INVESTMENT SUBADVISORY AGREEMENT
between
THE CHASE MANHATTAN BANK
and
CHASE ASSET MANAGEMENT, INC.
AGREEMENT made as of the __th day of _________, 1996, by and between
The Chase Manhattan Bank, a New York State chartered bank (the "Adviser"), and
Chase Asset Management, Inc., a Delaware Corporation (the "Sub-Adviser").
WHEREAS, the Adviser provides investment advisory services to the
series of Mutual Fund Select Group, a Massachusetts business trust (the
"Trust"), which is registered as an open-end, management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), pursuant
to an Investment Advisory Agreement dated _________ __, 1996 (the "Advisory
Agreement"); and
WHEREAS, the Sub-Adviser is a registered investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish
investment subadvisory services in connection with the series of the Trust
listed on Schedule A (each, a "Fund" and collectively, the "Funds"), and the
Sub-Adviser represents that it is willing and possesses legal authority to so
furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment.
(a) General. The Adviser hereby appoints the Sub-Adviser to act as
investment subadviser to the Funds for the period and on the terms set forth in
this Agreement. The Sub-Adviser accepts such appointment and agrees to furnish
the services herein set forth for the compensation herein provided.
(b) Employees of Affiliates. The Sub-Adviser may, in its discretion,
provide such services through its own employees or the employees of one or more
affiliated companies that are qualified to act as an investment subadviser to
the Funds under applicable laws and are under the control of The Chase Manhattan
Corporation, the indirect parent of the Sub-Adviser; provided that (i) all
persons, when providing services hereunder, are functioning as part of an
organized group of persons, and (ii) such organized group of persons is managed
at all times by authorized officers of the Sub-Adviser.
2. Delivery of Documents. The Adviser has delivered to the
Sub-Adviser copies of each of the following documents along with all amendments
thereto through the
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date hereof, and will promptly deliver to it all future amendments and
supplements thereto, if any:
(1) the Trust's Declaration of Trust;
(2) the By-Laws of the Trust;
(3) resolutions of the Board of Trustees of the Trust authorizing
the execution and delivery of the Advisory Agreement and this
Agreement;
(4) the most recent Post-Effective Amendment to the Trust's
Registration Statement under the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act, on Form N-1A as
filed with the Securities and Exchange Commission (the
"Commission");
(5) Notification of Registration of the Trust under the 1940 Act
on Form N-8A as filed with the Commission; and
(6) the Prospectuses and Statements of Additional Information of
the Funds.
3. Investment Advisory Services.
(a) Management of the Funds. The Sub-Adviser hereby undertakes to
act as investment subadviser to the Funds. The Sub-Adviser shall regularly
provide investment advice to the Funds and continuously supervise the investment
and reinvestment of cash, securities and other property composing the assets of
the Funds and, in furtherance thereof, shall:
(i) obtain and evaluate pertinent economic, statistical and
financial data, as well as other significant events and developments, which
affect the economy generally, the Funds' investment programs, and the issuers of
securities included in the Funds' portfolios and the industries in which they
engage, or which may relate to securities or other investments which the
Sub-Adviser may deem desirable for inclusion in a Fund's portfolio;
(ii) determine which issuers and securities shall be included in
the portfolio of each Fund;
(iii) furnish a continuous investment program for each Fund;
(iv) in its discretion, and without prior consultation, buy,
sell, lend and otherwise trade any stocks, bonds and other securities and
investment instruments on behalf of each Fund; and
(v) take, on behalf of each Fund, all actions the Sub-Adviser
may deem necessary in order to carry into effect such investment program and the
Sub-Adviser's
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functions as provided above, including the making of appropriate periodic
reports to the Adviser and the Trust's Board of Trustees.
(b) Covenants. The Sub-Adviser shall carry out its investment
subadvisory responsibilities in a manner consistent with the investment
objectives, policies, and restrictions provided in: (i) each Fund's Prospectus
and Statement of Additional Information as revised and in effect from time to
time; (ii) the Trust's Declaration of Trust, By-Laws or other governing
instruments, as amended from time to time; (iii) the 1940 Act; (iv) other
applicable laws; and (v) such other investment policies, procedures and/or
limitations as may be adopted by the Trust or the Adviser with respect to a Fund
and provided to the Sub-Adviser in writing. The Sub-Adviser agrees to use
reasonable efforts to manage each Fund so that it will qualify, and continue to
qualify, as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended, and regulations issued thereunder (the
"Code"), except as may be authorized to the contrary by the Trust's Board of
Trustees. The management of the Funds by the Sub-Adviser shall at all times be
subject to the review of the Adviser and the Trust's Board of Trustees.
