Exhibit (d)(23)
NEW ENGLAND ZENITH FUND
SUBADVISORY AGREEMENT
(CAPITAL GROWTH SERIES)
This Subadvisory Agreement (this "Agreement") is entered into as of May 1,
2001 by and between MetLife Advisers, LLC, a Delaware limited liability
company (the "Manager"), and Capital Growth Management Limited Partnership
(the "Subadviser").
WHEREAS, the Manager has entered into an Advisory Agreement dated May 1,
2001 (the "Advisory Agreement") with New England Zenith Fund (the "Trust"),
pursuant to which the Manager provides portfolio management and administrative
services to the Capital Growth Series of the Trust (the "Series");
WHEREAS, the Advisory Agreement provides that the Manager may delegate any
or all of its portfolio management responsibilities under the Advisory
Agreement to one or more subadvisers;
WHEREAS, the Manager desires to retain the Subadviser to render portfolio
management services in the manner and on the terms set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the Manager and the Subadviser agree as follows:
1. Subadvisory Services.
a. The Subadviser shall, subject to the supervision of the Manager and
in cooperation with the Manager, as administrator, or with any other
administrator appointed by the Manager (the "Administrator"), manage the
investment and reinvestment of the assets of the Series. The Subadviser
shall manage the Series in conformity with (1) the investment objective,
policies and restrictions of the Series set forth in the Trust's
prospectus and statement of additional information, as revised or
supplemented from time to time, relating to the Series (the "Prospectus"),
(2) any additional policies or guidelines established by the Manager or by
the Trust's trustees that have been furnished in writing to the Subadviser
and (3) the provisions of the Internal Revenue Code (the "Code")
applicable to "regulated investment companies" (as defined in Section 851
of the Code) and "segregated asset accounts" (as defined in Section 817 of
the Code), all as from time to time in effect
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(collectively, the "Policies"), and with all applicable provisions of law,
including without limitation all applicable provisions of the Investment
Company Act of 1940 (the "1940 Act") the rules and regulations thereunder
and the interpretive opinions thereof of the staff of the Securities and
Exchange Commission ("SEC") ("SEC Positions"); provided, however, that the
Manager agrees to inform the Subadviser of any and all applicable state
insurance law restrictions that operate to limit or restrict the
investments the Series might otherwise make ("Insurance Restrictions"),
and to inform the Subadviser promptly of any changes in such Insurance
Restrictions. Subject to the foregoing, the Subadviser is authorized, in
its discretion and without prior consultation with the Manager, to buy,
sell, lend and otherwise trade in any stocks, bonds and other securities
and investment instruments on behalf of the Series, without regard to the
length of time the securities have been held and the resulting rate of
portfolio turnover or any tax considerations; and the majority or the
whole of the Series may be invested in such proportions of stocks, bonds,
other securities or investment instruments, or cash, as the Subadviser
shall determine. Notwithstanding the foregoing provisions of this Section
1.a, however, the Subadviser shall, upon written instructions from the
Manager, effect such portfolio transactions for the Series as the Manager
shall determine are necessary in order for the Series to comply with the
Policies.
b. The Subadviser shall furnish the Manager and the Administrator daily,
weekly, monthly, quarterly and/or annual reports concerning portfolio
transactions and the investment performance of the Series in such form as
may be mutually agreed upon, and agrees to review the Series and discuss
the management of the Series with representatives or agents of the
Manager, the Administrator or the Trust at their reasonable request. The
Subadviser shall permit all books and records with respect to the Series
to be inspected and audited by the Manager and the Administrator at all
reasonable times during normal business hours, upon reasonable notice. The
Subadviser shall also provide the Manager, the Administrator or the Trust
with such other information and reports as may reasonably be requested by
the Manager, the Administrator or the Trust from time to time, including
without limitation all material as reasonably may be requested by the
Trustees of the Trust pursuant to Section 15(c) of the 1940 Act. The
Subadviser shall furnish the Manager (which may also provide it to the
Trust's Board of Trustees) with copies of all comment letters relevant to
the Series received from the SEC following routine or special SEC
examinations or inspections.
c. The Subadviser shall provide to the Manager a copy of the
Subadviser's Form ADV as filed with the SEC and any amendments or
restatements thereof in the future and a list of the persons whom the
Subadviser wishes to have authorized to give written and/or oral
instructions to custodians of assets of the Series.
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d. Unless the Manager gives the Subadviser written instructions to the
contrary, the Subadviser shall use its good faith judgment in a manner
which it reasonably believes best serves the interest of the Series'
shareholders to vote or abstain from voting all proxies solicited by or
with respect to the issuers of securities in which assets of the Series
are invested.
