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EXHIBIT 99.B5f
SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT dated as of October 1, 1992 by and among XXXXXXX XXXXX &
COMPANY, a Delaware corporation and U.S. registered investment adviser (the
"Adviser"), FRAMLINGTON OVERSEAS INVESTMENT MANAGEMENT LIMITED, an English
corporation and U.S. registered investment adviser (the "Sub-Adviser"), and
FRAMLINGTON GROUP plc, an English corporation ("Framlington").
WHEREAS, the Adviser is the investment manager for Xxxxxxx Xxxxx Mutual
Funds, Inc. (the "Fund"), an open-end diversified, management investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, the Adviser serves as investment adviser and manager for the
International Growth Shares Portfolio, an investment portfolio of the Fund (the
"Portfolio") and wants to retain the Sub-Adviser as the Adviser's agent to
furnish certain investment advisory services for the Portfolio; and
WHEREAS, FRAMLINGTON is the parent corporation of the Sub-Adviser.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Appointment. The Adviser hereby appoints the Sub-Adviser to
provide certain sub-investment management services to the Fund 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.
2. Management. Subject always to the supervision of the Fund's
Board of Directors and the Adviser, the Sub-Adviser will furnish an investment
program in respect of, and make investment decisions for, all assets of the
Portfolio and place all orders for the purchase and sale of securities, all on
behalf of the Portfolio. In the performance of its duties, the Sub-Adviser
will satisfy its fiduciary duties to the Portfolio (as set forth in Section 8,
below), and will monitor the Portfolio's investments, and will comply with the
provisions of the Fund's Articles of Incorporation and By-Laws, as amended from
time to time, and the stated investment objectives, policies and restrictions
of the Portfolio. The Sub-Adviser and the Adviser will each make its officers
and employees available to the other from time to time at reasonable times to
review investment policies of the Portfolio and to consult with each other
regarding the investment affairs of the Portfolio. The Sub-Adviser will report
to the Board of Directors and to the Adviser with respect to the implementation
of such program.
The Sub-Adviser further agrees that it:
(a) will use the same skill and care in providing such services as
it uses in providing services to fiduciary accounts for which it has
investment responsibilities;
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(b) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission and the Rules of IMRO (Investment
Management Regulatory Organisation Limited) and in addition will conduct
its activities under this Agreement in accordance with any applicable
regulations of any governmental authority pertaining to its investment
advisory activities;
(c) will place orders pursuant to its investment determinations for
the Portfolio either directly with the issuer or with any broker or
dealer. In placing orders with brokers and dealers, the Sub-Adviser will
attempt to obtain the most favorable overall results, taking into account
the net price, the method of execution and research services provided.
Consistent with this obligation, when the execution and price offered by
two or more brokers or dealers are comparable, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities to and from brokers and
dealers who provide the Sub-Adviser with research advice and other
services. In no instance will portfolio securities be purchased from or
sold to the Adviser, the Sub-Adviser or any affiliated person of either
the Fund, the Adviser, or the Sub-Adviser, except as may be permitted
under the 1940 Act;
(d) will report regularly to the Adviser and to the Board of
Directors and will make appropriate persons available for the purpose of
reviewing with representatives of the Adviser and the Board of Directors
on a regular basis at reasonable times the management of the Portfolio,
the performance of the Portfolio in relation to standard industry indices,
interest rate considerations and general conditions affecting the
marketplace and will provide various other reports from time to time as
reasonably requested by the Adviser;
(e) will maintain books and records with respect to the Fund's
securities transactions and will furnish the Adviser and the Fund's Board
of Directors such periodic and special reports as the Board or the Adviser
may request;
(f) will act upon instructions from the Adviser not inconsistent
with the fiduciary duties hereunder;
(g) will treat confidentially and as proprietary information of the
Fund all records and other information relative to the Fund, and will not
use records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to
and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld either where the Sub-Adviser
may be exposed to civil or criminal contempt proceedings for failure to
comply, or when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund; and
(h) will receive the research and recommendations of the Adviser
with respect to the investment and reinvestment of the assets of the
Portfolio.
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3. Books and Records. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records which
it maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records or copies of such records
upon the Fund's request. The Sub-Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
4. Expenses. During the term of this Agreement, 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,
if any) purchased for the Fund.
5. Sub-Advisory Fees. For the services provided and the expenses
assumed pursuant to this Agreement, the Adviser will pay the Sub-Adviser, and
the Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory
fee, accrued daily and payable monthly, computed at the annual rate of .40% of
the first $100,000,000 of average daily net assets of the Portfolio subject to
this Agreement and .275% of the average daily net assets in excess of
$100,000,000.
