SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT (Agreement) is made this
28th day of April, 2008, by and between Xxxx Xxxxx Partners
Fund Advisor, LLC, a Delaware limited liability company
(the Manager), and Batterymarch Financial Management, Inc.
a Maryland corporation (the Subadviser).
WHEREAS, the Manager has been retained by Xxxx Xxxxx
Partners Variable Equity Trust (the Trust), a Maryland business
trust registered as a management investment company under the
Investment Company Act of 1940, as amended (the 0000 Xxx) to
provide investment advisory, management, and administrative
services to the Trust with respect to certain series of the
Trust; and
WHEREAS, the Manager wishes to engage the Subadviser to
provide certain investment advisory services to the Trust with
respect to the series of the Trust designated in Schedule A
annexed hereto (the Fund) and Subadviser is willing to furnish
such services on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and
mutual covenants herein contained, it is agreed as follows:
1. In accordance with and subject to the
Management Agreement between the Trust and the Manager with
respect to the Fund (the Management Agreement), the Manager
hereby appoints the Subadviser to act as Subadviser with respect
to the Fund for the period and on the terms set forth in this
Agreement. The Subadviser accepts such appointment and agrees
to render the services herein set forth, for the compensation
herein provided.
2. The Manager shall cause the Subadviser to be
kept fully informed at all times with regard to the securities
owned by the Fund, its funds available, or to become available,
for investment, and generally as to the condition of the Funds
affairs. The Manager shall furnish the Subadviser with such
other documents and information with regard to the Funds affairs
as the Subadviser may from time to time reasonably request.
3. (a) Subject to the supervision of the Trusts
Board of Trustees (the Board) and the Manager, the Subadviser
shall regularly provide the Fund with respect to such portion
of the Funds assets as shall be allocated to the Subadviser by
the Manager from time to time (the Allocated Assets) with
investment research, advice, management and supervision and
shall furnish a continuous investment program for the Allocated
Assets consistent with the Funds investment objectives, policies
and restrictions, as stated in the Funds current Prospectus
and Statement of Additional Information. The Subadviser shall,
with respect to the Allocated Assets, determine from time to
time what securities and other investments will be purchased
(including, as permitted in accordance with this paragraph,
swap agreements, options and futures), retained, sold or
exchanged by the Fund and what portion of the Allocated Assets
will be held in the various securities and other investments in
which the Fund invests, and shall implement those decisions
(including the execution of investment documentation), all
subject to the provisions of the Trusts Declaration of Trust
and By-Laws (collectively, the Governing Documents), the
1940 Act, and the applicable rules and regulations promulgated
thereunder by the Securities and Exchange Commission (the SEC)
and interpretive guidance issued thereunder by the SEC staff
and any other applicable federal and state law, as well as the
investment objectives, policies and restrictions of the Fund
referred to above, and any other specific policies adopted by
the Board and disclosed to the Subadviser. The Subadviser is
authorized as the agent of the Trust to give instructions
with respect to the Allocated Assets to the custodian of
the Fund (including any sub-custodian or prime broker) as to
deliveries of securities and other investments and payments
of cash (including in respect of securities transactions or
cash margin calls) for the account of the Fund. Subject to
applicable provisions of the 1940 Act, the investment program
to be provided hereunder may entail the investment of all or
substantially all of the assets of the Fund in one or more
investment companies. The Subadviser will place orders pursuant
to its investment determinations for the Fund either directly
with the issuer or with any broker or dealer, foreign currency
dealer, futures commission merchant or others selected by it.
In connection with the selection of such brokers or dealers
and the placing of such orders, subject to applicable law,
brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934, as amended
(the Exchange Act)) to the Fund and/or the other accounts
over which the Subadviser or its affiliates exercise investment
discretion. The Subadviser is authorized to pay a broker or
dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund
which is in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction if
the Subadviser determines in good faith that such amount of
commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that
particulartransaction or the overall responsibilities which the
Subadviser and its affiliates have with respect to accounts over
which they exercise investment discretion. The Board may adopt
policies and procedures that modify and restrict the Subadvisers
authority regarding the execution of the Funds portfolio transactions
provided herein. The Subadviser shall exercise voting rights, rights
to consent to corporate action and any other rights pertaining to the
Allocated Assets subject to such direction as the Board may provide,
and shall perform such other functions of investment management
and supervision as may be directed by the Board. The Subadviser
may execute on behalf of the Fund certain agreements, instruments
and documents in connection with the services performed by it under
this Agreement. These may include, without limitation, brokerage
agreements, clearing agreements, account documentation, futures and
options agreements, swap agreements, other investment related
agreements, and any other agreements, documents or instruments
the Subadviser believes are appropriate or desirable in performing
its duties under this Agreement.
