INVESTMENT SUBADVISORY AGREEMENT
THIS AGREEMENT is made and entered into as of December 8, 2001 between
STRONG CAPITAL MANAGEMENT, INC. (the "Adviser"), a Wisconsin corporation
registered under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and X.X. XXXXXX & CO., INC. (the "Subadviser"), a Delaware corporation
registered under the Advisers Act.
WITNESSETH:
WHEREAS, Strong Dividend Income Fund (formerly Strong American Utilities
Fund) (the "Fund"), a series of Strong Conservative Equity Funds, Inc., a
Wisconsin corporation, is registered with the U.S. Securities and Exchange
Commission (the "Commission") as a series fund of an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"Investment Company Act");
WHEREAS, the Fund has, pursuant to an Advisory Agreement with the Adviser
dated as of December __, 2001 (the "Advisory Agreement"), retained the Adviser
to act as investment adviser for and to manage its assets;
WHEREAS, the Advisory Agreement permits the Adviser to delegate certain of
its duties under the Advisory Agreement to other investment advisers, subject to
the requirements of the Investment Company Act; and
WHEREAS, the Adviser desires to retain the Subadviser as subadviser for the
Fund to act as investment adviser for and to manage the Fund's Investments (as
defined below) and the Subadviser desires to render such services.
NOW, THEREFORE, the Adviser and Subadviser do mutually agree and promise as
follows:
1. APPOINTMENT AS SUBADVISER. The Adviser hereby retains the Subadviser to
act as investment adviser for and to manage certain assets of the Fund subject
to the supervision of the Adviser and the Board of Directors of the Fund and
subject to the terms of this Agreement; and the Subadviser hereby accepts such
employment. In such capacity, the Subadviser shall be responsible for the Fund's
Investments.
2. DUTIES OF SUBADVISER.
(a) INVESTMENTS. The Subadviser is hereby authorized and directed and
hereby agrees, subject to the stated investment policies and restrictions of the
Fund as set forth in the Fund's current prospectus and statement of additional
information as currently in effect and as supplemented or amended from time to
time (collectively referred to hereinafter as the "Prospectus") and subject to
the directions of the Adviser and the Fund's Board of Directors, to purchase,
hold and sell investments for the account of the Fund (hereinafter
"Investments") and to monitor on a continuous basis the performance of such
Investments.
(b) ALLOCATION OF BROKERAGE. The Subadviser is authorized, subject to the
supervision of the Adviser and the Board of Directors of the Fund, to place
orders for the purchase and sale of the Fund's Investments with or through such
persons, brokers or dealers, including the Subadviser or affiliates thereof, and
to negotiate commissions to be paid on such transactions in accordance with the
Fund's policy with respect to brokerage as set forth in the Prospectus. The
Subadviser may, on behalf of the Fund, pay brokerage commissions to a broker
which provides brokerage and research services to the Subadviser in excess of
the amount another broker would have charged for effecting the transaction,
provided (i) the Subadviser determines in good faith that the amount is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker in terms of the particular transaction or in
terms of the Subadviser's overall responsibilities with respect to the Fund and
the accounts as to which the Subadviser exercises investment discretion, (ii)
such payment is made in compliance with Section 28(e) of the Securities Exchange
Act of 1934, as amended, and any other applicable laws and regulations, and
(iii) in the opinion of the Subadviser, the total commissions paid by the Fund
will be reasonable in relation to the benefits to the Fund over the long term.
It is recognized that the services provided by such brokers may be useful to the
Subadviser in connection with the Subadviser's services to other clients. On
occasions when the Subadviser deems the purchase or sale of a security to be in
the best interests of the Fund 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 sold or
purchased in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of securities so
sold or purchased, 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 Fund and to such
other clients.
(c) SECURITIES TRANSACTIONS. The Subadviser and any affiliated person of
the Subadviser will not purchase securities or other instruments from or sell
securities or other instruments to the Fund; PROVIDED, HOWEVER, the Subadviser
may purchase securities or other instruments from or sell securities or other
instruments to the Fund if such transaction is permissible under applicable laws
and regulations, including, without limitation, the Investment Company Act and
the Advisers Act and the rules and regulations promulgated thereunder.
