Exhibit No. Ex-99.d(6)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH (FAR EAST), INC.
AND
FIDELITY INVESTMENTS JAPAN LIMITED
AGREEMENT made this 7th day of October, 2002, by and between Fidelity
Management & Research (Far East), Inc., a Massachusetts corporation (the
"Sub-Advisor") and Fidelity Investments Japan Limited, a Japanese corporation
(the "Japan Sub-Advisor").
WHEREAS, Fidelity Management & Research Company, a Massachusetts
corporation (the "Advisor") and The Japan Fund, Inc. (the "Portfolio") have
entered into an Advisory Agreement pursuant to which the Advisor is to act as
investment advisor of the Portfolio (the "Advisory Agreement");
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement (the
"Sub-Advisory Agreement") with the Advisor, pursuant to which the Sub-Advisor,
directly or through certain of its subsidiaries or other affiliated persons, may
provide, at the Advisor's discretion, investment advice or investment management
and order execution services to the Portfolio; and
WHEREAS, the Japan Sub-Advisor has personnel in Japan, and has been
formed for the purpose, among others, of researching and compiling information
and recommendations with respect to the economies of Japan and other Asian
countries and the securities of issuers located in Japan and other Asian
countries;
NOW THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Sub-Advisor and the Japan Sub-Advisor hereby agree as
follows:
1. Delegation of Duties: Pursuant to paragraph 1(c) of the Sub-Advisory
Agreement, the Sub-Advisor hereby delegates to the Japan Sub-Advisor, and the
Japan Sub-Advisor hereby accepts, responsibility for performing such investment
advisory, research and management services relating to the Japanese economy and
the securities of Japanese issuers (and such other Asian economies and issuers
as the Sub-Advisor may request from time to time) as may be requested of the
Sub-Advisor by the Advisor from time to time pursuant to the Sub-Advisory
Agreements. The Japan Sub-Advisor shall pay the salaries and fees of all
personnel of the Japan Sub-Advisor performing such services on behalf of the
Portfolio.
(a) INVESTMENT ADVICE: In connection with the performance of such
services, the Japan Sub-Advisor shall furnish to the Advisor and the Sub-Advisor
such factual information, research reports and investment recommendations as
Advisor or the Sub-Advisor may reasonably require. Such information may include
written and oral reports and analyses. All such reports, recommendations,
analyses and other information may be used, transferred, assigned or sold by the
Sub-Advisor, in its sole discretion, without the consent of the Japan
Sub-Advisor.
(b) INVESTMENT MANAGEMENT: The Japan Sub-Advisor is hereby authorized
to manage such portion of the Japanese or other Asian investments of the
Portfolio as the Sub-Advisor shall request from time to time. Such investment
management activities shall be subject to and in accordance with the investment
objective, policies and limitations provided in the Portfolio's Prospectus or
other governing instruments, as amended from time to time, the Investment
Company Act of 1940 (the "1940 Act") and rules thereunder, as amended from time
to time, and such other limitations as the Portfolio or the Advisor may impose
with respect to the Portfolio by notice to the Japan Sub-Advisor. With respect
to the portion of the investments of the Portfolio under its management, the
Japan Sub-Advisor is authorized to place orders for the purchase and sale of
such securities through such broker/dealers as the Japan Sub-Adviser may select
in accordance with the provisions of paragraph 3 hereof. All investment
management and any other activities of the Japan Sub-Advisor shall at all times
be subject to the control and direction of the Sub-Advisor, the Advisor and the
Portfolio's Board of Directors.
(c) SUBSIDIARIES AND AFFILIATES: The Japan Sub-Advisor may perform any
or all of the services contemplated by this Agreement directly or through such
of its subsidiaries or other affiliated persons as the Japan Sub-Advisor shall
determine; provided, however, that performance of such services through such
subsidiaries or other affiliated persons shall have been approved by the
Portfolio to the extent required pursuant to the 1940 Act and rules thereunder.
2. Information to be Provided to the Portfolio, the Advisor and the
Sub-Advisor: The Japan Sub-Advisor shall furnish such reports, evaluations,
information or analyses to the Portfolio, the Advisor, and the Sub-Advisor, as
the Portfolio's Board of Directors, the Advisor or the Sub-Advisor may
reasonably request from time to time, or as the Japan Sub-Advisor may deem to be
desirable.
3. Brokerage: In connection with the services provided under sub-paragraph
1(b) of this Agreement, the Japan Sub-Advisor shall place orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Japan Sub-Advisor, which may include brokers
or dealers affiliated with the Advisor, the Sub-Advisor or the Japan
Sub-Advisor. The Japan Sub-Advisor shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the Portfolio and at
commission rates which are reasonable in relation to the benefits received. 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 Portfolio and/or other accounts over which the Japan
Sub-Advisor, the Sub-Advisor of the Advisor exercise investment discretion. The
Japan Sub-Advisor is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing the Portfolio
transaction for the Portfolio which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if
the Japan Sub-Adviser determines in good faith that such amount 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 Japan
Sub-Advisor, the Sub-Advisor or the Advisor have with respect to accounts over
which they exercise investment discretion. The Directors of the Portfolio shall
periodically review the commissions paid by the Portfolio to determine if the
commissions paid over the representative periods of time are reasonable in
relation to the benefits to such Portfolio.
