Exhibit (d)(5)
FORWARD FUNDS, INC.
SUBADVISORY AGREEMENT
AGREEMENT, effective as of May 3, 1999, among Uniplan, Inc. (the
"Subadviser" or "Uniplan"), Forward Funds, Inc. (the "Company"), and Xxxxxxx
Investment Management Co., LLC (the "Adviser") on behalf of The Real Estate
Investment Fund (the "Fund"), a series of the Company.
WHEREAS, the Company is a Maryland corporation of the series type organized
under Articles of Incorporation dated October 3, 1997 (the "Articles") and is
registered under the Investment Company Act of 1940, as amended (the "1940 Act")
as an open-end, diversified management investment company, and the Fund is a
series of the Company; and
WHEREAS, the Adviser has been retained by the Company to provide investment
advisory services to the Fund with regard to the Fund's investments as further
described in the Company's registration statement on Form N-1A (the
"Registration Statement") pursuant to an Amended and Restated Investment
Management Agreement dated May 3, 1999 ("Investment Management Agreement"); and
WHEREAS, the Fund's Board of Directors, including a majority of the
directors who are not "interested persons," as defined in the 1940 Act, and the
Fund's stockholders have approved the appointment of the Subadviser to perform
certain investment advisory services for the Company, on behalf of the Fund
pursuant to this Subadvisory Agreement and as described in the Registration
Statement and the Subadviser is willing to perform such services for the Fund;
and
WHEREAS, the Subadviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the Adviser and the Subadviser as follows:
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the Adviser and the Subadviser as follows:
1. Appointment. The Adviser hereby appoints the Subadviser to perform
advisory services to the Fund for the periods and on the terms set forth in this
Subadvisory Agreement. The Subadviser accepts such appointment and agrees to
furnish the services herein set forth, for the compensation herein provided.
2. Investment Advisory Duties. Subject to the supervision of the Board of
Directors of the Fund and the Adviser, the Subadviser will, in coordination with
the Adviser, (a) provide a program of continuous investment management for the
Fund in accordance with the Fund's investment objectives, policies and
limitations as stated in the Fund's Prospectus and Statement of Additional
Information included as part of the Fund's Registration Statement filed with the
Securities and Exchange Commission, as they may be amended from time to time,
copies of
which shall be provided to the Subadviser by the Adviser; (b) make investment
decisions for the Fund; and (c) place orders to purchase and sell securities for
the Fund.
In performing its investment management services for the Fund under the
terms of this Agreement, the Subadviser will provide the Fund with ongoing
investment guidance and policy direction.
The Subadviser further agrees that, in performing its duties
hereunder, it will:
(a) comply with the 1940 Act and all rules and regulations thereunder, the
Advisers Act, the Internal Revenue Code (the "Code") and all other applicable
federal and state laws and regulations, and with any applicable procedures
adopted by the Directors;
(b) use reasonable efforts to manage the Fund so that it will qualify, and
continue to qualify, as a regulated investment company under Subchapter M of the
Code and regulations issued thereunder;
(c) place orders pursuant to its investment determinations for the Fund, in
accordance with applicable policies expressed in the Fund's Prospectus and/or
Statement of Additional Information established through written guidelines
determined by the Fund and provided to the Subadviser, and in accordance with
applicable legal requirements;
(d) furnish to the Company and the Adviser whatever statistical information
the Company, or the Adviser may reasonably request with respect to the Fund's
assets or contemplated investments. In addition, the Subadviser will keep the
Company, the Adviser and the Directors informed of developments materially
affecting the Fund's portfolio and shall, on the Subadviser's own initiative,
furnish to the Fund from time to time whatever information the Subadviser
believes appropriate for this purpose;
(e) make available to the Fund's administrator, First Data Investor
Services Group, Inc. (the "Administrator"), the Adviser and the Company,
promptly upon their request, such copies of its investment records and ledgers
with respect to the Fund as may be required to assist the Adviser, the
Administrator and the Company in their compliance with applicable laws and
regulations. The Subadviser will furnish the Directors, the Administrator, the
Adviser and the Company with such periodic and special reports regarding the
Fund as they may reasonably request;
(f) meet quarterly with the Adviser and the Company's Board of Directors to
explain its investment management activities, and any reports related to the
Fund as may reasonably be requested by the Adviser and/or the Company;
(g) immediately notify the Adviser and the Fund in the event that the
Subadviser or any of its affiliates: (1) becomes aware that it is subject to a
statutory disqualification that prevents the Subadviser from serving as an
investment adviser pursuant to this Subadvisory Agreement; or (2) becomes aware
that it is the subject of an administrative proceeding or enforcement action by
the Securities and Exchange Commission ("SEC") or other regulatory authority.
