INVESTMENT SUBADVISORY AGREEMENT
INVESTMENT SUBADVISORY AGREEMENT, EFFECTIVE JULY 1, 1995, BY AND BETWEEN
XXXXXXX ASSET MANAGEMENT COMPANY, INC., A DELAWARE CORPORATION REGISTERED AS AN
INVESTMENT ADVISOR UNDER THE INVESTMENT ADVISORS ACT OF 1940 (THE "ADVISOR"),
AND NCM CAPITAL MANAGEMENT GROUP, INC., A NORTH CAROLINA CORPORATION (THE
"SUBADVISOR").
WHEREAS, THE ADVISOR IS THE INVESTMENT MANAGER TO XXXXXXX SOCIAL INVESTMENT
FUND, MANAGED GROWTH PORTFOLIO ("FUND"), AN OPEN-END, DIVERSIFIED MANAGEMENT
INVESTMENT COMPANY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED (THE "1940 ACT");
WHEREAS, THE FUND IS A BALANCED FUND CONSISTING OF EQUITY, DEBT AND MONEY
MARKET SECURITIES;
WHEREAS, THE ADVISOR DESIRES TO RETAIN THE SUBADVISOR TO FURNISH IT WITH
CERTAIN INVESTMENT ADVISORY SERVICES IN CONNECTION WITH THE ADVISOR'S INVESTMENT
ADVISORY ACTIVITIES ON BEHALF OF THE FUND.
NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND THE TERMS AND
CONDITIONS HEREINAFTER SET FORTH, IT IS AGREED AS FOLLOWS:
1. SERVICES TO BE RENDERED BY THE SUBADVISOR TO THE FUND.
(A) INVESTMENT PROGRAM. PURSUANT TO THE DIRECTIONS OF THE
ADVISOR, WHICH IS SUBJECT TO THE CONTROL OF THE FUND BOARD OF TRUSTEES
("TRUSTEES"), THE SUBADVISOR, AT ITS EXPENSE, WILL CONTINUOUSLY FURNISH TO THE
FUND AN INVESTMENT PROGRAM FOR SUCH PORTION, IF ANY, OF FUND ASSETS TO BE
MANAGED BY THE SUBADVISOR AS DESIGNATED BY THE ADVISOR FROM TIME TO TIME. WITH
RESPECT TO SUCH ASSETS, THE SUBADVISOR WILL MAKE INVESTMENT DECISIONS, WHICH ARE
SUBJECT TO SECTION 1(G) OF THIS AGREEMENT, AND WILL PLACE ALL ORDERS FOR THE
PURCHASE AND SALE OF PORTFOLIO SECURITIES. IN THE PERFORMANCE OF ITS DUTIES,
THE SUBADVISOR WILL ACT IN THE BEST INTERESTS OF THE FUND AND WILL IN
CONJUNCTION WITH THE ADVISOR, COMPLY WITH (I) APPLICABLE LAWS AND REGULATIONS,
INCLUDING, BUT NOT LIMITED TO, THE 1940 ACT, AND SUBCHAPTER M OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, (II) THE FUND'S DECLARATION OF TRUST, BYLAWS
AND REGISTRATION STATEMENT AS FROM TIME TO TIME AMENDED, (III) RELEVANT
UNDERTAKINGS PROVIDED TO STATE SECURITIES REGULATORS, (IV) THE STATED INVESTMENT
OBJECTIVE, POLICIES AND RESTRICTIONS OF THE FUND, AND (V) SUCH OTHER GUIDELINES
AS THE TRUSTEES OR ADVISOR MAY ESTABLISH. AT THE REQUEST OF THE SUBADVISOR, THE
ADVISOR SHALL BE RESPONSIBLE FOR PROVIDING THE SUBADVISOR WITH CURRENT COPIES OF
THE MATERIALS SPECIFIED IN SUBSECTIONS (A)(II), (III), (IV) AND (V) OF THIS
SECTION 1.