The Subadviser agrees to observe and comply with Rule 17j-1 under the
Investment Company Act and the Fund's Code of Ethics, as the same may be amended
from time to time (or, in the case of the Fund's Code of Ethics, to adopt or
have adopted a Code of Ethics that complies in all material respects with the
requirements of the Fund's Code of Ethics). The Subadviser will make available
to the Adviser or the Fund at any time upon request, including facsimile without
delay, during any business day any reports required to be made by the Subadviser
pursuant to Rule 17j-1 under the Investment Company Act.
(d) BOOKS AND RECORDS. The Subadviser will maintain all books and records
required to be maintained pursuant to the Investment Company Act and the rules
and regulations promulgated thereunder with respect to transactions made by it
on behalf of the Fund including, without limitation, the books and records
required by Subsections (b)(1), (5), (6), (8), (9) and (10) and Subsection (f)
of Rule 31a-1 under the Investment Company Act and shall timely furnish to the
Adviser all information relating to the Subadviser's services hereunder needed
by the Adviser to keep such other books and records of the Fund required by Rule
31a-1 under the Investment Company Act. The Subadviser will also preserve all
such books and records for the periods prescribed in Rule 31a-2 under the
Investment Company Act, and agrees that such books and records shall remain the
sole property of the Fund and shall be immediately surrendered to the Fund upon
request. The Subadviser further agrees that all books and records maintained
hereunder shall be made available to the Fund or the Adviser at any time upon
request, including facsimile without delay, during any business day.
(e) INFORMATION CONCERNING INVESTMENTS AND SUBADVISER. From time to time as
the Adviser or the Fund may request, the Subadviser will furnish the requesting
party reports on portfolio transactions and reports on Investments held in the
portfolio, all in such detail as the Adviser or the Fund may request. The
Subadviser will also provide the Fund and the Adviser on a regular basis with
economic and investment analyses and reports or other investment services
normally available to institutional or other clients of the Subadviser.
The Subadviser will make available its officers and employees to meet with
the Fund's Board of Directors at the Fund's principal place of business on due
notice to review the Investments of the Fund (through quarterly telephone
presentations and, if necessary, in-person presentation once per year). The
Subadviser further agrees to inform the Fund and the Adviser on a current basis
of changes in investment strategy, tactics or key personnel.
The Subadviser will also provide such information or perform such
additional acts as are customarily performed by a subadviser and may be required
for the Fund or the Adviser to comply with their respective obligations under
applicable laws, including, without limitation, the Internal Revenue Code of
1986, as amended (the "Code"), the Investment Company Act, the Advisers Act, the
Securities Act of 1933, as amended (the "Securities Act") and any state
securities laws, and any rule or regulation thereunder.
(f) CUSTODY ARRANGEMENTS. The Subadviser acknowledges receipt of the
Custody Agreement dated as of June 10, 1993, for the Fund and agrees to comply
at all times with all requirements relating to such arrangements. The Subadviser
shall provide the Adviser, and the Adviser shall provide the Fund's custodian,
on each business day with information relating to all transactions concerning
the Fund's assets.
(g) ADVISER REPRESENTATIVES. The Subadviser shall include at least two (2)
representatives of the Adviser, as specified by the Adviser, in the list of
individuals authorized to give directions (without restrictions of any kind) to
brokers and dealers utilized by the Subadviser to execute portfolio transactions
for the Fund and custodians or depositories that hold securities or other assets
of the Fund at any time. Subadviser shall have no liability or responsibility
for the actions of such representatives of the Adviser. For so long as this
Agreement is in effect, the Adviser will not issue any instructions under this
provision without prior notice to the Subadviser.
(h) COMPLIANCE WITH APPLICABLE LAWS AND GOVERNING DOCUMENTS. The Subadviser
agrees that in all matters relating to its performance under this Agreement, the
Subadviser and its directors, officers, partners, employees and interested
persons, will act in accordance with all applicable laws, including, without
limitation, the Investment Company Act, the Advisers Act, the Code, the Public
Utility Holding Company Act of 1935, the Commodity Exchange Act, as amended (the
"CEA"), if applicable, and state securities laws, and any rules and regulations
promulgated thereunder. The Subadviser further agrees to act in accordance with
the Fund's Articles of Incorporation, By-Laws, currently effective registration
statement under the Investment Company Act, including any amendments or
supplements thereto, and Notice of Eligibility under Rule 4.5 of the CEA, if
applicable, (collectively, "Governing Instruments and Regulatory Filings") and
any instructions or directions of the Fund, its Board of Directors or the
Adviser.
