Ex-99.5(b)
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the 18th day of January, 1989, by and
between XXXXXXX XXXXX ASSET MANAGEMENT, INC., a Delaware
corporation (hereinafter referred to as "MLAM"), and XXXXXXX
XXXXX ASSET MANAGEMENT U.K.# LTD., a corporation organized under
the laws of England and Wales (hereinafter referred to as "MLAM
U.K.").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, XXXXXXX XXXXX GLOBAL ALLOCATION FUND, INC. (the
"Fund") is a Maryland corporation engaged in business as a non-
diversified open-end investment company registered under the
Investment Company Act of 1940, as amended (hereinafter referred
to as the "Investment Company Act"); and
WHEREAS, MLAM and MLAM U.K. are engaged principally in
rendering investment advisory services and are registered as
investment advisers under the Investment Advisers Act of 1940;
and
WHEREAS, MLAM U.K. is a member of the Investment Management
Regulatory Organisation, a self-regulating organization
recognized under the Financial Services Act of 1986 of the United
Kingdom (hereinafter referred to as "IMRO"), and the conduct of
its investment business is regulated by IMRO; and
WHEREAS, MLAM has entered into a management agreement with
the Fund (the "Management Agreement"), dated December 13, 1988,
pursuant to which MLAM will provide management and investment and
advisory services to the Fund; and
WHEREAS, MLAM U.K. is willing to provide investment advisory
services to MIAM in connection with the Fund's operations on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, MLAM U.K. and MLAM hereby agree
as follows:
ARTICLE I
---------
Duties of MLAM U.K.
-------------------
MLAM hereby employs MLAM U.K. to act as investment adviser
to MLAM and to furnish, or arrange for affiliates to furnish, the
investment advisory services described below, subject to the
broad supervision of MLAM and the Fund, for the period and on the
terms and conditions set forth in this Agreement. MLAM U.K.
hereby accepts such employment and agrees during such period, at
its own expense, to render, or arrange for the rendering of, such
services and to assume the obligations herein set forth for the
compensation provided for herein. MLAM and its affiliates shall
for all purposes herein be deemed a Professional Investor as
defined under the rules promulgated by IMRO (hereinafter referred
2.
to as the "IMRO Rules"). MLAM U.K. and its affiliates shall for
all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or
otherwise be deemed and agent of the Fund.
MLAM U.K. shall have the right to make unsolicited calls on
MLAM and shall provide MLAM with such investment research, advice
and supervision as the latter may from time to time consider
necessary for the proper supervision of the assets of the Fund,
shall furnish continuously an investment program for the Fund an
shall make recommendations from time to time as to which
securities shall be purchased, sold or exchanged and what portion
of the assets of the Fund shall be held in the various securities
in which the Fund invests, options, futures, options on futures
or cash, subject always to the restrictions of the Articles of
Incorporation and By-Laws of the Fund, as amended from time to
time, the provisions of the Investment Company Act and the
statements relating to the Fund's investment objectives,
investment policies and investment restrictions as the same are
set forth in the currently effective prospectus and statement of
additional information relating to the shares of the Fund under
the Securities Act of 1933, as amended (the "Prospectus" and
"Statement of Additional Information", respectively). MLAM U.K.
shall make recommendations as to foreign currency matters and the
advisability of entering into foreign exchange contracts, foreign
3.
currency options, foreign currency futures and related options on
foreign currency futures. MLAM U.K. shall also make
recommendations as to the manner in which voting rights, rights
to consent to corporate action and any other rights pertaining to
the Fund's portfolio securities shall be exercised.
MLAM U.K. will not hold money on behalf of MLAM or the Fund,
nor will MLAM U.K. be the registered holder of MLAM's or the
Fund's registered investments or the custodian of documents or
other evidence of title.
ARTICLE II
----------
Allocation of Charges and Expenses
----------------------------------
MLAM U.K. assumes and shall pay for maintaining the staff
and personnel necessary to perform its obligations under this
Agreement, and shall at its own expense, provide the office
space, equipment and facilities which it is obligated to provide
under Article I hereof, and shall pay all compensation of
officers of the Fund and all Directors of the Fund who are
affiliated persons of MLAM U.K.
ARTICLE III
-----------
Compensation of MLAM U.K.
-------------------------
For the services rendered, the facilities furnished and
expenses assumed by MLAM U.K., MLAM shall pay to MLAM U.K. at the
end of each calendar month a fee based upon the average daily
value of the net assets of the Fund, as determined and computed
in accordance with the description of the determination of net
4.
asset value contained in the Prospectus and Statement of
Additional Information, at the annual rate of 0.10 of 1.0%
(o.10%) of the average daily net assets of the Fund, commencing
on the day following effectiveness hereof. During any period
when the determination of net asset value is suspended by the
Directors of the Fund, the net asset value of a share as of the
last business day prior to such suspension shall for this purpose
be deemed to be the net asset value at the close of each
succeeding business day until it is again determined.
