Exhibit D(7)
INVESTMENT SUB-ADVISORY AGREEMENT
Between
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
and
X. X. XXXXXX INVESTMENT MANAGEMENT INC.
(as to the Small Cap Growth Equity)
INVESTMENT SUB-ADVISORY AGREEMENT
This Investment Sub-Advisory Agreement (this "Sub-Advisory Agreement"), is by
and between X.X. Xxxxxx Investment Management Inc., organized under the laws of
the State of Delaware (the "Sub-Adviser") and Massachusetts Mutual Life
Insurance Company, a mutual life insurance company organized under the laws of
the Commonwealth of Massachusetts ("MassMutual"), for the MassMutual Small Cap
Growth Equity Fund (the "Fund"), a series of MassMutual Institutional Funds (the
"Trust"), a Massachusetts business trust which is an open-end diversified
management investment company registered as such with the Securities and
Exchange Commission (the "Commission") pursuant to the Investment Company Act of
1940, as amended (the "Act"), effective as of the 3rd day of May, 1999.
WHEREAS, the Trust has appointed MassMutual as the investment adviser for the
Fund pursuant to the terms of an Investment Advisory Agreement (the "Advisory
Agreement");
WHEREAS, the Advisory Agreement provides that MassMutual may, at its option,
subject to approval by the Trustees of the Trust and, to the extent necessary,
the shareholders of the Fund, appoint a sub-adviser to assume certain
responsibilities and obligations of MassMutual under the Advisory Agreement;
WHEREAS, MassMutual and the Sub-Adviser are investments advisers registered with
the Commission as such under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"); and
WHEREAS, MassMutual desires to appoint the Sub-Adviser as one of the
sub-advisers for the Fund with responsibility for such portion of the Fund's
assets as MassMutual shall direct from time to time (the "Portfolio") and the
Sub-Adviser is willing to act in such capacity upon the terms herein set forth;
NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, MassMutual, the Fund and the Sub-Adviser, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. General Provision.
(a) MassMutual hereby employs the Sub-Adviser and the Sub-Adviser hereby
undertakes to act as the investment sub-adviser of the Fund with respect to the
Portfolio to provide investment advice and to perform for the Portfolio of the
Fund such other duties and functions as are hereinafter set forth. The
Sub-Adviser shall, in all matters, give to the Portfolio of the Fund and the
Trust's Board of Trustees, directly or through MassMutual, the benefit of the
Sub-Adviser's best judgment, effort, advice and recommendations and shall, at
all times conform to, and use its best efforts to ensure the Portfolio of the
Fund conforms to:
(i) the provisions of the Act and any rules or regulations
thereunder;
(ii) any other applicable provisions of state or federal law;
(iii) the provisions of the Agreement and Declaration of Trust and
Bylaws of the Trust, as amended from time to time (collectively referred
to as the "Trust Documents");
(iv) policies and determinations of the Board of Trustees of the
Trust and MassMutual;
(v) the fundamental and non-fundamental policies and investment
restrictions of the Fund as reflected in the Trust's registration
statement under the Act or as such policies may, from time to time, be
amended by the Fund's shareholders; and
(vi) the Prospectus and Statement of Additional Information of the
Fund in effect from time to time (collectively referred to as the
"Disclosure Documents").
(b) The appropriate officers and employees of the Sub-Adviser shall be
available upon reasonable notice for consultation with any of the Trustees and
officers of the Trust and MassMutual with respect to any matter dealing with the
business and affairs of the Fund with respect to the Portfolio, such as the
valuation of portfolio securities of the Portfolio of the Fund, including but
not limited to securities that are either not registered for public sale or
securities not traded on any securities market.
