Exhibit (d)(3) under Form N-1A
Exhibit (10) under 601/Reg. S-K
SUB-ADVISORY AGREEMENT
AGREEMENT, is made as of January 12, 2004, between XXXXX
BROTHERS XXXXXXXX & CO., a New York limited partnership (the
"Adviser") and Delaware International Advisers Ltd.
("Sub-Adviser"). This Agreement was initially effective with
respect to each Fund on the date set forth on Exhibit A (the
"Fund" or Funds").
WHEREAS, the Adviser has entered into an Investment Advisory
Agreement, amended and restated as of August 4, 2003 ("Advisory
Agreement"), with BBH Fund, Inc. (the "Investment Company") an
open-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act") and of
which each Fund is a series thereof;
WHEREAS, the Investment Company offers for public sale
distinct series of shares of beneficial interest of the Funds; and
WHEREAS, under the Advisory Agreement, the Adviser has
agreed to provide certain investment advisory services to the
Funds; and
WHEREAS, the Advisory Agreement permits the Adviser to
delegate certain of its duties as investment adviser thereunder
to a sub-adviser; and
WHEREAS, the Sub-Adviser is willing to furnish such services.
NOW, THEREFORE, in consideration of the premises and
mutual promises hereinafter set forth, the parties hereto agree
as follows:
1. The Adviser hereby appoints the Sub-Adviser to act as
investment sub-adviser to the Funds for the period and on the
terms set forth in this Agreement. The Sub-Adviser accepts such
appointment and agrees to render the services herein set forth,
for the compensation herein provided.
2. Subject to the general supervision of (1) the
Trustees/Directors of the Investment Company (the "Board"), and
(2) the Adviser, the Sub-Adviser shall manage the investment
operations and the composition of the portfolios of securities
and investments with respect to that portion of the Funds' assets
allocated to the Sub-Adviser from time to time by the Adviser in
its sole discretion, including cash ("Assets"), the purchase,
retention and disposition thereof and agreements relating
thereto, in accordance with the Funds' investment objective and
policies as stated in the Prospectuses (as defined in paragraph 3
of this Agreement) and subject to the following understandings:
(a) the Sub-Adviser shall furnish a continuous
investment program for the Assets of each Fund's portfolio and
determine from time to time which investments or securities will
be purchased, retained, sold or lent by the Funds, and which
portion of the assets will be invested or held uninvested as cash
and shall communicate in a timely manner all such transactions to
the Funds' portfolio accountant, the Advisor and custodian or
such depositories or agent designated by the Fund or the
Advisor. The Sub-Advisor shall not deviate from such investment
program and any guidelines provided by the Advisor without the
prior written consent of the Advisor and the Board of the
Investment Company;
(b) the Sub-Adviser shall use the same skill and care
in the management of each Fund's portfolio as it uses in the
investment management of other accounts for which it has
investment responsibility as agent;
(c) the Sub-Adviser, in the performance of its duties
and obligations under this Agreement, shall act in conformity
with the Investment Company's Declaration of Trust/Articles of
Incorporation and By-Laws and the Prospectuses of the Funds and
with the instructions and directions of the Board and will
conform to and comply with the requirements of the 1940 Act and
all other applicable federal and state laws and regulations,
provided such documents and amendments thereto have been
delivered to the Sub-Adviser in accordance with Section 3 below;
(d) the Sub-Adviser shall determine the Assets to be
purchased, sold or lent by the Funds and as agent for the Funds
will effect portfolio transactions pursuant to its determinations
either directly with the issuer or with any broker and/or dealer
in such securities; in placing orders with brokers and or dealers
the Sub-Adviser intends to seek best price and execution for
purchases and sales; the Sub-Adviser shall also make
recommendations regarding whether or not the Funds shall enter
into repurchase or reverse repurchase agreements and interest
rate futures contracts.
(e) unless the Advisor advised the Sub-Advisor in
writing that the right to vote proxies has been expressly
reserved to the Advisor or the Fund or otherwise delegated to
another party, the Sub-Advisor shall be authorized to exercise
voting rights incident to any securities held without
consultation with the Advisor or the Fund. The Sub-Advisor shall
also be authorized to respond to all corporate action matters
incident to the securities held for any Fund.
On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Funds as well as other
customers, the Sub-Adviser, may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to,
aggregate the securities to be so sold or purchased in order to
obtain the best execution and lower brokerage commissions, if
any. 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 Sub-Adviser in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to
the Funds and to such other customers;
(f) the Sub-Adviser shall maintain books and records
with respect to the Funds' securities transactions and shall
render to the Board and the Advisor such periodic and special
reports as the Board may reasonably request;
(g) the Sub-Adviser shall assist the Adviser and the
Funds' Administrator with the fair valuation of portfolio
securities as necessary and shall be responsible for identifying
the need to fairly value securities that are traded in markets
that close prior to the time the Fund calculates its net asset
value; and
(h) the investment management services of the
Sub-Adviser to the Funds under this Agreement are not to be
deemed exclusive, and the Sub-Adviser shall be free to render
similar services to others.
