INVESTMENT SUBADVISORY AGREEMENT
AGREEMENT made as of June 30, 1994 by and between United States Trust
Company of the Pacific Northwest, an Oregon corporation (the "Adviser"), and
Xxxxxx Xxxx Capital Management, a Delaware corporation (the "Subadviser").
In consideration of the promises and the mutual covenants herein contained,
the Adviser and the Subadviser agree as follows:
1. Appointment. The Adviser has been retained by St. Xxxxx Portfolios, a
New York trust (the "Trust") to act as investment adviser to the Trust with
respect to the series of the Trust listed on Exhibit A hereto (the "Series"). In
accordance with and subject to the Investment Advisory Agreement between the
Trust and the Adviser, attached hereto as Exhibit B (the "Advisory Agreement"),
the Adviser appoints the Subadviser to act as subadviser with respect to the
Series for the period and on the terms set forth in this Agreement. The
Subadviser accepts such appointment and agrees to provide an investment program
for the compensation provided by this Agreement.
2. Duties of the Subadviser. Subject to the direction and control of the
Adviser and the Board of Trustees of the Trust, the Subadviser shall:
(a) prepare (or otherwise obtain) and evaluate on both a macroeconomic and
microeconomic level any pertinent research; statistical, financial and economic
data; and other information necessary or appropriate for the performance of its
duties under this Agreement;
(b) formulate and continuously review, supervise, and administer an
investment program for each Series;
(c) determine the securities to be purchased by each Series, and
continuously monitor such securities and the issuers thereof to determine
whether and when to sell, exchange, or take any other action concerning such
securities;
(d) determine whether and how to exercise warrants, voting rights, or other
rights with respect to the Series' securities;
(e) provide valuations with respect to the securities held by each Series;
(f) render regular reports to the Trust's officers and the Board of
Trustees concerning the investment performance of the Trust, the Subadviser's
discharge of its responsibilities under this Agreement, and any other subject as
the Trust's officers or Board of Trustees reasonably may request; and
(g) assist the Adviser and the Trust's officers in connection with the
operation of the Trust and perform any further acts that may be necessary to
effectuate the purposes of this Agreement.
3. Supervision and Compliance. Notwithstanding any provision of this
Agreement, the Adviser shall retain all rights and ultimate responsibilities to
supervise, and, in its discretion, conduct investment advisory activities
relating to the Trust. The activities of the Subadviser shall be subject at all
times to the direction and control of the Board of Trustees of the Trust and the
Adviser and shall comply with: (a) the Declaration of Trust and By-Laws of the
Trust; (b) the Registration Statement of the Trust, as it may be amended from
time to time, including the investment objectives and policies set forth
therein; (d) the Investment Company Act and the regulations thereunder; (e) the
Internal Revenue Code of 1986 and the regulations thereunder applicable to
regulated investment companies; (f) any other applicable laws or regulations;
and (g) such other limitations as the Adviser or the Board of Trustees of the
Trust may adopt.
4. Purchase and Sale of Securities. The Subadviser shall, at its own
expense, place orders for the purchase, sale or loan of securities by the Trust
either directly with the issuer or with any broker and/or dealer who deals in
such securities.
(a) In placing orders with brokers and/or dealers, the Subadviser shall use
its best efforts to obtain the best net price and the most favorable execution
of its orders, after taking into account 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 and/or dealer,
and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. Consistent with this obligation, the
Subadviser may, to the extent permitted by law, purchase and sell portfolio
securities to and from brokers who provide brokerage and research services
(within the meaning of Section 28(e) of the Securities and Exchange Act of 1934)
to or for the benefit of the Trust and/or other accounts over which the
Subadviser exercises investment discretion. The Subadviser is authorized to pay
a broker who provides such brokerage and research services a commission for
effecting a securities transaction which is in excess of the amount of
commission another broker would have charged for effecting that transaction, if
the Subadviser determines in good faith that such commission was reasonable in
relation to the value of brokerage and research services provided by such
broker. This determination may be viewed in terms of either that particular
transaction or of the overall responsibilities of the Subadviser with respect to
the accounts as to which it exercises investment discretion.