The Subadviser further agrees to notify the Fund and the Adviser immediately of
any material fact known to the Subadviser respecting or relating to the
Subadviser that is not contained in the Fund's Registration Statement, or any
amendment or supplement thereto, but that is required to
be disclosed therein, and of any statement contained therein that becomes untrue
in any material respect; and
(h) in making investment decisions for the Fund, use no inside information
that may be in its possession or in the possession of any of its affiliates, nor
will the Subadviser seek to obtain any such information.
3. Futures and Options. The Subadviser's investment authority shall include
the authority to purchase, sell, cover open positions, and generally to deal in
financial futures contracts and options thereon.
The Subadviser will: (i) open and maintain brokerage accounts for financial
futures and options (such accounts hereinafter referred to as "Brokerage
Accounts") on behalf of and in the name of the Fund; and (ii) execute for and on
behalf of the Brokerage Accounts, standard customer agreements with a broker or
brokers. The Subadviser may, using such of the securities and other property in
the Brokerage Accounts as the Subadviser deems necessary or desirable, direct
the custodian to deposit on behalf of the Fund, original and maintenance
brokerage deposits and otherwise direct payments of cash, cash equivalents and
securities and other property into such brokerage accounts and to such brokers
as the Subadviser deems desirable or appropriate.
4. Investment Guidelines. The Company or the Adviser shall supply the
Subadviser with such information as the Subadviser shall reasonably require
concerning the Fund's investment policies, restrictions, limitations, tax
position, liquidity requirements and other information useful in managing the
Fund's investments.
5. Use of Securities Brokers and Dealers. Purchase and sale orders will
usually be placed with brokers which are selected by the Subadviser as able to
achieve "best execution" of such orders. "Best execution" shall mean prompt and
reliable execution at the most favorable securities price, taking into account
the other provisions hereinafter set forth. Whenever the Subadviser places
orders, or directs the placement of orders, for the purchase or sale of
portfolio securities on behalf of the Fund, in selecting brokers or dealers to
execute such orders; the Subadviser is expressly authorized to consider the fact
that a broker or dealer has furnished statistical, research or other information
or services which enhance the Subadviser's research and portfolio management
capability generally. It is further understood in accordance with Section 28(e)
of the Securities Exchange Act of 1934, as amended, that the Subadviser may
negotiate with and assign to a broker a commission which may exceed the
commission which another broker would have charged for effecting the transaction
if the Subadviser determines in good faith that the amount of commission charged
was reasonable in relation to the value of brokerage and/or research services
(as defined in Section 28(e)) provided by such broker, viewed in terms either of
the Fund or the Subadviser's overall responsibilities to the Subadviser's
discretionary accounts. Neither the Subadviser nor any parent, subsidiary or
related firm shall act as a securities broker with respect to any purchases or
sales of securities which may be made on behalf of the Fund.
Neither the Subadviser nor any parent, subsidiary or related firm shall act
as a securities broker with respect to any purchases or sales of securities
which may be made on behalf of the Fund. Unless otherwise directed by the
Company or the Adviser in writing, the Subadviser may utilize the service of
whatever independent securities brokerage firm or firms it deems
appropriate to the extent that such firms are competitive with respect to price
of services and execution.