(b) The Fund hereby authorizes any entity or person
associated with the Subadviser which is a member of a national
securities exchange to effect any transaction on the exchange for
the account of the Fund which is permitted by Section 11(a) of the
Exchange Act and Rule 11a2-2(T) thereunder, and the Fund hereby
consents to the retention of compensation for such transactions
in accordance with Rule 11a2-2(T)(a)(2)(iv). Notwithstanding the
foregoing, the Subadviser agrees that it will not deal with itself,
or with members of the Board or any principal underwriter of the
Fund, as principals or agents in making purchases or sales of
securities or other property for the account of the Fund, nor will
it purchase any securities from an underwriting or selling group in
which the Subadviser or its affiliates is participating, or arrange
for purchases and sales of securities between the Fund and another
account advised by the Subadviser or its affiliates, except in each
case as permitted by the 1940 Act and in accordance with such
policies and procedures as may be adopted by the Fund from time to
time, and will comply with all other provisions of the Governing
Documents and the Funds then-current Prospectus and Statement of
Additional Information relative to the Subadviser and its directors
and officers.
4. The Subadviser may delegate to any other one or
more companies that the Subadviser controls, is controlled by,
or is under common control with, or to specified employees of
any such companies, certain of the Subadvisers duties under this
Agreement, provided in each case the Subadviser will supervise
the activities of each such entity or employees thereof, that such
delegation will not relieve the Subadviser of any of its duties
or obligations under this Agreement and provided further that
any such arrangements are entered into in accordance with all
applicable requirements of the 1940 Act.
5. The Subadviser agrees that it will keep records
relating to its services hereunder in accordance with all applicable
laws, and in compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Subadviser hereby agrees that any records that
it maintains for the Fund are the property of the Fund, and further
agrees to surrender promptly to the Fund any of such records upon
the Funds request. The Subadviser further agrees to arrange for the
preservation of the records required to be maintained by Rule 31a-1
under the 1940 Act for the periods prescribed by Rule 31a-2 under
the 1940 Act.
6. (a) The Subadviser, at its expense, shall
supply the Board, the officers of the Trust, and the Manager with
all information and reports reasonably required by them and
reasonably available to the Subadviser relating to the services
provided by the Subadviser hereunder.
(b) The Subadviser shall bear all expenses, and shall
furnish all necessary services, facilities and personnel, in
connection with its responsibilities under this Agreement. Other
than as herein specifically indicated, the Subadviser shall not be
responsible for the Funds expenses, including, without limitation,
advisory fees; distribution fees; interest; taxes; governmental fees;
voluntary assessments and other expenses incurred in connection with
membership in investment company organizations; organization costs
of the Fund; the cost (including brokerage commissions, transaction
fees or charges, if any) in connection with the purchase or sale of
the Funds securities and other investments and any losses in
connection therewith; fees and expenses of custodians, transfer
agents, registrars, independent pricing vendors or other agents;
legal expenses; loan commitment fees; expenses relating to share
certificates; expenses relating to the issuing and redemption or
repurchase of the Funds shares and servicing shareholder accounts;
expenses of registering and qualifying the Funds shares for sale
under applicable federal and state law; expenses of preparing,
setting in print, printing and distributing prospectuses and
statements of additional information and any supplements thereto,
reports, proxy statements, notices and dividends to the Funds
shareholders; costs of stationery; website costs; costs of meetings
of the Board or any committee thereof, meetings of shareholders and
other meetings of the Fund; Board fees; audit fees; travel expenses
of officers, members of the Board and employees of the Fund, if any;
and the Funds pro rata portion of premiums on any fidelity bond and
other insurance covering the Fund and its officers, Board members
and employees; litigation expenses and any non-recurring or
extraordinary expenses as may arise, including, without limitation,
those relating to actions, suits or proceedings to which the Fund is
a party and the legal obligation which the Fund may have to indemnify
the Funds Board members and officers with respect thereto.
7. No member of the Board, officer or employee of the
Trust or Fund shall receive from the Trust or Fund any salary or other
compensation as such member of the Board, officer or employee while he
is at the same time a director, officer, or employee of the Subadviser
or any affiliated company of the Subadviser, except as the Board may
decide. This paragraph shall not apply to Board members, executive
committee members, consultants and other persons who are not regular
members of the Subadvisers or any affiliated companys staff.
8. As compensation for the services performed by the
Subadviser, including the services of any consultants retained by the
Subadviser, the Manager shall pay the Subadviser out of the management
fee it receives with respect to the Fund, and only to the extent
thereof, as promptly as possible after the last day of each month, a
fee, computed daily at an annual rate set forth on Schedule A annexed
hereto. The first payment of the fee shall be made as promptly as
possible at the end of the month succeeding the effective date of this
Agreement, and shall constitute a full payment of the fee due the
Subadviser for all services prior to that date. If this Agreement is
terminated as of any date not the last day of a month, such fee shall
be paid as promptly as possible after such date of termination, shall
be based on the average daily net assets of the Fund or, if less, the
portion thereof comprising the Allocated Assets in that period from
the beginning of such month to such date of termination, and shall be
that proportion of such average daily net assets as the number of
business days in such period bears to the number of business days in
such month. The average daily net assets of the Fund or the portion
thereof comprising the Allocated Assets shall in all cases be based
only on business days and be computed as of the time of the regular
close of business of the New York Stock Exchange, or such other time
as may be determined by the Board.
