INVESTMENT SUBADVISORY AGREEMENT
INVESTMENT SUBADVISORY AGREEMENT, effective 1st day of
October, 1997, by and between Xxxxxxx Asset Management Company, Inc.,
a Delaware corporation registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Adviser"), and XXXX Associates,
a division of Xxxxxxx Xxxxx and Associates, Inc. a Florida
corporation (the "Subadviser").
WHEREAS, the Adviser is the investment adviser to The
Xxxxxxx Fund, an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, the Adviser desires to retain the Subadviser to
furnish it with certain investment advisory services in connection
with the Adviser's investment advisory activities on behalf of The
Xxxxxxx Fund and any series of The Xxxxxxx Fund, for which Schedules
are attached hereto (each such series referred to individually as the
"Fund"); and
WHEREAS that, subject to approval of the Fund's
shareholders, it is contemplated that the Xxxxxxx Strategic Growth
Fund will be merged into the Xxxxxxx New Vision Small Cap Fund;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is hereby agreed as follows:
1. Services to be Rendered by the Subadviser to the Fund.
(a) Investment Program. Subject to the
control of The Xxxxxxx Fund's Board of Trustees and the
Adviser, the Subadviser at its expense continuously will
furnish to the Fund an investment program for such portion,
if any, of Fund assets designated by the Adviser from time
to time. With respect to such assets, the Subadviser will
make investment decisions, subject to Section 1(g) of this
Agreement, and will place all orders for the purchase and
sale of portfolio securities. The Subadviser is deemed to
be an independent contractor and, except as expressly
provided or authorized by this Agreement, has no authority
to act for or represent the Fund or the Adviser in any way
or otherwise be deemed an agent of the Fund or the Adviser.
In the performance of its duties, the Subadviser will act in
the best interests of the Fund and will comply with (i)
applicable laws and regulations, including, but not limited
to, the 1940 Act and Subchapter M of the Internal Revenue
Code of 1986, as amended, (ii) the terms of this Agreement,
(iii) the Fund's Declaration of Trust, Bylaws and
Registration Statement as from time to time amended, (iv)
relevant undertakings provided to State securities
regulators, (v) the stated investment objective, policies
and restrictions of the Fund, and (vi) such other guidelines
as the Trustees or Adviser may establish. The Adviser is
responsible for providing the Subadviser with current copies
of the materials specified in Subsections (a)(iii), (iv),
(v) and (vi) of this Section 1.
(b) Availability of Personnel.The Subadviser
at its expense will make available to the Trustees and
Adviser at reasonable times its portfolio managers and other
appropriate personnel, either in person or, at the mutual
convenience of the Adviser and the Subadviser, by telephone,
in order to review the Fund's investment policies and to
consult with the Trustees and Adviser regarding the Fund's
investment affairs, including economic, statistical and
investment matters relevant to the Subadviser's duties
hereunder, and will provide periodic reports to the Adviser
relating to the investment strategies it employs.
(c) Expenses, Salaries and Facilities. The
Subadviser will pay all expenses incurred by it in
connection with its activities under this Agreement (other
than the cost of securities and other investments, including
any brokerage commissions) including, but not limited to,
all salaries of personnel and facilities required for it to
execute its duties under this Agreement.
(d) Compliance Reports. The Subadviser at its
expense will provide the Adviser with such compliance
reports relating to its duties under this Agreement as may
be agreed on by such parties from time to time.
(e) Valuation. The Subadviser will assist the
Fund and its agents in determining whether prices obtained
for valuation purposes accurately reflect market price
information relating to the assets of the Fund for which the
Subadviser has responsibility on a daily basis (unless
otherwise agreed on by the parties hereto) and at such other
times as the Adviser shall reasonably request.
(f) Executing Portfolio Transactions.