6. Compensation. For its services specified in this Agreement, the Adviser
agrees to pay annual fees to the Subadviser equal to 0.60% of the first $100
million of Fund assets managed by the Adviser, 0.55% on the next $400 million
under management, and 0.45% on all assets above $500 million managed by the
Adviser. Fees shall be computed and accrued daily and paid monthly based on the
average daily net asset value of shares of the Fund as determined according to
the manner provided in the then-current Prospectus of the Fund.
7. Fees and Expenses. The Subadviser shall not be required to pay any
expenses of the Fund other than those specifically allocated to the Subadviser
in this section 7. In particular, but without limiting the generality of the
foregoing, the Subadviser shall not be responsible for the following expenses of
the Fund: organization and certain offering expenses of the Fund (including
out-of-pocket expenses, but not including the Subadviser's overhead and employee
costs); fees payable to the Subadviser and to any other Fund advisers or
consultants; legal expenses; auditing and accounting expenses; interest
expenses; taxes and governmental fees; fees, dues and expenses incurred by or
with respect to the Fund in connection with membership in investment company
trade organizations; cost of insurance relating to fidelity coverage for the
Company's officers and employees; fees and expenses of the Fund's Administrator
or of any custodian, subcustodian, transfer agent, registrar, or dividend
disbursing agent of the Fund; payments to the Administrator for maintaining the
Fund's financial books and records and calculating its daily net asset value;
other payments for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; expenses of preparing share
certificates; other expenses in connection with the issuance, offering,
distribution or sale of securities issued by the Fund; expenses relating to
investor and public relations; expenses of registering and qualifying shares of
the Fund for sale; freight, insurance and other charges in connection with the
shipment of the Fund's portfolio securities; brokerage commissions or other
costs of acquiring or disposing of any portfolio securities or other assets of
the Fund, or of entering into other transactions or engaging in any investment
practices with respect to the Fund; expenses of printing and distributing
prospectuses, Statements of Additional Information, reports, notices and
dividends to stockholders; costs of stationery or other office supplies; any
litigation expenses; costs of stockholders' and other meetings; the compensation
and all expenses (specifically including travel expenses relating to the Fund's
business) of officers, directors and employees of the Company who are not
interested persons of the Investment Manager; and travel expenses (or an
appropriate portion thereof) of officers or directors of the Company who are
officers, directors or employees of the Investment Manager to the extent that
such expenses relate to attendance at meetings of the Board of Directors of the
Company with respect to matters .concerning the Fund, or any committees thereof
or advisers thereto.
8. Books and Records. The Subadviser agrees to maintain such books and
records with respect to its services to the Fund as are required by Section 31
under the 1940 Act, and rules adopted thereunder, and by other applicable legal
provisions, and to preserve such records for the periods and in the manner
required by that Section, and those rules and legal provisions. The Subadviser
also agrees that records it maintains and preserves pursuant to Rules 31a-1 and
Rule 31a-2 under the 1940 Act and otherwise in connection with its services
hereunder are the property of the Fund and will be surrendered promptly to the
Company upon its request except that the Subadviser may retain copies of such
documents as may be required by law. The Subadviser further agrees that it will
furnish to regulatory authorities having the requisite authority any information
or reports in connection with its services hereunder which may be
requested in order to determine whether the operations of the Fund are being
conducted in accordance with applicable laws and regulations.
9. Aggregation of Orders. Provided the investment objectives, policies and
restrictions of the Fund are adhered to, the Fund agrees that the Subadviser may
aggregate sales and purchase orders of securities held in the Fund with similar
orders being made simultaneously `for other accounts managed by the Subadviser
or with accounts of the affiliates of the Subadviser, if in the Subadviser's
reasonable judgment such aggregation shall result in an overall economic benefit
to the Fund taking into consideration the advantageous selling or purchase
price, brokerage commission and other expenses. The Fund acknowledges that the
determination of such economic benefit to the Fund by the Subadviser represents
the Subadviser's evaluation that the Fund is benefited by relatively better
purchase or sales prices, lower commission expenses and beneficial timing of
transactions or a combination of these and other factors.