(B) AVAILABILITY OF PERSONNEL. THE SUBADVISOR AT ITS EXPENSE
WILL MAKE AVAILABLE TO THE TRUSTEES AND ADVISOR AT REASONABLE TIMES ITS
PORTFOLIO MANAGERS AND OTHER APPROPRIATE PERSONNEL, EITHER IN PERSON, OR, AT THE
MUTUAL CONVENIENCE OF THE ADVISOR AND THE SUBADVISOR, BY TELEPHONE, IN ORDER TO
REVIEW THE FUND'S INVESTMENT POLICIES AND TO CONSULT WITH THE TRUSTEES AND
ADVISOR REGARDING THE FUND'S INVESTMENT AFFAIRS, INCLUDING ECONOMIC, STATISTICAL
AND INVESTMENT MATTERS RELEVANT TO THE SUBADVISOR'S DUTIES HEREUNDER, AND WILL
PROVIDE PERIODIC REPORTS TO THE ADVISOR RELATING TO THE INVESTMENT STRATEGIES IT
EMPLOYS.
(C) EXPENSES, SALARIES AND FACILITIES. THE SUBADVISOR WILL PAY
ALL EXPENSES INCURRED BY IT IN CONNECTION WITH ITS ACTIVITIES UNDER THIS
AGREEMENT (OTHER THAN THE COST OF SECURITIES AND OTHER INVESTMENTS, INCLUDING
ANY BROKERAGE COMMISSIONS), INCLUDING BUT NOT LIMITED TO, ALL SALARIES OF
PERSONNEL AND FACILITIES REQUIRED FOR IT TO EXECUTE ITS DUTIES UNDER THIS
AGREEMENT.
(D) COMPLIANCE REPORTS. THE SUBADVISOR AT ITS EXPENSE WILL
PROVIDE THE ADVISOR WITH SUCH COMPLIANCE REPORTS RELATING TO ITS DUTIES UNDER
THIS AGREEMENT AS MAY BE AGREED UPON BY SUCH PARTIES FROM TIME TO TIME OR AS
REASONABLY REQUESTED BY THE TRUSTEES.
(E) VALUATION. THE ADVISOR WILL ASSIST THE FUND AND ITS AGENTS
IN DETERMINING WHETHER PRICES OBTAINED FOR VALUATION PURPOSES ACCURATELY REFLECT
MARKET PRICE INFORMATION RELATING TO THE ASSETS OF THE FUND FOR WHICH THE
SUBADVISOR HAS RESPONSIBILITY ON A DAILY BASIS (UNLESS OTHERWISE AGREED UPON BY
THE PARTIES HERETO) AND AT SUCH OTHER TIMES AS THE ADVISOR SHALL REASONABLY
REQUEST.
(F) EXECUTING PORTFOLIO TRANSACTIONS.
(I) BROKERAGE IN SELECTING BROKERS AND DEALERS TO EXECUTE PURCHASES
AND SALES OF INVESTMENTS FOR THE FUND, THE SUBADVISOR WILL USE ITS BEST EFFORTS
TO OBTAIN THE MOST FAVORABLE PRICE AND EXECUTION AVAILABLE IN ACCORDANCE WITH
THIS PARAGRAPH. THE SUBADVISOR AGREES TO PROVIDE THE ADVISOR AND THE FUND WITH
COPIES OF ITS POLICY WITH RESPECT TO ALLOCATION OF BROKERAGE ON TRADES FOR THE
FUND. SUBJECT TO REVIEW BY THE TRUSTEES OF APPROPRIATE POLICIES AND PROCEDURES,
THE SUBADVISOR MAY CAUSE THE FUND TO PAY A BROKER A COMMISSION, FOR EFFECTING A
PORTFOLIO TRANSACTION, IN EXCESS OF THE COMMISSION ANOTHER BROKER WOULD HAVE
CHARGED FOR EFFECTING THE SAME TRANSACTION. IF THE FIRST BROKER PROVIDED
BROKERAGE AND/OR RESEARCH SERVICES, INCLUDING STATISTICAL DATA, TO THE
SUBADVISOR, THE SUBADVISOR SHALL NOT BE DEEMED TO HAVE ACTED UNLAWFULLY, OR TO
HAVE BREACHED ANY DUTY CREATED BY THIS AGREEMENT, OR OTHERWISE, SOLELY BY REASON
OF ACTING ACCORDING TO SUCH AUTHORIZATION. THE ADVISOR MAY DIRECT THE
SUBADVISOR IN WRITING TO USE A PARTICULAR BROKER OR DEALER FOR ONE OR MORE
TRADES IF, IN THE SOLE OPINION OF THE ADVISOR, IT IS IN THE BEST INTEREST OF THE
FUND TO DO SO.
