EXHIBIT (d)(2)
SUB-ADVISORY CONTRACT
(amended and restated as of September 30, 2002)
This Sub-Advisory Contract (the "Agreement") is amended and restated as
of September 30, 2002, between XXXXXXX ASSET MANAGEMENT, INC., a Michigan
corporation ("LAMI" or the "Adviser"), and CASTLEARK MANAGEMENT, LLC, an
Illinois limited liability company ("CastleArk" or the "SubAdviser").
WHEREAS, the Adviser has entered into an Investment Management
Agreement, dated as of August 1, 2001 (the "Management Agreement"), with Xxxxxxx
Investments (the "Trust"), a Massachusetts business trust and a diversified,
open-end management investment company registered under the Investment Company
Act of 1940 (the "1940 Act"), pursuant to which LAMI acts as Adviser of the
Trust's separate series of shares of beneficial interest, one of which is the
Xxxxxxx Large-Cap Growth Fund (the "Fund"); and
WHEREAS, the Adviser and Subadviser have previously entered into a
Sub-Advisory Contract on August 1, 2001, and the parties desire to amend such
contract to provide for a temporary reduction in the fees to be paid to the
Subadviser; and
WHEREAS, LAMI desires to retain the Subadviser to provide investment
advisory services to the Fund and to manage the Fund as the Adviser shall from
time to time direct, and the Subadviser is willing to render such investment
advisory services;
NOW, THEREFORE, the Parties agree as follows:
1. Subject to the direction of the Adviser and the Board of
Trustees of the Trust, the Subadviser shall provide portfolio management
services to the Fund, including (but not limited to) the purchase, retention and
disposition of portfolio securities in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus and Statement
of Additional Information (such Prospectus and Statement of Additional
Information as currently in effect and as amended or supplemented from time to
time, being herein called the Prospectus), portfolio reconciliation, cash
management, back-office services, periodic reporting to the Adviser and the
Board of Trustees of the Trust and such other services as may be reasonably
requested by the Adviser. The Subadviser's activities shall be subject to the
following understandings:
(a) The Subadviser shall determine from time to time what
investments and securities will be purchased, retained, sold or loaned
by the Fund, and what portion of the assets will be invested or held
uninvested as cash or invested in cash equivalents.
(b) In the performance of its duties and obligations under
this Agreement, the Subadviser shall act in conformity with the
Declaration of Trust, Bylaws and Prospectus of the Fund and with the
instructions and directions of the Adviser and of the Board of Trustees
of the Trust, co-operate with the Adviser's (or its designee's)
personnel responsible for monitoring the Fund's compliance, and will
conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986 and all other applicable federal and
state laws and regulations. In connection therewith, the
Subadviser shall, among other things, comply with the Adviser's Code of
Ethics, soft dollar trading policy, brokerage allocation policy, and
such other policies as the Adviser or the Trust may establish, and it
shall prepare and file such reports as are, or may in the future be,
required by the Securities and Exchange Commission.
(c) The Subadviser shall place orders with or through such
persons, brokers or dealers (but only with brokers or dealers that are
not affiliated with the Subadviser) to carry out the policy with
respect to brokerage as set forth in the Fund's Prospectus or as the
Board of Trustees or the Adviser may direct from time to time. In
providing the Fund with investment supervision, it is recognized that
the Subadviser will give primary consideration to securing the most
favorable price and efficient execution. Within the framework of this
policy, the Subadviser may consider the financial responsibility,
research and investment information and other services provided by
brokers or dealers who may effect or be a party to any such transaction
or other transactions to which the Subadviser's other clients may be a
party. It is understood that no broker or dealer affiliated with the
Subadviser may be used as principal broker for securities transactions.
It is also understood that it is desirable for the Fund that the
Subadviser have access to supplemental investment and market research
and security and economic analysis provided by brokers who may execute
brokerage transactions at a higher cost to the Fund than may result
when allocating brokerage to other brokers on the basis of seeking the
most favorable price and efficient execution. Therefore, the Subadviser
is authorized to place orders for the purchase and sale of securities
for the Fund with such brokers, subject to review by the Trust's Board
of Trustees and the Adviser from time to time with respect to the
extent and continuation of this practice. It is understood that the
services provided by such brokers may be useful to the Subadviser in
connection with the Subadviser's services to other clients.
On occasions when the Subadviser deems the purchase or sale of
a security to be in the best interest of the Fund as well as other
clients of the Subadviser, the Subadviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation
to, aggregate the securities to be sold or purchased in order to obtain
the most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be made
by the Subadviser in the manner the Subadviser considers to be the most
equitable and consistent with its fiduciary obligations to the Fund and
to such other clients.
(d) The Subadviser shall maintain all books and records with
respect to the Fund's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act, and shall render to the Trust's Board of Trustees
and to the Adviser such periodic and special reports as the Trustees or
the Adviser may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation with
any of the Trustees or officers or employees
2
of the Fund or the Adviser with respect to any matter discussed herein,
including, without limitation, the valuation of the Fund's securities.
(e) The Subadviser shall provide to the Adviser and to the
Fund's Custodian on each business day information relating to all
transactions concerning the Fund's assets that it manages, including
(but not limited to) any pricing discrepancies from daily closing
prices reported by the Fund's pricing services, and shall provide the
Adviser with such other information as the Adviser may request.
(f) The Subadviser and Adviser understand and agree that the
Adviser intends to manage the Fund in a "manager-of-managers" style,
and that the Adviser will, among other things, (i) continually evaluate
the performance of the Subadviser to the Fund through quantitative and
qualitative analysis and consultations with the Subadviser, (ii)
periodically make recommendations to the Trust's Board of Trustees as
to whether this contract with the Subadviser should be renewed,
modified, or terminated and (iii) periodically report to the Trust's
Board of Trustees regarding the results of its evaluation and
monitoring functions. The Subadviser recognizes that its services may
be terminated or modified pursuant to this process.
(g) The Subadviser will support all marketing and sales
activities with respect to the Fund, including (but not limited to)
providing press and other publicity interviews, attending conferences
and seminars that the Adviser deems to be appropriate and meeting with
prospective and existing shareholders, registered investment advisers
and other financial intermediaries. The Adviser will reimburse the
Subadviser for its out-of-pocket expenses incurred in connection with
such marketing support, provided that the expenses are approved in
advance by the Adviser.
(h) The Adviser shall have the right to approve the specific
individuals employed by the Subadviser to perform the investment
management services described above, and the Adviser shall also have
the right to direct that the Subadviser terminate the involvement of
any one or more of such individuals with respect to the Fund's
investment management activities, but any such change in personnel of
the Subadviser shall not be deemed to be a termination of this
Agreement.