4. Compensation: For the services provided under subparagraph 1(a) of this
Agreement, the Sub-Advisor agrees to pay the Japan Sub-Advisor a monthly fee
equal to 100% of the Japan Sub-Advisor's costs incurred in connection with
rendering the services provided hereunder. For services provided under
subparagraph 1(b) of this Agreement, the Sub-Advisor agrees to pay the Japan
Sub-Advisor a monthly fee equal to 105% of the Japan Sub-Advisor's costs
incurred in connection with rendering the services thereunder. The Japan
Sub-Advisor's fee shall not be reduced to reflect expense reimbursements or fee
waivers by the Sub-Advisor or the Advisor, if any, in effect in respect of any
Portfolio from time to time.
5. Expenses: It is understood that the Portfolio will pay all of their
expenses other than those expressly stated to be payable by the Japan
Sub-Advisor hereunder, by the Sub-Advisor under the Sub-Advisory Agreement or by
the Advisor under the Advisory Agreement.
6. Interested Persons: It is understood (i) that Directors, officers, and
shareholders of the Portfolio are or may be or become interested in the Advisor,
the Sub-Advisor or the Japan Sub-Advisor as directors, officers or otherwise,
(ii) that directors, officers and stockholders of the Advisor, the Sub-Advisor
or the Japan Sub-Advisor are or may be or become similarly interested in the
Portfolio, and (iii) that the Advisor, the Sub-Advisor or the Japan Sub-Advisor
are or may be or become interested in the Portfolio as a shareholder or
otherwise.
7. Services to Other Companies or Accounts: The services of the Japan
Sub-Advisor to the Sub-Advisor are not to be deemed to be exclusive, the Japan
Sub-Advisor being free to render services to others and engage in other
activities, provided, however, that such other services and activities do not,
during the term of this Agreement, interfere in a material manner, with the
Japan Sub-Advisor's ability to meet all of its obligations hereunder. The Japan
Sub-Advisor shall for all purposes be an independent contractor and not an agent
or employee of the Sub-Advisor, the Advisor or the Portfolio.
8. Standard of Care: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on the
part of the Japan Sub-Advisor, the Japan Sub-Advisor shall not be subject to
liability to the Sub-Advisor, the Advisor, the Portfolio or to any shareholder
of the Portfolio for any act or omission in the course of or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security.
9. Liability: Notwithstanding anything in this Agreement to the contrary,
it is understood that the Sub-Advisor shall remain liable to the Advisor and the
Portfolio under the Sub-Advisory Agreement for the acts and omissions of Japan
Sub-Advisor taken in the course of the performance of the Japan Sub-Advisor's
duties hereunder to the same extent as would be the case had the Sub-Advisor
performed such acts or omissions itself, provided, however, that to the extent
the Sub-Advisor suffers a loss to the Advisor or the Portfolio as a result of or
arising out of such acts or omissions of the Japan Sub-Advisor, the Sub-Advisor
shall be entitled to seek redress against the Japan Sub-Advisor in accordance
with the terms hereof.
10. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 10, this Agreement shall continue in force until October 7, 2004
and indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved in respect of the Portfolio at least
annually by vote of the Portfolio's Board of Directors or by vote of a majority
of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified in respect of the Portfolio by
mutual consent of the Sub-Advisor and the Japan Sub-Advisor, subject to the
provisions of Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or interpretative releases
of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 10, the terms of any continuance or modification of this
Agreement in respect of the Portfolio must have been approved by the vote of a
majority of those Directors of the Portfolio 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 voting on such approval.
(d) Either the Sub-Advisor or the Japan Sub-Advisor may at any time on
sixty (60) days' prior written notice to the parties to this Agreement, the
Advisor and the Board of Directors of the Portfolio, terminate this Agreement in
respect of the Portfolio, without payment of any penalty. The Portfolio may at
any time on sixty (60) days' prior written notice to the parties to this
Agreement and the Advisor, terminate this Agreement in respect of the Portfolio,
without payment of any penalty, by action of the Board of Directors of the
Portfolio or by vote of a majority of the Portfolio's outstanding voting
securities. This Agreement shall terminate automatically in the event of its
assignment.
11. Governing Law: This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested person," when used
herein, shall have the respective meanings specified in the 1940 Act as now in
effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY MANAGEMENT &
RESEARCH COMPANY (Far
East) INC.
/S/XX XXXXXX
------------
By: XX Xxxxxx
Title: Treasurer
FIDELITY INVESTMENTS
JAPAN LIMITED
/S/XXXX X. XXXXXX
-----------------
By: Xxxx X. Xxxxxx
Title: President