(II) AGGREGATE TRANSACTIONS IN EXECUTING PORTFOLIO TRANSACTIONS FOR
THE FUND, THE SUBADVISOR MAY, BUT WILL NOT BE OBLIGATED TO, AGGREGATE THE
SECURITIES TO BE SOLD OR PURCHASED WITH THOSE OF ITS OTHER CLIENTS WHERE SUCH
AGGREGATION IS NOT INCONSISTENT WITH THE POLICIES OF THE FUND, TO THE EXTENT
PERMITTED BY APPLICABLE LAWS AND REGULATIONS. IF THE SUBADVISOR CHOOSES TO
AGGREGATE SALES OR PURCHASES, IT WILL ALLOCATE THE SECURITIES AS WELL AS THE
EXPENSES INCURRED IN THE TRANSACTION IN THE MANNER IT CONSIDERS TO BE THE MOST
EQUITABLE AND CONSISTENT WITH ITS FIDUCIARY OBLIGATIONS TO THE FUND AND ITS
OTHER CLIENTS INVOLVED IN THE TRANSACTION.
(G) SOCIAL SCREENING. THE ADVISOR IS RESPONSIBLE FOR SCREENING
THOSE INVESTMENTS SUBJECT TO SOCIAL SCREENING ("SECURITIES") TO DETERMINE THAT
THE SECURITIES INVESTMENTS MEET THE FUND'S SOCIAL INVESTMENT CRITERIA, AS THEY
MAY BE AMENDED FROM TIME TO TIME BY THE TRUSTEES. THE SUBADVISOR WILL BUY ONLY
THOSE SECURITIES WHICH THE ADVISOR DETERMINES MEET THE FUND'S SOCIAL SCREENS.
(H) VOTING PROXIES. THE SUBADVISOR AGREES TO TAKE APPROPRIATE
ACTION (WHICH MAY INCLUDE VOTING) ON ALL PROXIES FOR THE FUND'S PORTFOLIO
INVESTMENTS IN A TIMELY MANNER. SUCH ACTION IS SUBJECT TO THE DIRECTION OF THE
TRUSTEES AND ADVISOR AND WILL BE CONSISTENT WITH THE SOCIAL SCREENS AND CRITERIA
GOVERNING INVESTMENT SELECTION FOR THE FUND.
(I) FURNISHING INFORMATION FOR THE FUND'S PROXIES. THE SUBADVISOR
AGREES TO PROVIDE THE ADVISOR IN A TIMELY MANNER WITH ALL INFORMATION NECESSARY,
FOR PREPARATION OF THE FUND'S PROXY STATEMENTS, AS MAY BE NEEDED FROM TIME TO
TIME.
(J) ALLOCATION OF FUND ASSETS. THE SUBADVISOR AGREES TO PROVIDE
INFORMAL ADVICE TO THE ADVISOR WITH RESPECT TO THE ALLOCATION OF FUND ASSETS
AMONG EQUITY, DEBT AND MONEY MARKET SECURITIES IN A FORUM AND AT SUCH TIMES AS
AGREED TO BY THE PARTIES.
(K) INDEPENDENT CONTRACTOR. THE SUBADVISOR WILL FOR ALL PURPOSES
HEREIN BE DEEMED TO BE AN INDEPENDENT CONTRACTOR AND SHALL, EXCEPT AS EXPRESSLY
PROVIDED OR AUTHORIZED, HAVE NO AUTHORITY TO ACT FOR OR REPRESENT THE FUND OR
THE ADVISOR IN ANY WAY OR OTHERWISE BE DEEMED AN AGENT OF THE FUND OR THE
ADVISOR.
2. BOOKS, RECORDS AND MISCELLANEOUS MATTERS.
(A) IN CONNECTION WITH THE PURCHASE AND SALE OF THE FUND'S PORTFOLIO
SECURITIES, THE SUBADVISOR SHALL ARRANGE FOR THE TRANSMISSION TO THE FUND'S
CUSTODIAN, AND/OR THE ADVISOR ON A DAILY BASIS, OF SUCH CONFIRMATIONS, TRADE
TICKETS OR OTHER DOCUMENTATION AS MAY BE NECESSARY TO ENABLE THE ADVISOR TO
PERFORM ITS ACCOUNTING AND ADMINISTRATIVE RESPONSIBILITIES WITH RESPECT TO THE
MANAGEMENT OF THE FUND.