(c) Books and Records. Pursuant to applicable law, the Sub-Adviser
shall keep each Fund's books and records required to be maintained by, or on
behalf of, the Funds with respect to subadvisory services rendered hereunder.
The Sub-Adviser agrees that all records which it maintains for a Fund are the
property of the Fund and it will promptly surrender any of such records to the
Fund upon the Fund's request. The Sub-Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any such records of the Fund
required to be preserved by such Rule.
(d) Reports, Evaluations and other services. The Sub-Adviser shall
furnish reports, evaluations, information or analyses to the Adviser and the
Trust with respect to the Funds and in connection with the Sub-Adviser's
services hereunder as the Adviser and/or the Trust's Board of Trustees may
request from time to time or as the Sub-Adviser may otherwise deem to be
desirable. The Sub-Adviser shall make recommendations to the Adviser and the
Trust's Board of Trustees with respect to the Trust's policies, and shall carry
out such policies as are adopted by the Board of Trustees. The Sub-Adviser may,
subject to review by the Adviser, furnish such other services as the Sub-Adviser
shall from time to time determine to be necessary or useful to perform its
obligations under this Agreement.
(e) Purchase and Sale of Securities. The Sub-Adviser shall place all
orders for the purchase and sale of portfolio securities for each Fund with
brokers or dealers selected by the Sub-Adviser, which may include brokers or
dealers affiliated with the Adviser or the Sub-Adviser to the extent permitted
by the 1940 Act and the Trust's policies and procedures applicable to the Funds.
The Sub-Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which, under the circumstances, result in total costs or
proceeds being the most favorable to the Funds. In assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all factors
it deems relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability of the
broker or dealer, research services provided to the Sub-Adviser, and the
reasonableness of the commission, if any, both for the specific transaction and
on a
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continuing basis. In no event shall the Sub-Adviser be under any duty to obtain
the lowest commission or the best net price for any Fund on any particular
transaction, nor shall the Sub-Adviser be under any duty to execute any order in
a fashion either preferential to any Fund relative to other accounts managed by
the Sub-Adviser or otherwise materially adverse to such other accounts.
(f) Selection of Brokers or Dealers. In selecting brokers or dealers
qualified to execute a particular transaction, 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
Sub-Adviser, the Funds, and/or the other accounts over which the Sub-Adviser
exercises investment discretion. The Sub-Adviser is authorized to pay a broker
or dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for a Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines in good faith that the total
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the overall responsibilities of the Sub-Adviser with
respect to accounts over which it exercises investment discretion. The
Sub-Adviser shall report to the Board of Trustees of the Trust regarding overall
commissions paid by the Funds and their reasonableness in relation to their
benefits to the Funds.
(g) Aggregation of Securities Transactions. In executing portfolio
transactions for a Fund, the Sub-Adviser may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to, aggregate the
securities to be sold or purchased with those of other Funds or its other
clients if, in the Sub-Adviser's reasonable judgment, such aggregation (i) will
result in an overall economic benefit to the Fund, taking into consideration the
advantageous selling or purchase price, brokerage commission and other expenses,
and trading requirements, and (ii) is not inconsistent with the policies set
forth in the Trust's registration statement and the Fund's Prospectus and
Statement of Additional Information. In such event, the Sub-Adviser will
allocate the securities so purchased or sold, and the expenses incurred in the
transaction, in an equitable manner, consistent with its fiduciary obligations
to the Fund and such other clients.
4. Representations and Warranties.
(a) The Sub-Adviser hereby represents and warrants to the Adviser
as follows:
(i) The Sub-Adviser is a corporation duly organized and in good
standing under the laws of the State of Delaware and is fully authorized to
enter into this Agreement and carry out its duties and obligations hereunder.
(ii) The Sub-Adviser is registered as an investment adviser with
the Commission under the Advisers Act, and is registered or licensed as an
investment adviser under the laws of all applicable jurisdictions. The
Sub-Adviser shall maintain such registrations or licenses in effect at all times
during the term of this Agreement.
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(iii) The Sub-Adviser at all times shall provide its best judgment
and effort to the Adviser in carrying out the Sub-Adviser's obligations
hereunder.
(b) The Adviser hereby represents and warrants to the Sub-Adviser
as follows:
(i) The Adviser is a chartered bank duly organized and in good
standing under the laws of the State of New York and is fully authorized to
enter into this Agreement and carry out its duties and obligations hereunder.