(i) The Subadviser will not provide portfolio management
services to any other mutual fund using the same investment process or
style as the Subadviser uses with respect to the Fund without the
prior written consent of the Adviser, nor will the Subadviser organize
a mutual fund with a substantially similar investment objective as the
Fund. The Subadviser agrees to the Trust the first opportunity to
organize and register any new mutual fund that the Subadviser
develops.
2. The Subadviser may authorize and permit any of its directors,
officers and employees who may be elected as Trustees or officers of the Fund to
serve in the capacities in
3
which they are elected. Services to be furnished by the Subadviser under this
Agreement may be furnished through the medium of any of such directors, officers
or employees.
3. The Subadviser shall keep the Fund's books and records required
to be maintained by the Subadviser pursuant to Section 1(d) hereof and shall
timely furnish to the Adviser all information relating to the Subadviser's
services hereunder needed by the Adviser to keep the other books and records of
the Fund required by Rule 31a-1 under the 1940 Act. The Subadviser agrees that
all records which it maintains for the Fund are the property of the Fund and the
Subadviser will surrender promptly to the Fund any of such records upon the
Fund's request, provided, however, that the Subadviser may retain a copy of such
records. The Subadviser further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such records as are required to be maintained
by it pursuant to Section 1(d) hereof.
4. The Subadviser agrees to maintain its registration as an
investment adviser under the Investment Advisers Act of 1940 (the "Advisers
Act") and to maintain adequate compliance procedures to ensure its compliance
with the 1940 Act, the Advisers Act and any other applicable state and federal
laws or regulations.
5. The Subadviser shall furnish to the Adviser copies of all
records prepared in connection with (i) the performance of this Agreement and
(ii) the maintenance of compliance procedures pursuant to Section 1(b) hereof as
the Adviser may reasonably request.
6. For the services provided and the expenses assumed pursuant to
this Agreement, the Adviser shall pay the Subadviser as full compensation
therefor, a fee at the annual rates described below with respect to the average
daily net assets of the Fund. This fee will be computed daily, and will be paid
to the Subadviser monthly, within three (3) business days after receipt by the
Adviser of payment of its monthly management fee from the Trust. Such fee shall
be calculated by applying the annual rates set forth below to the average daily
net assets of the Fund for the calendar year computed in the manner used for the
determination of the net asset value of shares of the Fund. The annual fee rates
for the period from October 1, 2002, through September 30, 2004, are as follows:
Rate Amount of Net Assets
---- --------------------
35 basis points (0.35%) Up to $500,000,000
37.5 basis points (0.375%) $500,000,001 up to $1,000,000,000
35 basis points (0.35%) over $1,000,000,000
The annual fee rates for the period from October 1, 2004, and thereafter are as
follows:
Rate Amount of Net Assets
---- --------------------
40 basis points (0.40%) Up to $500,000,000
37.5 basis points (0.375%) $500,000,001 up to $1,000,000,000
35 basis points (0.35%) over $1,000,000,000
7. The Subadviser shall not be liable for any error of judgment or
for any loss suffered by the Fund or the Adviser in connection with the matters
to which this Agreement
4
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the Subadviser's part in the performance of its duties or from its
reckless disregard of its obligations and duties under this Agreement.
8. This Agreement shall continue in effect for a period of more
than two years from the date hereof only so long as such continuance is
specifically approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be terminated by the
Fund at any time, without the payment of any penalty, by the Board of Trustees
of the Trust or by vote of a majority of the outstanding voting securities (as
defined in the 0000 Xxx) of the Fund, or by the Adviser or the Subadviser at any
time, without the payment of any penalty, on not more than 60 days' nor less
than 30 days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 0000 Xxx) or
upon the termination of the Management Agreement.
9. Nothing in this Agreement shall limit or restrict the right of
any of the Subadviser's directors, officers or employees who may also be a
Trustee, officer or employee of the Fund to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any business, whether of a similar or dissimilar nature, nor limit or
restrict the Subadviser's right to engage in any other business or to render
services of any kind to any other corporation, firm, individual or association.
10. During the term of this Agreement, the Adviser agrees to furnish
the Subadviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature or other material prepared for
distribution to shareholders of the Fund or the public, which refer to the
Subadviser in any way, prior to use thereof and not to use material if the
Subadviser reasonably objects in writing within three (3) business days (or such
other time as may be mutually agreed) after receipt thereof. Sales literature
may be furnished to the Subadviser hereunder by first-class or overnight mail,
facsimile transmission equipment or hand delivery.
11. This Agreement may be amended by mutual consent, but the
consent of the Fund must be obtained in conformity with the requirements of the
1940 Act.
12. Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the 1940 Act or the Advisers Act shall be resolved by reference to such term
or provision of the 1940 Act or the Advisers Act and to interpretations thereof,
if any, by the United States Courts or in the absence of any controlling
decision of any such court, by rules, regulations or orders of the SEC issued
pursuant to said Acts. In addition, where the effect of a requirement of the
1940 Act or the Advisers Act reflected in any provision of the Agreement is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order. Subject to the
foregoing, this Agreement shall be governed by and construed in accordance with
the laws (without reference to conflicts of law provisions) of the State of
Illinois.
13. Any notices or other communications required or permitted
hereunder shall be deemed to have been given if sent by first class mail,
overnight delivery or hand delivery to the following addresses:
5
If to the Adviser, to:
Xxxxxxx Asset Management, Inc.
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
If to the Subadviser, to:
CastleArk Management, LLC
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to
be executed by their officers designed below as of the day and year first above
written.
XXXXXXX ASSET MANAGEMENT, INC.
By: /S/ XXXX X. XXXXXXXX
Xxxx X. Xxxxxxxx
CASTLEARK MANAGEMENT, LLC
By: /S/ XXXXXX X. XXXXX
Xxxxxx X. Xxxxx
6
EXHIBIT (d)(5)
SUB-ADVISORY CONTRACT
(amended and restated as of September 30, 2002)
This Sub-Advisory Contract (the "Agreement") is amended and restated as
of September 30, 2002, between XXXXXXX ASSET MANAGEMENT, INC., a Michigan
corporation ("LAMI" or the "Adviser"), and ARGENT CAPITAL MANAGEMENT LLC, a
Missouri limited liability company ("Argent" or the "SubAdviser").
