
to year thereafter with respect to each Sub-Advisory Portfolio provided
such continuance with respect to a Sub-Advisory Portfolio 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 Sub-Advisory Portfolio 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-Advisor,
either by majority vote of the Trustees of the Fund or, with respect to a Sub-
Advisory Portfolio, by the vote of a majority of the outstanding voting
securities of such Sub-Advisory Portfolio; (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-Advisor; and (e) the Sub-Advisor 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.
12.
This Agreement may be amended by the parties without the vote or consent
of the shareholders of any Sub-Advisory Portfolio 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-Advisor shall be liable for failing to do so.
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13.
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,
conflicts with the applicable provisions of the Act, the latter shall control.
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.
XXXXXX XXXXXXX INVESTMENT ADVISORS INC.
By: .....................................
Attest: .................................
TCW INVESTMENT MANAGEMENT COMPANY
By: .....................................
By: .....................................
Attest: .................................
Accepted and agreed to as of
the day and year first above written:
XXXXXX XXXXXXX SELECT DIMENSIONS
INVESTMENT SERIES
By: ..................................
Attest: ..............................
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