SUBADVISORY AGREEMENT
Xxxxxxxx Frontier Fund, Inc.
SUBADVISORY AGREEMENT, dated as of May 19, 1994 and amended January 1, 1996,
between J. & X. XXXXXXXX & CO. INCORPORATED, a Delaware corporation (the
"Manager") and XXXXXXXX XXXXXXXXX CO., a New York general partnership (the
"Subadviser").
WHEREAS, the Manager has entered into a Management Agreement dated December 29,
1988, as amended January 1, 1996 (the "Management Agreement") with Xxxxxxxx
Frontier Fund, Inc. (the "Fund"), an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), pursuant to which the Manager will render investment management
services to the Fund, and to administer the business and other affairs of the
Fund; and
WHEREAS, the Manager desires to retain the Subadviser to provide investment
management services to the Fund, and the Subadviser is willing to render such
investment management services.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:
1. Duties of the Subadviser. The Subadviser will provide the Fund with
investment management services with respect to assets of the Fund if, and to the
extent, designated by the Manager (such designated assets, "Qualifying Assets").
Such services shall include investment research, advice and supervision,
determining which securities shall be purchased or sold by the Fund, making
purchases and sales of securities on behalf of the Fund and determining how
voting and other rights with respect to securities of the Fund shall be
exercised, subject in each case to the control of the Board of Directors of the
Fund and in accordance with the objectives, policies and principles set forth in
the Registration Statement and Prospectus(es) of the Fund and the requirements
of the 1940 Act and other applicable law.
Subject to Section 36 of the 1940 Act, the Subadviser shall not be liable to the
Fund for any error of judgment or mistake of law or for any loss arising out of
any investment or for any act or omission in the management of the Fund and the
performance of its duties under this Agreement except for willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this Agreement.
2. Expenses. The Subadviser shall pay all of its expenses arising from the
performance of its obligations under Section 1.
3. Compensation
(a) As compensation for the services performed and the facilities
and personnel provided by the Subadviser pursuant to Section 1,
the Manager will pay to the Subadviser each month a fee, equal
to the applicable percentage of the average monthly Net
Qualifying Assets of the Fund.
(b) As used herein:
(1) The term "Applicable Percentage" means the percentage
fee rate that the Manager receives from the Fund
pursuant to the Management Agreement, which equals .95%
of the Fund's average daily net assets on the first
$750,000,000 of net assets and .85% of the Fund's
average daily net assets in excess of $750,000,000.
(2) The term "Net Qualifying Assets" means the Qualifying
Assets less related liabilities as designated by the
Manager.
(c) Average monthly Net Qualifying Assets shall be determined, for
any month, by taking the average of the value of the Net
Qualifying Assets as of the (i) opening of business on the first
day of such month and (ii) close of business on the last day of
such month.
(d) If the Subadviser shall serve hereunder for less than the whole
of any month, the fee hereunder shall be prorated.
4. Purchase and Sale of Securities. The Subadviser shall purchase securities
from or through and sell securities to or through such persons, brokers or
dealers as the Subadviser shall deem appropriate in order to carry out the
policy with respect to allocation of portfolio transactions as set forth in the
Registration Statement and Prospectus(es) of the Fund or as the Board of
Directors of the Fund may direct from time to time. In providing the Fund with
investment management and supervision, it is recognized that the Subadviser will
seek the most favorable price and execution, and, consistent with such policy,
may give consideration to the research, statistical and other services furnished
by brokers or dealers to the Subadviser for its use, to the general attitude of
brokers or dealers toward investment companies and their support of them, and to
such other considerations as the Board of Directors of the Fund may direct or
authorize from time to time.
Notwithstanding the above, it is understood that it is desirable for the Fund
that the Subadviser have access to supplemental investment and market research
and security and economic analysis provided by brokers who execute brokerage
transactions at a higher cost to the Fund than may result when allocating
brokerage to other brokers on the basis of seeking the most favorable price and
execution. Therefore, the Subadviser is authorized to place orders for the
purchase and sale of securities of the Fund with such brokers, subject to review
by the Fund's Board of Directors from time to time with respect to the extent
and continuation of this practice. It is understood that the services provided
by such brokers may be useful to the Subadviser in connection with its services
to other clients as well as the Fund.
If, in connection with purchases and sales of securities for the Fund, the
Subadviser may, without material risk, arrange to receive a soliciting dealer's
fee or other underwriter's or dealer's discount or commission, the Subadviser
shall, unless otherwise directed by the Board of Directors of the Fund, obtain
such fee, discount or commission and the amount thereof shall be applied to
reduce the compensation to be received by the Subadviser pursuant to Section 3
hereof.
Nothing herein shall prohibit the Board of Directors of the Fund from approving
the payment by the Fund of additional compensation to others for consulting
services, supplemental research and security and economic analysis.
5. Term of Agreement. This Agreement shall continue in full force and effect
until December 31, 1996, and from year to year thereafter if such continuance is
approved in the manner required by the 1940 Act, and if the Subadviser shall not
have notified the Manager in writing at least 60 days prior to such date or
prior to December 31 of any year thereafter that it does not desire such
continuance. This Agreement may be terminated at any time, without payment of
penalty by the Fund, on 60 days' written notice to the Subadviser by vote of the
Board of Directors of the Fund or by vote of a majority of the outstanding
voting securities of the Fund (as defined by the 1940 Act). This Agreement will
automatically terminate in the event of its assignment (as defined by the 0000
Xxx) or upon the termination of the Management Agreement.
6. Amendments. This Agreement may be amended by consent of the parties hereto
provided that the consent of the Fund is obtained in accordance with the
requirements of the 1940 Act.
7. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon either of the parties, to do anything in violation of
any applicable laws or regulations.
IN WITNESS WHEREOF, the Manager and the Subadviser have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
J. & X. XXXXXXXX & CO. INCORPORATED
By____________________________________________
XXXXXXXX XXXXXXXXX CO.
By____________________________________________