WHEREAS, the Adviser has entered into an Investment Management
Agreement, dated as of August 1, 2001 (the "Management Agreement"), with Xxxxxxx
Investments (the "Trust"), a Massachusetts business trust and a diversified,
open-end management investment company registered under the Investment Company
Act of 1940 (the "1940 Act"), pursuant to which LAMI acts as Adviser of the
Trust's separate series of shares of beneficial interest, one of which is the
Xxxxxxx Growth and Income Fund (the "Fund"); and
WHEREAS, the Adviser and Subadviser have previously entered into a
Sub-Advisory Contract on August 16, 2001, and such contract became effective on
November 30, 2001 (the "Effective Date"), the date on which the Securities and
Exchange Commission issued an order pursuant to Section 6(c) of the 1940 Act
exempting the Fund and the Adviser from having to obtain shareholder approval of
such contract or any material amendment thereto under Section 15(a) of the 1940
Act; and
WHEREAS, LAMI desires to retain the Subadviser to provide investment
advisory services to the Fund and to manage the Fund as the Adviser shall from
time to time direct and the Subadviser is willing to render such investment
advisory services;
NOW, THEREFORE, the Parties agree as follows:
1. Subject to the direction of the Adviser and the Board of
Trustees of the Trust, the Subadviser shall provide portfolio management
services to the Fund, including (but not limited to) the purchase, retention and
disposition of portfolio securities in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus and Statement
of Additional Information (such Prospectus and Statement of Additional
Information as currently in effect and as amended or supplemented from time to
time, being herein called the Prospectus), portfolio reconciliation, cash
management, back-office services, periodic reporting to the Adviser and the
Board of Trustees of the Trust and such other services as may be reasonably
requested by the Adviser. The Subadviser's activities shall be subject to the
following understandings:
(a) The Subadviser shall determine from time to time what
investments and securities will be purchased, retained, sold or loaned
by the Fund, and what portion of the assets will be invested or held
uninvested as cash or invested in cash equivalents.
(b) In the performance of its duties and obligations under
this Agreement, the Subadviser shall act in conformity with the
Declaration of Trust, Bylaws and Prospectus
of the Fund and with the instructions and directions of the Adviser and
of the Board of Trustees of the Trust, co-operate with the Adviser's
(or its designee's) personnel responsible for monitoring the Fund's
compliance, and will conform to and comply with the requirements of the
1940 Act, the Internal Revenue Code of 1986 and all other applicable
federal and state laws and regulations. In connection therewith, the
Subadviser shall, among other things, comply with the Adviser's Code of
Ethics, soft dollar trading policy, brokerage allocation policy, and
such other policies as the Adviser or the Trust may establish, and it
shall prepare and file such reports as are, or may in the future be,
required by the Securities and Exchange Commission.
(c) The Subadviser shall place orders with or through such
persons, brokers or dealers (but only with brokers or dealers that are
not affiliated with the Subadviser) to carry out the policy with
respect to brokerage as set forth in the Fund's Prospectus or as the
Board of Trustees or the Adviser may direct from time to time. In
providing the Fund with investment supervision, it is recognized that
the Subadviser will give primary consideration to securing the most
favorable price and efficient execution. Within the framework of this
policy, the Subadviser may consider the financial responsibility,
research and investment information and other services provided by
brokers or dealers who may effect or be a party to any such transaction
or other transactions to which the Subadviser's other clients may be a
party. It is understood that no broker or dealer affiliated with the
Subadviser may be used as principal broker for securities transactions.
It is also understood that it is desirable for the Fund that the
Subadviser have access to supplemental investment and market research
and security and economic analysis provided by brokers who may execute
brokerage transactions at a higher cost to the Fund than may result
when allocating brokerage to other brokers on the basis of seeking the
most favorable price and efficient execution. Therefore, the Subadviser
is authorized to place orders for the purchase and sale of securities
for the Fund with such brokers, subject to review by the Trust's Board
of Trustees and the Adviser from time to time with respect to the
extent and continuation of this practice. It is understood that the
services provided by such brokers may be useful to the Subadviser in
connection with the Subadviser's services to other clients.
On occasions when the Subadviser deems the purchase or sale of
a security to be in the best interest of the Fund as well as other
clients of the Subadviser, the Subadviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation
to, aggregate the securities to be sold or purchased in order to obtain
the most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be made
by the Subadviser in the manner the Subadviser considers to be the most
equitable and consistent with its fiduciary obligations to the Fund and
to such other clients.
2
(d) The Subadviser shall maintain all books and records with
respect to the Fund's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act, and shall render to the Trust's Board of Trustees
and to the Adviser such periodic and special reports as the Trustees or
the Adviser may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation with
any of the Trustees or officers or employees of the Fund or the Adviser
with respect to any matter discussed herein, including, without
limitation, the valuation of the Fund's securities.
(e) The Subadviser shall provide to the Adviser and to the
Fund's Custodian on each business day information relating to all
transactions concerning the Fund's assets that it manages, including
(but not limited to) any pricing discrepancies from daily closing
prices reported by the Fund's pricing services, and shall provide the
Adviser with such other information as the Adviser may request.
(f) The Subadviser and Adviser understand and agree that the
Adviser intends to manage the Fund in a "manager-of-managers" style,
and that the Adviser will, among other things, (i) continually evaluate
the performance of the Subadviser to the Fund through quantitative and
qualitative analysis and consultations with the Subadviser, (ii)
periodically make recommendations to the Trust's Board of Trustees as
to whether this contract with the Subadviser should be renewed,
modified, or terminated and (iii) periodically report to the Trust's
Board of Trustees regarding the results of its evaluation and
monitoring functions. The Subadviser recognizes that its services may
be terminated or modified pursuant to this process.
(g) The Subadviser will support all marketing and sales
activities with respect to the Fund, including (but not limited to)
providing press and other publicity interviews, attending conferences
and seminars that the Adviser deems to be appropriate and meeting with
prospective and existing shareholders, registered investment advisers
and other financial intermediaries. The Adviser will reimburse the
Subadviser for its out-of-pocket expenses incurred in connection with
such marketing support, provided that the expenses are approved in
advance by the Adviser.
(h) The Adviser shall have the right to approve the specific
individuals employed by the Subadviser to perform the investment
management services described above, and the Adviser shall also have
the right to direct that the Subadviser terminate the involvement of
any one or more of such individuals with respect to the Fund's
investment management activities, but any such change in personnel of
the Subadviser shall not be deemed to be a termination of this
Agreement.
(i) The Subadviser will not provide portfolio management
services to any other mutual fund using the same investment process or
style as the Subadviser uses with respect to the Fund without the prior
written consent of the Adviser, nor will the
3
Subadviser organize a mutual fund with a substantially similar
investment objective as the Fund. The Subadviser agrees to offer to the
Trust the first opportunity to organize and register any new mutual
fund that the Subadviser develops.
2. The Subadviser may authorize and permit any of its directors,
officers and employees who may be elected as Trustees or officers of the Fund to
serve in the capacities in which they are elected. Services to be furnished by
the Subadviser under this Agreement may be furnished through the medium of any
of such directors, officers or employees.