The Subadviser acknowledges receipt of the Fund's Governing Instruments and
Regulatory Filings. The Adviser hereby agrees to provide to the Subadviser any
amendments, supplements or other changes to the Governing Instruments and
Regulatory Filings as soon as practicable after such materials become available
and, upon receipt by the Subadviser, the Subadviser will act in accordance with
such amended, supplemented or otherwise changed Governing Instruments and
Regulatory Filings.
(i) FUND'S NAME; ADVISER'S NAME; SUBADVISER'S NAME. The Subadviser agrees
that it shall have no rights of any kind relating to the Fund's name ("Strong
Dividend Income Fund" and the former name, "Strong American Utilities Fund") or
in the name "Strong" as it is used in connection with investment products,
services or otherwise, and that it shall make no use of such names without the
express written consent of the Fund or the Adviser, as the case may be. The
Adviser agrees that it shall have no rights of any kind relating to the
Subadviser's name as it is used in connection with investment products, services
or otherwise, and that it shall make no use of such name without the express
written consent of the Subadviser.
(j) VOTING OF PROXIES. The Subadviser shall direct the custodian as to how
to vote such proxies as may be necessary or advisable in connection with any
matters submitted to a vote of shareholders of securities held by the Fund.
3. SERVICES EXCLUSIVE.
(a) EXCLUSIVE INVESTMENT ADVICE. Except as provided in Subsection (b) of
this Section 3 or as otherwise agreed to in writing by the Adviser, during the
term of this Agreement, as provided in Section 13 hereof, and for a period of
six (6) months after the date the Subadviser gives notice to the Adviser of its
intention to terminate this Agreement or six (6) months after the date the
Adviser gives notice to the Subadviser of its intention to terminate this
Agreement, the Subadviser (which for purposes of this Section 3 shall also
include any successors to the Subadviser), and any person or entity controlled
by, or under common control with, the Subadviser, shall not act as investment
adviser or subadviser, or otherwise render investment advice to, or sponsor,
promote or distribute, any investment company or comparable entity registered
under the Investment Company Act or other investment fund consisting of more
than 100 investors that is offered publicly but is not subject to the
registration requirements of the Investment Company Act that is substantially
similar to the Fund. For purposes hereof, BMC Fund, Inc. and Wall Street
Preferred Money Managers are not, as such accounts are presently operating and
managed by the Subadviser, substantially similar to the Fund.
(b) EXCEPTIONS. The Subadviser may, except as provided in Subsection (a) of
this Section 3, act as investment adviser for non-investment company clients;
PROVIDED, HOWEVER, that such services for others shall not in any way hinder,
impair, preclude or prevent the Subadviser from performing its duties and
obligations under this Agreement and that whenever the Fund and one or more
other accounts advised by the Subadviser have available funds for investment,
investments suitable and appropriate for each will be allocated in accordance
with procedures that are equitable for each account. Similarly, opportunities to
sell securities will be allocated in an equitable manner.
4. NON-COMPETITION. The Subadviser and any person or entity controlled by
the Subadviser will not in any manner sponsor, promote or distribute any new
investment product or service substantially similar to the Fund, as such phrase
is used in Section 3 hereof, for the period that the Subadviser is required to
provide exclusive services to the Fund pursuant to Section 3 hereof, without the
prior written consent of the Adviser.
5. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder, the
Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Fund or the Adviser in any way or
otherwise be deemed an agent of the Fund or the Adviser.
