Exhibit (d)(2)
SUBADVISORY AGREEMENT
Xxxxx Xxxxxx International Fund
SUBADVISORY AGREEMENT, dated as of _____________, by and between Xxxxx
Xxxxxx Fund Management LLC, a Delaware limited liability corporation (the
"Manager"), and Citigroup Asset Management Ltd., a private limited liability
company incorporated in England and Wales (the "Subadviser").
W I T N E S S E T H:
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WHEREAS, the Manager has been retained by Xxxxx Xxxxxx Investment
Series, a Massachusetts business trust (the "Trust"), to act as investment
adviser to the Trust with respect to the series of the Trust designated as Xxxxx
Xxxxxx International Fund (the "Fund"), and
WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act"), and
WHEREAS, the Manager wishes to engage the Subadviser to provide certain
investment advisory services for the Fund, and the Subadviser is willing to
provide such investment advisory services for the Fund on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Appointment of the Subadviser. In accordance with and subject to the
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Management Agreement between the Trust and the Manager (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 provide an
investment program with respect to the Fund for the compensation provided by
this Agreement.
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2. Duties of the Subadviser. The Subadviser shall provide the Manager
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with such investment advice and supervision as the Manager may from time to time
consider necessary for the proper management of such portion of the Fund's
investment assets as the Manager may designate from time to time.
Notwithstanding any provision of this Agreement, the Manager shall retain all
rights and ultimate responsibilities to supervise and, in its discretion,
conduct investment advisory activities relating to the Trust. The Subadviser
shall furnish continuously an investment program and shall determine from time
to time what securities shall be purchased, sold or exchanged and what portion
of the assets of the Fund allocated by the Manager to the Subadviser shall be
held uninvested, subject always to the restrictions of the Trust's Declaration
of Trust, dated as of March 1, 2002, and By-laws, as each may be amended and
restated from time to time (respectively, the "Declaration" and the "By-Laws"),
the provisions of the 1940 Act, and the then-current Registration Statement of
the Trust with respect to the Fund, and subject, further, to the Subadviser
notifying the Manager in advance of the Subadviser's intention to purchase any
securities except insofar as the requirement for such notification may be waived
or limited by the Manager, it being understood that the Subadviser shall be
responsible for compliance with any restrictions imposed in writing by the
Manager from time to time in order to facilitate compliance with the
above-mentioned restrictions and such other restrictions as the Manager may
determine. Further, the Manager or the Trustees of the Trust may at any time,
upon written notice to the Subadviser, suspend or restrict the right of the
Subadviser to determine what securities shall be purchased or sold on behalf of
the Fund and what portion, if any, of the assets of the Fund shall be held
uninvested. The Subadviser shall also, as requested, make recommendations to the
Manager as to the manner in which proxies, voting rights, rights to consent to
corporate action and any other rights pertaining to the Fund's portfolio
securities shall be exercised. Should the Board of Trustees of the Trust or the
Manager at any time, however, make any definite determination as to investment
policy applicable to the Fund and notify the Subadviser thereof in writing, the
Subadviser shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such determination has
been revoked.
The Subadviser shall take, on behalf of the Fund, all actions which it
deems necessary to implement the investment policies determined as provided
above, and in particular to place all orders for the purchase or sale of
securities for the Fund's account with the brokers or dealers selected by it,
and to that end the Subadviser is authorized as the agent of the Trust to give
instructions to the custodian and any subcustodian of the
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Fund as to deliveries of securities and payments of cash for the account of the
Fund. The Subadviser will advise the Manager on the same day it gives any such
instructions. In connection with the selection of such brokers or dealers and
the placing of such orders, 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) 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 particular transaction
or the overall responsibilities which the Subadviser and its affiliates have
with respect to accounts over which they exercise investment discretion. In
making purchases or sales of securities or other property for the account of the
Fund, the Subadviser may deal with itself, the Manager, or the Trustees of the
Trust or the Trust's underwriter or distributor, or with its or their respective
affiliate or affiliates, to the extent such actions are permitted by the 1940
Act. The Board of Trustees of the Trust, in its discretion, may instruct the
Subadviser to effect all or a portion of its securities transactions with one or
more brokers and/or dealers selected by the Board of Trustees, if it determines
that the use of such brokers and/or dealers is in the best interest of the
Trust.
3. Allocation of Charges and Expenses. The Subadviser shall furnish at
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its own expense all necessary services, facilities and personnel in connection
with its responsibilities under Section 2 above. Except as provided in the
foregoing sentence, it is understood that the Trust will pay from the assets of
the Fund all of its own expenses allocable to the Fund including, without
limitation, organization costs of the Fund; compensation of Trustees who are not
"affiliated persons" of the Manager; governmental fees; interest charges;
brokerage fees and commissions; loan commitment fees; taxes; membership dues in
industry associations allocable to the Trust; fees and expenses of independent
auditors, legal counsel and any transfer agent, distributor, shareholder
servicing agent, service agent, registrar or dividend disbursing agent of the
Trust; expenses of issuing and redeeming shares of beneficial interest and
servicing shareholder accounts; expenses of preparing, typesetting, printing and
mailing prospectuses, statements of additional information, shareholder reports,
notices, proxy statements and reports to governmental officers and commissions
and to existing shareholders of the
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Fund; expenses connected with the execution, recording and settlement of
security transactions; insurance premiums; fees and expenses of the custodian
for all services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of the Fund (including but not limited to the fees of independent pricing
services); expenses of meetings of the Fund's Trustees and of the Fund's
shareholders; expenses relating to the registration and qualification of shares
of beneficial interest of the Fund; and such non-recurring or extraordinary
expenses as may arise, including those relating to actions, suits or proceedings
to which the Trust on behalf of the Fund may be a party and the legal obligation
which the Trust may have to indemnify its Trustees and officers with respect
thereto.