3. The Subadviser shall keep the Fund's books and records required
to be maintained by the Subadviser pursuant to Section 1(d) hereof and shall
timely furnish to the Adviser all information relating to the Subadviser's
services hereunder needed by the Adviser to keep the other books and records of
the Fund required by Rule 31a-1 under the 1940 Act. The Subadviser agrees that
all records which it maintains for the Fund are the property of the Fund and the
Subadviser will surrender promptly to the Fund any of such records upon the
Fund's request, provided, however, that the Subadviser may retain a copy of such
records. The Subadviser further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such records as are required to be maintained
by it pursuant to Section 1(d) hereof.
4. The Subadviser agrees to maintain its registration as an
investment adviser under the Investment Advisers Act of 1940 (the "Advisers
Act") and to maintain adequate compliance procedures to ensure its compliance
with the 1940 Act, the Advisers Act and any other applicable state and federal
laws or regulations.
5. The Subadviser shall furnish to the Adviser copies of all
records prepared in connection with (i) the performance of this Agreement and
(ii) the maintenance of compliance procedures pursuant to Section 1(b) hereof as
the Adviser may reasonably request.
6. For the services provided and the expenses assumed pursuant to
this Agreement, the Adviser shall pay the Subadviser as full compensation
therefor, a fee at the annual rates described below with respect to the average
daily net assets of the Fund. This fee will be computed daily, and will be paid
to the Subadviser monthly. Such fee shall be calculated by applying the annual
rates set forth below to the average daily net assets of the Fund for the
calendar year computed in the manner used for the determination of the net asset
value of shares of the Fund. The annual fee rates for the period from October 1,
2002, through September 30, 2004, are as follows:
Rate Amount of Net Assets
---- --------------------
25 basis points (0.25%) Up to $250,000,000
35 basis points (0.35%) $250,000,000 up to $500,000,000
40 basis points (0.40%) $500,000,000 and more
The annual fee rates for the period from October 1, 2002, and thereafter are as
follows:
4
Rate Amount of Net Assets
---- --------------------
30 basis points (0.30%) Up to $250,000,000
35 basis points (0.35%) $250,000,000 up to $500,000,000
40 basis points (0.40%) $500,000,000 and more
7. The Subadviser shall not be liable for any error of judgment or
for any loss suffered by the Fund or the Adviser in connection with the matters
to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the Subadviser's part in the
performance of its duties or from its reckless disregard of its obligations and
duties under this Agreement.
8. This Agreement shall continue in effect for a period of two
years from the Effective Date, unless sooner terminated as hereinafter provided.
This Agreement shall continue in effect from year-to-year thereafter, but only
so long as such continuance is specifically approved at least annually in
conformity with the requirements of the 1940 Act; provided, however, that this
Agreement may be terminated by the Fund at any time, without the payment of any
penalty, by the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of the Fund, or by
the Adviser or the Subadviser at any time, without the payment of any penalty,
on not more than 60 days' nor less than 30 days' written notice to the other
party. This Agreement shall terminate automatically in the event of its
assignment (as defined in the 0000 Xxx) or upon the termination of the
Management Agreement.
9. Nothing in this Agreement shall limit or restrict the right of
any of the Subadviser's directors, officers or employees who may also be a
Trustee, officer or employee of the Fund to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any business, whether of a similar or dissimilar nature, nor limit or
restrict the Subadviser's right to engage in any other business or to render
services of any kind to any other corporation, firm, individual or association.
10. During the term of this Agreement, the Adviser agrees to furnish
the Subadviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature or other material prepared for
distribution to shareholders of the Fund or the public, which refer to the
Subadviser in any way, prior to use thereof and not to use material if the
Subadviser reasonably objects in writing within three (3) business days (or such
other time as may be mutually agreed) after receipt thereof. Sales literature
may be furnished to the Subadviser hereunder by first-class or overnight mail,
facsimile transmission equipment or hand delivery.
11. This Agreement may be amended by mutual consent, but the consent
of the Fund must be obtained in conformity with the requirements of the 1940
Act.
12. Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the 1940 Act or the Advisers Act shall be resolved by reference to such term
or provision of the 1940 Act or the Advisers Act
5
and to interpretations thereof, if any, by the United States Courts or in the
absence of any controlling decision of any such court, by rules, regulations or
orders of the SEC issued pursuant to said Acts. In addition, where the effect of
a requirement of the 1940 Act or the Advisers Act reflected in any provision of
the Agreement is revised by rule, regulation or order of the SEC, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
Subject to the foregoing, this Agreement shall be governed by and construed in
accordance with the laws (without reference to conflicts of law provisions) of
the State of Illinois.
13. Any notices or other communications required or permitted
hereunder shall be deemed to have been given if sent by first class mail,
overnight delivery or hand delivery to the following addresses:
If to the Adviser, to:
Xxxxxxx Asset Management, Inc.
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
If to the Subadviser, to:
Argent Capital Management LLC
000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to
be executed by their officers designed below as of the day and year first above
written.
XXXXXXX ASSET MANAGEMENT, INC.
By: /S/ XXXX X. XXXXXXXX
Xxxx X. Xxxxxxxx
ARGENT CAPITAL MANAGEMENT LLC
By: /S/ XXXXXX X. XXXXXXX
Xxxxxx X. Xxxxxxx
6
Exhibit (d)(6)
SUB-ADVISORY CONTRACT
This Sub-Advisory Contract (the "Agreement") is entered into on
November 21, 2001, between XXXXXXX ASSET MANAGEMENT, INC., a Michigan
corporation ("LAMI" or the "Adviser"), and XXXXXXXX XXXXXX ASSET MANAGEMENT
COMPANY LLC, a Delaware limited liability company (the "Subadviser").
WHEREAS, the Adviser has entered into an Investment Management
Agreement, dated as of August 1, 2001 (the "Management Agreement"), with Xxxxxxx
Investments (the "Trust"), a Massachusetts business trust that is registered as
a diversified, open-end management investment company registered under the
Investment Company Act of 1940 (the "1940 Act"), pursuant to which LAMI acts as
adviser of the Trust's separate series of shares of beneficial interest, one of
which is the Xxxxxxx Market Neutral Fund (the "Fund"); and
WHEREAS, the Trust has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement") for the purpose of registering its shares for public offering under
the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, LAMI desires to retain the Subadviser to provide investment
advisory services to the Fund and to manage the Fund as the Adviser shall from
time to time direct, commencing on the Effective Date specified in Section 7,
and the Subadviser is willing to render such investment advisory services;
NOW, THEREFORE, the Parties agree as follows:
1. Subject to the direction of the Adviser and the Board of
Trustees of the Trust, the Subadviser shall provide portfolio management
services to the Fund, including (but not limited to) the purchase, retention and
disposition of portfolio securities in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus and Statement
of Additional Information (such Prospectus and Statement of Additional
Information as currently in effect and as amended or supplemented from time to
time, being herein called the Prospectus), portfolio reconciliation, cash
management, back-office services, periodic reporting to the Adviser and the
Board of Trustees of the Trust and such other services as may be reasonably
requested by the Adviser. The Subadviser's activities shall be subject to the
following understandings:
(a) The Subadviser shall determine from time to time what
investments and securities will be purchased, retained, sold or loaned
by the Fund, and what portion of the assets will be invested or held
uninvested as cash or invested in cash equivalents.