6. COMPENSATION. The Adviser shall pay to the Subadviser a fee for its
services hereunder (the "Subadvisory Fee"), computed and paid monthly, based on
the net asset value of the Fund in accordance with the following schedule,
subject to adjustment as provided in Subsection (b) of this Section 6:
(a) FEE RATE SCHEDULE (the "Schedule"):
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ANNUAL
ASSET LEVEL SUBADVISORY FEE
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(b) ADJUSTMENT OF SUBADVISORY FEE. Notwithstanding the foregoing, the
Subadvisory Fee shall be subject to adjustment upward or downward depending upon
the Fund's performance compared to a benchmark (the "Benchmark"). The Benchmark
will be 90% of the performance of the Xxxxxxx 1000 Value Index. If the Fund's
performance is equal to or greater than the performance of the Benchmark for a
given period, as provided in Subsection (e) of this Section 6, then the
Subadvisory Fee shall be adjusted upward by 11% (rounded to the nearest two
decimal places). However, if the Fund's performance is less than the performance
of the Benchmark for a given period, as provided in Subsection (e) of this
Section 6, then the Subadvisory Fee shall be adjusted downward by 11% (rounded
to the nearest two decimal places). The adjusted Subadvisory Fees are summarized
in the table below:
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ANNUAL SUBADVISORY FEE ANNUAL SUBADVISORY FEE
IF FUND'S PERFORMANCE IS EQUAL TO IF FUND'S PERFORMANCE IS LESS
OR GREATER THAN THE BENCHMARK'S THAN THE BENCHMARK'S PERFORMANCE
ASSET LEVEL PERFORMANCE
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(c) The Adviser and the Subadviser shall share, in proportion to the fees
they receive under their respective Fund advisory or subadvisory agreement, in
the amount of payments the Adviser is obligated to make to third party
intermediaries who provide various administrative services for Fund shareholders
who invest through them.
(d) MOST FAVORED CLIENT COMPENSATION DISCLOSURE. In the event the
Subadviser charges any of its similarly situated mutual fund advisory or
subadvisory clients on a more favorable compensation basis, the Subadviser shall
immediately notify and fully disclose to the Adviser the nature and exact terms
of such arrangement.
(e) METHOD OF COMPUTATION; PAYMENT. The Subadvisory Fee shall be accrued
for each calendar day the Subadviser renders subadvisory services hereunder and
the sum of the daily fee accruals shall be paid monthly to the Subadviser as
soon as practicable following the last day of each month, by wire transfer if so
requested by the Subadviser, but no later than eight (8) calendar days
thereafter. The daily fee accruals will be computed by multiplying the fraction
of one (1) over the number of calendar days in the year by the annual rate as
described in Subsection (a), but adjusted as provided in Subsection (b), of this
Section 6 and multiplying the product by the net asset value of the Fund as
determined in accordance with the Prospectus as of the close of business on the
previous business day on which the Fund was open for business.
During the first year of this Agreement, the Adviser shall pay the
Subadviser as follows:
(i) For each of the first two months, the Adviser will pay the Subadviser
11% less (rounded to the nearest two decimal places) than the fees in the
Schedule. At the end of the third month, if the Fund's performance for the
entire three-month period is equal to or greater than the performance of the
Benchmark for that three-month period, then the Adviser will pay the Subadviser
an amount so that the Subadviser's total compensation for the first three
months, on a per month basis, will be 11% more (rounded to the nearest two
decimal places) than the fees in the Schedule for that time period.
(ii) At the end of the fourth month, the Fund's performance for the
cumulative four month period will be compared to the Benchmark's performance for
that same time period. If the Fund's performance is equal to or greater than the
Benchmark's performance, then the Subadviser will be paid 11% more (rounded to
the nearest two decimal places) than the fees in the Schedule and if the Fund's
performance is less than the Benchmark's performance, then the Subadviser will
be paid 11% less (rounded to the nearest two decimal places) than the fees in
the Schedule. The Subadviser will be paid in this manner through the first
eleven months by comparing the cumulative performance of the Fund against the
cumulative performance of the Benchmark through the end of each calculation
month.
After the first twelve months of operation under this Agreement, the
Adviser will pay the Subadviser a fee at the end of each month as follows:
(i) The twelve month performance of the Fund at the end of a given month
will be compared against the twelve month performance of the Benchmark for that
same time period.
(ii) If the performance of the Fund is equal to or greater than the
performance of the Benchmark for that twelve month period, the Adviser will pay
the Subadviser a fee that is 11% more (rounded to the nearest two decimal
places) than the fees in the Schedule.
(iii) If the performance of the Fund is less than the performance of the
Benchmark for that twelve month period, the Adviser will pay the Subadviser a
fee that is 11% less (rounded to the nearest two decimal places) than the fees
in the Schedule.
7. EXPENSES. The Subadviser shall bear all expenses incurred by it in
connection with its services under this Agreement and will, from time to time,
at its sole expense employ or associate itself with such persons as it believes
to be particularly fitted to assist it in the execution of its duties hereunder.