4. Compensation of the Subadviser. For the services to be rendered by
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the Subadviser hereunder, the Manager shall pay to the Subadviser out of the
management fee it receives from the Trust, and only to the extent thereof, an
investment subadvisory fee, computed daily and paid monthly, at an annual rate
equal to 0.70% of the aggregate assets of the Fund allocated to the Subadviser.
If the Subadviser serves as investment subadviser for less than the whole of any
period specified in this Section 4, the compensation to the Subadviser shall be
prorated. Neither the Trust nor the Fund shall be liable to the Subadviser for
the compensation of the Subadviser.
5. Covenants of the Subadviser. The Subadviser agrees that it will not
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deal with itself, or with the Trustees of the Trust or the Trust's principal
underwriter or distributor as principals in making purchases or sales of
securities or other property for the account of the Fund, except as permitted by
the 1940 Act, and will comply with all other provisions of the Declaration and
By-Laws and the then-current Registration Statement applicable to the Fund
relative to the Subadviser and its directors and officers.
6. Limitation of Liability of the Subadviser. The Subadviser shall not
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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, 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 hereunder. As used in this Section 6, the term
"Subadviser" shall include directors, officers, and employees of the Subadviser
as well as the Subadviser itself. The Trust, on behalf of the Fund, is expressly
made a third party beneficiary of this Agreement, and may enforce any
obligations of the
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Subadviser under this Agreement and recover directly from the Subadviser for any
liability the Subadviser may have hereunder.
7. Activities of the Subadviser. The services of the Subadviser to the
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Fund are not to be deemed to be exclusive, the Subadviser being free to render
investment advisory and/or other services to others, including accounts or
investment management companies with similar or identical investment objectives
to the Fund. It is understood that Trustees, officers, and shareholders of the
Trust or the Manager are or may be or may become interested in the Subadviser,
as directors, officers, employees, or otherwise and that directors, officers and
employees of the Subadviser are or may become similarly interested in the Trust
or the Manager and that the Subadviser may be or may become interested in the
Trust as a shareholder or otherwise.
8. Duration, Termination and Amendments of this Agreement. This
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Agreement shall become effective as of the day and year first above written, and
shall govern the relations between the parties hereto thereafter and shall
remain in force for a period of two years from its effectiveness, on which date
it will terminate unless its continuance after that date is "specifically
approved at least annually" (a) by the vote of a majority of the Trustees of the
Trust who are not "interested persons" of the Trust or of the Manager or of the
Subadviser at a meeting specifically called for the purpose of voting on such
approval, and (b) by the Board of Trustees of the Trust or by "vote of a
majority of the outstanding voting securities" of the Fund.
This Agreement may be terminated at any time without the payment of any
penalty by (i) the Trustees, (ii) the "vote of a majority of the outstanding
voting securities" of the Fund, or (iii) the Manager, in each case on not more
than 60 days' nor less than 30 days' written notice to the other party. This
Agreement may be terminated at any time without the payment of any penalty by
the Subadviser on not less than 90 days' written notice to the Manager. This
Agreement shall automatically terminate in the event of its "assignment."
This Agreement constitutes the entire agreement between the parties and
may be amended only if such amendment is approved by the Subadviser and the
"vote of a majority of the outstanding voting securities" of the Fund (except
for any such amendment as may be effected in the absence of such approval
without violating the 1940 Act).
The terms "specifically approved at least annually," "vote of a
majority of the outstanding voting securities," "assignment," "affiliated
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person," and "interested persons," when used in this Agreement, shall have the
respective meanings specified in, and shall be construed in a manner consistent
with, the 1940 Act, subject, however, to such exemptions as may be granted by
the Securities and Exchange Commission under said Act.
9. Governing Law. This Agreement shall be construed and the provisions
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thereof interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts provided, however, that nothing herein will be construed in a
manner inconsistent with the 1940 Act, the Investment Advisers Act of 1940, as
amended, or any rules or regulations of the Securities and Exchange Commission
thereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
XXXXX XXXXXX FUND CITIGROUP ASSET
MANAGEMENT LLC MANAGEMENT LTD.
By: By:
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Title: Title:
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The foregoing is acknowledged:
The undersigned officer of the Trust has executed this Agreement not
individually but in his capacity as an officer of the Trust under the
Declaration. The Trust does not hereby undertake, on behalf of the Fund or
otherwise, any obligation to the Subadviser.
XXXXX XXXXXX INVESTMENT SERIES
on behalf of Xxxxx Xxxxxx International
Fund
By:
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Title:
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