Exhibit (d)(4)
INVESTMENT SUB-ADVISORY AGREEMENT
between
BOSTON MANAGEMENT AND RESEARCH
and
FOX ASSET MANAGEMENT, LLC
for
XXXXX XXXXX SMALL-CAP VALUE FUND
AGREEMENT made this 13th day of April, 2004, between Boston Management and
Research, a Massachusetts business trust (the "Adviser"), and Fox Asset
Management, LLC, a Delaware limited liability corporation (the "Sub-Adviser").
WHEREAS, the Adviser has entered into an Investment Advisory Agreement (the
"Advisory Agreement") with Xxxxx Xxxxx Special Investment Trust (the "Trust"),
on behalf of Xxxxx Xxxxx Small-Cap Value Fund (the "Fund"), relating to the
provision of portfolio management services to the Fund; and
WHEREAS, the Advisory Agreement provides that the Adviser may delegate any
or all of its portfolio management responsibilities under the Advisory Agreement
to one or more sub-investment advisers; and
WHEREAS, the Adviser and the Trustees of the Trust desire to retain the
Sub-Adviser to render portfolio management services to the Fund in the manner
and on the terms set forth in this Agreement;
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the Adviser and the Sub-Adviser agree as follows:
1. Duties of the Sub-Adviser. The Adviser hereby employs the Sub-Adviser to
act as investment adviser for and to manage the investment and reinvestment of
the assets of the Fund and to administer its investment affairs, subject to the
supervision of the Adviser and the Trustees of the Trust, for the period and on
the terms set forth in this Agreement.
(a) The Sub-Adviser hereby accepts such employment and undertakes to afford
to the Fund the advice and assistance of the Sub-Adviser's organization in the
choice of investments and in the purchase and sale of securities for the Fund
and to furnish, for the use of the Fund, office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Fund
and for administering its affairs and to pay the salaries and fees of all
officers and Trustees of the Trust who are members of the Sub-Adviser's
organization and all personnel of the Sub-Adviser performing services relating
to research and investment activities. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, except as otherwise
expressly provided or authorized, have no authority to act for or represent the
Adviser or the Trust in any way or otherwise be deemed an agent of the Adviser
or the Trust.
(b) The Sub-Adviser shall provide the Fund with such investment management
and supervision as the Trust may, from time to time, consider necessary for the
proper supervision of the Fund's investments. As investment adviser to the Fund,
the Sub-Adviser shall furnish continuously an investment program and shall
determine, from time to time, what securities and other investments shall be
acquired, disposed of or exchanged and what portion of the Fund's assets shall
be held uninvested, subject always to the applicable restrictions of the
Declaration of Trust, By-Laws and registration statement of the Trust under the
Investment Company Act of 1940, all as from time to time amended. The
Sub-Adviser is authorized, in its discretion and without prior consultation with
the Adviser or the Trust, to buy, sell, and otherwise trade in any and all types
of securities, commodities and investment instruments on behalf of the Fund.
Should the Trustees of the Trust at any time, however, make any specific
determination as to investment policy for the Fund and notify the Sub-Adviser
thereof in writing, the Sub-Adviser shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. The Sub-Adviser shall take, on behalf of the
Trust, all actions that it deems necessary or desirable to implement the
investment policies of the Trust and the Fund.
(c) The Sub-Adviser shall place all orders for the purchase or sale of
portfolio securities for the account of the Fund either directly with the issuer
or with brokers or dealers selected by the Sub-Adviser, and, to that end, the
Sub-Adviser is authorized as the agent of the Fund to give instructions to the
custodian of the Fund as to deliveries of securities and payments of cash for
the account of the Fund. In connection with the selection of such brokers or
dealers and the placing of such orders, the Sub-Adviser shall use its best
efforts to seek to execute security transactions at prices that are advantageous
to the Fund and (when a disclosed commission is being charged) at reasonably
competitive commission rates. In selecting brokers or dealers qualified to
execute a particular transaction, brokers or dealers may be selected who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Sub-Adviser, and the
Sub-Adviser is expressly authorized to pay any broker or dealer who provides
such brokerage and research services a commission for executing a security
transaction that is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the Sub-Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
overall responsibilities that the Sub-Adviser and its affiliates have with
respect to accounts over which they exercise investment discretion. Subject to
the requirement set forth in the second sentence of this paragraph, the
Sub-Adviser is authorized to consider, as a factor in the selection of any
broker or dealer with whom purchase or sale orders may be placed, the fact that
such broker or dealer has sold or is selling shares of the Fund, or any other
series of the Trust, or of any one or more investment companies sponsored by the
Sub-Adviser, the Adviser, or their affiliates.