(i) Brokerage. In selecting brokers and
dealers to execute purchases and sales of
investments for the Fund, the Subadviser
will use its best efforts to obtain the
most favorable price and execution
available in accordance with this
paragraph. The Subadviser agrees to
provide the Adviser and the Fund with
copies of its policy with respect to
allocation of brokerage on trades for the
Fund. Subject to review by the Trustees
of appropriate policies and procedures,
the Subadviser may cause the Fund to pay a
broker a commission for effecting a
portfolio transaction, in excess of the
commission another broker would have
charged for effecting the same
transaction. If the first broker provided
brokerage and/or research services,
including statistical data, to the
Subadviser, 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 acting according to such authorization.
(ii) Aggregate Transactions. In executing
portfolio transactions for the Fund, the
Subadviser may, but will not be obligated
to, aggregate the securities to be sold or
purchased with those of its other clients
where such aggregation is not inconsistent
with the policies of the Fund, to the
extent permitted by applicable laws and
regulations. If the Subadviser chooses to
aggregate sales or purchases, it will
allocate the securities as well as the
expenses incurred in the transaction in
the manner it considers to be the most
equitable and consistent with its
fiduciary obligations to the Fund and its
other clients involved in the
transaction. The Adviser may direct the
Subadviser in writing to use a particular
broker or dealer for one or more trades
if, in the sole opinion of the Adviser, it
is in the best interest of the Fund to do
so.
(g) Social Screening. The Adviser is
responsible for screening those investments of the Fund
subject to social screening ("Securities") to determine that
the Securities investments meet the Fund's social investment
criteria, as may be amended from time to time by the
Trustees. The Subadviser will buy only those Securities
which the Adviser determines pass the Fund's social screens.
(h) Voting Proxies. The Subadviser agrees to
take appropriate action (which includes voting) on all
proxies for the Fund's portfolio investments in a timely
manner. Such action is subject to the direction of the
Trustees and Adviser and will be consistent with the social
screens and criteria governing investment selection for the
Fund.
(i) Furnishing Information for the Fund's
Proxies and Other Required Mailings. The Subadviser agrees
to provide the Adviser in a timely manner with all
information necessary, including the Subadviser's certified
balance sheet and information concerning the Subadviser's
controlling persons, for preparation of the Fund's proxy
statements or other required mailings, as may be needed from
time to time.
2. Books and Records.
(a) In connection with the purchase and sale
of the Fund's portfolio securities, the Subadviser shall
arrange for the transmission to the Fund's custodian, and/or
the Adviser on a daily basis, of such confirmations, trade
tickets or other documentation as may be necessary to enable
the Adviser to perform its accounting and administrative
responsibilities with respect to the management of the
Fund.
(b) Pursuant to Rule 31a-3 under the 1940 Act,
Rule 204-2 under the Investment Advisers Act of 1940, and
any other laws, rules or regulations regarding
recordkeeping, the Subadviser agrees that: (i) all records
it maintains for the Fund are the property of the Fund; (ii)
it will surrender promptly to the Fund or Adviser any such
records upon the Fund's or Adviser's request; (iii) it will
maintain for the Fund the records that the Fund is required
to maintain under Rule 31a-1(b) or any other applicable rule
insofar as such records relate to the investment affairs of
the Fund for which the Subadviser has responsibility under
this Agreement; and (iv) it will preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records it
maintains for the Fund.
(c) The Subadviser represents that it has
adopted and will maintain at all times a suitable Code of
Ethics that covers its activities with respect to its
services to the Fund.
(d) The Subadviser shall supply to the Fund
Board its policies on "soft dollars," trade allocations and
brokerage allocation procedures. The Subadviser shall
maintain appropriate fidelity bond and errors and omission
insurance policies.
3. Exclusivity. Each party and its affiliates may
have advisory, management service or other agreements with other
organizations and persons, and may have other interests and
businesses; provided, however, that during the term of the Agreement,
the Subadviser will not provide investment advisory services
("Services") to any other investment company registered under the 1940
Act except to the extent that, as of September 1, 1997, the
Subadviser has entered into a written agreement(s) to provide such
Services.
