Exhibit (d)(6)
INTERIM SUB-ADVISORY AGREEMENT
(International Equity Fund)
AGREEMENT made as of immediately after the close of business on
January 26, 2001 between MERCANTILE-SAFE DEPOSIT & TRUST COMPANY (the
"Adviser"), a Maryland trust company, and XXXXXX XXXX INVESTMENT MANAGEMENT INC.
(the "Sub-Adviser"), a Delaware corporation.
WHEREAS, M.S.D.&T. Funds, Inc. ("M.S.D.&T.") is registered as an open-
end, management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Adviser has been appointed investment adviser to
M.S.D.&T.'s International Equity Fund (the "Fund"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to assist it in
the provision of a continuous investment program for the Fund Account (as
hereinafter defined) as permitted by the Adviser's Advisory Agreement with
M.S.D.&T. pertaining to the Fund, and the Sub-Adviser is willing to do so; and
WHEREAS, the Board of Directors of the Fund has approved this
Agreement, and the Sub-Adviser is willing to furnish such services upon the
terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Adviser hereby appoints the Sub-Adviser to act
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as sub-adviser to the Fund for that portion of the assets of the Fund which the
Adviser, as fiduciary for M.S.D.&T., determines to assign to the Sub-Adviser
(such assets being referred to as the "Fund Account"). It is understood that
the Fund Account may consist of all, a portion of or none of the assets of the
Fund, and that the Adviser has the right to allocate and reallocate such assets
to the Fund Account at any time, and from time to time, upon such notice to the
Sub-Adviser as, in the Adviser's opinion, may be reasonably necessary to ensure
orderly management of the Fund Account or the Fund. Intending to be legally
bound, the Sub-Adviser accepts such appointment and agrees to render the
services herein set forth for the compensation herein provided.
2. Sub-Advisory Services. Subject to the supervision of M.S.D.&T.'s
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Board of Directors, the Sub-Adviser will assist the Adviser in providing a
continuous investment program for the Fund Account, including research and
management with respect to all securities and investments and cash equivalents
in the Fund Account. The Sub-Adviser will provide services under this Agreement
in accordance with the Fund's investment objective, policies and restrictions as
stated in the Fund's prospectus and statement of additional information and
resolutions of M.S.D.&T.'s Board of Directors applicable to the Fund. The
Adviser hereby
undertakes to provide the Sub-Adviser with copies of such prospectus, statement
of additional information and resolutions as the same become available from time
to time.
Without limiting the generality of the foregoing, the Sub-Adviser
further agrees that it will:
(a) prepare, subject to the Adviser's approval, lists of foreign
countries for investment by the Fund Account and determine from time to
time what securities and other investments will be purchased, retained or
sold for the Fund Account, including, with the assistance of the Adviser,
the Fund Account's investments in futures and forward currency contracts;
provided, however, that the Sub-Adviser shall not be responsible for taking
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action with respect to any proxies, notices, reports or other
communications relating to any of the Fund Account's portfolio securities;
(b) manage in consultation with the Adviser the Fund Account's
temporary investments in securities;
(c) place orders for the Fund Account either directly with the
issuer or with any broker or dealer;
(d) provide, at the Sub-Adviser's expense, using one or more
pricing services believed by the Sub-Adviser to be reliable, the value of
the portfolio securities and other assets of the Fund Account in accordance
with the 1940 Act, the Fund's current prospectus and applicable resolutions
of the Board of Directors of M.S.D.&T. on each day that the Fund's assets
are required to be valued, such information to be transmitted by telephone,
telecopy or other transmission as soon as possible and in any event within
24 hours of the time of valuation to BISYS Fund Services Ohio, Inc., as
fund accountant, or to such other person(s) as the Adviser may direct for
the benefit of the Fund;
(e) manage the Fund Account's overall cash position, and
determine from time to time what portion of the Fund Account's assets will
be held in different currencies;
(f) provide the Adviser with foreign broker research, a quarterly
review of international economic and investment developments and occasional
"White Papers" on international investment issues;
(g) attend regular business and investment-related meetings with
M.S.D.&T.'s Board of Directors and the Adviser if requested to do so by
M.S.D.&T. and/or the Adviser; and
(h) maintain books and records with respect to the securities
transactions for the Fund Account, furnish to the Adviser and M.S.D.&T.'s
Board of Directors such periodic and special reports as they may reasonably
request with respect to the Fund Account, and provide in advance to the
Adviser all reports to the Board of Directors for examination and review
within a reasonable time prior to M.S.D.&T. Board
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meetings. The Adviser hereby undertakes to provide the Sub-Adviser with at
least fourteen days prior written notice of the date, time and location of
all M.S.D.&T. Board meetings pertaining to the Fund Account.