(d) The Sub-Adviser shall furnish such reports, evaluations, information or
analyses to the Trust and the Adviser as the Trust's Board of Trustees or the
Adviser may reasonably request from time to time, or as the Sub-Adviser may deem
to be desirable.
2. Compensation of the Sub-Adviser. For the services, payments and
facilities to be furnished hereunder by the Sub-Adviser, to the extent the
Adviser receives at least such amount from the Fund pursuant to the Advisory
Agreement, the Sub-Adviser shall be entitled to receive from the Adviser
compensation in an amount equal to the following of the average daily net assets
of the Fund throughout each month:
Average Daily Net Annual Fee Rate
Assets for the Month (For Each Level)
-------------------- ----------------
Up to $500 million 0.75000%
$500 million but less than $1 billion 0.71875%
$1 billion but less than $2.5 billion 0.68750%
$2.5 billion but less than $5 billion 0.65625%
$5 billion and over 0.62500%
Such compensation shall be paid monthly in arrears on the last business day of
each month. The Fund's daily net assets shall be computed in accordance with the
Declaration of Trust of the Trust and any applicable votes and determinations of
the Trustees of the Trust. In case of initiation or termination of the Agreement
during any month with respect to the Fund, the fee for that month shall be based
on the number of calendar days during which it is in effect.
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The Sub-Adviser may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that, pursuant to
the Advisory Agreement, the Fund will pay all expenses other than those
expressly stated to be payable by the Sub-Adviser hereunder or by the Adviser
under the Advisory Agreement, which expenses payable by the Fund shall include,
without limitation, (i) expenses of maintaining the Fund and continuing its
existence; (ii) registration of the Trust under the Investment Company Act of
1940; (iii) commissions, spreads, fees and other expenses connected with the
acquisition, holding and disposition of securities and other investments; (iv)
auditing, accounting and legal expenses; (v) taxes and interest; (vi)
governmental fees; (vii) expenses of issue, sale and redemption of shares;
(viii) expenses of registering and qualifying the Fund and its shares under
federal and state securities laws and of preparing and printing registration
statements or other offering statements or memoranda for such purposes and for
distributing the same to shareholders and investors, and fees and expenses of
registering and maintaining registrations of the Fund and of the Fund's
principal underwriter, if any, as broker-dealer or agent under state securities
laws; (ix) expenses of reports and notices to shareholders and of meetings of
shareholders and proxy solicitations therefor; (x) expenses of reports to
governmental officers and commissions; (xi) insurance expenses; (xii)
association membership dues; (xiii) fees, expenses and disbursements of
custodians and subcustodians for all services to the Fund (including without
limitation safekeeping of funds, securities and other investments, keeping of
books, accounts and records, and determination of net asset values); (xiv) fees,
expenses and disbursements of transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars for all services to the Fund; (xv)
expenses for servicing shareholder accounts; (xvi) any direct charges to
shareholders approved by the Trustees of the Trust; (xvii) compensation and
expenses of Trustees of the Trust who are not members of the Adviser's or the
Sub-Adviser's organizations; (xviii) all payments to be made and expenses to be
assumed by the Fund pursuant to any one or more distribution plans adopted by
the Trust on behalf of the Fund pursuant to Rule 12b-1 under the Investment
Company Act of 1940; and (xix) such non-recurring items as may arise, including
expenses incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees, officers, and shareholders
with respect thereto.
