Travelers Series Trust
File Number 811-6465
Question 77Q1
Small Cap Growth Portfolio
SUB-ADVISORY AGREEMENT
This Sub-Advisory Agreement (this "Agreement") is entered into as of
May 1, 2005 by and between Travelers Asset Management International
Company LLC, a New York limited liability company ("TAMIC"), and Janus
Capital Management LLC, a Delaware limited liability
company ("Sub- Adviser").
WHEREAS, TAMIC and Travelers Series Trust, an open-end management
investment company registered under the Investment Company Act of
1940 and organized as a Massachusetts business trust (the "Trust"),
have entered into an Investment Advisory Agreement dated May 1, 2005,
(the "Investment Advisory Agreement"), a copy of which is attached
as Exhibit A hereto; and
WHEREAS, pursuant to the Investment Advisory Agreement, TAMIC
has agreed to provide investment management and advisory services
to the Travelers Series Trust: Small Cap Growth Portfolio, a series
of the Trust (the "Portfolio"); and
WHEREAS, the Investment Advisory Agreement provides that
TAMIC may engage a duly organized subadviser, to furnish investment
information, services and advice to assist TAMIC in carrying out
its responsibilities under the Investment Advisory Agreement,
provided that TAMIC obtains the consent and approval of the Board
of Trustees of the Trust (the "Board") and a majority of those
trustees who are not parties to the Investment Advisory Agreement
or "interested persons" of any party thereto in accordance with
the requirements of the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, TAMIC desires to retain Sub-Adviser to render
investment advisory services to TAMIC in the manner and on the
terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements set forth in this Agreement, TAMIC and Sub-Adviser
agree as follows:
1. Sub-Adviser Services.
(a) Sub-Adviser shall, subject to the supervision of
TAMIC and the Board, manage the investment and reinvestment of
that discrete portion of the Portfolio's assets deemed appropriate
from time to time by TAMIC in its discretion, subject to the periodic
review by the Board. References to the Portfolio or Portfolio assets
shall mean the portion of the Portfolio for which Sub-Adviser is
responsible. Subject to the investment objectives, policies and
restrictions set forth in the Trust's Declaration of Trust and in
its registration statement under the Securities Act of 1933 and the
Investment Company Act of 1940, and to the statement of investment
guidelines to be agreed upon from time to time between TAMIC and
Sub-Adviser, and subject further to the requirements under the
Internal Revenue Code of 1986, as amended (the "Code") described
in Section l(b) below, Sub-Adviser is authorized, in its discretion
and without prior consultation with TAMIC, to buy, sell, lend and
otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Trust, and the majority
or the whole of the Trust's assets may be invested in such proportions
of stocks, bonds, other securities or investment instruments, or
cash as Sub-Adviser shall determine. Sub-Adviser shall furnish
TAMIC quarterly and annual reports concerning transactions and
performance of the Trust.
(b) Sub-Adviser shall manage the investment and reinvestment
of the assets of the Trust in compliance with the diversification
requirements of Sections 817(h) and 851(b)(4) of the Code, and with
the annual gross income qualification requirements of Sections 851 (b)(2)
and 851 (b)(3 ) of the Code.
(c) Sub-Adviser shall be responsible for voting proxies on
securities held by the Portfolio. Sub-Adviser represents that is
has adopted and implemented written policies and procedures that
are, and are reasonably designed to ensure that the Sub-Adviser
will vote proxies, in compliance with the 1940 Act and the rules
and regulations thereunder. Sub-Adviser shall furnish TAMIC with
such information reasonably requested by TAMIC, in such form as may
be requested, as is necessary (1) for a summary description of the
Sub-adviser's proxy voting policies and procedures to be included in
the registration statement with respect to the Trust, and (2) for the
proxy voting record for the Trust to be filed with the SEC in accordance
with the requirements of From N-PX (or any successor form).
