EXHIBIT EX-99.d
SUB-ADVISORY AGREEMENT
THIS SUB-ADVISORY AGREEMENT ("Contract") is made among the AB FUNDS TRUST,
a Delaware business trust ("Trust"), and SBC FINANCIAL SERVICES, INC.
("Adviser"), a non-profit corporation organized under the laws of the State of
Texas, and ______________________, a registered investment advisor organized
under the laws of the State of __________________ ("Sub-Adviser").
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
("Management Agreement") with the Trust, an open-end management investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, the ___________ Fund ("Fund") is a series of the Trust; and
WHEREAS, under the Management Agreement, the Adviser has agreed to provide
certain investment advisory services to the Fund; and
WHEREAS, the Adviser is authorized under the Management Agreement to
delegate its investment advisory responsibilities to one or more persons or
companies; and
WHEREAS, the Sub-Adviser is willing to furnish such services to the
Adviser and the Fund;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Trust, the
Adviser and the Sub-Adviser agree as follows:
1. Appointment. The Adviser hereby appoints and employs the Sub-Adviser
as a discretionary portfolio manager, on the terms and conditions set forth
herein, of those assets of the Fund which the Adviser determines to assign to
the Sub-Adviser (those assets being referred to as the "Fund Account"). The
Adviser may from time to time make additions to and withdrawals, including but
not limited to cash and cash equivalents, from the Fund Account, subject to
verbal notification and subsequent written notification to the Sub-Adviser.
2. Acceptance of Appointment. The Sub-Adviser accepts that appointment
and agrees to render the services herein set forth, for the compensation herein
provided.
3. Duties as Sub-Adviser.
(a) Subject to the supervision and direction of the Trust's Board of
Trustees ("Board") and of the Adviser, including all written guidelines,
policies and procedures adopted by the Trust or the Adviser that are provided to
the Sub-Adviser, the Sub-Adviser will provide a continuous investment program
with respect to the Fund Account. The Sub-Adviser will determine from time to
time what investments in the Fund Account will be purchased, retained or sold by
the Fund. The Sub-Adviser will be responsible for placing purchase and sell
orders for investments and for other
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related transactions with respect to the Fund Account. The Sub-Adviser will
provide services under this Contract in accordance with the Fund's investment
objective, policies and restrictions and the description of its investment
strategy and style, all as stated in the Trust's registration statement under
the 1940 Act, and any amendments or supplements thereto ("Registration
Statement") of which the Sub-Adviser has written notice. The Sub-Adviser is
authorized on behalf of the Fund Account to enter into and execute any documents
required to effect transactions with respect to the Fund Account, provided that
such transactions are in accord with the Registration Statement and with all
written guidelines, policies and procedures adopted by the Trust or the Adviser
that are provided to the Sub-Adviser.
(b) In accordance with the Fund's investment policies described in the
Registration Statement, the Sub-Adviser is responsible for avoiding investment
of Fund Account assets in the securities issued by any company that is publicly
recognized, as determined by the Annuity Board of the Southern Baptist
Convention ("Annuity Board"), as being in the liquor, tobacco, gambling,
pornography or abortion industries, or any company whose products, services or
activities are publicly recognized, as determined by the Annuity Board, as being
incompatible with the moral and ethical posture of the Annuity Board. The
Adviser shall provide in writing to the Sub-Adviser a list of such prohibited
companies, which the Adviser in its sole discretion will amend or supplement
from time to time. The Adviser will provide the Sub-Adviser with such amendments
or supplements on a timely basis, and any such changes shall become effective
once they have been received by the Sub-Adviser. If the Sub-Adviser has a
question about whether any proposed transaction with respect to the Fund Account
would be in compliance with such investment policies, it may consult with the
Adviser during normal business hours, and the Adviser will provide instructions
upon which the Sub-Adviser may rely in purchasing and selling securities for the
Fund Account.