6. Services to Others. The Adviser understands, and has advised the
Fund's Board of Directors, that the Sub-Adviser may in the future act as an
investment adviser to fiduciary and other managed accounts and as investment
adviser or sub-investment adviser to other investment companies. The Adviser has
no objection to the Sub-Adviser's acting in such capacities, provided that
whenever the Portfolio and one or more other investment companies, or accounts
advised by the Sub-Adviser have available funds for investment, investments
suitable and appropriate for each will be allocated in a manner which in the
opinion of the Sub-Adviser is the most equitable for the Portfolio and all
other companies concerned. The Adviser recognizes, and has advised the Fund's
Board of Directors, that in some cases this procedure may adversely affect the
size of the position that the Portfolio may obtain in a particular security. In
addition, the Adviser understands, and has advised the Fund's Board of
Directors, that the persons employed by the Sub-Adviser to assist in the
Sub-Adviser's duties under this Agreement will not devote their full time to
such service and nothing contained in this Agreement will be deemed to limit or
restrict the right of Sub-Adviser or any of its affiliates to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature.
(a) The Adviser shall be responsible for making custodial
arrangements for the Portfolio.
(b) All assets in respect of which the Sub-Adviser shall provide
services pursuant to this Agreement shall be the property of the Fund. All
investments capable of registration will be registered in the name of the
Fund or the Fund's Custodian. All certificates and documents of title
relating to any such assets (whether or not in registered form) will be
held for safekeeping by the Fund's Custodian.
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(c) The Adviser hereby authorizes the Sub-Adviser to give such
instructions to the Fund's Custodian for delivery of all documents
relating to title, rights and privileges attaching to investments as is
necessary in connection with any services provided by the Sub-Adviser
under this Agreement.
7. Limitation of Liability. The Adviser will not take any action
against the Sub-Adviser to hold the Sub-Adviser liable for any error of
judgment or mistake of law or for any loss or failure to take profit or
advantage in connection with the performance of the Sub-Adviser's duties under
this Agreement, except a loss resulting from Sub-Adviser's willful misfeasance,
bad faith, or gross negligence in the performance of its duties under this
Agreement. In addition, the Sub-Adviser shall not be liable for any act or
default by the Fund's Custodian.
8. Indemnification. The Adviser agrees to indemnify the
Sub-Adviser and the Sub-Adviser and Framlington each agree to indemnify the
Adviser against any claim against, loss or liability to such other party
(including reasonable attorneys' fees) arising out of any action on the part of
the indemnifying party which constitutes willful misfeasance, bad faith or
gross negligence.
9. Duration and Termination. This Agreement will become effective
as to the Portfolio on October 1, 1992, provided that it has been approved by
vote of a majority of the outstanding voting securities of the Portfolio in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, will continue in effect until April 30, 1994.
Thereafter, if not terminated, this Agreement will continue in
effect for the Portfolio for successive periods of twelve months each ending on
April 30 of each year, provided such continuation is specifically approved at
least annually (a) by the vote of a majority of those members of the Fund's
Board of Directors who are not interested persons of the Fund, the Sub-Adviser,
or the Adviser, cast in person at a meeting called for the purpose of voting on
such approval, and (b) by the vote of a majority of the Fund's Board of
Directors or by the vote of a majority of all votes attributable to the
outstanding Shares of the Portfolio. Notwithstanding the foregoing, this
Agreement may be terminated as to the Portfolio at any time, without the
payment of any penalty, on sixty days' written notice by the Adviser or by the
Sub-Adviser on ninety (90) days' written notice and may also be terminated at
any time without penalty by the Board of Directors of the Fund or by vote of a
majority of all votes attributable to the outstanding shares of the Portfolio
on sixty (60) day's written notice to Sub-Adviser by the Fund. This Agreement
will immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" have the same meaning of such terms in
the 1940 Act.) This Agreement shall automatically terminate in the event that
the Management Agreement between the Adviser and the Fund with respect to the
Portfolio is terminated, assigned or not renewed.
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10. Amendment of this Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
11. Notice. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such notice.
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be
affected thereby. This Agreement will be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and will be
governed by the laws of the United States and the State of Illinois.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
XXXXXXX XXXXX & COMPANY
By: /s/Xxxxxxx X. Xxxxxxxxx
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Name: XXXXXXX X. XXXXXXXXX
Title: PARTNER, XXXXXXX XXXXX
& COMPANY, SENIOR V.P., XXXXXXX
XXXXX MUTUAL FUNDS, INC.
FRAMLINGTON OVERSEAS INVESTMENT
MANAGEMENT LIMITED
By: /s/X.X. Xxxxx
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Name: X.X. Xxxxx
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Title: Director
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FRAMLINGTON OVERSEAS INVESTMENT
MANAGEMENT LIMITED
By: /s/M. Hasui
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Name: M. Hasui
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Title: Deputy Chairman
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