3. Subcontractors. It is understood that the Sub-Adviser may from
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time to time engage or associate itself with such person or persons as the Sub-
Adviser may believe to be particularly fitted to assist the Sub-Adviser in the
performance of certain ministerial or administrative services required by this
Agreement; provided, however, that such person or persons shall have been
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approved by the Board of Directors of M.S.D.&T., that the compensation of such
person or persons shall be paid by the Sub-Adviser and that the Sub-Adviser
shall be as fully responsible to the Adviser and M.S.D.&T. for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
4. Covenants by Sub-Adviser. The Sub-Adviser agrees with respect to
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the services provided to the Fund that it:
(a) will conform with all Rules and Regulations of the Securities
and Exchange Commission ("SEC") applicable to it;
(b) will telecopy trade information to the Adviser on the first
business day following the day of the trade and cause broker confirmations
to be sent directly to the Adviser; and
(c) will treat confidentially and as proprietary information of
M.S.D. & T. all records and other information relative to the Fund,
the Fund Account and prior, present or potential shareholders, and will not
use such records and information for any purpose other than performance of
its responsibilities and duties hereunder (except after prior notification
to and approval in writing by M.S.D. & T., which approval shall not be
unreasonably withheld and may not be withheld and will be deemed granted
where the Sub-Adviser may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by M.S.D.
& T.).
5. Services Not Exclusive.
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(a) The services furnished by the Sub-Adviser hereunder are
deemed not to be exclusive, and nothing in this Agreement shall (i) prevent the
Sub-Adviser or any affiliated person (as defined in the 0000 Xxx) of the Sub-
Adviser from acting as investment adviser or manager for any other person or
persons, including other management investment companies with investment
objectives and policies the same as or similar to those of the Fund or (ii)
limit or restrict the Sub-Adviser or any such affiliated person from buying,
selling or trading any securities or other investments (including any securities
or other investments which the Fund is eligible to buy) for its or their own
accounts or for the accounts of others for whom it or they may be acting;
provided, however, that the Sub-Adviser agrees that it will not undertake any
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activities which, in its reasonable judgment, will adversely affect the
performance of its obligations to the Fund under this Agreement.
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(b) Nothing contained herein, however, shall prohibit the Sub-
Adviser from advertising or soliciting the public generally with respect to
products or services, regardless of whether such advertisement or solicitation
may include prior, present or potential shareholders of M.S.D. & T.
6. Portfolio Transactions. Investment decisions for the Fund Account
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shall be made by the Sub-Adviser independently from those for any other
investment companies and accounts advised or managed by the Sub-Adviser. The
Fund Account and such investment companies and accounts may, however, invest in
the same securities. When a purchase or sale of the same security is made at
substantially the same time on behalf of the Fund Account and/or another
investment company or account, the transaction will be averaged as to price, and
available investments allocated as to amount, in a manner which the Sub-Adviser
believes to be equitable to the Fund Account and such other investment company
or account. In some instances, this investment procedure may adversely affect
the price paid or received by the Fund Account or the size of the position
obtained or sold by the Fund Account. To the extent permitted by law, the Sub-
Adviser may aggregate the securities to be sold or purchased for the Fund
Account with those to be sold or purchased for other investment companies or
accounts in order to obtain best execution.
The Sub-Adviser shall place orders for the purchase and sale of
portfolio securities and will solicit broker-dealers to execute transactions in
accordance with the Fund's policies and restrictions regarding brokerage
allocations. The Sub-Adviser shall place orders pursuant to its investment
determinations for the Fund Account either directly with the issuer or with any
broker or dealer selected by the Sub-Adviser. In executing portfolio
transactions and selecting brokers or dealers, the Sub-Adviser shall use its
reasonable best efforts to seek the most favorable execution of orders, after
taking into account all factors the Sub-Adviser deems relevant, including the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. Consistent with this obligation, the Sub-Adviser may, to
the extent permitted by law, purchase and sell portfolio securities to and from
brokers and dealers who provide brokerage and research services (within the
meaning of Section 28(e) of the Securities Exchange Act of 1934) to or for the
benefit of the Fund Account and/or other accounts over which the Sub-Adviser or
any of its affiliates exercises investment discretion. The Sub-Adviser is
authorized to pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for the Fund Account
which 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 commission was 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 Sub-Adviser's overall
responsibilities to the Fund and to M.S.D.&T. In no instance will portfolio
securities be purchased from or sold to the Sub-Adviser, or the Fund's principal
underwriter, or any affiliated person thereof except as permitted by the
Securities and Exchange Commission.