3. The Adviser has delivered copies of each of the
following documents to the Sub-Adviser and will promptly notify
and deliver to it all future amendments and supplements, if any:
(a) Declaration of Trust/Articles of Incorporation of
the Investment Company and amendments thereto (such Declaration
of Trust/Articles of Incorporation and amendments, as presently
in effect and further amended from time to time, are herein
called the "Organizational Document");
(b) By-Laws of the Investment Company (such By-Laws,
as presently in effect and as amended from time to time, are
herein called the "By-Laws");
(c) Certified resolutions of the Board authorizing the
appointment of the Sub-Adviser and approving the form of this
Agreement;
(d) Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-1A (the
"Registration Statement") as filed with the Securities and
Exchange Commission (the "Commission") relating to the Investment
Company and the Funds' shares, and all amendments thereto;
(e) Notification of Registration of the Investment
Company under the 1940 Act on Form N-8A as filed with the
Commission; and
(f) Prospectuses of the Funds (such prospectuses, as
presently in effect and as amended or supplemented with respect
to the Funds from time to time, is herein called the
"Prospectuses").
4. The Sub-Adviser shall keep the Funds' books and records
required to be maintained by it pursuant to paragraph 2(e)
hereof. The Sub-Adviser agrees that all records which it
maintains for each Fund is the property of the Fund and it will
promptly surrender any of such records to the Fund upon the
Fund's request, provided that the Sub-Adviser is permitted to
retain copies of any records required for regulatory purposes.
The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 of the Commission under the 1940 Act any
such records as are required to be maintained by the Adviser with
respect to the Funds by Rule 31a-1 of the Commission under the
1940 Act. The Sub-Advisor will provide the auditors and
inspectors of any Fund and the Advisor with reasonable access to
any such books and records of the Funds during the Sub-Advisor's
normal business hours.
5. During the term of this Agreement the Sub-Adviser will
pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities and
investments purchased for the Funds. The Sub-Adviser will not
pay taxes, custody fees and/or brokerage commissions, if any.
6. For the services provided and the expenses borne
pursuant to this Agreement, the Adviser, not the Funds, will pay
the Sub-Adviser as full compensation therefor a fee as set forth
on Exhibit A attached hereto. This fee will be computed based on
the net asset value of the Assets allocated to the Sub-Adviser as
of 4:00 P.M. New York time on each business day within each month
and will be paid to the Sub-Adviser monthly during the succeeding
calendar month.
7. The Sub-Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by any Fund
or the Advisor in connection with the matters to which this
Agreement relates, except a loss, damage, cost or expense
directly arising from a breach of fiduciary duty owed to Fund
shareholders as a result of this Agreement or a loss, damage,
cost or expense resulting from willful misfeasance, bad faith or
gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under
this Agreement. The provisions of the foregoing sentence shall
survive the termination of this Agreement.
8. The Sub-Advisor acknowledges that all information and
documents disclosed by the Advisor to the Sub-Advisor, or which
come to the Sub-Advisor's attention during the course of its
performance under this Agreement, constitute valuable assets of
and are proprietary to the Advisor, and the Sub-Advisor also
acknowledges that the Advisor has a responsibility to its
customers and employees to keep the Advisor's records and
information confidential and proprietary. Therefore, the
Sub-Advisor agrees not to disclose, either directly or
indirectly, to any person, firm or corporation information of any
kind, nature or description concerning matters affecting or
relating to the business of the Advisor unless the information is
already in the public domain. Notwithstanding the foregoing,
provided, however, the Sub-Adviser may use the Fund's performance
in calculating composites, may give the Fund's and the Investment
Company's names to brokers and other third parties providing
services to the Fund, and may identify the Fund and/or Investment
Company on the Sub-Adviser's client list. This provision shall
survive termination of this Agreement.
9. The Sub-Adviser agrees to maintain errors and omissions
or professional liability insurance coverage in an amount that is
reasonable in light of the nature and scope of the Sub-Advisor's
business activities.
10. This Agreement shall continue in effect for two years
from the date of its execution with respect to any Fund, and
thereafter only so long as its continuance is specifically
approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be
terminated with respect to any Fund (i) at any time, without the
payment of any penalty, by vote of a majority of all the Board of
the Investment Company or by "vote of a majority of the
outstanding voting securities" of the Fund on 60 days written
notice to the Sub-Adviser, or (ii) by the Sub-Adviser at any
time, without the payment of any penalty, on 90 days written
notice to the Adviser or (iii) immediately, if, in the reasonable
judgment of the Adviser, the Sub-Adviser becomes unable to
discharge its duties and obligations under this Agreement,
including circumstances such as financial insolvency of the
Sub-Adviser or other circumstances that could adversely affect
the Funds. This Agreement will automatically and immediately
terminate in the event of its "assignment" or delegation by the
Sub-Adviser of any of its responsibilities hereunder.
11. The Sub-Adviser shall for all purposes herein be deemed
to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Board of the
Investment Company from time to time, have no authority to act
for or represent the Funds or the Investment Company or the
Advisor in any way or otherwise be deemed an agent of the Funds
or the Investment Company or the Advisor.