2. Obligations of TAMIC.
(a) TAMIC shall provide timely information to Sub-Adviser
regarding such matters as the composition of assets in the Trust, cash
requirements and cash available for investment in the Trust, and all
other information as may be reasonably necessary for Sub-Adviser to
perform its responsibilities hereunder.
(b) TAMIC shall furnish Sub-Adviser a copy of the Trust's
registration statement currently in effect and agrees during the
continuance of this Agreement to furnish Sub-Adviser copies of any
amendments or supplements thereto before or at the time the amendments
or supplements become effective. TAMIC shall also furnish Sub-Adviser
with minutes of meetings of the Board to the extent they may affect
the duties of Sub-Adviser, a certified copy of any financial statements
or reports prepared for the Trust by certified or independent public
accountants, and with copies of any financial statements or reports
made by the Trust to its shareholders or to any governmental body or
securities exchange, and any further materials or information which
Sub-Adviser may reasonably request to enable it to perform its functions
under this Agreement.
3. Custodian. TAMIC shall provide Sub-Adviser with a copy of the
Trust's agreement with the Custodian (the "Custodian") designated to
hold the Trust's assets and any modification thereto (the "Custody
Agreement") in advance. The Trust's assets shall be maintained in
the custody of the Custodian identified in, and in accordance with
the terms and conditions of, the Custody Agreement. Sub-Adviser shall
have no liability for the acts or omissions of the Custodian. Any assets
added to the Trust shall be delivered to the Custodian in accordance
with the Custody Agreement.
4. Proprietary Rights. TAMIC agrees and acknowledges that
Sub-Adviser is the sole owner of the name and xxxx "Xxxxx" and that
all use of any designation comprised in whole or part of Janus (a
"Xxxxx Xxxx") under this Agreement shall inure to the benefit of
Sub-Adviser. The use by TAMIC on its own behalf or on behalf of the
Trust of any Xxxxx Xxxx in any advertisement or sales literature or
other materials promoting the Trust shall be with the prior written
consent of Sub-Adviser. TAMIC shall not, and TAMIC shall use its best
efforts to cause the Trust not to, without the prior written consent of
Sub-Adviser, make representations regarding Sub-Adviser in any disclosure
document, advertisement or sales literature or other materials promoting
the Trust. Upon termination of this Agreement for any reason, TAMIC
shall cease, and TAMIC shall use its best efforts to cause the Trust to
cease, all use of any Xxxxx Xxxx(s) as soon as reasonably practicable.
5. Expenses. The Trust shall pay all, and Sub-Adviser shall not be
obligated to pay any, of the Trust's organizational, operational and
business expenses pursuant hereto, including, without limitation:
(a) interest and taxes; (b) brokerage fees and commissions and other costs
in connection with the purchase or sale of securities or other investment
instruments with respect to the Trust; and (c) transfer agent, dividend
disbursing agent, and custodian fees and expenses. Any reimbursement of
advisory fees required by any expense limitation provision shall be the
sole responsibility of The Travelers Insurance Company, and shall not be
the responsibility of Sub-Adviser. Sub-Adviser shall pay its own expenses
for the services to be provided pursuant to this Agreement.
6. Purchase and Sale of Assets. Absent instructions from TAMIC
to the contrary, Sub- Adviser shall place all orders for the purchase and
sale of securities for the Trust with brokers or dealers selected by
Sub-Adviser which may include brokers or dealers affiliated with Sub-Adviser.
