XXXX XXXXXXX TRUST
SUBADVISORY AGREEMENT
AGREEMENT made this ____ day of _______, 2008, between Xxxx Xxxxxxx
Investment Management Services, LLC, a Delaware limited liability company (the
"Adviser"), and Rainier Investment Management Inc., a Delaware corporation (the
"Subadviser"). In consideration of the mutual covenants contained herein, the
parties agree as follows:
1. APPOINTMENT OF SUBADVISER.
The Subadviser undertakes to act as investment subadviser to, and, subject
to the supervision of the Trustees of Xxxx Xxxxxxx Trust (the "Trust") and the
terms of this Agreement, to manage the investment and reinvestment of the assets
of the Portfolios specified in Appendix A to this Agreement as it shall be
amended by the Adviser and the Subadviser from time to time (the"Portfolios").
The Subadviser will be an independent contractor and will have no authority to
act for or represent the Trust or Adviser in any way except as expressly
authorized in this Agreement or another writing by the Trust and Adviser.
2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST
a. Subject always to the supervision and control of the Trustees of the
Trust, the Subadviser will manage the investments and determine the composition
of the assets of the Portfolios on a discretionary basis in accordance with the
Portfolios' registration statement, as amended. In fulfilling its obligations to
manage the investments and reinvestments of the assets of the Portfolios, the
Subadviser will:
i. obtain and evaluate pertinent economic, statistical, financial and
other information affecting individual companies or industries the securities of
which are included in the Portfolios or are under consideration for inclusion in
the Portfolios;
ii. formulate and implement a continuous investment program for each
Portfolio consistent with the Subadviser's investment strategy and the specific
investment objectives and related investment policies for each such Portfolio as
described in the Trust's registration statement, as amended;
iii. take whatever steps Subadviser deems necessary or advisable in
order to implement these investment programs by the purchase and sale of
securities including the placing of orders for such purchases and sales;
iv. regularly report to the Trustees of the Trust with respect to the
implementation of these investment programs; and
v. provide assistance to the Trust's Custodian regarding the fair
value of securities held by the Portfolios for which market quotations are not
readily available.
b. The Subadviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel required
for it to execute its duties faithfully, and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment necessary for the
efficient conduct of the investment affairs of the Portfolios (excluding
determination of net asset value and fund accounting services, shareholder
relations services, fund administration services, transfer agency services,
custodial services and brokerage services).
c. The Subadviser will select brokers and dealers to effect all
transactions subject to the following conditions: the Subadviser will place all
necessary orders with brokers, dealers, or issuers, and will negotiate brokerage
commissions if applicable. The Subadviser is directed at all times to seek and
execute brokerage transactions for the Portfolios in accordance with such
policies or practices as may be established by the Trustees and described in the
Trust's registration statement as amended. The Subadviser may pay a
broker-dealer which provides research and brokerage services a higher spread or
commission for a particular transaction than otherwise might have been charged
by another broker-dealer, if the Subadviser determines that the higher spread or
commission is reasonable in relation to the value of the brokerage and research
services that such broker-dealer provides, viewed in terms of either the
particular transaction or the Subadviser's overall responsibilities with respect
to accounts managed by the Subadviser. The Subadviser may use for the benefit of
the Subadviser's other clients, or make available to companies affiliated with
the Subadviser or to its directors for the benefit of its clients, any such
brokerage and research services that the Subadviser obtains from brokers or
dealers.
d. On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interest of the Portfolio 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 purchased or sold to attempt to obtain a more 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 Portfolio and to its other clients.
e. The Subadviser will maintain all accounts, books and records with
respect to the Portfolios as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act of 1940
(the "Investment Company Act") and Investment Advisers Act of 1940 (the
"Investment Advisers Act") and the rules thereunder.
f. The Subadviser shall have the authority to vote all proxies and respond
to all corporate actions received in connection with securities held by the
Portfolios. Subadviser shall exercise such voting rights and monitor such
corporate actions in accordance with Subadviser's written proxy voting policies
and procedures, as the same may be amended from time to time. Adviser
acknowledges on behalf of the Portfolios that there may be times when refraining
to vote a proxy may be appropriate under such policies. In addition, Adviser
acknowledges and agrees that Subadviser shall not have any responsibility to
initiate, consider or participate in any bankruptcy, class action or other
litigation against or involving any issue of securities held in or formerly held
in the Account or to advise or take any action on behalf of the Portfolios or
the
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Trust with respect to any such actions or litigation. Subadviser will forward
any important information received by it about such actions to Adviser.