2. Duties of the Sub-Adviser.
(a) The Sub-Adviser shall, subject to the direction and control of the
Trust's Board of Trustees or MassMutual, to the extent MassMutual's direction is
not inconsistent with that of the Board of Trustees, (i) regularly provide
investment advisory services to the Portfolio of the Fund with respect to its
investments and investment policies; (ii) with respect to the Portfolio,
supervise and monitor continuously the investment program of the Fund and the
composition of its portfolio and determine what securities or other investments
shall be purchased or sold by the Fund; (iii) with respect to the Portfolio,
arrange, subject to the provisions of Section 5 hereof, for the purchase of
securities and other investments for the Fund and the sale of securities and
other investments held in the portfolio of the Fund; (iv) provide reports on the
foregoing to the Board of Trustees at each Board meeting with respect to the
Portfolio; and (v) undertake to do anything incidental to the foregoing to
facilitate the performance of the Sub-Adviser's obligations hereunder, including
voting or exercising any consent rights with respect to such securities or
investments.
(b) The Sub-Adviser shall provide to MassMutual such reports for the Fund,
and in such time frames, as MassMutual and the Sub-Adviser shall mutually agree
or as required by applicable law or regulation.
(c) None of MassMutual, the Fund or the Trust shall be required to pay any
compensation other than as provided by the terms of this Sub-Advisory Agreement.
This provision shall not apply to prevent the Sub-Adviser from obtaining
investment information, research or assistance from any other person, firm or
corporation to supplement, update or otherwise improve its investment management
services, subject, however, to the provisions of Section 5 hereof.
(d) Provided that nothing herein shall be deemed to protect the
Sub-Adviser from acts or omissions in breach of this Sub-Advisory Agreement or
from willful misfeasance, bad faith or gross negligence in the performance of
its duties, or reckless disregard to its obligations and duties under this
Sub-Advisory Agreement, the Sub-Adviser shall not be liable for any loss
sustained by reason of good faith errors or omissions in connection with any
matters to which this Sub-Advisory Agreement relates.
(e) The Sub-Adviser shall make all material disclosures to MassMutual and
the Fund of public information regarding itself and its partners, officers,
directors, shareholders, employees, affiliates or any person who controls any of
the foregoing, including, but not limited to, information regarding any change
in control of the Sub-Adviser or any change in its key personnel material to the
services provided hereunder, information regarding any material adverse change
in the condition (financial or otherwise) of the Sub-Adviser or any person who
controls the Sub-Adviser, information regarding the investment performance and
general investment methods of the Sub-Adviser with respect to the Portfolio of
the Fund, information that MassMutual reasonably deems material to the Fund or
necessary to enable MassMutual to monitor the performance of the Sub-Adviser and
information that is required, in the reasonable judgment of MassMutual, to be
disclosed in any filings required by any governmental agency or by any
applicable law, regulation, rule or order.
(f) The Sub-Adviser shall provide MassMutual, upon reasonable prior
written request by MassMutual to the Sub-Adviser, with access to inspect at the
Sub-Adviser's office the books and records of the Sub-Adviser relating to the
Portfolio of the Fund and the Sub-Adviser's performance hereunder and to meet
personnel of the Sub-Adviser who have responsibilities with respect to the
Portfolio of the Fund.
3. Other Activities.
(a) Nothing in this Sub-Advisory Agreement shall prevent MassMutual or the
Sub-Adviser or any officer thereof from acting as investment adviser or
sub-adviser for any other person, firm or corporation and shall not in any way
limit or restrict MassMutual or the Sub-Adviser or any of their respective
directors, officers, members, stockholders, partners or employees or affiliates
from buying, selling, or trading any securities for its own account or for the
account of others for whom it or they may be acting, provided that such
activities are in compliance with U.S. federal and state securities laws,
regulations and rules.
(b) The Sub-Adviser agrees that it will not knowingly or deliberately
favor any other account, mutual fund or commingled fund managed or controlled by
it over the Fund. The Sub-Adviser, upon reasonable request and receipt of
adequate assurances of confidentiality, shall provide MassMutual with an
explanation of the differences, if any, in performance between the Portfolio of
the Fund and any other mutual fund or commingled fund with investment objectives
and policies similar to the Portfolio of the Fund for which the Sub-Adviser, or
any one of its principals or affiliates, acts as investment adviser. To the
extent that a particular investment is suitable for both the Fund and the
Sub-Adviser's other clients, such investment will be allocated among the Fund
and such other clients in a manner that is fair and equitable in the
circumstances.