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(b) The Subadviser may execute transactions through itself and its
affiliates on a securities exchange provided that the commissions paid by the
Trust are "reasonable and fair" compared to commissions received by other
brokers having comparable execution capability and provided that the
transactions are effected pursuant to procedures established by the Board of
Trustees of the Trust. An affiliated broker may transmit, clear and settle
transactions for the Trust that are executed on a securities exchange provided
that the affiliated broker arranges for unaffiliated brokers to execute the
transactions.
(c) Notwithstanding the foregoing, the Board of Trustees and the Adviser
periodically shall review the commissions paid by the Trust and determine
whether those commissions were reasonable in relation to the brokerage and
research services received. In addition, the Board of Trustees of the Trust, in
its discretion, may instruct the Subadviser to effect all or a portion of its
securities transactions with one or more brokers and/or dealers selected by the
Board of Trustees, if it determines that the use of such brokers and/or dealers
is in the best interest of the Trust.
(d) When the Subadviser deems the purchase or sale of a security to be in
the best interest of the Trust as well as other customers, the Subadviser, to
the extent permitted by applicable law, may aggregate the securities to be so
sold or purchased in order to obtain the best execution or lower brokerage
commissions. The Subadviser also may purchase or sell a particular security for
one or more customers in different amounts. Allocation of the securities
purchased or sold in either manner, as well as the expenses incurred in the
transactions, will be made by the Subadviser in a manner that is equitable and
consistent with applicable law and regulations and with its fiduciary
obligations to the Trust and to such other customers.
5. Expenses.
(a) The Subadviser shall furnish at its own expense all office space,
office facilities, equipment and personnel necessary or appropriate to the
performance of its duties under this Agreement. The Subadviser also shall pay
the salaries of all personnel performing services related to the Subadviser's
duties under this Agreement.
(b) It is understood that the Trust will pay all of its expenses and
liabilities, including compensation of its independent Trustees; taxes and
governmental fees; interest charges; fees and expenses of the Trust's
independent auditors and legal counsel; trade association membership dues; fees
and expenses of any custodian (including safekeeping of funds and
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securities, maintenance of books and accounts and calculation of the net asset
value of beneficial interests of each Series), transfer agent and registrar and
dividend disbursing agent of the Trust; expenses of preparing and mailing
reports to investors and regulatory agencies; expenses relating to the issuance,
registration and qualification of shares of each Series, and the preparation,
printing and mailing of prospectuses for such purposes;insurance premiums;
brokerage and other expenses of executing portfolio transactions; expenses of
investors' and Trustees' meetings; organization expenses; and extraordinary
expenses.
6. Compensation of the Subadviser. In consideration of the services to be
rendered by the Subadviser under this Agreement, the Adviser shall pay the
Subadviser a fee accrued daily and paid monthly at an annual rate equal to that
specified in Exhibit A to this Agreement for that Series' average daily net
assets. The fee for any period in which the Subadviser serves as investment
adviser pursuant to this Agreement for less than one full month shall be paid
for that portion of the month accrued. For purposes of calculating fees, the
value of the net assets of each Series of the Trust shall be computed in the
manner specified in its Registration Statement on Form N-1A.
7. Services to Others. The services of the Subadviser to the Adviser and
the Trust are not to be deemed exclusive, and the Subadviser is free to render
services to others and to engage in other activities, provided, however, that
those services and activities do not adversely affect the Subadviser's ability
to perform its obligations under this Agreement.
8. Books, Records, and Information. The Subadviser shall provide the
Adviser and the Trust with all records concerning the Subadviser's activities
that the Trust is required by law to maintain. Any records required to be
maintained and preserved pursuant to the provisions of Rule 31a-1 and Rule 31a-2
under the Investment Company Act which are prepared or maintained by the
Subadviser on behalf of the Trust are the property of the Trust and will be
surrendered promptly to the Trust on request. The Subadviser also shall comply
with all reasonable requests for information by the Adviser or the Trust's
officers or Board of Trustees, including information required for the Trust's
filings with the Securities and Exchange Commission and state securities
commissions.