9. The Subadviser assumes no responsibility under this
Agreement other than to render the services called for hereunder, in
good faith, and shall not be liable 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 execution of securities transactions for
the Fund, provided that nothing in this Agreement shall protect the
Subadviser against any liability to the Manager or the Fund to which
the Subadviser would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and
duties hereunder. As used in this Section 9, the term Subadviser
shall include any affiliates of the Subadviser performing services for
the Trust or the Fund contemplated hereby and the partners,
shareholders, directors, officers and employees of the Subadviser and
such affiliates.
10. Nothing in this Agreement shall limit or restrict the
right of any director, officer, or employee of the Subadviser who may
also be a Board member, officer, or employee of the Trust or the Fund,
to engage in any other business or to devote his time and attention in
part to the management or other aspects of any other business, whether
of a similar nature or a dissimilar nature, nor to limit or restrict
the right of the Subadviser to engage in any other business or to
render services of any kind, including investment advisory and
management services, to any other fund, firm, individual or
association. If the purchase or sale of securities consistent with the
investment policies of the Fund or one or more other accounts of the
Subadviser is considered at or about the same time, transactions in
such securities will be allocated among the accounts in a manner
deemed equitable by the Subadviser. Such transactions may be combined,
in accordance with applicable laws and regulations, and consistent
with the Subadvisers policies and procedures as presented to the
Board from time to time.
11. For the purposes of this Agreement, the Funds net
assets shall be determined as provided in the Funds then-current
Prospectus and Statement of Additional Information and the terms
assignment, interested person, and majority of the outstanding voting
securities shall have the meanings given to them by Section 2(a) of
the 1940 Act, subject to such exemptions as may be granted by the SEC
by any rule, regulation or order.
12. This Agreement will become effective with respect
to the Fund on the date set forth opposite the Funds name on
Schedule A annexed hereto, provided that it shall have been approved
by the Trusts Board and, if so required by the 1940 Act, by
shareholders of the Fund in accordance with the requirements of the
1940 Act and, unless sooner terminated as provided herein, will
continue in effect through November 30, 2008. Thereafter, if not
terminated, this Agreement shall continue in effect with respect
to the Fund, so long as such continuance is specifically approved
at least annually (i) by the Board or (ii) by a vote of a majority
of the outstanding voting securities of the Fund, provided that in
either event the continuance is also approved by a majority of the
Board members who are not interested persons of any party to this
Agreement, by vote cast in person at a meeting called for the purpose
of voting on such approval.
13. This Agreement is terminable with respect to the
Fund without penalty by the Board or by vote of a majority of the
outstanding voting securities of the Fund, in each case on not more
than 60 days nor less than 30 days written notice to the Subadviser,
or by the Subadviser upon not less than 90 days written notice to the
Fund and the Manager, and will be terminated upon the mutual written
consent of the Manager and the Subadviser. This Agreement shall
terminate automatically in the event of its assignment by the
Subadviser and shall not be assignable by the Manager without the
consent of the Subadviser.
14. The Subadviser agrees that for any claim by it against
the Fund in connection with this Agreement or the services rendered
under this Agreement, it shall look only to assets of the Fund for
satisfaction and that it shall have no claim against the assets of
any other portfolios of the Trust.
15. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no material amendment of the
Agreement shall be effective until approved, if so required by the
1940 Act, by vote of the holders of a majority of the Funds
outstanding voting securities.
16. This Agreement, and any supplemental terms contained
on Annex I hereto, if applicable, embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter hereof.
Should any part of this Agreement be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto and their respective
successors.
17. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State
of New York.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers thereunto duly authorized.
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
By: _______________________________
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
BATTERYMARCH FINANCIAL MANAGEMENT,
INC.
By: _______________________________
Name:
Title:
The foregoing is acknowledged:
The undersigned officer of the Trust has executed this
Agreement not individually but in his/her capacity as an officer
of the Trust. The Trust does not hereby undertake, on behalf of the
Fund or otherwise, any obligation to the Subadviser.
XXXX XXXXX PARTNERS VARIABLE EQUITY
TRUST
By: _______________________________
Name: R. Xxx Xxxxxx
Title: President and Principal
Executive Officer
ANNEX I
Not applicable.
SCHEDULE A
Xxxx Xxxxx Partners Variable Global Equity Portfolio
Date:
April 28, 2008
Fee:
The sub-advisory fee will be 70% of the management fee paid to Xxxx
Xxxxx Partners Fund Advisor, LLC, net of expense waivers and
reimbursements.
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