4 Compensation of the Sub-Adviser.
MassMutual agrees to pay the Sub-Adviser and the Sub-Adviser agrees to accept as
full compensation for the performance of all functions and duties on its part to
be performed pursuant to the provisions hereof, a fee paid quarterly, in
arrears, at the following rate: an annual rate of .60% on the first $200 million
of Aggregate Assets; an annual rate of .55% on the next $300 million of
Aggregate Assets; and an annual rate of .50% of Aggregate Assets in excess of
$500 million. For the purposes of this Sub-Advisory Agreement, "Aggregate
Assets" shall mean the aggregate of (i) the average daily net assets of the
Portfolio of the Fund for which the Sub-Advisor provides investment advisory
services, determined at the close of the New York Stock Exchange on each day
that the Exchange is open for trading, and (ii) the average daily net assets of
all other portfolios of funds or accounts of MassMutual or its affiliates
utilizing the same small cap growth investment strategy as the Portfolio of the
Fund, including portfolios of other funds registered under the Act (namely MML
Small Cap Growth Equity Fund), for which the Sub-Advisor provides investment
advisory services determined at the close of the Exchange on each day that the
Exchange is open for trading. MassMutual shall pay the Sub-Advisor such fee on
the first business day immediately following the end of each calendar quarter.
5. Portfolio Transactions and Brokerage.
(a) The Sub-Adviser is authorized, with respect to the Portfolio in
arranging the purchase and sale of the Fund's publicly-traded portfolio
securities, to employ or deal with such members of securities exchanges, brokers
or dealers (hereinafter "broker-dealers"), as may, in its best judgment,
implement the policy of the Fund to obtain, at reasonable expense, the best
execution of the Fund's portfolio transactions.
(b) The Sub-Adviser may effect the purchase and sale of securities (which
are otherwise publicly traded) in private transactions on such terms and
conditions as are customary in such transactions, may use a broker to effect
such transactions, and may enter into a contract in which the broker acts either
as principal or as agent.
(c) The Sub-Adviser shall select broker-dealers to effect the Fund's
portfolio transactions on the basis of its estimate of their ability to obtain
best execution of particular and related portfolio transactions. The abilities
of a broker-dealer to obtain best execution of particular portfolio
transaction(s) will be judged by the Sub-Adviser on the basis of all relevant
factors and considerations including, insofar as feasible, the execution
capabilities required by the transaction or transactions; the ability and
willingness of the broker-dealer to facilitate the Fund's portfolio transactions
by participating therein for its own account; the importance to the Fund of
speed, efficiency or confidentiality; the broker-dealer's apparent familiarity
with sources from or to whom particular securities might be purchased or sold;
other matters involved in the receipt of brokerage and research services in
accordance with Section 28(e) of the Securities Exchange Act of 1934, as
amended; as well as any other matters relevant to the
selection of a broker-dealer for particular and related transactions of the
Fund; and such other considerations as the Board of Trustees of the Trust or
MassMutual determine and provide to the Sub-Adviser from time to time.
6. Representations And Warranties of The Sub-Adviser.
The Sub-Adviser hereby represents and warrants to the Fund and MassMutual that:
(a) The Sub-Adviser has obtained all required governmental and regulatory
licenses, registrations and approvals required by law as may be necessary to
perform its obligations under this Sub-Advisory Agreement and to act as
contemplated by the Trust Documents and the Disclosure Documents, including
without limitation registration as an investment adviser under the Advisers Act,
and will maintain and renew any required licenses, registrations, approvals and
memberships during the term of this Sub-Advisory Agreement.