(B) PURSUANT TO RULE 31A-3 UNDER THE 1940 ACT, RULE 204-2 UNDER THE
INVESTMENT ADVISORS ACT OF 1940 AND ANY OTHER LAWS, RULES OR REGULATIONS
REGARDING RECORDKEEPING, THE SUBADVISOR AGREES THAT: (I) ALL RECORDS IT
MAINTAINS FOR THE FUND ARE THE PROPERTY OF THE FUND; (II) IT WILL SURRENDER
PROMPTLY TO THE FUND OR ADVISOR ANY SUCH RECORDS UPON THE FUND'S OR ADVISOR'S
REQUEST; (III) IT WILL MAINTAIN FOR THE FUND THE RECORDS THAT THE FUND IS
REQUIRED TO MAINTAIN UNDER RULE 31A-1(B) INSOFAR AS SUCH RECORDS RELATE TO THE
INVESTMENT AFFAIRS OF THE FUND FOR WHICH THE SUBADVISOR HAS RESPONSIBILITY UNDER
THIS AGREEMENT; AND (IV) IT WILL PRESERVE FOR THE PERIODS PRESCRIBED BY RULE
31A-2 UNDER THE 1940 ACT THE RECORDS IT MAINTAINS FOR THE FUND.
(C) THE SUBADVISOR REPRESENTS THAT IT HAS ADOPTED AND WILL MAINTAIN AT
ALL TIMES A SUITABLE CODE OF ETHICS THAT COVERS ITS ACTIVITIES WITH RESPECT TO
ITS SERVICES TO THE FUND.
(D) THE SUBADVISOR SHALL SUPPLY TO THE TRUSTEES ITS POLICIES ON "SOFT
DOLLARS" AND TRADE ALLOCATIONS AND BROKERAGE ALLOCATION PROCEDURES. THE
SUBADVISOR SHALL MAINTAIN APPROPRIATE FIDELITY BOND AND ERRORS AND OMISSION
INSURANCE POLICIES.
3. COMPENSATION. THE ADVISOR WILL PAY TO THE SUBADVISOR AS
COMPENSATION FOR THE SUBADVISOR'S SERVICES RENDERED PURSUANT TO THIS AGREEMENT
AN ANNUAL SUBADVISORY FEE AS SPECIFIED THE SCHEDULE ATTACHED HERETO AND MADE
PART OF THIS AGREEMENT. THE BASE FEE SHALL BE PAYABLE FOR EACH MONTH WITHIN 15
BUSINESS DAYS AFTER THE END OF SUCH MONTH AND THE PERFORMANCE FEE SHALL BE
PAYABLE FOR EACH MONTH WITHIN 45 DAYS AFTER THE END OF SUCH MONTH. IF THE
SUBADVISOR SHALL SERVE FOR LESS THAN THE WHOLE OF A MONTH, THE COMPENSATION AS
SPECIFIED SHALL BE PRORATED. THE SCHEDULE MAY BE AMENDED FROM TIME TO TIME,
PROVIDED THAT AMENDMENTS ARE MADE IN CONFORMITY WITH APPLICABLE LAWS AND
REGULATIONS AND THE DECLARATION OF TRUST AND BYLAWS OF THE FUND.
4. DURATION AND TERMINATION OF THE AGREEMENT. THIS AGREEMENT SHALL
REMAIN IN FULL FORCE AND EFFECT CONTINUOUSLY (UNLESS TERMINATED AUTOMATICALLY AS
SET FORTH IN THIS SECTION 5) EXCEPT AS FOLLOWS:
(A) THE FUND MAY AT ANY TIME TERMINATE THIS AGREEMENT WITHOUT
PENALTY BY PROVIDING NOT LESS THAN 60 DAYS WRITTEN NOTICE DELIVERED OR MAILED BY
REGISTERED MAIL, POSTAGE PREPAID, TO THE ADVISOR AND THE SUBADVISOR. SUCH
TERMINATION CAN BE AUTHORIZED BY THE AFFIRMATIVE VOTE OF A MAJORITY OF THE (I)
TRUSTEES OR (II) OUTSTANDING VOTING SECURITIES OF THE FUND.