9. Limitations on Liability.
(a) The Subadviser hereby is notified expressly of the limitation of
shareholder liability as set forth in the Declaration of Trust and agrees that
any obligation of the Trust or the Series arising in connection with this
Agreement shall be
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limited in all cases to the Series and their assets, and the Subadviser shall
not seek satisfaction of any such obligation from any Trustee or shareholder of
the Series.
(b) The Subadviser shall give the Adviser and the Trust the benefit of its
best judgment and efforts in rendering services under this Agreement. In the
absence of willful malfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Subadviser, the
Subadviser shall not be liable to the Trust, to any shareholder of the Series or
to the Adviser for any act or omission in the course of, or connected with,
rendering services under this Agreement or for any losses that may be sustained
in the purchase, holding or sale of any security. The Adviser agrees that the
Subadviser shall not be liable for, and shall be indemnified and held harmless
by the Adviser for, any losses, liabilities, or expenses that the Subadviser may
incur due to errors of judgment, mistakes, acts or ommission of the Adviser.
10. Effective Date; Termination; Amendments.
(a) This Agreement shall be effective as to each Series on the date the
Series commences investment operations, and, unless terminated sooner as
provided herein, shall continue until the second anniversary of the execution of
this Agreement. Thereafter, unless terminated sooner as provided herein, this
Agreement shall continue in effect as to each Series for successive annual
periods, provided that such continuance is specifically approved at least
annually by the vote of a majority of the Board of 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 voting on such continuance, and
either: (i) the vote of a majority of the outstanding voting securities of such
Series; or (ii) the vote of a majority of the full Board of Trustees.
(b) This Agreement may be terminated at any time and as to any one or more
Series, without the payment of any penalty, either by: (i) the Trust, by action
of the Board of Trustees or by vote of a majority of the outstanding voting
securities of such Series, on 60 days' written notice to the Subadviser; (ii)
the Adviser, on 60 days' written notice to the Subadviser; or (iii) the
Subadviser, on 90 days' written notice to the Adviser and the Trust. This
Agreement shall terminate immediately in the event of its assignment.
(c) This Agreement may be amended only if such amendment is approved by the
vote of a majority of the outstanding voting securities of the Trust or by vote
of a majority of the Board of Trustees of the Trust who are not parties to this
Agreement or interested persons of any such
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party, cast in person at a meeting called for the purpose of voting on such
amendment.
(d) As used in this Agreement, the terms "specifically approved at least
annually," "majority of the outstanding voting securities," "interested persons"
and "assignment" shall have the same meanings as such terms have in the
Investment Company Act and the regulations thereunder.
11. Governing Law. This Agreement shall be construed in accordance with the
laws of the Commonwealth of Massachusetts without giving effect to the choice of
law provisions thereof, to the extent that such laws are consistent with
provisions of the Investment Company Act and the regulations thereunder.
12. Miscellaneous. The captions in this Agreement are included for the
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. Should any
part of this Agreement be held or made invalid by a court decision, statute,
regulation, or otherwise, the remainder of this Agreement shall not be affected
thereby. This Agreement shall be binding and shall inure to the benefit of the
parties hereto and their respective successors, to the extent permitted by law.
IN WITNESS WHEREOF, the Adviser and the Subadviser have caused this
Agreement to be executed and delivered in their names and on their behalf by the
undersigned, duly authorized officers, all as of the day and year first above
written.
UNITED STATES TRUST COMPANY OF THE
PACIFIC NORTHWEST
By: /S/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
XXXXXX XXXX CAPITAL MANAGEMENT
By: /S/
Name:
Title: Vice President/Principal
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Exhibit A
SCHEDULE OF SERIES AND FEES UNDER INVESTMENT
SUBADVISORY AGREEMENT
Series Names Annual
Fee (as a percentage of the
average daily net assets of a
series)
Equity Growth Portfolio 40 basis points on first $20 million
30 basis points on next $30 million
Fees on assets in excess of $50
million to be negotiated
Exhibit B
COPY OF EXECUTED INVESTMENT ADVISORY AGREEMENT
BETWEEN ST. XXXXX PORTFOLIOS AND
UNITED STATES TRUST COMPANY OF THE PACIFIC NORTHWEST