2. Obligations of the Manager.
a. The Manager shall provide (or cause the Trust's custodian to provide)
timely information to the Subadviser regarding such matters as the
composition of assets in the Series, cash requirements and cash available
for investment in the Series, and all other information as may be
reasonably necessary for the Subadviser to perform its responsibilities
hereunder.
b. The Manager has furnished the Subadviser a copy of the Prospectus and
agrees during the continuance of this Agreement to furnish the Subadviser
copies of any revisions or supplements thereto at, or, if practicable,
before the time the revisions or supplements become effective. The Manager
agrees to furnish the Subadviser with relevant sections of minutes of
meetings of the Trustees of the Trust applicable to the Series to the
extent they may affect the duties of the Subadviser, and with copies of
any financial statements or reports of the Trust with respect to the
Series to its shareholders, and any further materials or information which
the Subadviser may reasonably request to enable it to perform its
functions under this Agreement, including, but not limited to, timely
information relating to any Insurance Restrictions.
3. Custodian. The Manager shall provide the Subadviser with a copy of the
Series' agreement with the custodian designated to hold the assets of the
Series (the "Custodian") and any modifications thereto (the "Custody
Agreement"). The assets of the Series shall be maintained in the custody of
the Custodian identified in, and in accordance with the terms and conditions
of, the Custody Agreement (or any sub-custodian properly appointed as provided
in the Custody Agreement). The Subadviser shall provide timely instructions
directly to the Trust's custodian, in the manner and form as required by the
Trust's Custody Agreement (including with respect to exchange offerings and
other corporate actions) necessary to effect the investment and reinvestment
of the Series' assets. Any assets added to the Series shall be delivered
directly to the Custodian.
4. Expenses. Except for expenses specifically assumed or agreed to be paid
by the Subadviser pursuant hereto, the Subadviser shall not be liable for any
expenses of the Manager or the Trust including, without limitation, (a)
interest and taxes, (b) brokerage commissions and other costs in connection
with the purchase or sale of securities or other investment instruments with
respect to the Series, and (c) custodian fees and expenses. The Subadviser
will pay its own expenses incurred in furnishing the services to be provided
by it pursuant to this Agreement.
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5. Purchase and Sale of Assets. Absent instructions from the Manager to the
contrary, the Subadviser shall place all orders for the purchase and sale of
securities for the Series with brokers or dealers selected by the Subadviser,
which may include brokers or dealers affiliated with the Subadviser, provided
such orders comply with Rule 17e-1 (or any successor or other relevant
regulations) under the 1940 Act in all respects. To the extent consistent with
applicable law and then-current SEC positions, purchase or sell orders for the
Series may be aggregated with contemporaneous purchase or sell orders of other
clients of the Subadviser. The Subadviser shall use its best efforts to obtain
execution of transactions for the Series at prices which are advantageous to
the Series and at commission rates that are reasonable in relation to the
benefits received. However, the Subadviser may select brokers or dealers on
the basis that they provide brokerage, research or other services or products
to the Series and/or other accounts serviced by the Subadviser. Not all such
services or products need to be used by the Subadviser in managing the Series.
6. Compensation of the Subadviser. As full compensation for all services
rendered, facilities furnished and expenses borne by the Subadviser hereunder,
the Manager shall pay the Subadviser compensation at the annual rate of 0.45%
of the first $100 million of the average daily net assets of the Series during
the Series' then-current fiscal year, 0.40% of the next $400 million of such
assets, 0.35% of the next $500 million of such assets and 0.30% of such assets
in excess of $1 billion. Such compensation shall be payable monthly in arrears
or at such other intervals, not less frequently than quarterly, as the Manager
is paid by the Series pursuant to the Advisory Agreement. If the Subadviser
shall serve for less than the whole of any month or other agreed-upon
interval, the foregoing compensation shall be prorated. The Manager may from
time to time waive the compensation it is entitled to receive from the Trust;
however, any such waiver will have no effect on the Manager's obligation to
pay the Subadviser the compensation provided for herein.
7. Non-Exclusivity. The Manager agrees that the services of the Subadviser
are not to be deemed exclusive and that the Subadviser and its affiliates are
free to act as investment manager and provide other services to various
investment companies and other managed accounts, except as the Subadviser and
the Manager or the Administrator may otherwise agree from time to time in
writing before or after the date hereof. This Agreement shall not in any way
limit or restrict the Subadviser or any of its directors, officers, employees
or agents from buying, selling or trading any securities or other investment
instruments for its or their own account or for the account of others for whom
it or they may be acting, provided that such activities do not adversely
affect or otherwise impair the performance by the Subadviser of its duties and
obligations under this Agreement. The Manager recognizes and agrees that the
Subadviser may provide advice to or take action with
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respect to other clients, which advice or action, including the timing and
nature of such action, may differ from or be identical to advice given or
action taken with respect to the Series. The Subadviser shall for all purposes
hereof be deemed to be an independent contractor and shall, unless otherwise
provided or authorized, have no authority to act for or represent the Trust or
the Manager in any way or otherwise be deemed an agent of the Trust or the
Manager.