4. Compensation. The Adviser will pay to the
Subadviser as compensation for the Subadviser's services rendered
pursuant to this Agreement an annual Subadvisory fee as specified in
one or more Schedules attached hereto and made part of this
Agreement. Such fees shall be paid by the Adviser (and not by the
Fund). Such fees shall be payable for each month within 15 business
days after the end of such month. If the Subadviser shall serve for
less than the whole of a month, the compensation as specified shall
be prorated based on the portion of the month for which services were
provided. The Schedules may be amended from time to time, provided
that amendments are made in conformity with applicable laws and
regulations and the Declaration of Trust and Bylaws of the Fund. Any
change in the Schedule pertaining to any new or existing series of
the Fund shall not be deemed to affect the interest of any other
series of the Fund and shall not require the approval of shareholders
of any other series of the Fund.
5. Assignment and Amendment of Agreement. This
Agreement automatically shall terminate without the payment of any
penalty in the event of its assignment or if the Investment Advisery
Agreement between the Adviser and the Fund shall terminate for any
reason. This Agreement constitutes the entire agreement between the
parties, and may not be amended except in a writing signed by both
parties. This Agreement shall not be materially amended unless, if
required by Securities and Exchange Commission rules and regulations,
such amendment is approved by the affirmative vote of a majority of
the outstanding shares of the Fund, and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of The Xxxxxxx Fund who are not interested
persons of the Fund, the Adviser or the Subadviser.
6. Duration and Termination of the Agreement. This
Agreement shall become effective upon its execution; provided,
however, that this Agreement shall not become effective with respect
to any Fund now existing or hereafter created unless it has first
been approved (a) by a vote of the majority of those Trustees of The
Xxxxxxx Fund who are not parties to this Agreement or interested
persons of such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by a vote of a majority
of that Fund's outstanding voting securities. This Agreement shall
remain in full force and effect with respect to a Fund continuously
thereafter (unless terminated automatically as set forth in Section
5.) except as follows:
(a) The Xxxxxxx Fund may at any time terminate
this Agreement without penalty with respect to any or all
Funds by providing not less than 60 days written notice
delivered or mailed by registered mail, postage prepaid, to
the Adviser and the Subadviser. Such termination can be
authorized by the affirmative vote of a majority of the (i)
Trustees of The Xxxxxxx Fund or (ii) outstanding voting
securities of the applicable Fund.
(b) This Agreement will terminate
automatically with respect to a fund unless, by January 1,
1998, and at least annually thereafter, the continuance of
the Agreement is specifically approved by (i) the Trustees
of The Xxxxxxx Fund or the shareholders of such Fund by the
affirmative vote of a majority of the outstanding shares of
such Fund, and (ii) a majority of the Trustees of The
Xxxxxxx Fund who are not interested persons of the Fund,
Adviser or Subadviser, by vote cast in person at a meeting
called for the purpose of voting on such approval. If the
continuance of this Agreement is submitted to the
shareholders of any series for their approval and such
shareholders fail to approve such continuance as provided
herein, the Subadviser may continue to serve hereunder in a
manner consistent with the 1940 Act and the rules and
regulations thereunder.
(c) The Adviser may at any time terminate this
Agreement with respect to any or all Funds by not less than
60 days written notice delivered or mailed by registered
mail, postage prepaid, to the Subadviser, and the Subadviser
may at any time terminate this Agreement with respect to any
or all Funds by not less than 90 days written notice
delivered or mailed by registered mail, postage prepaid, to
the Adviser, unless otherwise mutually agreed in writing.
(d) The Adviser may terminate this Agreement
with respect to any or all Funds immediately by written
notice if the Confidentiality and Non-Use Agreement referred
to in Section of this Agreement is, in the sole opinion of
the Adviser, is violated.
Upon termination of this Agreement with respect to any Fund,
the duties of the Adviser delegated to the Subadviser under this
Agreement with respect to such Fund automatically shall revert to the
Adviser.
Notwithstanding any other provision, the Agreement, as it
relates to the Xxxxxxx Strategic Growth Fund will terminate
immediately upon the merger of the Xxxxxxx Strategic Growth Fund into
the Xxxxxxx New Vision Small Cap Fund.