Purchase or sell orders for the Trust may be aggregated with contemporaneous
purchase or sell orders of other clients of Sub-Adviser, provided that any
such purchase or sell orders executed contemporaneously shall be allocated
in a manner that Sub-Adviser reasonably deems to be equitable to all
accounts involved. Sub-Adviser shall use its best efforts to insure that
the Trust shall not be disadvantaged by Sub-Adviser buying or selling a
security for another client before buying or selling such security for the
Trust. Sub-Adviser shall use its best efforts to obtain execution of Trust
transactions at prices which are advantageous to the Trust and at commission
rates that are reasonable in relation to the benefits received. However,
Sub-Adviser may select brokers or dealers on the basis that they provide
brokerage, research, or other services or products to the Trust and/or
other accounts serviced by Sub-Adviser. Sub-Adviser may pay a broker or
dealer an amount of commission for effecting a securities transaction in
excess of the amount of commission or dealer spread another broker or
dealer would have charged for effecting that transaction if Sub-Adviser
determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research products and/or
services provided by such broker or dealer. This determination, with
respect to brokerage and research services or products, may be viewed
in terms of either that particular transaction or the overall
responsibilities which Sub-Adviser and its affiliates have with respect
to the Trust and to accounts over which they exercise investment discretion,
and not all such services or products may be used by Sub-Adviser in managing
the Trust.
7. Compensation of Sub-Adviser. TAMIC shall pay to Sub-Adviser a
monthly fee equivalent on an annual basis to the following:
Annual Aggregate Net Asset
Management Fee Value of the Account
0.65% of the first $50,000,000
0.55% of the next $100,000,000
0.50% of the next $500,000,000
0.45% of the next $650,000,000
TAMIC and Subadviser may agree to fee waivers from time to time which may
be reflected in a separate agreement.
The advisory fees will be deducted on each valuation date. The
Sub-Adviser shall have no right to obtain compensation directly from the
Trust or the Portfolio for services provided hereunder and agrees to look
solely to TAMIC for payment of fees due. The fee for the period from the
Effective Date (defined below) of the Agreement to the end of the month
during which the Effective Date occurs shall be prorated according to the
proportion that such period bears to the full monthly period. Upon any
termination of this Agreement before the end of a month, the fee for such
part of that month shall be prorated according to the proportion that such
period bears to the full monthly period and shall be payable upon the
date of termination of this Agreement. For the purpose of determining
fees payable to the Sub-Adviser, the value of the Portfolio's net assets
shall be computed at the times and in the manner specified in the
Prospectus and/or the SAI.
8. Non-Exclusivity. TAMIC agrees that the services of Sub-Adviser
are not to be deemed exclusive and that Sub-Adviser and its affiliates
are free to act as investment manager and provide other services to
various investment companies and managed accounts. This Agreement
shall not in any way limit or restrict Sub-Adviser or any of its
directors, officers, employees, or agents from buying, selling or
trading any securities or other investment instruments for its or
their own account or for the account of others for whom it or they may
be acting, provided that such activities will not adversely affect or
otherwise impair the performance by Sub-Adviser of its duties and
obligations under this Agreement. TAMIC recognizes and agrees that
Sub-Adviser may provide advice to or take action with respect to other
clients, which advice or action, including the timing and nature of
such action, may differ from or be identical to advice given or
action taken with respect to the Trust.
9. Liability. Except as may otherwise be provided by the
Investment Company Act of 1940 or federal securities laws, neither
Sub-Adviser nor any of its officers, directors, employees or agents
shall be subject to any liability to TAMIC, the Trust or any
shareholder of the Trust for any error of judgment, mistake of law,
or any loss arising out of any investment or other act or omission
in the course of, connected with, or arising out of any services to
be rendered under this Agreement, except by reason of 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. TAMIC shall hold harmless and
indemnify Sub-Adviser for any loss, liability, cost, damage or
expense (including reasonable attorneys fees and costs) arising
from any claim or demand by the Trust or any past or present
shareholder of the Trust that is not based upon the Sub-Adviser's
willful misfeasance, bad faith, or gross negligence in the
performance of its duties or the reckless disregard of its
obligations and duties under this Agreement. TAMIC acknowledges
and agrees that Sub- Adviser makes no representation or warranty,
express or implied, that any level of performance or investment
results will be achieved by the Trust or that the Trust will
perform comparably with any standard or index, including other
clients of Sub-Adviser, whether public or private.