10. Liability.
a. Neither the Subadviser nor its officers, directors, employees,
affiliates, agents or controlling persons shall be liable to the
Company, the Adviser, the Fund, its shareholders and/or any other
person for the acts, omissions, errors of judgment and/or mistakes of
law of any other fiduciary and/or person with respect to the Fund.
b. Neither the Subadviser nor its officers, directors, employees,
affiliates; agents or controlling persons or assigns shall be liable
for any act, omission, error of judgment or mistake of law and/or for
any loss suffered by the Company, the Adviser, the Fund, its
shareholders and/or any other person in connection with the matters to
which this Agreement relates; provided that no provision of this
Agreement shall be deemed to protect the Subadviser against any
liability to the Company, the Adviser, the Fund and/or its
shareholders which it might otherwise be subject by reason of any
willful misfeasance, bad faith or gross negligence in the performance
of its duties or the reckless disregard of its obligations and duties
under this Agreement.
c. The Company on behalf of the Fund, hereby agrees to indemnify and hold
harmless the Subadviser, its directors, officers and employees and
agents and each person, if any, who controls the Subadviser
(collectively, the "Indemnified Parties") against any and all losses,
claims damages or liabilities (including reasonable attorneys fees and
expenses), joint or several, relating to the Adviser, the Company or
Fund, to which any such Indemnified Party may become subject under the
Securities Act of 1933, as amended (the "1933 Act"), the 1934 Act, the
Investment Advisers Act of 1940, as amended (the "Advisers Act") or
other federal or state statutory law or regulation, at common law or
otherwise; insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (1) any
act, omission, error and/or mistake of any other fiduciary and/or any
other person; or (2) any untrue statement or alleged untrue statement
of a material fact or any omission or alleged omission to state a
material fact required to be stated or necessary to make the
statements made not misleading in (a) the Registration Statement, the
prospectus or any other filing, (b) any advertisement or sales
literature authorized by the Company for use in the offer and sale of
shares of the Fund, or (c) any application or other document
filed in connection with the qualification of the Company or shares of
the Fund under the Blue Sky or securities laws of any jurisdiction,
except insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any such
untrue statement or omission or alleged untrue statement or omission
(i) in a document prepared by the Subadviser, or (ii) made in reliance
upon and in conformity with information furnished to the Company by or
on behalf of the Subadviser pertaining to or originating with the
Subadviser for use in connection with any document referred to in
clauses (a), (b) or (c).
d. It is understood, however, that nothing in this paragraph 10 shall
protect any Indemnified Party against, or entitle any Indemnified
Party to, indemnification against any liability to the Company, the
Adviser, Fund and/or its shareholders to which such Indemnified Party
is subject, by reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of any
reckless disregard of its obligations and duties under this Agreement.
11. Services Not Exclusive. It is understood that the services of the
Subadviser are not exclusive, and that nothing in this Agreement shall prevent
the Subadviser from providing similar services to other investment companies or
to other series of investment companies, including the Company (whether or not
their investment objectives and policies are similar to those of the Fund) or
from engaging in other activities, provided such other services and activities
do not, during the term of this Agreement, interfere in a material manner with
the Subadviser's ability to meet its obligations to the Fund hereunder. When the
Subadviser recommends the purchase or sale of a security for other investment
companies and other clients, and at the same time the Subadviser recommends the
purchase or sale of the same security for the Fund, it is understood that in
light of its fiduciary duty to the Fund, such transactions will be executed on a
basis that is fair and equitable to the Fund. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither the
Subadviser nor any of its directors, officers or employees shall act as a
principal or agent or receive any commission. If the Subadviser provides any
advice to its clients concerning the shares of the Fund, the Subadviser shall
act solely as investment counsel for such clients and not in any way on behalf
of the Company or the Fund.
The Subadviser provides investment advisory services to numerous other
funds and bank collective funds and may give advice and take action which may
differ from the timing or nature of action taken by the Subadviser with respect
to the Fund. Nothing in this Agreement shall impose upon the Subadviser any
obligations other than those imposed by law to purchase, sell or recommend for
purchase or sale, with respect to the Fund, any security which the Subadviser,
or the shareholders, officers, directors, employees or affiliates may purchase
or sell for their own account or for the account of any client.
12. Duration and Termination. This Agreement shall continue until May 3,
2001, and thereafter shall continue automatically for successive annual periods,
provided such continuance is specifically approved at least annually by (i) the
Directors or (ii) a vote of a "majority" (as defined in the 0000 Xxx) of the
Fund's outstanding voting securities (as defined in the 1940 Act), provided that
in either event the continuance is also approved by a majority of the Directors
who ate not parties to this Agreement or "interested persons" (as defined in the
0000 Xxx) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. Notwithstanding the
foregoing, this Agreement may be terminated: (a) at any time
without penalty by the Fund upon the vote of a majority of the Directors or by
vote of the majority of the Fund's outstanding voting securities, upon sixty
(60) days' written notice to the Subadviser; (b) by the Adviser at any time
without penalty, upon sixty (60) days' written notice to the Subadviser or (c)
by the Subadviser at any time without penalty, upon sixty (60) days' written
notice to the Company. This Agreement will also terminate automatically in the
event of its assignment (as defined in the 1940 Act). Any termination of this
Agreement will be without prejudice to the completion of transactions already
initiated by the Subadviser on behalf of the Fund at the time of such
termination. The Subadviser shall take all steps reasonably necessary after such
termination to complete any such transactions and is hereby authorized to take
such steps.
13. Amendments. This Agreement may be amended at any time but only by the
mutual agreement of the parties.
14. Proxies. Unless the Company gives written instructions to the contrary,
the Subadviser shall vote all proxies solicited by or with respect to the
issuers of securities invested in by the Fund. The Subadviser shall maintain a
record of how the Subadviser voted and such record shall be available to the
Company upon its request. The Subadviser shall use its best good faith judgment
to vote such proxies in a manner which best serves the interests of the Fund's
shareholders.
15. Notices. Any written notice required by or pertaining to this Agreement
shall be personally delivered to the party for whom it is intended, at the
address stated below, or shall be sent to such party by prepaid first class mail
or facsimile.
If to the Company:
Forward Funds, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
If to the Subadviser:
Uniplan, Inc.
000 X. Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
If to the Adviser:
Xxxxxxx Investment Management Co., LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
16. Confidential Information. The Subadviser shall maintain the strictest
confidence regarding the business affairs of the Fund: Written reports furnished
by the Subadviser to the Company and the Adviser shall be treated by all of the
parties as confidential and for. the exclusive use and benefit of the Company
and the Fund except as disclosure may be required by applicable law.
17. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State of
California, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC
thereunder.
(b) Concurrently with the execution of this Agreement, the Subadviser is
delivering to the Adviser and the Company a copy of Part II of its Form ADV, as
revised, on file with the Securities and Exchange Commission. The Adviser and
the Company hereby acknowledge receipt of such copy.
(c) The captions of this Agreement are included for convenience only and in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
(d) 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 hereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(f) Nothing herein shall be construed as constituting the Subadviser as an
agent of the Company or the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of May 3, 1999.
FORWARD FUNDS, INC.
By: /s/ Xxxxxx Xxxxxx
------------------------------------
President
UNIPLAN, INC.
By: /s/ X. Xxxxxxxxx
------------------------------------
Name: X. Xxxxxxxxx
Title: President
XXXXXXX INVESTMENT MANAGEMENT
CO., LLC
By: /s/ Xxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Managing Director