(b) There is, to the best of its knowledge, no pending, threatened or
contemplated action, suit or proceeding before or by any court, governmental,
administrative or self-regulatory body or arbitration panel to which the
Sub-Adviser or any of its principals or affiliates is a party, or to which any
of the assets of the Sub-Adviser is subject, which reasonably might be expected
to (i) result in any material adverse change in the Sub-Adviser's condition
(financial or otherwise), business or prospects, (ii) affect adversely in any
material respect any of the Sub-Adviser's assets, (iii) materially impair the
Sub-Adviser's ability to discharge its obligations under this Sub-Advisory
Agreement, or (iv) result in a matter which would require an amendment to the
Sub-Adviser's Form ADV, Part II; and the Sub-Adviser has not received any notice
of an investigation by the Securities and Exchange Commission or any state
regarding U.S. federal or state securities laws, regulations or rules.
(c) All references in the Disclosure Documents concerning the Sub-Adviser
and its affiliates and the controlling persons, affiliates, stockholders,
directors, officers and employees of any of the foregoing are accurate in all
material respects and do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make such information not
misleading.
(d) The Sub-Adviser has supplied to MassMutual the performance of the
relevant composite of the Sub-Adviser's accounts and the composite represents in
all material respects the aggregate investment performance of all accounts which
had or have, for all periods covered, investment policies, objectives and
strategies which are substantially similar to the investment policies,
objectives and strategies of the Portfolio of the Fund as set forth in the
Disclosure Documents. . The exclusion of any account from the composite does not
cause the composite to be misleading in any material respect. No account so
included was created or maintained to establish a performance record.
The foregoing representations and warranties shall be continuing during the term
of this Sub-Advisory Agreement.
7. Covenants of the Sub-Adviser.
(a) If at any time during the term of this Sub-Advisory Agreement, the
Sub-Adviser discovers any fact or omission, or any event or change of
circumstances occurs, which would make the Sub-Adviser's representations and
warranties in Section 6 inaccurate or incomplete in any material respect, or
which might render the Disclosure Documents untrue or misleading in any material
respect, the Sub-Adviser will provide prompt written notification to the Fund
and MassMutual of any such fact, omission, event or change of circumstances, and
the facts related thereto.
(b) The Sub-Adviser agrees that, during the term of this Sub-Advisory
Agreement, and for so long as investment in the Fund is being offered for sale,
it will provide the Fund and the Sub-Adviser with updated information relating
to the Sub-Adviser's performance results as reasonably required from time to
time by the Fund and MassMutual. The Sub-Adviser shall use its best efforts to
provide such information within a reasonable period of time after the end of the
month to which such updated information relates and the information is available
to it.
8. Confidentiality.
All information and advice furnished by one party to the other party (including
their respective agents, employees and representatives) hereunder shall be
treated as confidential and shall not be disclosed to third parties, except as
may be necessary to comply with applicable governmental laws, rules and
regulations, subpoenas or court orders.
9. Duration.
Unless terminated earlier pursuant to Section 10 hereof, this Sub-Advisory
Agreement shall remain in effect for a period of two years from the date hereof.
Thereafter it shall continue in effect from year to year, unless terminated
pursuant to Section 10 hereof, so long as such continuance shall be approved at
least annually by the Trust's Board of Trustees, including the vote of the
majority of the Trustees of the Trust who are not parties to this Sub-Advisory
Agreement or "interested persons" (as defined in the Act) of any such party cast
in person at a meeting called for the purpose of voting on such approval, or by
the holders of a "majority" (as defined in the Act) of the outstanding voting
securities of the Fund.
10. Termination.
(a) This Sub-Advisory Agreement shall terminate automatically upon its
unauthorized assignment (within the meaning of the Act), the termination of the
Advisory Agreement or the dissolution of the Fund.