10. Termination. If approved by a vote of a majority of
the outstanding voting securities of the Trust, (as defined
in the Investment Company Act of 1940), this Agreement shall
become effective as of May 1, 2005, and:
(a) shall be subject to termination, without the
payment of any penalty, upon sixty days' written notice, by
(i) TAMIC or Sub-Adviser, (ii) the Board, or (iii) by a vote
of a majority of the outstanding voting securities of the Trust;
(b) shall not be amended without prior approval of
the Board, a majority of the outstanding voting securities of
the Trust, and Sub-Adviser;
(c) shall automatically terminate upon assignment
by either party; and
(d) shall continue in effect for so long as such
continuance is specifically approved (i) at least annually by
the vote of a majority of the Board who are not parties to
such agreement or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on such
approval and at which the Board has been furnished such
information as may be reasonably necessary to evaluate the
terms of said agreement; or (ii) by a vote of a majority of
the outstanding voting securities of the Trust.
11. General.
(a) Sub-Adviser may perform its services through
any employee, officer, or agent of Sub-Adviser, and TAMIC
shall not be entitled to the advice, recommendation or
judgment of any specific person.
(b) If any term or provision of this Agreement
or the application thereof to any person or circumstances
is held to be invalid or unenforceable to any extent, the
remainder of this Agreement or the application of such
provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent
permitted by law.
(c) This Agreement shall be governed by and
interpreted in accordance with the laws of the State of
Colorado, exclusive of conflicts of laws.
(d) Sub-Adviser agrees that it shall furnish
to the California Commissioner of Insurance any information
or reports concerning the Trust as the Commissioner, in the
performance of his or her duties, may reasonably request.
(e) Sub-Adviser acknowledges that all books and
records which it maintains for the Trust in performing its
duties under this Agreement are the property of the Trust
and subject to its control; provided, however, that during
the term of this Agreement the Trust shall not exercise
such control so as to interfere with the performance of
Sub-Adviser's duties hereunder.
(f) This Agreement is subject to the provisions
of the Investment Company Act of 1940, as amended, and the
rules and regulations promulgated thereunder.
12. Consultation with other Sub-Advisers. Sub-Adviser
shall not consult with any other sub-adviser to the Trust
or any sub-advisers to any other investment company or
investment company series for which TAMIC serves as investment
adviser concerning transactions for the Trust in securities
or other assets.
13. Rule 38a-1 Compliance.
The Sub-Adviser represents, warrants and agrees that it has
adopted and implemented, and throughout the term of this
Agreement will maintain in effect and implement, policies
and procedures reasonably designed to prevent, detect and
correct violations by the Sub-Adviser and its supervised
persons, and, to the extent the activities of the Sub-Adviser
in respect of the Trust could affect the Trust, by the Trust,
of "federal securities laws" (as defined in Rule 38a-1 under
the 1940 Act), and that the Sub-Adviser has provided the Trust
with true and complete copies of its policies and procedures
(or summaries thereof) and related information requested by
the Trust. The Sub-Adviser agrees to cooperate with periodic
reviews by the Trust's compliance personnel of the
Sub-Adviser's policies and procedures, their operation and
implementation and other compliance matters and to provide
to the Trust from time to time such additional information
and certifications in respect of the Sub-Adviser's policies
and procedures, compliance by the Sub-Adviser with federal
securities laws and related matters as the Trust's compliance
personnel may reasonably request.
14. Portfolio Holdings Information. TAMIC and
Sub-Adviser will not use any information concerning holdings
of the Portfolio, including, without limitation, the names of
the portfolio holdings and the values thereof, for purposes
of making any decision about whether to purchase or redeem
shares of the Portfolio.
IN WITNESS WHEREOF, the parties hereto have caused this
Sub-Advisory Agreement to be signed by their respective
officials thereunto duly authorized as of the day and year
first above written.
TRAVELERS ASSET MANAGEMENT
INTERNATIONAL COMPANY LLC
By:
Name:
Title:
Attest:
Title:
JANUS CAPITAL MANAGEMENT LCC
By:
Name:
Title:
Attest:
Title:
