SUBADVISORY CONTRACT AMONG THE TRUST, ON BEHALF
OF CLEARWATER GROWTH FUND, CMC AND PARAMETRIC
SUBADVISORY CONTRACT
AGREEMENT made as of the 10th day of September, 2003, by and among
CLEARWATER INVESTMENT TRUST, a Massachusetts business trust (the "Trust"),
CLEARWATER MANAGEMENT CO., INC., a Minnesota corporation (the "Manager"), and
PARAMETRIC PORTFOLIO ASSOCIATES (the "Subadviser").
W I T N E S S E T H:
WHEREAS, the Manager desires to utilize the services of the Subadviser
as financial counsel with respect to the Clearwater Growth Fund (the "Fund"), a
separate series of the Trust; and
WHEREAS, the Subadviser is willing to perform such services on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and benefits
herein contained, it is agreed as follows:
1. The Subadviser's Services. The Subadviser will serve the Manager as
financial counsel with respect to the Fund which is under the management of the
Manager pursuant to the Management Contract dated May 1, 1998 between the
Manager and the Trust. Subject to the supervision of the Manager and the Trust's
Board of Trustees, the investment policies and restrictions applicable to the
Fund as set forth in the registration statement of the Trust filed with the
Securities and Exchange Commission and such resolutions as from time to time may
be adopted by the Trust's Trustees and furnished to the Subadviser, the
Subadviser is hereby authorized and directed and hereby agrees to develop,
recommend and implement such investment program and strategy for the Fund as may
from time to time in the circumstances appear most appropriate to the
achievement of the investment objectives of the Fund as stated in the aforesaid
registration statement, to provide research and analysis relative to the
investment program and investments of the Fund, to determine what securities
should be purchased and sold and what portion of the assets of the Fund should
be held in cash or cash equivalents or other assets and to monitor on a
continuing basis the performance of the portfolio securities of the Fund. In
addition, the Subadviser will place orders for the purchase and sale of
portfolio securities and will advise the Manager and the custodian for the Fund
on a prompt basis of each purchase and sale of a portfolio security specifying
the name of the issuer, the description and amount or number of shares of the
security purchased, the market price, commission and gross or net price, trade
date, settlement date and identity of the effecting broker or dealer. From time
to time as the Trustees of the Trust or the Manager may reasonably request, the
Subadviser will furnish to the Trust's officers and to each of its Trustees
reports on portfolio transactions and reports on issues of securities held by
the Fund, all in such detail as any such Trustee or the Manager may reasonably
request. The Subadviser also will inform the Trust's officers and Trustees on a
current basis of changes in investment strategy or tactics. The Subadviser will
make its officers and employees available to meet with the Trust's officers and
Trustees and the Manager's officers and Directors at least quarterly on due
notice to review the investments and investment program of the Fund in the light
of current and prospective economic and market conditions.
2. Avoidance of Inconsistent Position.
(a) In connection with purchases and sales of portfolio
securities for the account of the Fund, the Subadviser will not act as a
principal or agent or receive any commission except as permitted by the
Investment Company Act of 1940, as amended (the "1940 Act"). The Subadviser
shall arrange for the placing of all orders for the purchase and sale of
portfolio securities for the Fund's account with brokers or dealers selected by
the Subadviser. In the selection of such brokers or dealers and the placing of
such orders, the Subadviser is directed at all times to seek for the Fund the
most favorable execution and net price available except as otherwise described
herein. 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 analyses provided by brokers who may 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 efficient
execution. Therefore, the Subadviser is authorized to place orders for the
purchase and sale of securities for the Fund with such brokers consistent with
the requirements of Section 28(e) of the Securities Exchange Act of 1934,
subject to review by the Trust's Trustees 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 (and the services of the Subadviser's affiliates) to other clients.
(b) On occasions when the Subadviser deems the purchase or
sale of a security to be in the best interest of the Fund as well as other
clients, the Subadviser, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be sold or purchased in order to
obtain the best execution and lower brokerage commissions, if any. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Subadviser in the
manner it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such clients.
3. Other Agreements, etc. It is understood that any of the
shareholders, Trustees, officers and employees of the Trust may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the Subadviser, any interested person (as defined in the 0000 Xxx) of the
Subadviser, any organization in which the Subadviser may have an interest or any
organization which may have an interest in the Subadviser and that the
Subadviser, any such interested person or any such organization may have an
interest in the Trust. It is also understood that the Subadviser, the Manager
and the Trust may have advisory, management, service or other contracts with
other individuals or entities, and may have other interests and businesses. When
a security proposed to be purchased or sold for the Trust is also to be
purchased or sold for other accounts managed by the Subadviser at the same time,
the Subadviser shall make such purchases or sales on a pro rata, rotating or
other equitable basis so as to avoid any one account being preferred over any
other account.