(b) The Sub-Advisory Agreement may be terminated by MassMutual or the
Board of Trustees of the Trust: (i) by written notice to the Sub-Adviser with
immediate effect, if the Sub-Adviser's registration under the Adviser's Act is
suspended, terminated, lapsed or not renewed; (ii) by written notice to the
Sub-Adviser with immediate effect, if the Sub-Adviser is bankrupt or insolvent,
seeks an arrangement with creditors, is dissolved or terminated or ceases to
exist; (iii) by written notice to the Sub-Adviser with immediate effect, if
MassMutual determines in good faith, for any reason, that such termination is
appropriate for the protection of the Fund, including without limitation a good
faith determination by MassMutual or the Board of Trustees of the Trust that the
Sub-Adviser has breached an obligation or duty under this Sub-Advisory
Agreement; or (iv) in their sole discretion, without penalty, upon ninety days
prior written notice to Sub-Adviser. This Sub-Advisory Agreement also may be
terminated at any time, without penalty, by the vote of the holders of a
"majority" of the outstanding voting securities of the Fund (as defined in the
Act).
(c) The Sub-Advisory Agreement may be terminated by the Sub-Adviser,
without penalty at any time, upon ninety days' prior written notice, to
MassMutual and the Trust.
11. Indemnification.
(a) The Sub-Adviser agrees to indemnify and hold harmless MassMutual, the
Fund and any of its or their controlling persons or shareholders, partners,
directors, officers and/or employees of any of them against any loss, claim,
damage, charge, liability or expense (including, without limitation, reasonable
attorneys' and accountants' fees) to which such persons may become subject,
insofar as such loss, claim, damage, charge, liability or expense arises out of
or is based upon any demands, claims, liabilities, expenses, lawsuits, actions
or proceedings relating to this Sub-Advisory Agreement or to the advisory
services for the account of the Fund provided by the Sub-Adviser, provided that
the loss, claim, damage, liability, cost or expense related to, was based upon,
or arose out of an act or omission of the Sub-Adviser or its officers,
directors, employees, agents or controlling persons constituting willful
misfeasance, bad faith, gross negligence, fraud, willful misconduct, a breach of
this Sub-Advisory Agreement, or a violation of applicable federal or state
securities laws, rules and regulations.
(b) MassMutual agrees to indemnify and hold harmless the Sub-Adviser and
any of its controlling persons, affiliates, or any shareholders, partners,
directors, officers and/or employees of any of them against any loss, claim,
settlement, damage, charge, liability or expense (including, without limitation,
reasonable attorneys' and accountants' fees) to which such persons may become
subject, insofar as such loss, claim, settlement, damage, charge,
liability or expense arises out of or is based upon any demands, claims,
liabilities, expenses, lawsuits, actions or proceedings relating to this
Sub-Advisory Agreement, the advisory services for the account of the Fund
provided by the Sub-Adviser, the operation of the Fund or the contents of the
Disclosure Documents, provided that the loss, claim, damage, liability, cost or
expense did not relate to, or was not based upon, or did not arise out of act or
omission of the Sub-Adviser, any of its controlling persons, affiliates or any
of its or their shareholders, partners, officers, directors or employees
constituting willful misfeasance, bad faith, gross negligence, fraud, willful
misconduct, a breach of this Sub-Advisory Agreement, or a violation of
applicable federal or state securities laws, rules and regulations.
(c) Promptly after receipt by an indemnified party under this Section 11
of notice of any claim or dispute or commencement of any action or litigation,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party under this Section 11, notify the indemnifying party of
the commencement thereof; but the omission to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 11 except to the extent, if any, that such
failure or delay prejudiced the other party in defending against the claim. In
case any such claim, dispute, action or litigation is brought or asserted
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, to assume the defense thereof, with
counsel specially approved in writing by such indemnified party, such approval
not to be unreasonably withheld, following notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof; in
which event, the indemnifying party will not be liable to such indemnified party
under this Section 11 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof, but shall
continue to be liable to the indemnified party in all other respects as
heretofore set forth in this Section 11. Notwithstanding any other provisions of
this Section 11, if, in any claim, dispute, action or litigation as to which
indemnity is or may be available, any indemnified party reasonably determines
that its interests are or may be, in whole or in part, adverse to the interests
of the indemnifying party, the indemnified party may retain its own counsel,
with the choice of counsel subject to the consent of the indemnifying party
(which consent shall not be withheld unreasonably), in connection with such
claim, dispute, action or litigation and shall continue to be indemnified by the
indemnifying party for any legal or any other expenses reasonably incurred in
connection with investigating or defending such claim, dispute, action or
litigation.