(b) In the performance of its duties and obligations under
this Agreement, the Subadviser shall act in conformity with the
Declaration of Trust, Bylaws and Prospectus of the Fund and with the
instructions and directions of the Adviser and of the Board of Trustees
of the Trust, co-operate with the Adviser's personnel responsible for
monitoring the Fund's compliance, and will conform to and comply with
the requirements of the 1940 Act, the Internal Revenue Code of 1986 and
all other federal and state laws and
regulations to the extent applicable to the Subadviser's services. In
connection therewith, the Subadviser shall, among other things, comply
with the Subadviser's Code of Ethics and the Trust's soft dollar
trading and brokerage allocation policies (as described in the Trust's
Statement of Additional Information or as otherwise adopted from time
to time by the Trust) , and such other policies as the Adviser or the
Trust may establish, and it shall prepare and provide to the Adviser
such reports as are, or may in the future be, reasonably required to
permit the Adviser or the Trust to make such filings as are required by
the Commission. The Adviser agrees to provide copies of such policies
to the Subadviser prior to their adoption by the Adviser or the Trust,
and to allow the Subadviser an opportunity to comment thereon.
(c) The Subadviser shall place orders with or through such
persons, brokers or dealers (but only with brokers or dealers that are
not directly or indirectly affiliated with the Subadviser) to carry out
the policy with respect to brokerage as set forth in the Fund's
Prospectus or as the Board of Trustees or the Adviser may direct from
time to time. In providing the Fund with investment supervision, it is
recognized that the Subadviser will give primary consideration to
securing the most favorable price and efficient execution. Within the
framework of this policy, the Subadviser may consider the financial
responsibility, research and investment information and other services
provided by brokers or dealers who may effect or be a party to any such
transaction or other transactions to which the Subadviser's other
clients may be a party. It is understood that no broker or dealer
affiliated with the Subadviser may be used as principal broker for
securities transactions. It is also understood that it is desirable for
the Fund that the Subadviser have access to supplemental investment and
market research and security and economic analysis provided by brokers
who may execute brokerage transactions at a higher cost to the Fund
than may result when allocating brokerage to other brokers on the basis
of seeking the most favorable price and efficient execution. Therefore,
the Subadviser is authorized to place orders for the purchase and sale
of securities for the Fund with such brokers, subject to review by the
Trust's Board of Trustees and the Adviser from time to time with
respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers may be useful to
the Subadviser in connection with the Subadviser's services to other
clients.
On occasions when the Subadviser deems the purchase or sale of
a security to be in the best interests of the Fund as well as other
clients of the Subadviser, the Subadviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation
to, aggregate the securities to be sold or purchased in order to obtain
the most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be made
by the Subadviser in the manner the Subadviser considers to be the most
equitable and consistent with its fiduciary obligations to the Fund and
to such other clients.
2
(d) The Subadviser shall maintain all books and records with
respect to the Fund's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act, and shall render to the Trust's Board of Trustees
and to the Adviser such periodic and special reports as the Trustees or
the Adviser may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation with
any of the Trustees or officers or employees of the Fund or the Adviser
with respect to any matter discussed herein, including, without
limitation, the valuation of the Fund's securities.
(e) The Subadviser shall provide to the Adviser and to the
Fund's Custodian on each business day information relating to all
transactions concerning the Fund's assets that it manages, including
(but not limited to) any pricing discrepancies from daily closing
prices reported by the Fund's pricing services, and shall provide the
Adviser with such other information as the Adviser may request.
(f) The Subadviser and Adviser understand and agree that the
Adviser intends to manage the Fund in a "manager-of-managers" style,
and that the Adviser will, among other things, (i) continually evaluate
the performance of the Subadviser to the Fund through quantitative and
qualitative analysis and consultations with the Subadviser, (ii)
periodically make recommendations to the Trust's Board of Trustees as
to whether this contract with the Subadviser should be renewed,
modified, or terminated and (iii) periodically report to the Trust's
Board of Trustees regarding the results of its evaluation and
monitoring functions. The Subadviser recognizes that its services may
be terminated or modified pursuant to this process.
(g) The Subadviser will provide to the Adviser reasonable
support for marketing and sales activities with respect to the Fund,
including (but not limited to) providing press and other publicity
interviews, attending conferences and seminars that the Adviser
reasonably deems to be appropriate and meeting with prospective and
existing shareholders, registered investment advisers and other
financial intermediaries. The Adviser will reimburse the Subadviser for
its out-of-pocket expenses incurred in connection with such marketing
support, provided that the expenses are approved in advance by the
Adviser.
(h) The Subadviser shall promptly notify the Adviser of any
change in the employment status of the specific individuals employed
by the Subadviser to perform the investment management services
described above, of any change in the investments process by which the
Fund is managed, and of any material changes in the senior management,
operations or ownership of the Subadviser.
(i) For a period of one year after the date of this
Agreement, the Subadviser will not, without the prior written consent
of the Adviser, provide portfolio management services to any other
mutual fund that is registered with the Commission under the 1940 Act
which uses a "market neutral" investment style.
3
2. The Subadviser shall keep the Fund's books and records required
to be maintained by the Subadviser pursuant to Section 1(d) hereof and shall
timely furnish to the Adviser all information relating to the Subadviser's
services hereunder needed by the Adviser to keep the other books and records of
the Fund required by Rule 31a-1 under the 1940 Act. The Subadviser agrees that
all records which it maintains for the Fund are the property of the Fund and the
Subadviser will surrender promptly to the Fund any of such records upon the
Fund's request, provided, however, that the Subadviser may retain a copy of such
records. The Subadviser further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such records as are required to be maintained
by it pursuant to Section 1(d) hereof.
3. The Subadviser agrees to maintain its registration as an
investment adviser under the Investment Advisers Act of 1940 (the "Advisers
Act") and to maintain adequate compliance procedures to ensure its compliance
with the 1940 Act, the Advisers Act and any other applicable state and federal
laws or regulations.
4. The Subadviser shall furnish to the Adviser copies of all
records prepared in connection with (i) the performance of this Agreement and
(ii) the maintenance of compliance procedures pursuant to Section 1(b) hereof as
the Adviser may reasonably request.
