Ex-99.(d)(61)
Exhibit (d)(61)
FORM OF
THE TRAVELERS SERIES TRUST
SUBADVISORY AGREEMENT
AIM CAPITAL APPRECIATION PORTFOLIO
This Subadvisory Agreement (this "Agreement") is entered into as of
[DATE], 2005 by and between Travelers Investment Adviser, Inc., a Delaware
corporation (the "Manager"), and A I M Capital Management, Inc., a ________
corporation (the "Subadviser").
WHEREAS, the Manager has entered into an Advisory Agreement dated
________, 2005 (the "Advisory Agreement") with The Travelers Series Trust (the
"Fund"), pursuant to which the Manager provides portfolio management services to
the AIM Capital Appreciation Portfolio (the "Portfolio");
WHEREAS, the Manager desires to retain the Subadviser to render
portfolio management services in the manner and on the terms set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the Manager and the Subadviser agree as follows:
1. SUBADVISORY SERVICES.
a. The Subadviser shall, subject to the supervision of the
Fund's Board of Trustees and the Manager and in cooperation with the Manager, as
administrator, or with any other administrator appointed by the Manager or the
Fund (the "Administrator"), manage the investment and reinvestment of the assets
of the Portfolio. The Subadviser shall invest and reinvest the assets of the
Portfolio in conformity with (1) the investment objective, policies and
restrictions of the Portfolio set forth in the Fund's prospectus and statement
of additional information, as revised or supplemented from time to time,
relating to the Portfolio (the "Prospectus"), (2) any additional policies or
guidelines established by the Manager or by the Fund's Trustees that have been
furnished in writing to the Subadviser and (3) the provisions of the Internal
Revenue Code (the "Code") applicable to "regulated investment companies" (as
defined in Section 851 of the Code) and "segregated asset accounts" (as defined
in Section 817 of the Code) including, but not limited to, the diversification
requirements of Section 817(h) of the Code and the regulations thereunder, all
as from time to time in effect (collectively, the "Policies"), and with all
applicable provisions of law, including without limitation all applicable
provisions of the Investment Company Act of 1940 (the "1940 Act") the rules and
regulations thereunder and the interpretive opinions thereof of the staff of the
Securities and Exchange Commission ("SEC") ("SEC Positions"); provided, however,
that the Manager agrees to inform the Subadviser of any and all applicable state
insurance law restrictions that operate to limit or restrict the investments the
Portfolio might otherwise make ("Insurance Restrictions"), and to inform the
Subadviser promptly of any changes in such Insurance Restrictions. Subject to
the foregoing, the Subadviser is authorized, in its discretion and without prior
consultation with the Manager, to buy, sell, lend and otherwise trade in any
stocks, bonds and
other securities and investment instruments on behalf of the Portfolio, without
regard to the length of time the securities have been held and the resulting
rate of portfolio turnover or any tax considerations; and the majority or the
whole of the Portfolio may be invested in such proportions of stocks, bonds,
other securities or investment instruments, or cash, as the Subadviser shall
determine. Notwithstanding the foregoing provisions of this Section 1.a,
however, the Subadviser shall, upon written instructions from the Manager,
effect such portfolio transactions for the Portfolio as the Manager shall
determine are necessary in order for the Portfolio to comply with the Policies.