7. Notification to the Adviser. The Subadviser
promptly shall notify the Adviser in writing of the occurrence of any
of the following events:
(a) the Subadviser shall fail to be registered as
an investment Adviser under the Investment Advisers Act of
1940, as amended, and under the laws of any jurisdiction in
which the Subadviser is required to be registered as an
investment Adviser in order to perform its obligations under
this Agreement;
(b) the Subadviser shall have been served or
otherwise have notice of any action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of
the Fund;
(c) the Subadviser violates its Code of Ethics as
relates to trading by the Fund. The Subadviser will notify
the Adviser (i) when it discovers a violation has occurred;
and (ii) when action has been taken to rectify the
violation; or
(d) any other event, including but not limited to,
a change in personnel or the addition or loss of major
clients of the Subadviser that might affect the ability of
the Subadviser to provide the Services provided for under
this Agreement.
8. Definitions. For the purposes of this Agreement,
the terms "vote of a majority of the outstanding Shares," "affiliated
person," "control," "interested person" and "assignment" shall have
their respective meanings as defined in the 1940 Act and the rules
and regulations thereunder subject, however, to such exemptions as
may be granted by the Securities and Exchange Commission under said
Act; and the term "specifically approve at least annually" shall be
construed in a manner consistent with the 1940 Act and the rules and
regulations thereunder.
9. Indemnification. The Subadviser shall indemnify
and hold harmless the Adviser, the Fund and their respective
trustees, directors, officers and shareholders from any and all
claims, losses, expenses, obligations and liabilities (including
reasonable attorneys fees) arising or resulting from the Subadviser's
willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties hereunder.
The Adviser shall indemnify and hold harmless the
Subadviser, the Fund and their respective Trustees, directors,
officers and shareholders from any and all claims, losses, expenses,
obligations and liabilities (including reasonable attorneys fees)
arising or resulting from the Adviser's willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties hereunder
or under its Investment Advisery Agreement with the Fund.
10. Applicable Law and Jurisdiction. This Agreement
shall be governed by Maryland law, and any dispute arising from this
Agreement or the services rendered hereunder shall be resolved
through legal proceedings, whether state, federal, or otherwise,
conducted in the state of Maryland or in such other manner or
jurisdiction as shall be mutually agreed upon by the parties hereto.
11. Confidentiality. This Agreement is not binding on
the Adviser unless the Subadviser has signed and is subject to a
confidentiality and non-use agreement ("Non-Use Agreement") not
materially different than the one attached hereto as Exhibit 1. For
a period of two (2) years from the date of termination of this
Agreement, the Subadviser shall not attempt to develop, market or
sell any product which uses or employs any Confidential Information,
as that term is defined in the Non-Use Agreement.
12. Miscellaneous. Notices of any kind to be given to
a party hereunder shall be in writing and shall be duly given if
mailed, delivered or communicated by answer back facsimile
transmission to such party at the address set forth below, attention
President, or at such other address or to such other person as a
party may from time to time specify.
Subadviser agrees that for a period of two (2) years from
the date of termination of this Agreement, it shall not directly or
indirectly, hire, employ or engage, or attempt to hire, employ or
engage any employee of the Adviser without the prior written
permission of the Adviser.
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes
hereof. The captions in this Agreement are included for convenience
only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be signed in duplicate on its behalf by its duly
authorized representative, all as of the day and year first written
above.
Witness:
Xxxxxxx Asset Management Company, Inc.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000X
Xxxxxxxx, Xxxxxxxx 00000
BY:_______________________ BY:______________________________
Attest: XXXX Associates, a division of Xxxxxxx
Xxxxx and Associates, Inc.
By:________________________ By:_______________________________
Fee Schedule to the Investment Subadvisory Agreement
between Xxxxxxx Asset Management Company, Inc.
and XXXX Associates
As compensation pursuant to Section 4 of the Investment
Subadvisory Agreement between Xxxxxxx Asset Management Company, Inc.
(the "Adviser") and XXXX Associates (the "Subadviser"), the Adviser
shall pay the Subadviser an annual subadvisory fee computed daily and
payable monthly, at an annual rate equal to:
(1) 0.40% of the average daily net assets of Xxxxxxx
Strategic Growth Fund, and
(2) 0.40% of the average daily net assets of Xxxxxxx New
Vision Small Cap Fund.