5. For the services provided and the expenses assumed pursuant to
this Agreement, the Adviser shall pay the Subadviser as full compensation
therefor, as follows:
(a) prior to the earlier of (i) the date on which this
Agreement is approved by the vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of the Fund or (ii) the
date on which the Securities and Exchange Commission issues an order
exempting the Trust and the Adviser from the provisions of Section
15(a) of the 1940 Act that would otherwise require that this Agreement
be approved by vote of a majority of the outstanding voting securities
(as defined in the 0000 Xxx) of the Fund, the Adviser shall pay to the
Subadviser an amount equal to the out-of-pocket costs incurred by the
Subadviser in performing its duties under this Agreement, which amount
shall be paid by the Adviser within ten (10) days after submission to
it by the Subadviser of an itemized statement detailing such costs; and
(b) from and after the earlier of (i) the date on which this
Agreement is approved by the vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of the Fund or (ii) the
date on which the Securities and Exchange Commission issues an order
exempting the Trust and the Adviser from the provisions of Section
15(a) of the 1940 Act that would otherwise require that this Agreement
be approved by vote of a majority of the outstanding voting securities
(as defined in the 0000 Xxx) of the Fund, the Adviser shall pay to the
Subadviser a fee at the annual rates described below with respect to
the average daily net assets of the Fund, which fee will be computed
daily, and paid monthly. Such fee shall be calculated by applying the
annual rates set forth below to the average daily net assets of the
Fund for the calendar year computed in the manner
4
used for the determination of the net asset value of shares of the
Fund. The annual fee rates are as follows:
Rate Amount of Incremental Net Assets
---- --------------------------------
70 basis points (0.70%) First $24,999,999 of net assets
75 basis points (0.75%) Next $25,000,000 of net assets, up to $49,999,999
80 basis points (0.80%) Assets in excess of $50,000,000
For example, if the Fund has average daily net assets of $55,000,000,
the fee would be 70 basis points on the first $24,999,999 of assets, 75
basis points on the next $25,000,000 of assets and 80 basis points on
the last $5,000,001 of assets.
(c) If the exemptive order referred to in this Section 5 is not
issued on or before February 1, 2002, the Adviser agrees to take reasonable
actions to recommend to the Trust's Board of Trustees that a special meeting of
the shareholders of the Fund be called for the purpose of obtaining the
shareholder approval of this Agreement required by Section 15(a) of the 1940
Act.
6. The Subadviser shall not be liable for any error of judgment or
for any loss suffered by the Fund or the Adviser in connection with the matters
to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the Subadviser's part in the
performance of its duties or from its reckless disregard of its obligations and
duties under this Agreement.
7. The Subadviser shall commence to provide services hereunder, and
this Agreement shall become effective, on the date first stated above (the
"Effective Date"). This Agreement shall continue in effect for a period of two
years from the Effective Date, unless sooner terminated as hereinafter provided.
This Agreement shall continue in effect from year-to-year thereafter, but only
so long as such continuance is specifically approved at least annually in
conformity with the requirements of the 1940 Act; provided, however, that this
Agreement may be terminated by the Fund at any time, without the payment of any
penalty, by the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of the Fund, or by
the Adviser or the Subadviser at any time, without the payment of any penalty,
on 60 days' prior written notice to the other party. This Agreement shall
terminate automatically in the event of its assignment (as defined in the 0000
Xxx) or upon the termination of the Management Agreement.
8. Nothing in this Agreement shall limit or restrict the right of
any of the Subadviser's directors, officers or employees who may also be a
Trustee, officer or employee of the Fund to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any business, whether of a similar or dissimilar nature, nor limit or
restrict the Subadviser's right to engage in any other business or to render
services of any kind to any other corporation, firm, individual or association.
5
9. During the term of this Agreement, the Adviser agrees to furnish
the Subadviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature or other material prepared for
distribution to shareholders of the Fund or the public, which refer to the
Subadviser in any way, prior to use thereof and not to use material if the
Subadviser reasonably objects in writing within three (3) business days (or such
other time as may be mutually agreed) after receipt thereof. Sales literature
may be furnished to the Subadviser hereunder by first-class or overnight mail,
facsimile transmission equipment or hand delivery.
10. This Agreement may be amended by mutual written consent, but the
consent of the Fund must be obtained in conformity with the requirements of the
1940 Act.
11. Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the 1940 Act or the Advisers Act shall be resolved by reference to such term
or provision of the 1940 Act or the Advisers Act and to interpretations thereof,
if any, by the United States Courts or in the absence of any controlling
decision of any such court, by rules, regulations or orders of the SEC issued
pursuant to said Acts. In addition, where the effect of a requirement of the
1940 Act or the Advisers Act reflected in any provision of the Agreement is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order. Subject to the
foregoing, this Agreement shall be governed by and construed in accordance with
the laws (without reference to conflicts of law provisions) of the State of
Illinois.
12. Any notices or other communications required or permitted
hereunder shall be deemed to have been given if sent by first class mail,
overnight delivery or hand delivery to the following addresses:
If to the Adviser, to:
Xxxxxxx Asset Management, Inc.
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Vice President and Chief Investment Officer
If to the Subadviser, to:
Xxxxxxxx Xxxxxx Asset Management Company LLC
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Chief Compliance Officer
[SIGNATURES APPEAR ON FOLLOWING PAGE]
6
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to
be executed by their officers designed below as of the day and year first above
written.
XXXXXXX ASSET MANAGEMENT, INC.
By: /S/ XXXX X. XXXXXXXX
Xxxx X. Xxxxxxxx, Chairman
XXXXXXXX XXXXXX ASSET MANAGEMENT
COMPANY LLC
By: /S/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx, Vice Chairman
7
Exhibit (d)(7)
SUB-ADVISORY CONTRACT
This Sub-Advisory Contract (the "Agreement") is entered into on March
6, 2002, between XXXXXXX ASSET MANAGEMENT, INC., a Michigan corporation (the
"Adviser"), and GAMCO INVESTORS, INC., d/b/a/ GABELLI ASSET MANAGEMENT COMPANY,
a New York corporation (the "Subadviser").