(c) The Sub-Adviser agrees that, in placing orders with brokers, it will
seek to obtain the best net result in terms of price and execution; provided
that, on behalf of the Fund, and in compliance with Section 28(e) of the
Securities Exchange Act of 1934, the Sub-Adviser may, in its discretion, use
brokers (including brokers that may be affiliates of the Sub-Adviser to the
extent permitted by Section 3(d) hereof) who provide the Sub-Adviser with
research, analysis, advice and similar services to execute portfolio
transactions, and the Sub-Adviser may pay to those brokers in return for
brokerage and research services a higher commission than may be charged by other
brokers, subject to the Sub-Adviser's determining in good faith that such
commission is reasonable in terms either of the particular transaction or of the
overall responsibility of the Sub-Adviser to the Fund and its other clients and
that the total commissions paid by the Fund will be reasonable in relation to
the benefits to the Fund over the long term. The Sub-Adviser agrees to provide
the Adviser with reports or other information regarding brokerage and benefits
received therefrom, upon the Adviser's reasonable request. In no instance will
portfolio securities be purchased from or sold to the Sub-Adviser, any other
investment sub-adviser that serves as sub-adviser to one or more series of the
Trust, or any affiliated person thereof, except in accordance with the federal
securities laws and the rules and regulations thereunder, or in accordance with
an order of exemption received from the United States Securities and Exchange
Commission ("SEC"). Whenever the Sub-Adviser simultaneously places orders to
purchase or sell the same security on behalf of the Fund and one or more other
accounts advised by the Sub-Adviser, the orders will be allocated as to price
and amount among all such accounts in a manner believed to be equitable over
time to each account.
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(d) Except as permitted by law or an exemptive order or rule of the SEC,
and policies and procedures adopted by the Board thereunder, the Sub-Adviser
will not execute without the prior written approval of the Adviser any portfolio
transactions for the Fund Account with a broker and/or dealer that is (i) an
affiliated person of the Trust, including the Adviser or any sub-Adviser for any
series of the Trust; (ii) a principal underwriter of the Fund's shares; or (iii)
an affiliated person of such an affiliated person or principal underwriter. The
Adviser agrees that it will provide the Sub-Adviser with a written list of such
brokers and dealers and will, from time to time, update such list as necessary.
The Sub-Adviser agrees that it will provide the Adviser with a written list of
brokers and dealers that are affiliates of the Sub-Adviser and will, from time
to time, update such list as necessary.
(e) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to the 1940 Act and the rules and regulations promulgated
thereunder with respect to actions by the Sub-Adviser on behalf of the Fund, and
will furnish the Board, the Adviser or the Fund's administrator
("Administrator") with such periodic and special reports as any of them
reasonably may request. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records that it maintains
for the Fund are the property of the Trust, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records that it maintains for
the Trust and that are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Trust a complete set of any
records that it maintains for the Fund upon request by the Trust.
(f) All transactions will be consummated by payment to or delivery by
the custodian designated by the Trust (the "Custodian"), or such depositories or
agents as may be designated by the Custodian in writing, of all cash and/or
securities due to or from the Fund Account, and the Sub-Adviser shall not have
possession or custody thereof. The Sub-Adviser shall advise the Custodian and
confirm in writing to the Trust, to the Adviser and any other designated agent
of the Fund, including the Administrator, all investment orders for the Fund
Account placed by it with brokers and dealers at the time and in the manner set
forth in Rule 31a-1 under the 1940 Act. For purposes of the foregoing sentence,
communication via electronic means will be acceptable as agreed to in writing
from time to time by the Adviser. The Trust shall issue to the Custodian such
instructions as may be appropriate in connection with the settlement of any
transaction initiated by the Sub-Adviser. The Trust shall be responsible for all
custodial arrangements and the payment of all custodial charges and fees, and,
upon giving proper instructions to the Custodian, the Sub-Adviser shall have no
responsibility or liability with respect to custodial arrangements or the acts,
omissions or other conduct of the Custodian, except that it shall be the
responsibility of the Sub-Adviser to notify the Adviser if the Custodian fails
to confirm in writing proper execution of the instructions.
(g) The Sub-Adviser agrees to provide, at such times as shall be
reasonably requested by the Board or the Adviser, the analysis and reports
specified on Schedule A attached hereto, including without limitation monthly
reports setting forth the investment performance of the Fund Account. The
Sub-Adviser also agrees to make available to the Board and Adviser any economic,
statistical and investment services that the Sub-Adviser normally makes
available to its institutional or other customers.