(ii) The Trust has been duly organized as a business trust
under the laws of the State of Massachusetts.
(iii) The Trust is registered as an investment company with the
Commission under the 1940 Act, and shares of the each Fund are registered for
offer and sale to the public under the 1933 Act and all applicable state
securities laws where currently sold. Such registrations will be kept in effect
during the term of this Agreement.
5. Compensation. (a) As compensation for the services which the
SubAdviser is to provide or cause to be provided pursuant to Paragraph 3, with
respect to each Fund, the Adviser shall pay to the Sub-Adviser (or cause to be
paid by the Trust directly to the Sub-Adviser) a fee, which shall be accrued
daily and paid in arrears on the first business day of each month, at an annual
rate set forth in Schedule A, as a percentage of the average daily net assets of
the Fund during the preceding month (computed in the manner set forth in the
Fund's most recent Prospectus and Statement of Additional Information). Average
daily net assets shall be based upon determinations of net assets made as of the
close of business on each business day throughout such month. The fee for any
partial month shall be calculated on a proportionate basis, based upon average
daily net assets for such partial month.
(b) The Sub-Adviser shall have the right, but not the obligation, to
voluntarily waive any portion of the sub-advisory fee from time to time. Any
such voluntary waiver will be irrevocable and determined in advance of rendering
sub-investment advisory services by the Sub-Adviser, and shall be in writing and
signed by the parties hereto.
(c) If the aggregate expenses incurred by, or allocated to, each
Fund in any fiscal year shall exceed the lowest expense limitation, if
applicable to such Fund, imposed by state securities laws or regulations
thereunder, as such limitations may be raised or lowered from time to time, the
Sub-Adviser shall reduce its investment advisory fee, but not below zero, to the
extent of its share of such excess expenses; provided, however, there shall be
excluded from such expenses the amount of any interest, taxes, brokerage
commissions and extraordinary expenses (including but not limited to legal
claims and liabilities and litigation costs and any indemnification related
thereto) paid or payable by the Fund. Such reduction, if any, shall be computed
and accrued daily, shall be settled on a monthly basis and shall be based upon
the expense limitation applicable to the Fund as at the end of the last business
day of the month. Should two or more of such expense limitations be applicable
at the end
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of the last business day of the month, that expense limitation which results in
the largest reduction in the Sub-Adviser's fee shall be applicable. For the
purposes of this paragraph, the Sub-Adviser's share of any excess expenses shall
be computed by multiplying such excess expenses by a fraction, the numerator of
which is the amount of the investment advisory fee which would otherwise be
payable to the Sub-Adviser for such fiscal year were it not for this subsection
5(b) and the denominator of which is the sum of all investment advisory and
administrative fees which would otherwise be payable by the Fund were it not for
the expense limitation provisions of any investment advisory or administrative
agreement to which the Fund is a party.
6. Interested Persons. It is understood that, to the extent
consistent with applicable laws, the Trustees, officers and shareholders of the
Trust or the Adviser are or may be or become interested in the Sub-Adviser as
directors, officers or otherwise and that directors, officers and shareholders
of the Sub-Adviser are or may be or become similarly interested in the Trust or
the Adviser.
7. Expenses. The Sub-Adviser will pay all expenses incurred by it in
connection with its activities under this Agreement other than the cost of
securities (including brokerage commissions) purchased for or sold by the Funds.
8. Non-Exclusive Services; Limitation of Sub-Adviser's Liability.
The services of the Sub-Adviser hereunder are not to be deemed exclusive, and
the Sub-Adviser may render similar services to others and engage in other
activities. The Sub-Adviser and its affiliates may enter into other agreements
with the Funds, the Trust or the Adviser for providing additional services to
the Funds, the Trust or the Adviser which are not covered by this Agreement, and
to receive additional compensation for such services. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Sub-Adviser, or a breach of fiduciary duty
with respect to receipt of compensation, neither the Sub-Adviser nor any of its
directors, officers, shareholders, agents, or employees shall be liable or
responsible to the Adviser, the Trust, the Funds or to any shareholder of the
Funds for any error of judgment or mistake of law or for any act or omission in
the course of, or connected with, rendering services hereunder or for any loss
suffered by the Adviser, the Trust, a Fund, or any shareholder of a Fund in
connection with the performance of this Agreement.
9. Effective Date; Modifications; Termination. This Agreement shall
become effective on the date hereof (the "Effective Date") provided that it
shall have been approved by a majority of the outstanding voting securities of
each Fund, in accordance with the requirements of the 1940 Act, or such later
date as may be agreed by the parties following such shareholder approval.