ARTICLE IV
----------
Limitation of Liability of MLAM U.K.
------------------------------------
MLAM U.K. shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or
for any act of omission in the performance of sub-advisory
services rendered with respect to the Fund, except for willful
misfeasance, bad faith or gross negligence in the performance of
its duties, or by reason of reckless disregard of its obligations
and duties hereunder. As used in this Article IV, MLAM U.K.
shall include any affiliates of MLAM U.K. performing services for
MLAM contemplated hereby and directors, officers and employees of
MLAM U.K. and such affiliates.
5.
ARTICLE V
---------
Activities of MLAM U.K.
-----------------------
The services of MLAM U.K. to the Fund are not to be deemed
to be exclusive, MLAM U.K. and any person controlled by or under
common control with MLAM U.K. (for purpose of this Article V
referred to as "affiliate" ) being free to render services to
others. It is understood that Directors, officers, employees and
shareholders of the Fund are or may become interested in MLAM
U.K. and its affiliates, as directors, officers, employees and
shareholders of MLAM U.K. and its affiliates are or may become
similarly interested in the Fund, and that MLAM U.K. and
directors, officers, employees, partners and shareholders of its
affiliates may become interested in the Fund as shareholders or
otherwise.
ARTICLE VI
----------
MLAM U.K. Statements Pursuant to IMRO Rules
-------------------------------------------
Any complaints concerning MLAM U.K. should be in writing
addressed to the attention of the Managing Director of MLAM U.K.
MLAM has the right to obtain from MLAM U.K. a copy of the IMRO
complaints procedure and to approach IMRO directly.
MLAM U.K. may make recommendations, subject to the
investment restrictions referred to in Article I herein,
regarding Investments Not Readily Realisable (as that term is
used in the IMRO Rules) or investments denominated in a currency
other than British pound sterling. There can be no certainty
6.
that market makers will be prepared to deal in unlisted or thinly
traded securities and an accurate valuation may be hard to
obtain. The value of investments recommended by MLAM U.K. may be
subject to exchange rate fluctuations which may have favorable or
unfavorable affects on investments.
MLAM U.K. nay make recommendations, subject to the
investment restrictions referred to in Article I herein,
regarding options, futures or contracts for differences. Markets
can be highly volatile and such investments carry a high degree
of loss exceeding the original investment and any margin on
deposit.
ARTICLE VII
-----------
Duration and Termination of this Agreement
------------------------------------------
This Agreement shall become effective as of the date first
above written and shall remain in force until November 30, 1990
and thereafter, but only so long as such continuance is
specifically approved at least annually by (i) the Directors of
the Fund, or by the vote of a majority of the outstanding voting
securities of the Fund, and (ii) a majority of those Directors
who are not parties to this Agreement or interested persons of
any such party cast in person at a meeting called for the purpose
of voting on such approval.
This Agreement may be terminated at any time, without the
payment of any penalty, by MLAM or by vote of a majority of the
outstanding voting securities of the Fund, or by MLAM U.K., on
7.
sixty days' written notice to the other party. This Agreement
shall automatically terminate in the event of its assignment or
in the event of the termination of the Management Agreement. Any
termination shall be without prejudice to the completion of
transactions already initiated.
ARTICLE VIII
------------
Amendments of this Agreement
----------------------------
This Agreement may be amended by the parties only if such
amendment is specifically approved by (i) the Directors of the
Fund, or by the vote of a majority of outstanding voting
securities of the Fund, and (ii) a majority of those Directors
who are not parties to this Agreement or interested persons of
any such party cast in person at a meeting called for the purpose
of voting on such approval.
ARTICLE IX
----------
Definitions of Certain Terms
----------------------------
The terms "vote of a majority of the outstanding voting
securities", "assignment", "affiliated person" and "interested
person", when used in this Agreement, shall have the respective
meanings specified in the Investment Company Act and the rules
and regulations thereunder, subject, however, to such exemptions
as may be granted by the Securities and Exchange Commission under
said Act.
8.
ARTICLE X
---------
Governing Law
-------------
This Agreement shall be construed in accordance with laws of
the State of New York and the applicable provisions of the
Investment Company Act. To the extent that the applicable laws
of the State of Hew York, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company
Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
XXXXXX XXXXX ASSET MANAGEMENT, INC.
By /s/ Xxxxx X. Xxxxx
----------------------------------
XXXXXXX XXXXX ASSET MANAGEMENT U.K., LTD.
By /s/
----------------------------------
9.