(h) In accordance with procedures adopted by the Board, as amended from
time to time,
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the Sub-Adviser will assist the Administrator and/or the Fund in determining the
fair valuation of all portfolio securities held in the Fund Account and will use
its reasonable efforts to arrange for the provision of valuation information or
a price(s) for each portfolio security held in the Fund Account for which the
Administrator does not obtain prices in the ordinary course of business from an
automated pricing service.
4. Further Duties. In all matters relating to the performance of this
Contract, the Sub-Adviser will act in conformity with the provisions of the
Trust's Trust Instrument, By-Laws and Registration Statement of which it has
received written notice, with all written guidelines, policies and procedures
adopted by the Trust as applicable to the Fund Account that are provided to the
Sub-Adviser in writing, and with the written instructions and written directions
of the Board and the Adviser; and will comply with the requirements of the 1940
Act and the Investment Advisers Act of 1940, as amended ("Advisers Act") and the
rules under each, and all other federal and state laws and regulations
applicable to the Trust and the Fund. The Adviser agrees to provide to the
Sub-Adviser copies of the Trust's Trust Instrument, By-Laws, Registration
Statement, written guidelines, policies and procedures adopted by the Trust as
applicable to the Fund Account, written instructions and directions of the Board
and the Adviser, and any amendments or supplements to any of these materials as
soon as practicable after such materials become available.
5. Proxies. Unless the Adviser gives written instructions to the
contrary, provided the Custodian has timely forwarded the relevant proxy
materials, the Sub-Adviser will vote all proxies solicited by or with respect to
the issuers of securities in which assets of the Fund Account may be invested
from time to time. The Adviser shall instruct the Custodian to forward or cause
to be forwarded to the Sub-Adviser (or its designated agent) all relevant proxy
solicitation materials.
6. Expenses. During the term of this Contract, the Sub-Adviser will
bear all expenses incurred by it in connection with its services under this
Contract other than the cost of securities (including brokerage commissions,
transactional fees and taxes, if any) purchased for the Fund. The Fund shall be
responsible for its expenses.
7. Compensation. The compensation of the Sub-Adviser for its services
under this Contract shall be calculated daily and paid monthly by the Trust, and
not the Adviser, in accordance with the attached Schedule B. The Sub-Adviser
shall not be responsible for any expenses incurred by the Fund or the Trust. If
this Contract becomes effective or terminates before the end of any month, the
fee for the period from the effective date to the end of the month or from the
beginning of such month to the date of termination, as the case may be, shall be
pro-rated according to the proportion that such period bears to the full month
in which such effectiveness or termination occurs. The Adviser shall be
responsible for computing the fee based upon a percentage of the average daily
net asset value of the assets of the Fund Account.
8. Limitation of Liability. The Sub-Adviser shall not be liable for any
loss due solely to a mistake of investment judgment, but shall be liable for any
loss which is incurred by reason of an act or omission of its employee, partner,
director or affiliate, if such act or omission involves willful misfeasance, bad
faith or gross negligence, or breach of its duties or obligations hereunder,
whether express or implied. Nothing in this paragraph shall be deemed a
limitation or waiver of any obligation or duty that may not by law be limited or
waived.
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9. Indemnification.
(a) The Adviser shall indemnify the Sub-Adviser or any of its directors,
officers, employees or affiliates for all losses, damages, liabilities, costs
and expenses (including legal) ("Losses") incurred by the Sub-Adviser by reason
of or arising out of any act or omission by the Adviser under this Contract, or
any breach of warranty, representation or agreement hereunder, except to the
extent that such Losses arise as a result of the negligence, gross negligence,
willful misfeasance or bad faith of the Sub-Adviser or the Sub-Adviser's breach
of fiduciary duty to the Adviser.
(b) The Trust shall indemnify the Sub-Adviser or any of its directors,
officers, employees or affiliates for all losses, damages, liabilities, costs
and expenses (including legal) ("Losses") incurred by the Sub-Adviser by reason
of or arising out of any act or omission by the Trust under this Contract, or
any breach of warranty, representation or agreement hereunder, except to the
extent that such Losses arise as a result of the negligence, gross negligence,
willful misfeasance or bad faith of the Sub-Adviser or the Sub-Adviser's breach
of fiduciary duty to the Trust.
(c) The Sub-Adviser shall indemnify the Adviser or any of its directors,
officers, employees or affiliates for all losses, damages, liabilities, costs
and expenses (including legal) ("Losses") incurred by the Adviser by reason of
or arising out of any act or omission by the Sub-Adviser under this Contract if
such act or omission involves the negligence, gross negligence, willful
misfeasance, bad faith or breach of fiduciary duty of the Sub-Adviser, or any
breach of warranty, representation or agreement hereunder, except to the extent
that such Losses arise as a result of the negligence, gross negligence, willful
misfeasance or bad faith of the Adviser or the Adviser's breach of fiduciary
duty to the Sub-Adviser.
(d) The Sub-Adviser shall indemnify the Trust or any of its trustees,
officers, employees or affiliates for all losses, damages, liabilities, costs
and expenses (including legal) ("Losses") incurred by the Trust by reason of or
arising out of any act or omission by the Sub-Adviser under this Contract if
such act or omission involves the negligence, gross negligence, willful
misfeasance, bad faith or breach of fiduciary duty of the Sub-Adviser, or any
breach of warranty, representation or agreement hereunder, except to the extent
that such Losses arise as a result of the negligence, gross negligence, willful
misfeasance or bad faith of the Trust or the Trust's breach of fiduciary duty to
the Sub-Adviser.
10. Representations, Warranties and Agreements of the Trust. The Trust
represents, warrants and agrees that:
(a) The Adviser and the Sub-Adviser each has been duly appointed by the
Board of Trustees of the Trust to provide investment services to the Fund
Account as contemplated hereby.
(b) The Trust will cause the Adviser to deliver to the Sub-Adviser a
true and complete copy of the Fund's Registration Statement as effective from
time to time, and such other documents or instruments governing the investment
of the Fund Account and such other information as reasonably requested by the
Sub-Adviser, as is necessary for the Sub-Adviser to carry out its obligations
under this Contract.
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11. Representations of Adviser. The Adviser represents, warrants and
agrees that:
(a) The Adviser has been duly authorized by the Board of Trustees of the
Trust to delegate to the Sub-Adviser the provision of investment services to the
Fund Account as contemplated hereby.
(b) The Adviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Contract
remains in effect; (ii) is not prohibited by the 1940 Act, the Advisers Act or
other law, regulation or order from performing the services contemplated by this
Contract; (iii) has met and will seek to continue to meet for so long as this
Contract remains in effect, any other applicable federal or state requirements,
or the applicable requirements of any regulatory or industry self-regulatory
agency necessary to be met in order to perform the services contemplated by this
Contract; (iv) has the authority to enter into and perform the services
contemplated by this Contract; and (v) will promptly notify the Sub-Adviser of
the occurrence of any event that would disqualify the Adviser from serving as an
investment adviser of an investment company pursuant to Section 9(a) of the 1940
Act or otherwise.
12. Representations of Sub-Adviser. The Sub-Adviser represents, warrants
and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Contract
remains in effect; (ii) is not prohibited by the 1940 Act, the Advisers Act or
other law, regulation or order from performing the services contemplated by this
Contract; (iii) has met and will seek to continue to meet for so long as this
Contract remains in effect, any other applicable federal or state requirements,
or the applicable requirements of any regulatory or industry self-regulatory
agency necessary to be met in order to perform the services contemplated by this
Contract; (iv) has the authority to enter into and perform the services
contemplated by this Contract; and (v) will promptly notify the Trust and
Adviser of the occurrence of any event that would disqualify the Sub-Adviser
from serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise. The Sub-Adviser will also immediately
notify the Trust and the Adviser if it is served or otherwise receives notice of
any action, suit, proceeding, inquiry or investigation, at law or in equity, or
any threat thereof, before or by any court, public board or body, directly
involving the affairs of the Fund.
(b) The Sub-Adviser has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and will provide the Adviser
and the Trust with a copy of such code of ethics, together with evidence of its
adoption and a certification that the Sub-Adviser has adopted procedures
reasonably necessary to prevent violations of such code of ethics. Within thirty
(30) days following the end of the last calendar quarter of each year that this
Contract is in effect, the Sub-Adviser shall furnish to the Trust and the
Adviser (a) a written report that describes any issues arising under the code of
ethics or procedures during the relevant period, including, but not limited to,
information about material violations of the code or procedures and sanctions
imposed in response to material violations; and (b) a written certification that
the Sub-Adviser has adopted procedures reasonably necessary to prevent
violations of the code of ethics. In addition, the Sub-Adviser shall (i)
promptly report to the Board in writing any material amendments to its code of
ethics; (ii) immediately furnish to the Board all material information regarding
any violation of the code of ethics by any person who would be considered an
Access Person under the
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Trust's and Adviser's code of ethics, if such person were not subject to the
Sub-Adviser's code of ethics; and (iii) provide quarterly reports to the Adviser
on any material violations of the Sub-Adviser's code of ethics during the period
so indicated. Upon the reasonable written request of the Adviser, the
Sub-Adviser shall permit the Adviser, its employees or its agents to examine the
reports required to be made to the Sub-Adviser by Rule 17j-1(c)(1) and all other
records relevant to the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided the Trust and the Adviser with a copy
of its Form ADV, which as of the date of this Contract is its Form ADV as most
recently filed with the SEC and promptly will furnish a copy of any material
amendments to the Trust and the Adviser at least annually. Such amendments shall
reflect significant developments affecting the Sub-Adviser, as required by the
Investment Advisers Act of 1940.
(d) The Sub-Adviser will notify the Trust and the Adviser of any change
of control of the Sub-Adviser, including any change of its general partners,
controlling persons or 25% shareholders, as applicable, and any changes in the
key personnel who are either the portfolio manager(s) of the Fund Account or
senior management of the Sub-Adviser, in each case prior to such change if the
Sub-Adviser is aware of such change but in any event not later than promptly
after such change. The Sub-Adviser agrees to bear all reasonable expenses of the
Trust and Adviser, if any, arising out of such change.
(e) The Sub-Adviser agrees to maintain an appropriate level of errors
and omissions or professional liability insurance coverage equal to not less
than $5,000,000.
(f) The Sub-Adviser agrees that neither it, nor any of its affiliates,
will in any way refer directly or indirectly to its relationship with the Trust,
the Fund, the Adviser or any of their respective affiliates in offering,
marketing or other promotional materials without the express written consent of
the Adviser. However, the Sub-Adviser may use the performance of the Fund
Account in its composite performance.
13. Services Not Exclusive. The services furnished by the Sub-Adviser
hereunder are not to be deemed to be exclusive, and the Sub-Adviser shall be
free to furnish similar services to others, except as prohibited by applicable
law or agreed upon in writing among the Sub-Adviser, the Trust and the Adviser.
14. Confidentiality. Subject to the duty of the parties to comply with
applicable law, including any demand of any regulatory or taxing
authority having jurisdiction, the parties hereto shall treat as
confidential all material non-public information pertaining to the
Fund Account and the actions of the Sub-Adviser, the Adviser and the
Trust in respect thereof.
15. Authorized Representatives of the Adviser. The Sub-Adviser is
expressly authorized to rely upon any and all instructions,
approvals and notices given on behalf of the Adviser by any one or
more of those persons designated as representatives of the Adviser
whose names, titles and specimen signatures appear in Schedule C
attached hereto. The Adviser may amend such Schedule C from time to
time by written notice to the Sub-Adviser. The Sub-Adviser shall
continue to rely
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upon these instructions until notified by the Adviser to the
contrary.
16. Duration and Termination.
(a) This Contract shall become effective upon the commencement of
operations of the Trust, provided that this Contract shall not take effect
unless it has first been approved: (i) by the vote of a majority of those
Trustees of the Trust who are not parties to this Contract or interested persons
of any such party, cast in person at a meeting called for the purpose of voting
on such approval, and (ii) by the vote of a majority of the outstanding voting
securities of the Fund.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect until June 30, 2005. Thereafter, if not terminated, this
Contract shall continue automatically from year to year, provided that such
continuance is specifically approved annually in accordance with the 1940 Act:
(i) by a vote of a majority of those Trustees of the Trust who are not parties
to this Contract or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval, and (ii) by the Board
or by vote of a majority of the outstanding voting securities of the Fund,
unless any requirement for a vote of the outstanding voting securities of the
Fund is rendered inapplicable by an order of exemption from the SEC.
(c) Notwithstanding the foregoing, this Contract may be terminated by
any party hereto at any time, without the payment of any penalty, immediately
upon written notice to the other party, but any such termination shall not
affect the status, obligations, or liabilities of any party hereto to the other
arising prior to termination. This Contract will terminate automatically in the
event of its assignment or upon termination of the Management Agreement as it
relates to the Fund.
17. Amendment of this Contract. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought. No material amendment of this Contract shall
be effective until approved (i) by the vote of a majority of those Trustees of
the Trust who are not parties to this Contract or interested persons of any such
party, and (ii) by the vote of a majority of the outstanding voting securities
of the Fund (unless the Trust receives an SEC order or no-action letter
permitting it to modify the Contract without such vote or a regulation exists
under the 1940 Act that permits such action without such vote).
18. Limitation of Trustee and Shareholder Liability. The Adviser and
Sub-Adviser are hereby expressly put on notice of the limitation of shareholder
liability as set forth in the Trust Instrument of the Trust and agree that
obligations assumed by the Trust pursuant to this Contract shall be limited in
all cases to the Trust and its assets, and if the liability relates to one or
more series of the Trust, the obligations hereunder of the Trust shall be
limited to the respective assets of the Fund. The Adviser and Sub-Adviser
further agree that they shall not seek satisfaction of any such obligation from
the shareholders or any individual shareholder of the Trust or the Fund, nor any
officer, director or trustee of the Trust, neither as a group nor individually.
19. Governing Law. This Contract shall be construed in accordance with
the 1940 Act and the laws of the State of Delaware, without giving effect to the
conflicts of laws principles thereof. To the extent that the applicable laws of
the State of Delaware conflict with the applicable provisions of the 1940 Act,
the latter shall control.
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20. Miscellaneous. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "affiliated person,"
"interested person," "assignment," "broker," "investment adviser," "net assets,"
"sale," "sell" and "security" shall have the same meaning as such terms have in
the 1940 Act, subject to such exemption as may be granted by the SEC by any
rule, regulation or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Contract is made less
restrictive by a rule, regulation or order of the SEC, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order. This Contract and the Schedule(s) attached
hereto embody the entire agreement and understanding among the parties. This
Contract may be signed in counterpart.
21. Notices. Any notice herein required is to be in writing and is
deemed to have been given to the Sub-Adviser, Adviser or the Trust upon receipt
of the same at their respective addresses set forth below. All written notices
required or permitted to be given under this Contract will be delivered by
personal service, by postage mail - return receipt requested or by facsimile
machine or a similar means of same day delivery which provides evidence of
receipt (with a confirming copy by mail as set forth herein). All notices
provided to Adviser will be sent to the attention of Xxxx X. Xxxxx. All notices
provided to the Sub-Adviser will be sent to the attention of ________________.
[rest of page left intentionally blank]
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of __________, 2004.
AB FUNDS TRUST
on behalf of
[FUND NAME]
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attest:
By: Xxxxxx X. Xxxxxx By: Xxxx X. Xxxxx
-------------------------------- -----------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxx X. Xxxxx
Title: Vice President and Secretary Title: President
SBC FINANCIAL SERVICES, INC.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attest:
By: Xxxxxxxx X. Xxxxxxx By: Xxxxxx X. Xxxxxxx
------------------------ -----------------------
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Vice President & Chief Title: Vice President and
Compliance Officer Investment Officer
[SUB-ADVISER]
[Address]
[Address]
Attest:
By:_________________________________ By: _____________________
Name: Name:
Title: Title:
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SCHEDULE A
REPORTS TO BE MADE BY SUB-ADVISER
MONTHLY
1. Transaction and valuation reports, including investment performance.
2. Report showing the derivative holdings.
3. Transactions with affiliated broker/dealers
QUARTERLY
1. At the end of each calendar quarter a statement to the effect that the
sub-adviser has discharged its responsibilities in accordance with the
Investment Manager Mandate, noting any instances of non-compliance during
the quarter, and will continue to maintain the portfolio in compliance
(compliance checklist).
2. Provide report to SBC Financial Services, Inc. on any material violations
of the sub-adviser's code of ethics during period.
3. Commission recapture report (if applicable).
4. All fixed income sub-advisers utilizing derivatives, provide a report that
demonstrates stress testing of the portfolio. At a minimum, such testing
should demonstrate the effect on the portfolio of a 100 basis point move
in interest rates along with quantification of the duration contribution
of the derivatives in the portfolio.
5. All equity sub-advisers provide a report documenting how any proxies were
voted during the quarter.
6. Provide an attribution analysis report.
ANNUALLY
1. Provide SAS 70 reports or other internal control reports. If a standard
internal control report is not available please provide a description of
what controls are in place to prevent things such as rogue traders, trades
outside our guidelines or the portfolio investment objectives, and general
violation of the sub-adviser's policies or code of ethics.
2. Furnish with an updated proxy voting policy.
3. Provide a copy of the current code of ethics
4. Provide proof of liability and fiduciary insurance coverage and ERISA
bonding requirements.
5. Affirm in writing the sub-adviser's fiduciary status.
6. Furnish an updated form ADV part I & II or more frequently if revised.
PERIODIC
1. Immediately furnish all material information regarding any violation of the
code of ethics by any person who would be considered an Access Person under
the Trust's and Advisor's code of ethics, if such person were not subject
to the sub-adviser's code of ethics.
2. Promptly notify SBC Financial Services, Inc. of any material event related
to the organization that would be deemed an important consideration in the
ongoing relationship between sub-advisers and AB Funds Trust.
3. Timely advise SBC Financial Services, Inc. of any significant changes in
the ownership, organizational structure, financial condition or key
personnel staffing.
4. Advise SBC Financial Services, Inc. of any change in the portfolio manager
assigned to the account.
5. Promptly inform SBC Financial Services, Inc. of any major changes in the
sub-adviser's investment outlook, investment strategy and/or portfolio
structure.
6. Meet with SBC Financial Services, Inc. at least twice annually for a formal
portfolio review - once in the Annuity Board's offices and once in
sub-adviser's offices.
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7. Advise SBC Financial Services, Inc. of any pertinent issues that the
sub-adviser deems to be of significant interest.
8. Provide SBC Financial Services, Inc. with reports or other information
regarding brokerage and benefits received there from.
9. Provide SBC Financial Services, Inc. with list of affiliated
brokers/dealers.
10. Provide copies of any other periodic or special reports required pursuant
to the 1940 Act and the rules and regulations promulgated there under
with respect to actions by the sub-adviser.
11. Promptly notify SBC Financial Services, Inc. of any material amendments
to sub-adviser's code of ethics.
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SCHEDULE B
SUB-ADVISORY FEES
This Schedule B contains the sub-advisory fee information required by
Section 7 of the Sub-Advisory Agreement among AB Funds Trust ("Trust"), SBC
Financial Services, Inc. ("Adviser") and _______________ ("Sub-Adviser")
relating to the ___________ Fund ("Fund"), a series of the Trust.
Fee Schedule. Fees payable to the Sub-Adviser pursuant to this Contract
shall be calculated daily and paid monthly by the Trust. The fees are calculated
as of the close of trading on the last business day of the month by applying the
applicable fee rate to the average daily assets of the Fund allocated to the
Sub-Adviser for that period. For purposes of calculating the fee, the value of
the Fund's assets shall be determined in the same manner as that which the Fund
uses to determine the net asset value of its shares. The applicable annualized
fee rate shall be as indicated in the schedule below of the Fund's assets
allocated to the Sub-Adviser.
AVERAGE DAILY NET ASSETS ANNUAL RATE
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SCHEDULE C
AUTHORIZED REPRESENTATIVES OF THE ADVISER
President Xxxx X. Xxxxx
Vice President and Secretary Xxxxxx X. Xxxxxx
Vice President and Treasurer Xxxxxxx X. Xxxxxxxxx
Senior Vice President Xxxxxx X. Xxxxxxx
Vice President Xxxx X. Xxxxx
Vice President and Chief Compliance Officer Xxxxxxxx X. Xxxxxxx
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