(B) THIS AGREEMENT WILL TERMINATE AUTOMATICALLY UNLESS, BY JANUARY
1, 1997, AND AT LEAST ANNUALLY THEREAFTER, THE CONTINUANCE OF THE AGREEMENT IS
SPECIFICALLY APPROVED BY (I) THE TRUSTEES OR THE SHAREHOLDERS OF THE FUND BY THE
AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF THE FUND, AND (II) A
MAJORITY OF THE TRUSTEES, WHO ARE NOT INTERESTED PERSONS OF THE FUND, ADVISOR OR
SUBADVISOR, AS CONTEMPLATED BY THE 1940 ACT. IF THIS AGREEMENT IS SUBMITTED TO
THE SHAREHOLDERS OF THE FUND FOR THEIR APPROVAL AND SUCH SHAREHOLDERS FAIL TO
APPROVE SUCH AGREEMENT, THE SUBADVISOR ONLY MAY CONTINUE TO SERVE HEREUNDER AT
THE TRUSTEE'S REQUEST AND IN A MANNER CONSISTENT WITH THE 1940 ACT AND THE RULES
AND REGULATIONS THEREUNDER.
(C) THE ADVISOR MAY AT ANY TIME TERMINATE THIS AGREEMENT WITH
RESPECT TO THE FUND BY NOT LESS THAN 60 DAYS WRITTEN NOTICE DELIVERED OR MAILED
BY REGISTERED MAIL, POSTAGE PREPAID, TO THE SUBADVISOR, AND THE SUBADVISOR MAY
AT ANY TIME TERMINATE THIS AGREEMENT BY NOT LESS THAN 90 DAYS WRITTEN NOTICE
DELIVERED OR MAILED BY REGISTERED MAIL, POSTAGE PREPAID, TO THE ADVISOR, UNLESS
OTHERWISE MUTUALLY AGREED IN WRITING.
NOTWITHSTANDING THE ABOVE, THIS AGREEMENT AUTOMATICALLY SHALL TERMINATE WITHOUT
THE PAYMENT OF ANY PENALTY IN THE EVENT (I) OF ITS ASSIGNMENT WITHOUT PRIOR
WRITTEN CONSENT, (II) TERMINATION FOR ANY REASON OF THE INVESTMENT ADVISORY
AGREEMENT BETWEEN THE ADVISOR AND THE FUND, OR (III) IF THE FORM OF THIS
AGREEMENT AND THE INVESTMENT ADVISORY AGREEMENT BETWEEN THE ADVISOR AND FUND IS
NOT APPROVED BY THE AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF
THE FUND.
UPON TERMINATION OF THIS AGREEMENT WITH RESPECT TO THE FUND, THE DUTIES OF THE
ADVISOR DELEGATED TO THE SUBADVISOR UNDER THIS AGREEMENT WITH RESPECT TO THE
FUND AUTOMATICALLY SHALL REVERT TO THE ADVISOR.
5. NOTIFICATION TO THE ADVISOR. THE SUBADVISOR WILL PROMPTLY NOTIFY
THE ADVISOR IN WRITING OF THE OCCURRENCE OF ANY OF THE FOLLOWING EVENTS:
(A) THE SUBADVISOR SHALL FAIL TO BE REGISTERED AS AN INVESTMENT
ADVISOR UNDER THE INVESTMENT ADVISORS ACT OF 1940, AS AMENDED, AND UNDER THE
LAWS OF ANY JURISDICTION IN WHICH THE SUBADVISOR IS REQUIRED TO BE REGISTERED AS
AN INVESTMENT ADVISOR IN ORDER TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT;
(B) THE SUBADVISOR SHALL HAVE BEEN SERVED OR OTHERWISE HAVE NOTICE OF
ANY ACTION, SUIT, PROCEEDING, INQUIRY OR INVESTIGATION, AT LAW OR IN EQUITY,
BEFORE OR BY ANY COURT, PUBLIC BOARD OR BODY, INVOLVING THE AFFAIRS OF THE FUND;
(C) A VIOLATION OF THE SUBADVISOR'S CODE OF ETHICS IS DISCOVERED AND,
AGAIN, WHEN ACTION HAS BEEN TAKEN TO RECTIFY SUCH VIOLATION; OR
(D) ANY OTHER EVENT THAT MIGHT AFFECT THE ABILITY OF THE SUBADVISOR
TO PROVIDE THE SERVICES PROVIDED FOR UNDER THIS AGREEMENT.