WHEREAS, the Adviser has entered into an Investment Management
Agreement, dated as of August 1, 2001 (the "Management Agreement"), with Xxxxxxx
Investments (the "Trust"), a Massachusetts business trust that is registered as
a diversified, open-end management investment company registered under the
Investment Company Act of 1940 (the "1940 Act"), pursuant to which the Adviser
acts as adviser of the Trust's separate series of shares of beneficial interest,
one of which is the Xxxxxxx Communications Fund (the "Fund"); and
WHEREAS, the Trust has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement") for the purpose of registering its shares for public offering under
the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Adviser desires to retain the Subadviser to provide
investment advisory services to the Fund and to manage the Fund as the Adviser
shall from time to time direct, commencing on the Effective Date specified in
Section 7, and the Subadviser is willing to render such investment advisory
services;
NOW, THEREFORE, the parties agree as follows:
1. Portfolio Management Services; Allocation of Brokerage. Subject
to the direction of the Adviser and the Board of Trustees of the Trust, the
Subadviser shall provide portfolio management services to the Fund, including
(but not limited to) the purchase, retention and disposition of portfolio
securities in accordance with the Fund's investment objectives, policies and
restrictions as stated in the Prospectus and Statement of Additional
Information (such Prospectus and Statement of Additional Information as
currently in effect and as amended or supplemented from time to time, being
herein called the Prospectus), portfolio reconciliation, cash management,
back-office services, periodic reporting to the Adviser and the Board of
Trustees of the Trust and such other services as may be reasonably requested by
the Adviser. The Subadviser shall not effect any transactions that would cause
the Funds to be out of compliance with any of such investment objectives,
policies or restrictions. The Subadviser's activities shall be subject to the
following understandings:
(a) The Subadviser shall determine from time to time what
investments and securities will be purchased, retained, sold or loaned
by the Fund, and what portion of the assets will be invested or held
uninvested as cash or invested in cash equivalents.
(b) In the performance of its duties and obligations under
this Agreement, the Subadviser shall act in conformity with the
Declaration of Trust, Bylaws and Prospectus of the Fund and with the
instructions and directions of the Adviser and of the Board of Trustees
of the Trust, co-operate with the Adviser's personnel responsible for
monitoring
the Fund's compliance, and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986 and
all other federal and state laws and regulations to the extent
applicable to the Subadviser's services. In connection therewith, the
Subadviser shall, among other things, comply with the Subadviser's
code of ethics and the Trust's soft dollar trading and brokerage
allocation policies (as described in the Trust's Statement of
Additional Information or as otherwise adopted from time to time by
the Trust) , and such other policies as the Adviser or the Trust may
establish, and it shall prepare and provide to the Adviser such
reports as are, or may in the future be, reasonably required to
permit the Adviser or the Trust to make such filings as are required
by the Commission. The Adviser agrees to provide copies of such
policies to the Subadviser prior to their adoption by the Adviser or
the Trust, and to allow the Subadviser an opportunity to comment
thereon.
(c) The Subadviser shall have authority and discretion to
select brokers and dealers (but only brokers or dealers not directly or
indirectly affiliated with the Subadviser or the Adviser) to execute
portfolio transactions for the Fund, and to select markets on or in
which these transactions will be executed.
(i) In exercising such authority and discretion, the
Subadviser's primary responsibility shall be to seek to obtain
best net price and execution for the Fund. However, this
responsibility shall not require the Subadviser to solicit
competitive bids for each transaction or to seek the lower
available commission cost, so long as the Subadviser
reasonably believes that the broker or dealer selected by it
can be expected to obtain a "best execution" market price on
the particular transaction and determines in good faith that
the commission cost is reasonable in relation to the value of
any brokerage and research services (as defined in Section
28(e) of the Securities Exchange Act of 1934) provided by such
broker or dealer to the Subadviser, viewed in terms of either
the particular transaction or the Subadvisers overall
responsibility with respect to its clients, indicating the
Fund, as to which the Subadviser exercises investment
discretion, notwithstanding that the Fund may not be the
direct or exclusive beneficiary of any such services or that
another broker may be willing to charge the Fund a lower
commission on a particular transaction. The Subadviser shall,
at its expense, prepare and submit to the Adviser once each
year at a time designated by the Adviser, a report which
evaluates the Subadviser's performance in fulfilling its
responsibilities under this clause (i).
(ii) Subject to the requirements of clause (i) alone,
the Adviser shall have the right to request that transactions
giving rise to brokerage commissions, in an amount to be
agreed upon by the Adviser and the Subadviser, shall be
executed by brokers and dealers that provide brokerage or
research services directly to the Adviser (including research
services that are designed to assist the Adviser in evaluating
the performance of the Subadviser), or as to which an ongoing
2
relationship will be of value to the Fund and its shareholders
in the management of the Fund's assets.
(iii) On occasions when the Subadviser deems the
purchase or sale of a security to be in the best interests of
the Fund as well as other clients of the Subadviser, the
Subadviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to,
aggregate the securities to be sold or purchased in order to
obtain the most favorable price or lower brokerage commissions
and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Subadviser in
the manner the Subadviser considers to be the most equitable
and consistent with its fiduciary obligations to the Fund and
to such other clients.
(d) The Subadviser shall maintain all books and records with
respect to the Fund's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1
under the 1940 Act, and shall render to the Trust's Board of Trustees
and to the Adviser such periodic and special reports as the Trustees or
the Adviser may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation with
any of the Trustees or officers or employees of the Fund or the Adviser
with respect to any matter discussed herein, including, without
limitation, the valuation of the Fund's securities.
(e) The Subadviser shall provide to the Adviser and to the
Fund's Custodian on each business day information relating to all
transactions concerning the Fund's assets that it manages, including
(but not limited to) any pricing discrepancies from daily closing
prices reported by the Fund's pricing services, and shall provide the
Adviser with such other information as the Adviser may request.
(f) The Subadviser and Adviser understand and agree that the
Adviser intends to manage the Fund in a "manager-of-managers" style,
and that the Adviser will, among other things, (i) continually evaluate
the performance of the Subadviser to the Fund through quantitative and
qualitative analysis and consultations with the Subadviser, (ii)
periodically make recommendations to the Trust's Board of Trustees as
to whether this contract with the Subadviser should be renewed,
modified, or terminated and (iii) periodically report to the Trust's
Board of Trustees regarding the results of its evaluation and
monitoring functions. The Subadviser recognizes that its services may
be terminated or modified pursuant to this process.
(g) The Subadviser will provide to the Adviser reasonable
support for marketing and sales activities with respect to the Fund.
The Adviser will reimburse the Subadviser for its out-of-pocket
expenses incurred in connection with such marketing support, provided
that the expenses are approved in advance by the Adviser. The
Subadviser shall submit all marketing materials, press releases and
other public
3
announcements to the Adviser for its prior approval before using or
releasing any of the same.
(h) The Subadviser shall promptly notify the Adviser of any
change in the employment status of the specific individuals employed
by the Subadviser to perform the investment management services
described above, of any change in the investments process by which the
Fund is managed, and of any material changes in the senior management,
trading policies, operations or ownership of the Subadviser. In
addition, the Subadviser shall promptly notify the Adviser of (a) any
portfolio securities that become in default, have been downgraded by a
naturally-recognized rating agency or become illiquid, (b) any pending
litigation or investigation involving the Subadviser or (c) any
scheduled examination of its operations by the Commission.
2. Books and Records. The Subadviser shall keep the Fund's books
and records required to be maintained by the Subadviser pursuant to Section
1(d) hereof and shall timely furnish to the Adviser all information relating to
the Subadviser's services hereunder needed by the Adviser to keep the other
books and records of the Fund required by Rule 31a-1 under the 1940 Act. The
Subadviser agrees that all records which it maintains for the Fund are the
property of the Fund and the Subadviser will surrender promptly to the Fund any
of such records upon the Fund's request, provided, however, that the Subadviser
may retain a copy of such records. The Subadviser further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as
are required to be maintained by it pursuant to Section 1(d) hereof.
3. Voting of Proxies. Subject to such oversight as the Board of
Trustees of the Trust deems appropriate, the Subadviser shall have the authority
to vote and direct the voting of all proxies solicited by or with respect to the
issuers of securities in which assets of the Fund shall be invested from time to
time in accordance with such policies as may be determined from time to time by
the Subadviser. The Subadviser shall provide a copy of its proxy voting policies
to the Adviser, shall promptly notify the Adviser of any change in such policies
and shall provide a report to the Adviser by the 20th of the month following the
end of each calendar quarter which shows the votes which have been cast by the
Subadviser with respect to portfolio securities of the Fund during such quarter.
4. Compliance With Laws. The Subadviser agrees to maintain its
registration as an investment adviser under the Investment Advisers Act of 1940
(the "Advisers Act") and to maintain adequate compliance procedures to ensure
its compliance with the 1940 Act, the Advisers Act and any other applicable
state and federal laws or regulations. The Subadviser shall furnish to the
Adviser a copy of the Subadviser's Form ADV registration under the Advisers Act
and shall provide a copy of each amendment thereto promptly after making any
amendment. The Subadviser has adopted and agrees to implement a code of ethics
containing provisions reasonably necessary to prevent its Access Persons (as
such term is defined in Rule 17j-1 under the 0000 Xxx) from engaging in any
conduct prohibited by Rule 17j-1. The
4
Subadviser will provide to the Adviser each quarter a certification evidencing
compliance by the Subadviser's Access Persons with such code of ethics.
5. Furnishing Records. The Subadviser shall furnish to the
Adviser copies of all records prepared in connection with (i) the performance
of this Agreement and (ii) the maintenance of compliance procedures pursuant to
Section 1(b) hereof as the Adviser may reasonably request.
6. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Adviser shall pay the Subadviser as full
compensation therefor, a fee at the annual rate of 40 basis points (0.40%) of
the average daily net assets of the Fund, which fee will be computed daily, and
paid monthly. Such fee shall be calculated by applying the annual rates set
forth below to the average daily net assets of the Fund for the calendar year
computed in the manner used for the determination of the net asset value of
shares of the Fund.
7. Limitation on Liability of Subadviser. The Subadviser shall not
be liable for any error of judgment or for any loss suffered by the Fund or the
Adviser in connection with the matters to which this Agreement relates, except
a loss resulting from willful misfeasance, bad faith or gross negligence on the
Subadviser's part in the performance of its duties or from its reckless
disregard of its obligations and duties under this Agreement.
8. Commencement Date; Term; Termination. The Subadviser shall
commence to provide services hereunder, and this Agreement shall become
effective, on the date first stated above (the "Effective Date"). This
Agreement shall continue in effect for a period of two years from the Effective
Date, unless sooner terminated as hereinafter provided. This Agreement shall
continue in effect from year-to-year thereafter, but only so long as such
continuance is specifically approved at least annually in conformity with the
requirements of the 1940 Act; provided, however, that this Agreement may be
terminated by the Fund at any time, without the payment of any penalty, by the
Board of Trustees of the Trust or by vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of the Fund, or by the Adviser
or the Subadviser at any time, without the payment of any penalty, on not less
than 30 or more than 60 days' prior written notice to the other party. This
Agreement shall terminate automatically in the event of its assignment (as
defined in the 0000 Xxx) or upon the termination of the Management Agreement.
9. No Exclusivity. Nothing in this Agreement shall limit or
restrict the right of any of the Subadviser's directors, officers or employees
who may also be a Trustee, officer or employee of the Fund to engage in any
other business or to devote his or her time and attention in part to the
management or other aspects of any business, whether of a similar or dissimilar
nature, nor limit or restrict the Subadviser's right to engage in any other
business or to render services of any kind to any other corporation, firm,
individual or association.
10. Materials to be Provided by Adviser. During the term of this
Agreement, the Adviser agrees to furnish the Subadviser at its principal office
all prospectuses, proxy statements,
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reports to shareholders, sales literature or other material prepared for
distribution to shareholders of the Fund or the public, which refer to the
Subadviser in any way, prior to use thereof and not to use material if the
Subadviser reasonably objects in writing within three (3) business days (or
such other time as may be mutually agreed) after receipt thereof. Sales
literature may be furnished to the Subadviser hereunder by first-class or
overnight mail, facsimile transmission equipment or hand delivery.
11. Amendments. This Agreement may be amended by mutual written
consent, but the consent of the Board of Trustees of the Trust must be obtained
in conformity with the requirements of the 1940 Act and any exemptive order
issued by the Securities and Exchange Commission permitting the Adviser to
operate in a "manager-of-managers" style.
12. Governing Law. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act or the Advisers Act shall be resolved by
reference to such term or provision of the 1940 Act or the Advisers Act and to
interpretations thereof, if any, by the United States Courts or in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to said Acts. In addition, where the effect of a
requirement of the 1940 Act or the Advisers Act reflected in any provision of
the Agreement is revised by rule, regulation or order of the SEC, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
Subject to the foregoing, this Agreement shall be governed by and construed in
accordance with the laws (without reference to conflicts of law provisions) of
the State of Illinois.
12. Notices. Any notices or other communications required or
permitted hereunder shall be deemed to have been given if sent by first class
mail, overnight delivery or hand delivery to the following addresses:
If to the Adviser, to:
Xxxxxxx Asset Management, Inc.
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Vice President and Chief Investment Officer
If to the Subadviser, to:
GAMCO Investors, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx, Managing Director
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Parties hereto have caused this instrument to
be executed by their officers designed below as of the day and year first above
written.
XXXXXXX ASSET MANAGEMENT, INC.
By: /S/ XXXX X. XXXXXXXX
Title: Chairman and CEO
GAMCO INVESTORS, INC.
By: /S/ XXXXX X. XXXXXXX
Title: ______________________
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