4. Subadviser's Compensation. The Manager shall pay to the Subadviser
for its services hereunder a fee at the annual rate of 0.15% of the Fund's net
assets under the Subadviser's management. Such fee shall be calculated and
accrued on a monthly basis as a percentage of the Fund's month end net assets
under the Subadviser's management, and shall be payable quarterly after the end
of each calendar quarter on or before the 15th day of January, April, July and
October of each year with respect to the preceding quarter. If this Contract
shall be effective for only a portion of a calendar quarter, the aforesaid fee
shall be prorated for that portion of such calendar quarter during which this
Contract is in effect.
5. Assignment and Amendment. This Contract shall automatically
terminate, without the payment of any penalty, in the event of its assignment
(as defined in the 0000 Xxx) or in the event of the termination of the
Management Contract between the Trust and the Manager insofar as it applies to
the Fund; provided, that such termination shall not relieve either party of any
liability incurred hereunder. The terms of this Contract shall not be changed
unless such change is approved in accordance with the requirements of the 1940
Act, and as such requirements may be modified by rule, regulation or order of
the Securities and Exchange Commission (the "SEC").
6. Effective Period and Termination of this Contract.
(a) This Contract shall become effective on the date hereof
and shall remain in full force and effect until two years from the date hereof
and from year to year thereafter, but only so long as its continuance is
approved annually in accordance with the requirements of the 1940 Act, and as
such requirements may be modified by rule, regulation or order of the SEC,
subject to the respective rights of the Trust, the Manager and the Subadviser to
terminate this Contract as provided in paragraphs (b) and (c) hereof.
(b) The Trust or the Manager may at any time terminate this
Contract by not more than sixty (60) days' nor less than thirty (30) days'
written notice given to the Subadviser.
(c) The Subadviser may at any time terminate this Contract by
not less than one hundred twenty (120) days' written notice given to the Trust
and the Manager.
7. Complete Agreement. This Contract states the entire agreement of the
parties hereto, and is intended to be the complete and exclusive statement of
the terms hereof. It may not be added to or changed orally, and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with Section 5 hereof and the applicable requirements of the 1940
Act.
8. Nonliability of the Subadviser. In the absence of willful
misfeasance, bad faith or gross negligence on the part of the Subadviser, or of
reckless disregard of its obligations and duties hereunder, the Subadviser shall
not be subject to any liability to the Manager or the Trust, to any shareholder
of the Fund, or to any person, firm or organization, for any act or omission in
the course of, or connected with, rendering services hereunder. Nothing herein,
however, shall derogate from the Subadviser's obligations under applicable
federal and state securities laws.
9. Limitation of Liability of the Trustees, Officers and Shareholders.
A copy of the Declaration of Trust of the Trust is on file with the Secretary of
State of The Commonwealth of Massachusetts, and notice is hereby given that this
Contract is executed on behalf of the Trustees of the Trust as Trustees and not
individually and that the obligations under this Contract are not binding upon
any of the Trustees, officers or shareholders of the Trust but are binding only
upon the assets and property of the Fund.
10. Notices. Any notice, instruction, request or other communications
required or contemplated by this Contract shall be in writing and shall be duly
given when deposited by first class mail, postage prepaid, addressed to (or
delivered by hand with confirmation to) the Trust, the Manager or the Subadviser
at the applicable address set forth below:
If to Subadviser:
Parametric Portfolio Associates
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
If to Trust:
Clearwater Investment Trust
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxx, Xxxxxxxxx 00000-0000
If to Manager:
Clearwater Management Co., Inc.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxx, Xxxxxxxxx 00000-0000
11. Disclosure Statement. The Manager and the Trust acknowledge receipt
of the Subadviser's written disclosure statement required by Rule 204-3 under
the Investment Advisers Act of 1940 not less than 48 hours prior to entering
into this Contract.
12. Governing Law. This Contract and all performance hereunder shall be
governed by, interpreted, construed and enforced in accordance with the laws of
the State of Minnesota.
13. Any term or provision of this Contract which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Contract or affecting
the validity or enforceability of any of the terms or provisions of this
Contract in any other jurisdiction.
14. This Contract may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their duly authorized officers and as of the day and year first
written above.
CLEARWATER INVESTMENT TRUST
By: Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
CLEARWATER MANAGEMENT CO., INC.
By: Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman and Treasurer
PARAMETRIC PORTFOLIO ASSOCIATES
By: Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Chief Financial Officer