4. Other Interests. It is understood that Trustees and officers of the
Trust and shareholders of the Fund are or may be or become interested in the
Sub-Adviser as trustees, officers, employees, shareholders or otherwise and that
trustees, officers, employees and shareholders of the Sub-Adviser are or may be
or become similarly interested in the Fund, and that the Sub-Adviser may be or
become interested in the Fund as a shareholder or otherwise. It is also
understood that trustees, officers, employees and shareholders of the
Sub-Adviser may be or become interested (as directors, trustees, officers,
employees, shareholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) that the Sub-Adviser may
organize, sponsor, or acquire, or with which it may merge or consolidate, and
which may include the words "Fox Asset" or any combination thereof as part of
their name, and that the Sub-Adviser or its subsidiaries or affiliates may enter
into advisory or management agreements or other contracts or relationships with
such other companies or entities.
5. Limitation of Liability of the Sub-Adviser. The services of the
Sub-Adviser to the Adviser for the benefit of the Fund are not to be deemed to
be exclusive, the Sub-Adviser being free to render services to others and engage
in other business activities. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on the
part of the Sub-Adviser, the Sub-Adviser shall not be subject to liability to
the Adviser or the Trust or any shareholder of the Fund for any act or omission
in the course of, or connected with, rendering services hereunder or for any
losses that may be sustained in the acquisition, holding, or disposition of any
security or other investment.
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6. Duration and Termination of this Agreement. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect through and including March 31,
2005 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after March 31, 2005 is specifically approved
at least annually (i) by the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Fund and (ii) by the vote
of a majority of those Trustees of the Trust who are not interested persons of
the Sub-Adviser, the Adviser, or the Trust cast in person at a meeting called
for the purpose of voting on such approval.
This Agreement may be terminated as to the Fund without the payment of any
penalty by (i) the Adviser, subject to the approval of the Trustees of the
Trust; (ii) the vote of the Trustees of the Trust; (iii) the vote of a majority
of the outstanding voting securities of the Fund at any annual or special
meeting; or (iv) the Sub-Adviser, in each case on sixty (60) days' written
notice. This Agreement shall terminate automatically in the event of its
assignment or in the event that the Advisory Agreement shall have terminated for
any reason.
7. Amendments of the Agreement. This Agreement may be amended by a writing
signed by both parties hereto, provided that no amendment to this Agreement
shall be effective until approved (i) by the vote of a majority of those
Trustees of the Trust who are not interested persons of the Sub-Adviser, the
Adviser, or the Trust cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the outstanding
voting securities of the Fund.
8. Limitation of Liability. The Sub-Adviser expressly acknowledges the
provision in the Declarations of Trust of the Trust and of the Adviser limiting
the personal liability of trustees, officers and shareholders of the Fund and
the Adviser, respectively, and the Sub-Adviser hereby agrees that it shall have
recourse to the Trust or the Adviser, respectively, for payment of claims or
obligations as between the Trust or the Adviser, respectively, and the
Sub-Adviser arising out of this Agreement and shall not seek satisfaction from
the trustees, officers, or shareholders of the Trust or the Adviser.
9. Certain Definitions. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940, as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote, at a meeting of
shareholders, of the lesser of (a) 67 per centum or more of the shares of the
Fund present or represented by proxy at the meeting if the holders of more than
50 per centum of the outstanding shares of the Fund are present or represented
by proxy at the meeting, or (b) more than 50 per centum of the outstanding
shares of the Fund.
10. Miscellaneous.
(a) If any term or provision of this Agreement or the application thereof
to any person or circumstance is held to be invalid or unenforceable to any
extent, the remainder of this Agreement or the application of such provision to
other persons or circumstances shall not be affected thereby and shall be
enforced to the fullest extent permitted by law.
(b) This Agreement shall be governed by and interpreted in accordance with
the laws of the Commonwealth of Massachusetts.
(c) This Agreement may be executed by the parties hereto in any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
BOSTON MANAGEMENT AND RESEARCH
By: /s/ Xxxx X. Xxxxxx
----------------------------
Vice President
and not individually
FOX ASSET MANAGEMENT, LLC
By: /s/ J. Xxxxx Xxxxxxxxxx
----------------------------
Name: J. Xxxxx Xxxxxxxxxx
Title: President
Acknowledged and agreed to as of the day
and year first above written:
XXXXX XXXXX SPECIAL INVESTMENT TRUST
(on behalf of Xxxxx Xxxxx Small-Cap Value Fund)
By: /s/ Xxxxxx X. Xxxxx Xx.
------------------------
President
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