8. REPRESENTATIONS AND WARRANTIES OF SUBADVISER. The Subadviser represents
and warrants to the Adviser and the Fund as follows:
(a) The Subadviser is registered as an investment adviser under the
Advisers Act;
(b) The Subadviser has filed a notice of exemption pursuant to Rule 4.14
under the CEA with the Commodity Futures Trading Commission (the "CFTC") and the
National Futures Association (the "NFA"), if applicable;
(c) The Subadviser is a corporation duly organized and validly existing
under the laws of the State of Delaware with the power to own and possess its
assets and carry on its business as it is now being conducted;
(d) The execution, delivery and performance by the Subadviser of this
Agreement are within the Subadviser's powers and have been duly authorized by
all necessary action on the part of its shareholders, and no action by or in
respect of, or filing with, any governmental body, agency or official is
required on the part of the Subadviser for the execution, delivery and
performance by the Subadviser of this Agreement, and the execution, delivery and
performance by the Subadviser of this Agreement do not contravene or constitute
a default under (i) any provision of applicable law, rule or regulation, (ii)
the Subadviser's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Subadviser;
(e) This Agreement is a valid and binding agreement of the Subadviser;
(f) The Subadviser and any affiliated person of the Subadviser have not:
(i) within 10 years from the date hereof been convicted of any felony or
misdemeanor involving the purchase or sale of any securities or arising out of
the conduct as an underwriter, broker, dealer, investment adviser, municipal
securities dealer, government securities broker, government securities dealer,
transfer agent, or entity or person required to be registered under the CEA, or
as an affiliated person, salesman, or employee of any investment company, bank,
insurance company, or entity or person required to be registered under the CEA;
or
(ii) by reason of any misconduct, been permanently or temporarily enjoined
by an order, judgment or decree of any court of competent jurisdiction or other
governmental authority from acting as an underwriter, broker, dealer, investment
adviser, municipal securities dealer, government securities broker, government
securities dealer, transfer agent, or entity or person required to be registered
under the CEA, or an affiliated person, salesman, or employee of any investment
company, bank, insurance company, or entity or person required to be registered
under the CEA or from engaging in or continuing any conduct or practice in
connection with any such activity or in connection with the purchase or sale of
any security; or
(iii) been a party to litigation or other adversarial proceedings involving
any former or current client that is material to the Subadviser's business;
(g) The Form ADV of the Subadviser attached hereto as Exhibit A is a true
and complete copy of the form filed with the Commission and the information
contained therein is accurate and complete in all material respects and does not
omit to state any material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading;
(h) The Subadviser's audited financial statements attached hereto as
Exhibit B for the fiscal years ended November 30, 2000, 1999 and 1998 are true
and complete copies of the Subadviser's financial statements, are accurate and
complete in all material respects and do not omit to state any material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading;
(i) The Subadviser's Code of Ethics attached hereto as Exhibit C has been
duly adopted by the Subadviser, meets the requirements of Rule 17j-1 under the
Investment Company Act and such code has been complied with and no violation has
occurred.
9. REPRESENTATIONS AND WARRANTIES OF ADVISER. The Adviser represents and
warrants to the Subadviser as follows:
(a) The Adviser is registered as an investment adviser under the Advisers
Act;
(b) The Adviser has filed a notice of exemption pursuant to Rule 4.14 under
the CEA with the CFTC and the NFA;
(c) The Adviser is a corporation duly organized and validly existing under
the laws of the State of Wisconsin with the power to own and possess its assets
and carry on its business as it is now being conducted;
(d) The execution, delivery and performance by the Adviser of this
Agreement are within the Adviser's powers and have been duly authorized by all
necessary action on the part of its shareholders, and no action by or in respect
of, or filing with, any governmental body, agency or official is required on the
part of the Adviser for the execution, delivery and performance by the Adviser
of this Agreement, and the execution, delivery and performance by the Adviser of
this Agreement do not contravene or constitute a default under (i) any provision
of applicable law, rule or regulation, (ii) the Adviser's governing instruments,
or (iii) any agreement, judgment, injunction, order, decree or other instrument
binding upon the Adviser;
(e) This Agreement is a valid and binding agreement of the Adviser;
(f) The Adviser and any affiliated person of the Adviser have not:
(i) within 10 years from the date hereof been convicted of any felony or
misdemeanor involving the purchase or sale of any securities or arising out of
the conduct as an underwriter, broker, dealer, investment adviser, municipal
securities dealer, government securities broker, government securities dealer,
transfer agent, or entity or person required to be registered under the CEA, or
as an affiliated person, salesman, or employee of any investment company, bank,
insurance company, or entity or person required to be registered under the CEA;
or
(ii) by reason of any misconduct, been permanently or temporarily enjoined
by an order, judgment or decree of any court of competent jurisdiction or other
governmental authority from acting as an underwriter, broker, dealer, investment
adviser, municipal securities dealer, government securities broker, government
securities dealer, transfer agent, or entity or person required to be registered
under the CEA, or an affiliated person, salesman, or employee of any investment
company, bank, insurance company, or entity or person required to be registered
under the CEA or from engaging in or continuing any conduct or practice in
connection with any such activity or in connection with the purchase or sale of
any security; or
(iii) been a party to litigation or other adversarial proceedings involving
any former or current client that is material to the Adviser's business;
(g) The Form ADV of the Adviser attached hereto as Exhibit D is a true and
complete copy of the form filed with the Commission and the information
contained therein is accurate and complete in all material respects and does not
omit to state any material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading;
(h) The Adviser acknowledges that it received a copy of the Subadviser's
Form ADV at least 48 hours prior to the execution of this Agreement.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; DUTY TO UPDATE INFORMATION.