6. DEFINITIONS. FOR THE PURPOSES OF THIS AGREEMENT, THE TERMS "VOTE OF
A MAJORITY OF THE OUTSTANDING SHARES," "AFFILIATED PERSON," "CONTROL,"
"INTERESTED PERSON" AND "ASSIGNMENT" SHALL HAVE THEIR RESPECTIVE MEANINGS AS
DEFINED IN THE 1940 ACT AND THE RULES AND REGULATIONS THEREUNDER SUBJECT,
HOWEVER, TO SUCH EXEMPTIONS AS MAY BE GRANTED BY THE SECURITIES AND EXCHANGE
COMMISSION UNDER SAID ACT; AND THE TERM "SPECIFICALLY APPROVE AT LEAST ANNUALLY"
SHALL BE CONSTRUED IN A MANNER CONSISTENT WITH THE 1940 ACT AND THE RULES AND
REGULATIONS THEREUNDER.
7. INDEMNIFICATION. THE SUBADVISOR WILL INDEMNIFY AND HOLD HARMLESS
THE ADVISOR, THE FUND AND THEIR RESPECTIVE TRUSTEES, DIRECTORS, OFFICERS AND
POLICYHOLDERS FROM ANY AND ALL CLAIMS, LOSSES, EXPENSES, OBLIGATIONS AND
LIABILITIES (INCLUDING REASONABLE ATTORNEYS FEES) ARISING OR RESULTING FROM THE
SUBADVISOR'S WILLFUL MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE OR RECKLESS
DISREGARD OF ITS DUTIES HEREUNDER.
THE ADVISOR SHALL INDEMNIFY AND HOLD HARMLESS THE SUBADVISOR, THE FUND,
THEIR RESPECTIVE TRUSTEES, OFFICERS AND POLICYHOLDERS FROM ANY AND ALL CLAIMS,
LOSSES, EXPENSES, OBLIGATION AND LIABILITIES (INCLUDING REASONABLE ATTORNEYS
FEES) ARISING OR RESULTING FROM THE ADVISOR'S WILLFUL MISFEASANCE, BAD FAITH,
GROSS NEGLIGENCE OR RECKLESS DISREGARD OF ITS DUTIES HEREUNDER OR UNDER ITS
INVESTMENT ADVISORY AGREEMENT WITH THE FUND.
8. APPLICABLE LAW AND JURISDICTION. THIS AGREEMENT IS GOVERNED BY
MARYLAND LAW, AND ANY DISPUTE ARISING FROM THIS AGREEMENT OR THE SERVICES
RENDERED HEREUNDER SHALL BE RESOLVED THROUGH LEGAL PROCEEDINGS, WHETHER STATE,
FEDERAL, OR OTHERWISE, CONDUCTED IN THE STATE OF MARYLAND OR IN SUCH OTHER
MANNER OR JURISDICTION AS SHALL BE MUTUALLY AGREED UPON BY THE PARTIES HERETO.
9. MISCELLANEOUS. NOTICES OF ANY KIND TO BE GIVEN TO A PARTY HEREUNDER
SHALL BE IN WRITING AND SHALL BE DULY GIVEN IF MAILED, DELIVERED OR COMMUNICATED
BY ANSWER BACK FACSIMILE TRANSMISSION TO SUCH PARTY AT THE ADDRESS SET FORTH
BELOW, OR AT SUCH OTHER ADDRESS OR TO SUCH OTHER PERSON AS A PARTY MAY FROM TIME
TO TIME SPECIFY IN WRITING.
EACH PARTY AGREES TO PERFORM SUCH FURTHER ACTS AND EXECUTE SUCH FURTHER
DOCUMENTS AS ARE NECESSARY TO EFFECTUATE THE PURPOSES HEREOF. THE CAPTIONS IN
THIS AGREEMENT ARE INCLUDED FOR CONVENIENCE ONLY AND IN NO WAY DEFINE OR DELIMIT
ANY OF THE PROVISIONS HEREOF OR OTHERWISE AFFECT THEIR CONSTRUCTION OR EFFECT.