7. Books and Records. In compliance with the requirements of Rule
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31a-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records which
it maintains for
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M.S.D.&T. are the property of M.S.D.&T. and further agrees to surrender promptly
to M.S.D.&T. any of such records upon M.S.D.&T.'s request; provided, however,
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that the Sub-Adviser may make and retain photocopies of such records in order to
comply with applicable regulatory requirements. The Sub-Adviser further agrees
to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records required to be maintained by Rule 31a-1 under the 1940 Act.
8. Expenses. During the term of this Agreement, the Sub-Adviser
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will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities, commodities and other
investments (including brokerage commissions and other transaction charges, if
any) purchased for the Fund Account.
9. Compensation. For the services provided and the expenses assumed
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with respect to the Fund Account pursuant to this Agreement, the Sub-Adviser
will be entitled to a fee, computed daily and payable quarterly, from the
Adviser, calculated at the annual rate of 0.45% of the average daily net assets
in the Fund Account.
10. Standard of Care; Limitation of Liability. The Sub-Adviser shall
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exercise due care and diligence and use the same skill and care in providing its
services hereunder as it uses in providing services to other investment
companies, but shall not be liable for any action taken or omitted by the Sub-
Adviser in the absence of bad faith, willful misconduct, negligence or reckless
disregard of its duties. Notwithstanding the foregoing, it is agreed that the
relative investment performance of the Fund Account shall not constitute a
breach by the Sub-Adviser of these obligations.
11. Reference to Sub-Adviser. Neither the Adviser nor any affiliate
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or agent of the Adviser shall make reference to or use the name of the Sub-
Adviser or any of its affiliates, or any of their clients, except references
concerning the identity of and services provided by the Sub-Adviser to the Fund,
which references shall not differ in substance from those included in the
current registration statement pertaining to the Fund, this Agreement and the
Advisory Agreement between the Adviser and M.S.D.&T. with respect to the Fund,
in any advertising or promotional materials without the prior approval of the
Sub-Adviser, which approval shall not be unreasonably withheld or delayed. The
Adviser hereby agrees to make all reasonable efforts to cause M.S.D.&T. and any
affiliate thereof to satisfy the foregoing obligation.
12. Duration and Termination. Unless sooner terminated, this
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Agreement shall continue until June 25, 2001. This Agreement is terminable at
any time without penalty, on 60 days' notice, by the Adviser, the Sub-Adviser or
by M.S.D.&T.'s Board of Directors or by vote of a majority of the outstanding
voting securities of the Fund. This Agreement will terminate automatically in
the event of its assignment (as defined in the 1940 Act). This Agreement will
also terminate automatically on the date a superceding Agreement is approved by
vote of a majority of the outstanding voting securities of the Fund. (As used
in this Agreement, the term "majority of the outstanding voting securities"
shall have the same meaning as ascribed to such term in the 1940 Act.)
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13. Amendment of This Agreement. No provision of this Agreement may
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be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement for which
approval by the outstanding voting securities of the Fund is required under the
1940 Act shall be effective until approved by vote of a majority of the
outstanding voting securities of the Fund.
14. Notice. Any notice, advice or report to be given pursuant to
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this Agreement shall be delivered or mailed:
To Sub-Adviser at:
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000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
To the Adviser at:
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Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
To M.S.D.&T. at:
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Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
15. Miscellaneous. The captions in this Agreement are included for
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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 Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by
Maryland law.
16. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
MERCANTILE-SAFE DEPOSIT & TRUST
COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Senior Vice President
XXXXXX XXXX INVESTMENT
MANAGEMENT INC.
By: /s/ Xxxxxxx Xxx
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Xxxxxxx Xxx
First Vice President/Director, Business
Development
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