All representations and warranties made by the Subadviser and the Adviser
pursuant to Sections 8 and 9 hereof shall survive for the duration of this
Agreement and the parties hereto shall immediately notify, but in no event later
than five (5) business days, each other in writing upon becoming aware that any
of the foregoing representations and warranties are no longer true. In addition,
the Subadviser will deliver to the Adviser and the Fund copies of any
amendments, supplements or updates to any of the information provided to the
Adviser and attached as exhibits hereto within fifteen (15) days after becoming
available. Within forty-five (45) days after the end of each calendar year
during the term hereof, the Subadviser shall certify to the Adviser that it has
complied with the requirements of Rule 17j-1 under the Investment Company Act
with regard to its duties hereunder during the prior year and that there has
been no violation of the Subadviser's Code of Ethics with respect to the Fund or
in respect of any matter or circumstance that is material to the performance of
the Subadviser's duties hereunder or, if such violation has occurred, that
appropriate action was taken in response to such violation.
11. LIABILITY AND INDEMNIFICATION.
(a) LIABILITY. In the absence of willful misfeasance, bad faith or
negligence on the part of the Subadviser or a breach of its duties hereunder,
the Subadviser shall not be subject to any liability to the Adviser or the Fund
or any of the Fund's shareholders, and, in the absence of willful misfeasance,
bad faith or negligence on the part of the Adviser or a breach of its duties
hereunder, the Adviser shall not be subject to any liability to the Subadviser,
for any act or omission in the case of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of Investments; PROVIDED, HOWEVER, that nothing herein shall relieve the
Adviser and the Subadviser from any of their obligations under applicable law,
including, without limitation, the federal and state securities laws and the
CEA.
(b) INDEMNIFICATION. The Subadviser shall indemnify the Adviser and the
Fund, and their respective officers and directors, for any liability and
expenses, including attorneys' fees, which may be sustained as a result of the
Subadviser's willful misfeasance, bad faith, negligence, breach of its duties
hereunder or violation of applicable law, including, without limitation, the
federal and state securities laws or the CEA. The Adviser shall indemnify the
Subadviser and its officers and directors, for any liability and expenses,
including attorneys' fees, which may be sustained as a result of the Adviser's
willful misfeasance, bad faith, negligence, breach of its duties hereunder or
violation of applicable law, including, without limitation, the federal and
state securities laws or the CEA.
12. DURATION AND TERMINATION.
(a) DURATION. This Agreement shall be submitted for approval by
shareholders of the Fund at the first meeting of shareholders of the Fund
following the effective date of its Registration Statement on Form N-1A covering
the initial offering of shares of the Fund. This Agreement shall continue in
effect for a period of two years from the date hereof, subject thereafter to
being continued in force and effect from year to year if specifically approved
each year by either (i) the Board of Directors of the Fund, or (ii) by the
affirmative vote of a majority of the Fund's outstanding voting securities. In
addition to the foregoing, each renewal of this Agreement must be approved by
the vote of a majority of the Fund's 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. Prior to voting on the
renewal of this Agreement, the Board of Directors of the Fund may request and
evaluate, and the Subadviser shall furnish, such information as may reasonably
be necessary to enable the Fund's Board of Directors to evaluate the terms of
this Agreement.