g. All portfolio transactions for the Portfolios will be consummated by
payment to or delivery by the custodian or custodians of the Portfolios (the
"Custodian"), or such depositories or agents as may be designated by the
Custodian in writing, as custodian for the Portfolio, of all cash and/or
securities due to or from the Portfolio, and the Subadviser shall not have
possession or custody thereof or any responsibility or liability with respect to
such custody. The Subadviser shall advise and confirm in writing to the
Custodian all investment orders for the Portfolios placed by it with brokers and
dealers. The Portfolios shall issue to the Custodian such instructions as may be
appropriate in connection with the settlement of any transaction initiated by
the Subadviser. The Portfolios 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 Subadviser shall have no
responsibility or liability with respect to custodial arrangements or the acts,
omissions or other conduct of the Custodian.
3. COMPENSATION OF SUBADVISER
The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.
4. LIABILITY OF SUBADVISER
Neither the Subadviser nor any of its directors, officers or employees
shall be liable to the Adviser or the Trust for any error of judgment or mistake
of law or for any loss suffered by the Adviser or Trust in connection with the
matters to which this Agreement relates except for losses resulting from willful
misfeasance, bad faith or gross negligence in the performance of, or from the
reckless disregard of, the duties of the Subadviser or any of its directors.
5. REGULATION
The Subadviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
6. CONFLICTS OF INTEREST
It is understood that trustees, officers, agents and shareholders of the
Trust are or may be interested in the Subadviser as trustees, officers, partners
or otherwise; that employees, agents and partners of the Subadviser are or may
be interested in the Trust as trustees, officers, shareholders or otherwise;
that the Subadviser may be interested in the Trust; and that the existence of
any such dual interest shall not affect the validity hereof or of any
transactions hereunder except as otherwise provided in the Agreement and
Declaration of Trust of the Trust and the Articles of Incorporation of the
Subadviser, respectively, or by specific provision of applicable law.
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7. DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective with respect to each Portfolio on the
later of (i) its execution and (ii) the date of the meeting of the Board of
Trustees of the Trust, at which meeting this Agreement is approved as described
below. The Agreement will continue in effect for a period more than two years
from the date of its execution only so long as such continuance is specifically
approved at least annually either by the Trustees of the Trust or by a majority
of the outstanding voting securities of each of the Portfolios, provided that in
either event such continuance shall also be approved by the vote of a majority
of the Trustees of the Trust who are not interested persons (as defined in the
Investment Company Act) of any party to this Agreement cast in person at a
meeting called for the purpose of voting on such approval. Any required
shareholder approval of this Agreement or of any continuance of this Agreement
shall be effective with respect to any Portfolio if a majority of the
outstanding voting securities of the series (as defined in Rule 18f-2(h) under
the Investment Company Act) of shares of that Portfolio votes to approve the
Agreement or its continuance, notwithstanding that the Agreement or its
continuance may not have been approved by a majority of the outstanding voting
securities of (a) any other Portfolio affected by the Agreement or (b) all the
portfolios of the Trust.
If any required shareholder approval of this Agreement or any continuance
of this Agreement is not obtained, the Subadviser will continue to act as
investment subadviser with respect to such Portfolio pending the required
approval of this Agreement or its continuance or of a new contract with the
Subadviser or a different adviser or subadviser or other definitive action;
provided, that the compensation received by the Subadviser in respect of such
Portfolio during such period is in compliance with Rule 15a-4 under the
Investment Company Act.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Adviser or Subadviser on sixty days' written notice to the Trust and the other
party. This Agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act) or in the event the Advisory Agreement between the Adviser and the Trust
terminates for any reason. Termination of this Agreement shall not affect any
liability or obligations of the Portfolios for outstanding trades/securities
transactions initiated prior to Subadvisor's receipt of written notice of such
termination.
8. PROVISION OF CERTAIN INFORMATION BY SUBADVISER
The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:
a. the Subadviser fails to be registered as an investment adviser under the
Investment Advisers Act or under the laws of any jurisdiction in which the
Subadviser is required to be registered as an investment adviser in order to
perform its obligations under this Agreement;
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b. the Subadviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust; and
c. any material change in actual control or management of the Subadviser or
any change in the principal portfolio manager of any Portfolio.
9. PROVISION OF CERTAIN INFORMATION BY ADVISER
The Adviser will promptly notify the Subadviser in writing of the
occurrence of any of the following events:
a. the termination of the Investment Advisory Agreement between Adviser and
the Trust;
b. any supplement, amendment, modification or other change to the
registration statement of the Trust as effective from time to time and such
other documents governing the investment of the Portfolios and such other
information as is necessary for the Portfolio manager to carry out its
obligations under this Agreement; and
c. additions or withdrawals of cash to the Portfolios.
10. SERVICES TO OTHER CLIENTS
The Adviser understands, and has advised the Trust's Board of Trustees,
that the Subadviser now acts, or may in the future act, as an investment adviser
to fiduciary and other managed accounts and as investment adviser or subadviser
to other investment companies. Further, the Adviser understands, and has advised
the Trust's Board of Trustees that the Subadviser and its affiliates may give
advice and take action for its accounts, including investment companies, which
differs from advice given on the timing or nature of action taken for the
Portfolio. The Subadviser is not obligated to initiate transactions for a
Portfolio in any security which the Subadviser, its partners, affiliates or
employees may purchase or sell for their own accounts or other clients.
11. CONSULTATION WITH SUBADVISERS TO OTHER TRUST PORTFOLIOS
As required by Rule 17a-10 under the Investment Company Act of 1940, the
Subadviser is prohibited from consulting with the entities listed below
concerning transactions for a Portfolio in securities or other assets:
a. other subadvisers to a Portfolio;
b. other subadvisers to a Trust portfolio; and
c. other subadvisers to a portfolio under common control with the
Portfolio.
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Adviser will provide Subadviser with a list of all such other subadvisers,
and any applicable changes thereto, and Subadviser shall be entitled to rely on
such list as being complete and accurate until notified in writing by Adviser to
the contrary.
12. AMENDMENTS TO THE AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the Trustees of the Trust and
by the vote of a majority of the Trustees of the Trust who are not interested
persons of any party to this Agreement cast in person at a meeting called for
the purpose of voting on such approval. Any required shareholder approval shall
be effective with respect to any Portfolio if a majority of the outstanding
voting securities of that Portfolio vote to approve the amendment,
notwithstanding that the amendment may not have been approved by a majority of
the outstanding voting securities of (a) any other Portfolio affected by the
amendment or (b) all the portfolios of the Trust.
13. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties.
14. HEADINGS
The headings in the sections of this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
15. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or
applicable party in person or by registered mail or a private mail or delivery
service providing the sender with notice of receipt. Notice shall be deemed
given on the date delivered or mailed in accordance with this paragraph.
16. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, insofar as is possible, as
if such portion had never been contained herein.
17. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of The Commonwealth of Massachusetts, or any of the
applicable provisions of the Investment Company Act. To the extent that the laws
of The Commonwealth of Massachusetts, or any of the provisions in this
Agreement, conflict with applicable provisions of the Investment Company Act,
the latter shall control.
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18. LIMITATION OF LIABILITY
The Agreement and Declaration of Trust, a copy of which, together with all
amendments thereto (the "Declaration"), is on file in the office of the
Secretary of The Commonwealth of Massachusetts, provides that the name "Xxxx
Xxxxxxx Trust" refers to the Trustees under the Declaration collectively as
Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of the Trust shall be held to any personal liability,
nor shall resort be had to their private property, for the satisfaction of any
obligation or claim, in connection with the affairs of the Trust or any
portfolio thereof, but only the assets belonging to the Trust, or to the
particular Portfolio with respect to which such obligation or claim arose, shall
be liable.