12. Disclaimer of Shareholder Liability.
MassMutual and the Sub-Adviser understand that the obligations of the Trust
under this Sub-Advisory Agreement are not binding upon any Trustee or
shareholder of the Trust personally, but bind only the Trust and the Trust's
property. MassMutual and the Sub-Adviser represent that each has notice of the
provisions of the Trust Documents disclaiming shareholder and Trustee liability
for acts or obligations of the Trust.
13. Notice.
Any notice under this Sub-Advisory Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party, with a copy to the
Trust, at the addresses below or such other address as such other party may
designate for the receipt of such notice.
If to MassMutual: Massachusetts Mutual Life Insurance Company
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Vice President
If to the Sub-Adviser: X.X. Xxxxxx Investment Management, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Vice President
If to either MassMutual or the Sub-Adviser, copies to:
MassMutual Institutional Funds
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Vice President
14. No Assignment.
No assignment (within the meaning of the Act) of this Sub-Advisory Agreement may
be made without the express written consent of all parties hereto.
15. Amendments to this Sub-Advisory Agreement.
This Sub-Advisory Agreement may be amended only by a written instrument approved
in writing by all parties hereto.
16. Governing Law.
This Sub-Advisory Agreement shall be governed by and construed in accordance
with the internal laws of the Commonwealth of Massachusetts, without giving
effect to principles of conflict of laws.
17. Survival.
The provisions of this Sub-Advisory Agreement shall survive the termination or
other expiration of this Sub-Advisory Agreement with respect to any matter
arising while this Sub-Advisory Agreement was in effect.
18. Successors.
This Sub-Advisory Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors and permitted assigns.
19. Entire Agreement.
This Sub-Advisory Agreement constitutes the entire agreement among the parties
hereto with respect to the matters referred to herein, and no other agreement,
oral or otherwise, shall be binding on the parties hereto.
20. No Waiver.
No failure or delay on the part of any party hereto in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
Any waiver granted hereunder must be in writing and shall be valid only in the
specific instance in which given.
21. Severability.
If any one or more provisions in this Sub-Advisory Agreement shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not effect any other provision
of this Sub-Advisory Agreement, but this Sub-Advisory Agreement shall be
construed so as to effectuate the intent of the parties hereto as nearly as
possible without giving effect to such invalid, illegal or unenforceable
provision had never been contained herein.
22. Counterparts.
This Sub-Advisory Agreement may be executed in any number of counterparts, each
of which shall constitute an original, but all of which when taken together
shall constitute one and the same instrument.
23. Disclosure.
Neither MassMutual, the Trust or the Fund shall, without the prior written
consent of the Sub-Adviser, make representations regarding, or reference to,
the Sub-Adviser or any affiliates in any disclosure document, advertisement,
sales literature or other promotional materials.
IN WITNESS WHEREOF, the Fund, MassMutual and the Sub-Adviser have caused this
Sub-Advisory Agreement to be executed as of the day and year first above
written.
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
---------------------------------
Title: Executive Vice President
--------------------------------
X.X. XXXXXX INVESTMENT MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------------
Title: Vice President
--------------------------------
ACKNOWLEDGED:
MASSSMUTUAL INSTITUTIONAL FUNDS
on behalf of MassMutual Small Cap Growth Equity Fund
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
----------------------------
Title: President
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