8. Liability and Indemnification. Except as may otherwise be provided by the
1940 Act or other federal securities laws, neither the Subadviser nor any of
its officers, partners, managing directors, employees, affiliates or agents
(the "Indemnified Parties") shall be subject to any liability to the Manager,
the Trust, the Series or any shareholder of the Series for any error of
judgment, or any loss arising out of any investment or other act or omission
in the course of, connected with, or arising out of any service to be rendered
under this Agreement, except by reason of willful misfeasance, bad faith or
gross negligence in the performance of any Indemnified Party's duties or by
reason of reckless disregard by any Indemnified Party of its obligations and
duties. The Manager shall hold harmless and indemnify the Subadviser for any
loss, liability, cost, damage or expense (including reasonable attorneys fees
and costs) arising (i) from any claim or demand by any past or present
shareholder of the Series that is not based upon the obligations of the
Subadviser with respect to the Series under this Agreement or (ii) resulting
from the failure of the Manager to inform the Subadviser of any applicable
Insurance Restrictions or any changes therein. The Subadviser agrees to
indemnify the Manager for any loss, liability, cost, damage or expense
(including reasonable attorney's fees) resulting from a material misstatement
or omission in the Series' Prospectus with respect to disclosure of the
Series' investment objectives, policies and risks. The Manager acknowledges
and agrees that the Subadviser makes no representation or warranty, express or
implied, that any level of performance or investment results will be achieved
by the Series or that the Series will perform comparably with any standard or
index, including other clients of the Subadviser, whether public or private.
9. Effective Date and Termination. This Agreement shall become effective as
of the date of its execution, and
a. unless otherwise terminated, this Agreement shall continue in effect
until May 1, 2003, and from year to year thereafter so long as such
continuance is specifically approved at least annually (i) by the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the Series, and (ii) by vote of a majority of the trustees
of the Trust who are not interested persons of the Trust, the Manager or
the Subadviser, cast in person at a meeting called for the purpose of
voting on such approval;
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b. this Agreement may at any time be terminated on sixty days' written
notice to the Subadviser either by vote of the Board of Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the
Series;
c. this Agreement shall automatically terminate in the event of its
assignment or upon the termination of the Advisory Agreement;
d. this Agreement may be terminated by the Subadviser on sixty days'
written notice to the Manager and the Trust, or, if approved by the Board
of Trustees of the Trust, by the Manager on sixty days' written notice to
the Subadviser; and
Termination of this Agreement pursuant to this Section 9 shall be without
the payment of any penalty. In the event of termination of this Agreement, all
compensation due to the Subadviser through the date of termination will be
calculated on a pro rata basis through the date of termination and paid on the
first business day after the next succeeding month end.
10. Amendment. This Agreement may be amended at any time by mutual consent
of the Manager and the Subadviser, provided that, if required by law (as may
be modified by any exemptions received by the Manager), such amendment shall
also have been approved by vote of a majority of the outstanding voting
securities of the Series and by vote of a majority of the trustees of the
Trust who are not interested persons of the Trust, the Manager or the
Subadviser, cast in person at a meeting called for the purpose of voting on
such approval.
11. Certain Definitions. For the purpose of this Agreement, the terms "vote
of a majority of the outstanding voting securities," "interested person,"
"affiliated person" and "assignment" shall have their respective meanings
defined in the 1940 Act, subject, however, to such exemptions as may be
granted by the SEC under the 1940 Act.
12. General.
a. The Subadviser may perform its services through any employee, officer
or agent of the Subadviser, and the Manager shall not be entitled to the
advice, recommendation or judgment of any specific person; provided,
however, that the persons identified in the Prospectus of the Series shall
perform the portfolio management duties described therein until the
Subadviser notifies the Manager that one or more other employees, officers
or agents of the Subadviser, identified in such notice, shall assume such
duties as of a specific date. The Subadviser shall use commercially
reasonable efforts to inform the Manager of any such events enough time
prior to the event taking effect such that allows the Manager sufficient
time to prepare and file any necessary supplement to the Prospectus.
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b. If any term or provision of this Agreement or the application thereof
to any person or circumstances is held to be invalid or unenforceable to
any extent, the remainder of this Agreement or the application of such
provision to other persons or circumstances shall not be affected thereby
and shall be enforced to the fullest extent permitted by law.
c. This Agreement shall be governed by and interpreted in accordance
with the laws of the Commonwealth of Massachusetts.
Metlife Advisers, LLC
By: /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------
Xxxx X. Xxxxxxx, Xx.
Senior Vice President
Capital Growth Management Limited
Partnership
By: Kenbob, Inc., as General Partner
By: /s/ Xxxxxx X. Xxxx
----------------------------
Xxxxxx X. Xxxx
President
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