b. The Subadviser shall furnish the Manager and the
Administrator daily, weekly, monthly, quarterly and/or annual reports concerning
portfolio transactions and the investment performance of the Portfolio in such
form as may be mutually agreed upon, and agrees to review the Portfolio and
discuss the management of the Portfolio with representatives or agents of the
Manager, the Administrator or the Fund at their reasonable request. The
Subadviser shall, as part of a complete portfolio compliance testing program,
perform quarterly diversification testing under Section 817 (h) of the Code. The
Subadviser shall provide timely notice each calendar quarter that such
diversification was satisfied, or if not satisfied, that corrections were made
within 30 days of the end of the calendar quarter. The Subadviser shall also
provide the Manager, the Administrator or the Fund with such other information
and reports as may reasonably be requested by the Manager, the Administrator or
the Fund from time to time, including without limitation (i) all material as
reasonably may be requested by the Trustees of the Fund pursuant to Section
15(c) of the 1940 Act; (ii) monthly or quarterly compliance checklists in the
form prescribed by the Manager; and (iii) such periodic reports as may be
required by the Fund's or the Manager's compliance program under Rule 38a-1
under the 1940 Act. The Subadviser shall furnish the Manager (which may also
provide it to the Fund's Board of Trustees) with copies of all material comments
that are directly related to the Portfolio and the services provided under this
Agreement received from the SEC following routine or special SEC examinations or
inspections.
If the Fund inadvertently fails the diversification
requirements of Section 817(h) of the Code, the Subadviser shall assist the
Manager in the preparation of any request for relief or argument to the
Commissioner of the Internal Revenue Service pursuant to Treas. Reg. Section
1-817-5(c)(2) and Revenue Procedure 92-25 (or its successor).
c. The Subadviser shall provide to the Manager a copy of the
Subadviser's Form ADV as filed with the SEC and any amendments or restatements
thereof in the future and a list of the persons whom the Subadviser wishes to
have authorized to give written and/or oral instructions to custodians of assets
of the Portfolio.
d. Unless the Manager gives the Subadviser written
instructions to the contrary, the Subadviser shall use its good faith judgment
in a manner which it reasonably believes best serves the interest of the
Portfolio's shareholders to vote or abstain from voting all proxies solicited by
or with respect to the issuers of securities in which assets of the Portfolio
are invested. The Manager shall instruct the Fund's custodian, the
Administrator, and other parties providing services to a Portfolio to promptly
forward misdirected proxy statements to the Subadviser. The Subadviser shall
provide the Fund in a timely manner with such records of its proxy voting on
behalf of each
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Portfolio as necessary for the Fund to comply with the requirements of Form N-PX
or any successor law, rule, regulation or SEC Position.
e. The Subadviser represents, warrants and agrees that it has
adopted and implemented, and throughout the term of this Agreement will maintain
in effect and implement, policies and procedures reasonably designed to prevent,
detect and correct violations by the Subadviser and its supervised persons, and,
to the extent the activities of the Subadviser could affect the Fund, by the
Fund, of "federal securities laws" (as defined in Rule 38a-1 under the 1940
Act), and that the Subadviser has provided the Fund with true and complete
copies of its policies and procedures (or summaries thereof) and related
information requested by the Fund. The Subadviser agrees to cooperate with
periodic reviews by the Fund's compliance personnel of the Subadviser's policies
and procedures, their operation and implementation and other compliance matters
and to provide to the Fund from time to time such additional information and
certifications in respect of the Subadviser's policies and procedures,
compliance by the Subadviser with federal securities laws and related matters as
the Fund's compliance personnel may reasonably request. The Subadviser agrees to
promptly notify the Manager of any material compliance violations that affect a
Portfolio.
f. In accordance with Rule 17a-10 under the 1940 Act and any
other applicable law, the Subadviser shall not consult with any other subadviser
to the Portfolio or any subadviser to any other portfolio of the Trust or to any
other investment company or investment company series for which the Manager or
an affiliated person of the Manager serves as investment adviser concerning
transactions for the Portfolio in securities or other assets, other than for
purposes of complying with conditions of paragraphs (a) and (b) of Rule 12d3-1
under the 1940 Act.
g. As the delegate of the Trustees of the Fund, the
Subadviser shall be responsible for providing reasonable and good faith fair
valuations for any securities in the Portfolio for which current market
quotations are not readily available or reliable.
h. The Subadviser agrees that all books and records which it
maintains for the Fund are the Fund's property. The Subadviser also agrees upon
request of the Manager or the Fund, promptly to surrender the books and records
to the requester or make the books and records available for inspection by
representatives of regulatory authorities. The Subadviser shall permit all books
and records with respect to the Portfolio to be inspected and audited by the
Manager and the Administrator at all reasonable times during normal business
hours, upon reasonable notice. The Subadviser further agrees to maintain and
preserve the Fund's books and records in accordance with the Investment Company
Act and rules thereunder.
2. OBLIGATIONS OF THE MANAGER.
a. The Manager shall provide (or cause the Fund's custodian to
provide) information to the Subadviser in a timely manner regarding such matters
as the composition of assets in the Portfolio, cash requirements and cash
available for investment in the Portfolio, and all other information as may be
reasonably necessary for the Subadviser to perform its responsibilities
hereunder.
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b. The Manager has furnished the Subadviser a copy of the
Prospectus and agrees during the continuance of this Agreement to furnish the
Subadviser copies of any revisions or supplements thereto at, or, if
practicable, before the time the revisions or supplements become effective. The
Manager agrees to furnish the Subadviser with relevant sections of minutes of
meetings of the Trustees of the Fund applicable to the Portfolio to the extent
they may affect the duties of the Subadviser, and with copies of any financial
statements or reports of the Fund with respect to the Portfolio to its
shareholders, and any further materials or information which the Subadviser may
reasonably request to enable it to perform its functions under this Agreement,
including, but not limited to, timely information relating to any Insurance
Restrictions.
3. CUSTODIAN. The Manager shall provide the Subadviser with a
copy of the Portfolio's agreement with the custodian designated to hold the
assets of the Portfolio (the "Custodian") and any modifications thereto (the
"Custody Agreement"). The assets of the Portfolio shall be maintained in the
custody of the Custodian identified in, and in accordance with the terms and
conditions of, the Custody Agreement (or any sub-custodian properly appointed as
provided in the Custody Agreement). The Subadviser shall provide timely
instructions directly to the Fund's custodian, in the manner and form as
required by the Fund's Custody Agreement (including with respect to exchange
offerings and other corporate actions) necessary to effect the investment and
reinvestment of the Portfolio's assets. Any assets added to the Portfolio shall
be delivered directly to the Custodian.
4. EXPENSES. Except for expenses specifically assumed or agreed
to be paid by the Subadviser pursuant hereto, the Subadviser shall not be liable
for any expenses of the Manager or the Fund including, without limitation, (a)
interest and taxes, (b) brokerage commissions and other costs in connection with
the purchase or sale of securities or other investment instruments with respect
to the Portfolio, and (c) custodian fees and expenses. The Subadviser will pay
its own expenses incurred in furnishing the services to be provided by it
pursuant to this Agreement.
5. PURCHASE AND SALE OF ASSETS. Absent instructions from the
Manager to the contrary, the Subadviser shall place all orders for the purchase
and sale of securities for the Portfolio with brokers or dealers selected by the
Subadviser, which may include brokers or dealers affiliated with the Subadviser
provided such orders comply with Rule 17e-1 (or any successor or other relevant
regulations) under the 1940 Act in all respects. To the extent consistent with
applicable law and then-current SEC Positions, purchase or sell orders for the
Portfolio may be aggregated with contemporaneous purchase or sell orders of
other clients of the Subadviser. The Subadviser shall use its best efforts to
obtain Portfolio securities at prices which are advantageous to the Portfolio
and at commission rates that are reasonable in relation to the benefits
received. However, the Subadviser may select brokers or dealers on the basis
that they provide brokerage, research or other services or products to the
Portfolio and/or other accounts serviced by the Subadviser. Not all such
services or products need to be used by the Subadviser in managing the
Portfolio. The Subadviser agrees that securities are to be purchased through
brokers and dealers that, in the Subadviser's best judgment, offer the best
combination of price and execution. The Subadviser, in seeking to obtain best
execution of portfolio transactions for the Portfolio, may consider the quality
and reliability of brokerage services, as well as research and investment
information and other services provided by brokers or dealers. Accordingly, the
Subadviser's selection of a broker or dealer for transactions for
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the Portfolio may take into account such relevant factors as (i) price, (ii) the
broker's or dealer's facilities, reliability and financial responsibility, (iii)
when relevant, the ability of the broker to effect securities transactions,
particularly with regard to such aspects as timing, order size and execution of
the order, (iv) the broker's or dealer's recordkeeping capabilities and (v) the
research and other services provided by such broker or dealer to the Subadviser
which are expected to enhance its general portfolio management capabilities
(collectively, "Research"), notwithstanding that the Portfolio may not be the
exclusive beneficiary of such Research. Commission rates, being a component of
price is one factor considered together with other factors. The Subadviser shall
not be obligated to seek in advance competitive bidding for the most favorable
commission rate applicable to any particular transaction for the Portfolio or to
select any broker-dealer on the basis of its purported posted commission rate.
Accordingly, in compliance with Section 28(e) of the Securities Exchange Act of
1934, as amended, the Adviser, in its discretion, may cause the Portfolio to pay
a commission for effecting a transaction for the Portfolio in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, provided that the Subadviser has determined in good faith that
the commission is reasonable in relation to the value of the brokerage and/or
Research provided by the broker to the Subadviser viewed in terms of that
particular transaction or its overall responsibilities with respect to the
account as to which the Subadviser exercises investment discretion. From time to
time, when determined by the Subadviser in its capacity of a fiduciary to be in
the best interest of the Portfolio, the Subadviser may purchase securities from
or sell securities on behalf of the Portfolio to another account managed by the
Subadviser at prevailing market levels in accordance with the procedures under
Rule 17a-7 under the 1940 Act and other applicable law.
6. COMPENSATION OF THE SUBADVISER. As full compensation for all
services rendered, facilities furnished and expenses borne by the Subadviser
hereunder, the Manager shall pay the Subadviser compensation at the annual rate
of 0.375%. Such compensation shall be payable monthly in arrears or at such
other intervals, not less frequently than quarterly, as the Manager is paid by
the Portfolio pursuant to the Advisory Agreement. If the Subadviser shall serve
for less than the whole of any month or other agreed-upon interval, the
foregoing compensation shall be prorated. The Manager may from time to time
waive the compensation it is entitled to receive from the Fund; however, any
such waiver will have no effect on the Manager's obligation to pay the
Subadviser the compensation provided for herein.
7. NON-EXCLUSIVITY. The Manager agrees that the services of the
Subadviser are not to be deemed exclusive and that the Subadviser and its
affiliates are free to act as investment manager and provide other services to
various investment companies and other managed accounts, except as the
Subadviser and the Manager or the Administrator may otherwise agree from time to
time in writing before or after the date hereof. This Agreement shall not in any
way limit or restrict the Subadviser or any of its directors, officers,
employees or agents from buying, selling or trading any securities or other
investment instruments for its or their own account or for the account of others
for whom it or they may be acting, provided that such activities do not
adversely affect or otherwise impair the performance by the Subadviser of its
duties and obligations under this Agreement. The Manager recognizes and agrees
that the Subadviser may provide advice to or take action with respect to other
clients, which advice or action, including the timing and nature of such action,
may differ from or be identical to advice given or action taken with respect to
the Portfolio. The
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Subadviser shall for all purposes hereof be deemed to be an independent
contractor and shall, unless otherwise provided or authorized, have no authority
to act for or represent the Fund or the Manager in any way or otherwise be
deemed an agent of the Fund or the Manager except in connection with the
investment management services provided by the Subadviser hereunder.
8. LIABILITY. Except as may otherwise be provided by the 1940 Act
or other federal securities laws, neither the Subadviser nor any of its
officers, partners, managing directors, employees, affiliates or agents shall be
subject to any liability to the Manager, the Fund, the Portfolio or any
shareholder of the Portfolio for any loss arising from any claim or demand based
upon, any error of judgment, or any loss arising out of any investment or other
act or omission in the course of, connected with, or arising out of any service
to be rendered under this Agreement, except by reason of willful misfeasance,
bad faith or gross negligence in the performance of any duties or by reason of
reckless disregard of its obligations and duties. The Manager acknowledges and
agrees that the Subadviser makes no representation or warranty, express or
implied, that any level of performance or investment results will be achieved by
the Portfolio or that the Portfolio will perform comparably with any standard or
index, including other clients of the Subadviser, whether public or private.
9. EFFECTIVE DATE AND TERMINATION. This Agreement shall become
effective as of [DATE], 2005, and
a. unless otherwise terminated, this Agreement shall continue
in effect until [DATE], 2007, and from year to year thereafter so long as such
continuance is specifically approved at least annually (i) by the Board of
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio, and (ii) by vote of a majority of the Trustees of
the Fund who are not interested persons of the Fund, the Manager or the
Subadviser, cast in person at a meeting called for the purpose of voting on such
approval;
b. this Agreement may at any time be terminated on sixty days'
written notice to the Subadviser either by vote of the Board of Trustees of the
Fund or by vote of a majority of the outstanding voting securities of the
Portfolio;
c. this Agreement shall automatically terminate in the event
of its assignment or upon the termination of the Advisory Agreement;
d. this Agreement may be terminated by the Subadviser on sixty
days' written notice to the Manager and the Fund, or, if approved by the Board
of Trustees of the Fund, by the Manager on sixty days' written notice to the
Subadviser; and
Termination of this Agreement pursuant to this Section 9 shall be
without the payment of any penalty. In the event of termination of this
Agreement, all compensation due to the Subadviser through the date of
termination will be calculated on a pro rata basis through the date of
termination and paid on the first business day after the next succeeding month
end.
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10. AMENDMENT. This Agreement may be amended at any time by mutual
consent of the Manager and the Subadviser, provided that, if required by law (as
may be modified by any exemptions received by the Manager), such amendment shall
also have been approved by vote of a majority of the outstanding voting
securities of the Portfolio and by vote of a majority of the Trustees of the
Fund who are not interested persons of the Fund, the Manager or the Subadviser,
cast in person at a meeting called for the purpose of voting on such approval.
11. CERTAIN DEFINITIONS. For the purpose of this Agreement, the
terms "vote of a majority of the outstanding voting securities," "interested
person," "affiliated person" and "assignment" shall have their respective
meanings defined in the 1940 Act, subject, however, to such exemptions as may be
granted by the SEC under the 1940 Act.
12. GENERAL.
a. The Subadviser may perform its services through any
employee, officer or agent of the Subadviser, and the Manager shall not be
entitled to the advice, recommendation or judgment of any specific person;
provided, however, that the persons identified in the Prospectus of the
Portfolio shall perform the portfolio management duties described therein until
the Subadviser notifies the Manager that one or more other employees, officers
or agents of the Subadviser, identified in such notice, shall assume such duties
as of a specific date. The Subadviser shall use commercially reasonable efforts
to inform the Manager of any such events enough time prior to the event taking
effect such that allows the Manager sufficient time to prepare and file any
necessary supplement to the Prospectus.
b. If any term or provision of this Agreement or the
application thereof to any person or circumstances 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.
c. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York.
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13. USE OF NAME.
It is understood that the phrase "AIM" and any derivative
names or logos associated with such name are the valuable property of the
Subadviser, and that the Fund has the right to include such phrases as a part of
the names of its series or for any other purpose only so long as this Agreement
shall continue. Upon termination of this Agreement the Fund shall forthwith
cease to use such phrases and logos.
TRAVELERS INVESTMENT ADVISER, INC.
By______________________________
Name:
Title:
A I M CAPITAL MANAGEMENT INC.
By_____________________________
Name:
Title:
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