(a) This Agreement shall continue in force for two years from the
Effective Date and shall continue in effect from year to year thereafter as to
each Fund for successive annual periods, provided such continuance is
specifically approved at least annually (i) by a vote of the majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
7
voting on such approval, and (ii) by a vote of the Board of Trustees of the
Trust or a majority of the outstanding voting securities of the Fund.
(b) The modification of any of the non-material terms of this
Agreement may be approved by a vote of a majority of those Trustees of the Trust
who are not interested persons of any party to this Agreement, cast in person at
a meeting called for the purpose of voting on such approval.
(c) Notwithstanding the foregoing provisions of this Paragraph 9,
either party hereto may terminate this Agreement as to any Fund(s) at any time
on sixty (60) days' prior written notice to the other, without payment of any
penalty. A termination of the SubAdviser may be effected as to any particular
Fund by the Adviser, by a vote of the Trust's Board of Trustees, or by vote of a
majority of the outstanding voting securities of the Fund. This Agreement shall
terminate automatically in the event of its assignment.
10. Limitation of Liability of Trustees and Shareholders. The
Sub-Adviser acknowledges the following limitation of liability:
The terms "Mutual Fund Select Group" and "Trustees of Mutual Fund
Select Group" refer, respectively, to the trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under the
Declaration of Trust, to which reference is hereby made and a copy of which is
on file at the office of the Secretary of State of the State of Massachusetts,
such reference being inclusive of any and all amendments thereto so filed or
hereafter filed. The obligations of "Mutual Fund Select Group" entered into in
the name or on behalf thereof by any of the Trustees, representatives or agents
are made not individually, but in such capacities and are not binding upon any
of the Trustees, shareholders or representatives of the Trust personally, but
bind only the assets of the Trust, and all persons dealing with the Trust or a
Fund must look solely to the assets of the Trust or Fund for the enforcement of
any claims against the Trust or Fund.
11. Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment," "control," and "interested
persons," when used herein, shall have the respective meanings specified in the
1940 Act. References in this Agreement to the 1940 Act and the Advisers Act
shall be construed as references to such laws as now in effect or as hereafter
amended, and shall be understood as inclusive of any applicable rules,
interpretations and/or orders adopted or issued thereunder by the Commission.
12. Independent Contractor. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Board of Trustees of the Trust
from time to time, have no authority to act for or represent a Fund in any way
or otherwise be deemed an agent of a Fund.
13. Structure of Agreement. The Adviser and Sub-Adviser are
entering into this Agreement with regard to the respective Funds severally and
not jointly. The responsibilities and benefits set forth in this Agreement shall
be deemed to be effective as
8
between the Adviser and Sub-Adviser in connection with each Fund severally and
not jointly. This Agreement is intended to govern only the relationships between
the Adviser, on the one hand, and the Sub-Adviser, on the other hand, and is not
intended to and shall not govern (i) the relationship between the Adviser or
Sub-Adviser and any Fund, or (ii) the relationships among the respective Funds.
14. Governing Law. This Agreement shall be governed by the laws
of the State of New York, provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act or the Advisers Act.
15. Severability. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby and, to this extent, the
provisions of this Agreement shall be deemed to be severable.
16. Notices. Notices of any kind to be given to the Adviser
hereunder by the Sub-Adviser shall be in writing and shall be duly given if
mailed or delivered to the Adviser at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
or at such other address or to such individual as shall be so specified by the
Adviser to the Sub-Adviser. Notices of any kind to be given to the Sub-Adviser
hereunder by the Adviser shall be in writing and shall be duly given if mailed
or delivered to the Sub-Adviser at 1211 Avenue of the Americas, Xxx Xxxx, Xxx
Xxxx 00000 or at such other address or to such individual as shall be so
specified by the Sub-Adviser to the Adviser. Notices shall be effective upon
delivery.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
written above.
CHASE ASSET MANAGEMENT, INC. THE CHASE MANHATTAN BANK
By:_________________________ By:___________________________
Name: Name:
Title: Title:
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Schedule A
Fund: Fee:
1. Vista Select Balanced Fund 0.25%
2. Vista Select Bond Fund 0.15
3. Vista Select Emerging Growth Fund 0.30
4. Vista Select Equity Income Fund 0.20
5. Vista Select Intermediate Bond Fund 0.15
6. Vista Select Large Cap Equity Fund 0.20
7. Vista Select Large Cap Growth Fund 0.20
8. Vista Select Short Term Bond Fund 0.10
9. Vista Select Small Cap Equity Fund 0.30