IN WITNESS WHEREOF, AND HAVE EACH CAUSED THIS INSTRUMENT TO BE SIGNED IN
DUPLICATE ON ITS BEHALF BY ITS DULY AUTHORIZED REPRESENTATIVE, ALL AS OF THE DAY
AND YEAR FIRST ABOVE WRITTEN.
WITNESS: XXXXXXX ASSET MANAGEMENT COMPANY, INC.
BY:___________________________ BY:_________________________________
0000 XXXXXXXXXX XXXXXX, XXXXX 0000X
XXXXXXXX, XXXXXXXX 00000
WITNESS: NCM CAPITAL MANAGEMENT GROUP, INC.
BY:___________________________ BY:_________________________________
000 XXXX XXXX XXXXXX
XXXXXX, XXXXX XXXXXXXX 00000
1
SCHEDULE TO THE INVESTMENT SUBADVISORY AGREEMENT
BETWEEN XXXXXXX ASSET MANAGEMENT COMPANY, INC.
AND NCM CAPITAL MANAGEMENT GROUP, INC.
AS COMPENSATION PURSUANT TO SECTION 3 OF THE SUBADVISORY AGREEMENT BETWEEN
XXXXXXX ASSET MANAGEMENT COMPANY, INC. (THE "ADVISOR") AND NCM CAPITAL
MANAGEMENT GROUP, INC., (THE "SUBADVISOR"), THE ADVISOR SHALL PAY THE SUBADVISOR
AN ANNUAL SUBADVISORY FEE FOR THE XXXXXXX SOCIAL INVESTMENT FUND, MANAGED GROWTH
PORTFOLIO ("FUND"), CONSISTING OF A BASE FEE AND A PERFORMANCE FEE AS DEFINED
BELOW.
1. BASE FEE. THE ANNUAL BASE FEE WILL CONSIST OF A FEE, COMPUTED DAILY AND
PAYABLE MONTHLY, AT AN ANNUAL RATE EQUAL TO 0.25% OF THE AVERAGE DAILY NET
ASSETS OF THE FUND UNDER THE MANAGEMENT OF THE SUBADVISOR.
2. PERFORMANCE FEE. IN ADDITION TO THE BASE FEE, THE SUBADVISOR WILL
RECEIVE A PERFORMANCE FEE BASED ON THE INVESTMENT PERFORMANCE OF AVERAGE DAILY
NET ASSETS OF THE FUND IN RELATION TO THE INVESTMENT RECORD OF THE XXXXXXX 3000
("INDEX"). THE PERFORMANCE FEE WILL BE PAID MONTHLY ONCE IT ACCRUES PURSUANT
TO PARAGRAPH 2C. BELOW. THE PERFORMANCE FEE IS COMPUTED AS FOLLOWS:
A. THE PERFORMANCE FEE WILL BE CREATED BY APPLYING A PERFORMANCE
ADJUSTMENT RATE ("PERFORMANCE ADJUSTMENT RATE") TO THE AVERAGE DAILY NET ASSETS
OF THE FUND OVER THE PERFORMANCE PERIOD ("PERFORMANCE PERIOD"). ONE-TWELFTH OF
THE ANNUAL PERFORMANCE ADJUSTMENT RATE WILL BE APPLIED TO THE AVERAGE OF THE
DAILY NET ASSETS OF THE FUND (COMPUTED IN THE MANNER SET FORTH IN THE
DECLARATION OF TRUST OR BYLAWS OF THE FUND) UNDER THE MANAGEMENT OF THE
SUBADVISOR THROUGHOUT THE PERFORMANCE PERIOD DETERMINED AS OF THE CLOSE OF
BUSINESS ON EACH BUSINESS DAY. THE RESULTING DOLLAR AMOUNT WILL BE THE
PERFORMANCE FEE ADDED TO OR DEDUCTED FROM THE BASE FEE.
B. THE PERFORMANCE ADJUSTMENT RATE WILL BE COMPUTED AS FOLLOWS:
(I) 0.05% OF THE FUND'S AVERAGE DAILY NET ASSETS DURING THE PERFORMANCE
PERIOD UNDER THE MANAGEMENT OF THE SUBADVISOR ("AVERAGE DAILY NET ASSETS") IF
THE AVERAGE NET ASSETS INVESTMENT PERFORMANCE DURING THE PERFORMANCE PERIOD
("INVESTMENT PERFORMANCE") WAS BETTER OR WORSE THAN THE INVESTMENT RECORD OF THE
INDEX DURING THE PERFORMANCE PERIOD ("INVESTMENT RECORD") BY 6.0% OR MORE, BUT
LESS THAN 12.0%;
(II) 0.10% OF THE AVERAGE DAILY NET ASSETS IF THE INVESTMENT
PERFORMANCE WAS BETTER OR WORSE THAN THE INVESTMENT RECORD BY 12.0% OR MORE, BUT
LESS THAN 18.0%; AND
(III) 0.15% OF THE AVERAGE DAILY NET ASSETS IF THE INVESTMENT
PERFORMANCE WAS BETTER OR WORSE THAN THE INVESTMENT RECORD BY 18.0% OR MORE.
C. THE PERFORMANCE PERIOD WILL COMMENCE ON JANUARY 1, 1996 ("BEGINNING
DATE"). AT THE END OF THE TWELFTH MONTH FOLLOWING THE BEGINNING DATE, A
PERFORMANCE FEE WILL BE PAID, TO THE EXTENT WARRANTED UNDER THE TERMS OF THIS
SCHEDULE, BASED ON THE INVESTMENT PERFORMANCE OF THE FUND DURING THE PRECEDING
TWELVE MONTHS. FOLLOWING THE TWELFTH MONTH, A NEW MONTH WILL BE ADDED TO THE
PERFORMANCE PERIOD AND THE MONTHLY PAYMENT WILL BE BASED ON AN INCREASING
2
DB:Documents:AGREEMENTS:Sub-Agree for NCM and CSIF Managed Growth
NUMBER OF MONTHS UNTIL THE PERFORMANCE PERIOD EQUALS 36 MONTHS.
THEREAFTER, THE PERFORMANCE PERIOD WILL CONSIST OF THE PREVIOUS 36 MONTHS, AND
EACH MONTHLY PAYMENT WILL BE BASED ON THE INVESTMENT RECORD FOR THAT 36-MONTH
PERFORMANCE PERIOD.
D. THE COMPUTATION OF THE INVESTMENT PERFORMANCE AND THE INVESTMENT
RECORD WILL BE MADE IN ACCORDANCE WITH RULE 205-1 UNDER THE INVESTMENT ADVISORS
ACT OF 1940 OR ANY OTHER APPLICABLE RULE OR EXEMPTION AS, FROM TIME TO TIME, MAY
BE ADOPTED, AMENDED OR GRANTED BY THE SECURITIES AND EXCHANGE COMMISSION.
E. PAYMENT (OR SUBTRACTION) OF A PERFORMANCE FEE IS CONDITIONED ON: (1)
THE PERFORMANCE OF THE FUND AS A WHOLE HAVING EXCEEDED (OR TRAILED) THE LIPPER
BALANCED FUND INDEX ("FUND INDEX") DURING THE PERFORMANCE PERIOD; AND (2) TO THE
EXTENT PAYMENT OF A POSITIVE PERFORMANCE FEE IS DUE, SUCH PAYMENT NOT CAUSING
THE FUND'S PERFORMANCE TO FALL BELOW THE FUND INDEX.
F. TO THE EXTENT THAT MORE THAN ONE SUBADVISOR IS DUE A PERFORMANCE
FEE, THE AMOUNT OF PERFORMANCE FEE PAID WILL BE REDUCED PRO RATA AMONG SUCH
SUBADVISORS TO THE EXTENT SUCH PAYMENT WILL CAUSE THE FUND'S PERFORMANCE TO FALL
BELOW THE FUND INDEX.
G. THE PERFORMANCE FEE WILL BE BASED ON CLASS A SHARES ONLY.
3. FEE WAIVER. THE SUBADVISORS AGREES TO WAIVE ITS SUBADVISORY FEES TO THE
SAME EXTENT, CALCULATED AS A PERCENTAGE, AS THE ADVISOR AND ALL OTHER
SUBADVISORS WAIVE THEIR ADVISORY FEE AND SUBADVISOR FEES DUE TO STATE EXPENSE
LIMITATIONS OR AS MAY BE OTHERWISE REQUIRED BY LAW.