12. This Agreement may be amended by mutual consent,
provided that any material amendment hereto shall be approved (a)
by vote of a majority of those members of the Board of the
Investment Company 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 amendment, and
(b) by "vote of a majority of the outstanding voting securities"
of the Funds.
13. As used in this Agreement, the terms "assignment",
"interested persons" and "vote of a majority of the outstanding
voting securities" shall have the meanings assigned to them
respectively in the 1940 Act.
14. Notices of any kind to be given to the Adviser by the
Sub-Adviser shall be in writing and shall be duly given if mailed
or delivered to the Adviser at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Treasurer, or at such other address or to such
other individual as shall be specified by the Adviser to the
Sub-Adviser. Notices of any kind to be given to the Sub-Adviser
by the Adviser shall be in writing and shall be duly given if
mailed or delivered to the Sub-Adviser at Delaware International
Advisers Ltd., 00 Xxxxxxxxx, 0xx Xxxxx, Xxxxxx, XX0X 0XX, Xxxxxxx
Attention: Xxxxx X. Xxxxxx, with a copy to General Counsel,
Delaware Investments, One Commerce Square, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000-0000, or at such other address or to such
other individual as shall be specified by the Sub-Adviser to the
Adviser.
15. The Adviser represents, warrants and agrees as follows:
(a) The Adviser is registered as an investment adviser under
the Investment Advisers Act of 1940 ("Advisers
Act"); and
(b) The Advisory Agreement permits the Adviser to
delegate certain of its duties as investment adviser
thereunder to a sub-adviser.
16. The Sub-Adviser represents, warrants and agrees as
follows:
(a) (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 Agreement remains in effect;
(ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement;
(iii) has met and will seek to continue to meet for so long
as this Agreement 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 Agreement; (iv) has the authority to
enter into and perform the services contemplated by this
Agreement; (v) will promptly notify the 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; and (vi) is not presently under investigation
by any regulatory agency and does not know of any pending or
anticipated investigation or litigation by any such
regulatory agency.
(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 Board with a copy
of such code of ethics, together with evidence of its adoption.
Within forty-five days of the end of the last calendar quarter of
each year that this Agreement is in effect, the president or a
vice-president of the Sub-Adviser shall certify to the Adviser
that the Sub-Adviser has complied with the requirements of Rule
17j-1 during the previous year and that there has been no
violation of the Sub-Adviser's code of ethics or, if such a
violation has occurred, that appropriate action was taken in
response to such violation. 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 Adviser with a
copy of its Form ADV, which as of the date of this Contract is
its Form ADV most recently filed with the Commission and will
furnish a copy of all amendments to the Adviser at least annually.
(d) The Sub-Adviser will notify the Adviser of any
change of control of the Sub-Adviser, including any change of its
general partners or 25% shareholders, as applicable, and any
changes in the key personnel who are either the portfolio
manager(s) of the Funds or senior management of the Sub-Adviser,
in each case prior to, or promptly after, such change.
(e) Except as stated in Section 8 of this Agreement, 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 Investment
Company, the Funds, the Adviser or any of their
respective affiliates in offering, marketing or
other promotional materials without the express
written consent of the Adviser.
17. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms or provisions of this Agreement in any other
jurisdiction.
18. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York and together
with the other agreements and documents referenced herein, shall
constitute the entire agreement of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers or Partners
designated below on the day and year first above written.
DELAWARE INTERNATIONAL XXXXX BROTHERS XXXXXXXX & CO.
ADVISER LTD.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxx
Title: Managing Director Title: Managing Director
EXHIBIT A
to the
SUB-ADVISORY AGREEMENT dated as of January 12, 2004, between
XXXXX BROTHERS XXXXXXXX & CO. and Delaware International Advisers
Ltd
As compensation for its services hereunder, the Sub-Adviser shall
receive a fee determined on the dates and in the manner
hereinafter set forth.
The following annual rates, exclusive of Value Added Tax, if
applicable, shall apply to the BBH International Equity Fund (the
"Fund") assets, as described below:
Market Value of Fee as Percentage of
Fund Assets Market Value of Fund
Assets
First $50 Million 0.50%
Next $50 Million 0.35%
Thereafter 0.30%
Subject to maintaining BBH assets under management of at least
$100 million with the Sub-Adviser.
For purposes of applying the fee schedule, the market value shall
be determined based on daily net assets (after fund expenses)
during the term of this Agreement and as of the date of
termination of this Agreement. The fee stated above shall be
applied to such market value. The fee shall be invoiced for the
calendar quarter then ended as soon as the amount thereof shall
be determined and shall be payable in accordance with the terms
of the invoice. The Investment Adviser shall calculate the fees
due and notify the Sub-Adviser accordingly. The Sub-Adviser
reserves the right to discuss the fees and manner of calculation
with the Investment Adviser.
Initial:
/s/ CI
Investment Advisor
/s/ DT
Sub-Advisor