(b) TERMINATION. Notwithstanding whatever may be provided herein to the
contrary, this Agreement may be terminated at any time, without payment of any
penalty:
(i) By vote of a majority of the Board of Directors of the Fund, or by vote
of a majority of the outstanding voting securities of the Fund, or by the
Adviser, in each case, upon sixty (60) days' written notice to the Subadviser;
(ii) By the Adviser upon breach by the Subadviser of any representation or
warranty contained in Section 8 hereof, which shall not have been cured during
the notice period, upon twenty (20) days written notice;
(iii) By the Adviser immediately upon written notice to the Subadviser if
the Subadviser becomes unable to discharge its duties and obligations under this
Agreement; or
(iv) By the Subadviser upon 180 days written notice to the Adviser and the
Fund.
This Agreement shall terminate automatically in the event of its assignment
(as such term is defined in the Investment Company Act).
13. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to the
Advisory Agreement and shall oversee and review the Subadviser's performance of
its duties under this Agreement. Nothing contained in this Agreement shall
obligate the Adviser to provide any funding or other support for the purpose of
directly or indirectly promoting investments in the Fund.
14. AMENDMENT. This Agreement may be amended by mutual consent of the
parties, provided that the terms of each such amendment shall be approved by the
Board of Directors of the Fund or by a vote of a majority of the outstanding
voting securities of the Fund. If such amendment is proposed in order to comply
with the recommendations or requirements of the Commission or state regulatory
bodies or other governmental authority, or to expressly obtain any advantage
under federal or state or non-U.S. laws, the Adviser shall notify the Subadviser
of the form of amendment which it deems necessary or advisable and the reasons
therefor, and if the Subadviser declines to assent to such amendment, the
Adviser may terminate this Agreement forthwith.
15. CONFIDENTIALITY. Subject to the duties of the Adviser, the Fund and the
Subadviser to comply with applicable law, including any demand of any regulatory
or taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Fund and the actions of the
Subadviser, the Adviser and the Fund in respect thereof.
16. NOTICE. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other party, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Adviser:
Strong Capital Management, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
(b) If to the Subadviser:
X.X. Xxxxxx & Co., Inc.
00 Xxxxxxxx Xxxxx
Xxxxxx Xxxx, X. J. 07302
Attention: Xx. Xxxxx X. Xxxx
Facsimile: (000) 000-0000
(c) If to the Fund:
Strong Dividend Income Fund
c/o Strong Capital Management, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
17. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Wisconsin and the
Subadviser consents to the exclusive jurisdiction of courts, both federal and
state, and venue in Wisconsin, with respect to any dispute arising under or in
connection with this Agreement.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall together constitute one and the same
instrument.
19. CAPTIONS. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
20. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision or applicable law, the remainder of the Agreement
shall not be affected adversely and shall remain in full force and effect.
21. CERTAIN DEFINITIONS.
(a) "Business Day" As used herein, business day means any customary
business day in the United States on which the New York Stock Exchange is open.
(b) MISCELLANEOUS. Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a term or
provision of the Investment Company Act shall be resolved by reference to such
term or provision of the Investment Company Act and to interpretations thereof,
if any, by the U.S. courts or, in the absence of any controlling decisions of
any such court, by rules, regulation or order of the Commission validly issued
pursuant to the Investment Company Act. Specifically, as used herein,
"investment company," "affiliated person," "interested person," "assignment,"
"broker," "dealer" and "affirmative vote of the majority of the Fund's
outstanding voting securities" shall all have such meaning as such terms have in
the Investment Company Act. The term "investment adviser" shall have such
meaning as such term has in the Advisers Act and the Investment Company Act, and
in the event of a conflict between such Acts, the most expansive definition
shall control. In addition, where the effect of a requirement of the Investment
Company Act reflected in any provision of this Agreement is relaxed by a rule,
regulation or order of the Commission, whether of special or general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first written above.
STRONG CAPITAL MANAGEMENT, INC.
By: -----------------------------------------------------
Name:
Title:
Attest:
-----------------------------------------------------
Name:
Title:
X.X. XXXXXX & CO., INC.
(the "Subadviser")
By:
-----------------------------------------------------
Name:
Title:
Attest:
-----------------------------------------------------
Name:
Title: