SUBADVISORY AGREEMENT
SUBADVISORY AGREEMENT, dated April 28, 1998 between J. & X.
XXXXXXXX & CO. INCORPORATED, a Delaware corporation (the "Manager") and
XXXXXXXXX INVESTMENT MANAGEMENT LIMITED (the "Subadviser").
WHEREAS, the Manager has entered into a Management Agreement,
dated March 19, 1992 (the "Management Agreement"), with Xxxxxxxx Xxxxxxxxx
Global Fund Series, Inc. (the "Corporation"), 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 or contract
to obtain as hereinafter provided investment management services to the
Corporation, and to administer the business and other affairs of the
Corporation; and
WHEREAS, the Manager desires to retain the Subadviser to
provide investment advisory and other services to the Corporation, and the
Subadviser is willing to render such services, in each case effective July 1,
1998.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
1. DUTIES OF THE SUBADVISER. Subject in each case to the
control of the Board of Directors of the Corporation and in accordance with the
objectives, policies and principles set forth in the Registration Statement and
Prospectus(es) of the Corporation and the requirements of the 1940 Act, and in
conjunction with and under the supervision of the Manager, the Subadviser agrees
to furnish the Manager and the Corporation with such investment advice, research
and assistance as the Manager or the Corporation shall from time to time
reasonably request. Subject to the foregoing, the Subadviser shall (i)
participate in the development of the Corporation's overall investment strategy,
in the determination of country allocations and in the determination of sector
and industry weightings for the various Series of the Corporation, (ii) provide
investment advice and research to the Corporation with respect to existing and
potential investments in securities of non-U.S. issuers, including company
visits and meetings with management, (iii) determine securities for investment,
(iv) select brokers, and (v) cause the execution of trades, including foreign
exchange dealings. The Subadviser will make available representatives to report
in person to the Board of Directors at least semi-annually on investment
results, regulatory compliance and other matters that the Manager or the Board
of Directors may reasonably request. The Subadviser shall also provide such
reports and other information to the Manager or the Board of Directors as such
persons may reasonably request.
Portfolio accounting and pricing for the Corporation will be
the ultimate responsibility of a third party accounting agent or administrator;
however, in the event that an asset under the supervision of the Subadviser
cannot be priced by a pricing source authorized by
the Manager, the Subadviser will provide the third party accounting agent or
administrator with daily prices for such asset in accordance with the
Corporation's pricing procedures. Notwithstanding the foregoing, the Subadviser
will be responsible for coordinating work with custodians in respect of assets
under the Subadviser's supervision ("Custodians"), including liaising as
required with Custodians in respect of trade settlement, safe custody of assets,
income collection and the processing of corporate actions. The Subadviser will
use all reasonable efforts to monitor the performance of Custodians within the
terms of the Corporation's custodian agreements (to the extent such terms are
known by the Subadviser or a related entity). With respect to the securities of
issuers under the supervision of the Subadviser, the Subadviser shall provide
executed trade information to Custodians, third party accounting agents or
administrators and/or the Manager, which may be done via computer.
Subject to Section 36 of the 1940 Act, the Subadviser shall
not be liable to the Corporation 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
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; PROVIDED,
HOWEVER, that the Subadviser shall be liable for any loss arising out of any act
or omission of the Subadviser that results, directly or indirectly, in an error
in the net asset value of any series of the Corporation.
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 by the Subadviser pursuant to Section 1, the Manager will pay to the
Subadviser each month a fee based on the Applicable Percentage of the average
monthly assets under the Subadviser's supervision.
(b) As used herein, the term "Applicable Percentage" shall
mean an annual rate of .90% for the period July 1, 1998 through June 30, 1999;
.70% for the period July 1, 1999 through June 30, 2000; and .50% thereafter.
(c) Average monthly assets under the Subadviser's supervision
shall be determined, for any month, by taking the average of the assets
(adjusted to reflect receivables for assets sold and payables for assets
purchased) under the Subadviser's supervision as of (i) the opening of business
on the first day of such month and (ii) the 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.
(e) Any fee payable to the Subadviser under this Agreement
shall be paid to the Subadviser or to an affiliate of the Subadviser at an
address designated by the Subadviser.
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
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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 Corporation or as the Board of Directors of
the Corporation may direct from time to time. In providing the Corporation 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 Corporation may
direct or authorize from time to time.
Notwithstanding the above, it is understood that it is
desirable for the Corporation 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 Corporation
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
Corporation with such brokers, subject to review by the Corporation'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 Corporation.
If, in connection with purchases and sales of securities for
the Corporation, 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 Corporation, 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
Corporation from approving the payment by the Corporation of additional
compensation to others for consulting services, supplemental research and
security and economic analysis.
5. TERM OF AGREEMENT. This Agreement shall become effective
July 1, 1998 and shall continue in full force and effect with respect to each
Series of the Corporation until December 31, 1999, and from year to year
thereafter if such continuance is approved in the manner required by the 1940
Act if the Subadviser shall not have notified the Manager in writing at least 60
days prior to such December 31 or prior to December 31 of any year thereafter
that it does not desire such continuance. This Agreement may be terminated at
any time with respect to any Series, without payment of penalty by the
Corporation, on 60 days' written notice to the Subadviser by vote of the Board
of Directors of the Corporation or by vote of a majority of the outstanding
voting securities (as defined by the 0000 Xxx) of such Series. 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.
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6. AMENDMENTS. This Agreement may be amended by consent of the
parties hereto provided that the consent of the Corporation 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_____________________________________
XXXXXXXXX INVESTMENT MANAGEMENT LIMITED
By_____________________________________
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