19. CONFIDENTIALITY.
The Subadviser agrees to treat Trust portfolio holdings as confidential
information in accordance with the Trust's "Policy Regarding Disclosure of
Portfolio Holdings," as such policy may be amended from time to time, and to
prohibit its employees from trading on any such confidential information.
20. COMPLIANCE
Upon execution of this Agreement, the Subadviser shall provide the Adviser
with the Subadviser's written policies and procedures ("Compliance Policies") as
required by Rule 206(4)-7 under the Investment Advisers Act. Throughout the term
of this Agreement, the Subadviser shall promptly submit to the Adviser: (i) any
material changes to the Compliance Policies, (ii) notification of the
commencement of a regulatory examination of the Subadviser and documentation
describing the results of any such examination and of any periodic testing of
the Compliance Policies, and (iii) notification of any material compliance
matter that relates to the services provided by the Subadviser to the Trust
including but not limited to any material violation of the Compliance Policies
or of the Subadviser's code of ethics and/or related code. Throughout the term
of this Agreement, the Subadviser shall provide the Adviser with any
certifications, information and access to personnel and resources (including
those resources that will permit testing of the Compliance Policies by the
Adviser) that the Adviser may reasonably request to enable the Trust to comply
with Rule 38a-1 under the Investment Company Act.
(THE REMAINDER OF THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first mentioned
above.
XXXX XXXXXXX INVESTMENT MANAGEMENT
SERVICES, LLC
--------------------------------
By:
Name:
Title:
RAINIER INVESTMENT MANAGEMENT INC.
--------------------------------
By:
Name:
Title:
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APPENDIX A
The Subadviser shall serve as investment subadviser for each Portfolio of
the Trust listed below. The Adviser will pay the Subadviser, as full
compensation for all services provided under this Agreement with respect to each
Portfolio, the fee computed separately for such Portfolio at an annual rate as
follows (the "Subadviser Fee"):
First $3 billion of Between $3 billion and $6 Excess Over $6 billion of
Portfolio Aggregate Net Assets* billion of Aggregate Net Assets* Aggregate Net Assets*
--------- --------------------- -------------------------------- -------------------------
Growth Equity Trust [_] [_] [_]
* The term Aggregate Net Assets includes the net assets of a Portfolio of the
Trust. It also includes with respect to each Portfolio the net assets of
one or more other portfolios as indicated below, but in each case only for
the period during which the Subadviser for the Portfolio also serves as the
subadviser for the other portfolio(s). For purposes of determining
Aggregate Net Assets and calculating the Subadviser Fee, the net assets of
the Portfolio and each other portfolio of the Trust are determined as of
the close of business on the previous business day of the Trust, and the
net assets of each portfolio of each other fund are determined as of the
close of business on the previous business day of that fund.
Trust Portfolio(s) Other Portfolio(s)
------------------- ------------------
Growth Equity Trust -- Rainer Growth Trust, a series of Xxxx Xxxxxxx
Funds III
The Subadviser Fee for a Portfolio shall be based on the applicable annual
fee rate for the Portfolio which for each day shall be equal to (i) the sum of
the amounts determined by applying the annual percentage rates in the table to
the applicable portions of Aggregate Net Assets divided by (ii) Aggregate Net
Assets (the "Applicable Annual Fee Rate"). The Subadviser Fee for each Portfolio
shall be accrued for each calendar day, and the sum of the daily fee accruals
shall be paid monthly to the Subadviser within 30 calendar days of the end of
each month. The daily fee accruals will be computed by multiplying the fraction
of one over the number of calendar days in the year by the Applicable Annual Fee
Rate, and multiplying this product by the net assets of the Portfolio. The
Adviser shall provide Subadviser with such information as Subadviser may
reasonably request supporting the calculation of the fees paid to it hereunder.
Fees shall be paid either by wire transfer or check, as directed by Subadviser.
If, with respect to any Portfolio, this Agreement becomes effective or
terminates, or if the manner of determining the Applicable Annual Fee Rate
changes, before the end of any month, the fee (if any) for the period from the
effective date to the end of such month or from the beginning of such month to
the date of termination or from the beginning of such month to the date such
change, as the case may be, shall be prorated according to the proportion which
such period bears to the full month in which such effectiveness or termination
or change occurs.
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