Exhibit (d)3)(xi)
CDC NVEST STAR ADVISERS FUND
SUB-ADVISORY AGREEMENT
(FUND ASSET MANAGEMENT, L.P. DOING BUSINESS AS MERCURY ADVISORS)
Sub-Advisory Agreement (this "Agreement") entered into as of the 1st day of
September, 2001 by and among CDC Nvest Funds Trust I, a Massachusetts business
trust (the "Trust"), with respect to its CDC Nvest Star Advisers Fund series
(the "Series"), CDC IXIS Asset Management Advisers, L.P., a Delaware limited
partnership (the "Manager"), and Fund Asset Management, L.P., a Delaware limited
partnership doing business as Mercury Advisors (the "Sub-Adviser").
WHEREAS, the Manager has entered into an Advisory Agreement dated October
30, 2000 (the "Advisory Agreement") with the Trust, relating to the provision of
portfolio management and administrative services to the Series;
WHEREAS, the Advisory Agreement provides that the Manager may delegate any
or all of its portfolio management responsibilities under the Advisory Agreement
to one or more sub-advisers;
WHEREAS, the Manager and the trustees of the Trust desire to retain the
Sub-Adviser to render portfolio management services in the manner and on the
terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the Trust, the Manager and the Sub-Adviser agree as
follows:
1. Sub-Advisory Services.
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a. The Sub-Adviser shall, subject to the supervision of the Manager and of
any administrator appointed by the Manager (the "Administrator"), manage the
investment and reinvestment of such portion of the assets of the Series as the
Manager may from time to time allocate to the Sub-Adviser for management (such
portion, the "Segment"), and the Sub-Adviser shall have the authority on behalf
of the Series to vote all proxies and exercise all other rights of the Series as
a security holder of companies in which the Segment from time to time invests.
The Sub-Adviser shall manage the Segment in conformity with (1) the investment
objective, policies and restrictions of the Series set forth in the Trust's
prospectus and statement of additional information relating to the Series, (2)
any additional policies or guidelines established by the Manager or by the
Trust's trustees that have been furnished in writing to the Sub-Adviser and (3)
the provisions of the Internal Revenue Code (the "Code") applicable to
"regulated investment companies" (as defined in Section 851 of the Code), all as
from time to time in effect (collectively, the "Policies"), and with all
applicable provisions of law, including without limitation all applicable
provisions of the Investment Company Act of 1940, as amended (the "1940 Act")
and the rules and regulations thereunder. For purposes of compliance with the
Policies, the Sub-Adviser shall be entitled to treat the Segment as though the
Segment constituted the entire Series, and the Sub-Adviser shall not be
responsible in any way for the compliance of any assets of the Series, other
than with respect to the Segment, with the Policies, or for the compliance of
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the Series, taken as a whole, with the Policies. Subject to the foregoing, the
Sub-Adviser is authorized, in its discretion and without prior consultation with
the Manager, to buy, sell, lend and otherwise trade in any stocks, bonds and
other securities and investment instruments on behalf of the Series, without
regard to the length of time the securities have been held and the resulting
rate of portfolio turnover or any tax considerations; and the majority or the
whole of the Segment may be invested in such proportions of stocks, bonds, other
securities or investment instruments, or cash, as the Sub-Adviser shall
determine. Notwithstanding the foregoing provisions of this Section 1.a;
however, the Sub-Adviser shall, upon written instructions from the Manager,
effect such portfolio transactions for the Segment as the Manager shall
determine are necessary in order for the Series to comply with the Policies.
b. The Sub-Adviser shall furnish the Manager and the Administrator monthly,
quarterly and annual reports concerning portfolio transactions and performance
of the Segment in such form as may be mutually agreed upon, and agrees to review
the Segment and discuss the management of it. The Sub-Adviser shall permit all
books and records with respect to the Segment to be inspected and audited by the
Manager and the Administrator at all reasonable times during normal business
hours, upon reasonable notice. The Sub-Adviser shall also provide the Manager
with such other information and reports as may reasonably be requested by the
Manager from time to time, including without limitation all material requested
by or required to be delivered to the Trustees of the Trust.
c. The Sub-Adviser shall provide to the Manager a copy of the Sub-Adviser's
Form ADV as filed with the Securities and Exchange Commission and a list of the
persons whom the Sub-Adviser wishes to have authorized to give written and/or
oral instructions to custodians of assets of the Series.
2. Obligations of the Manager.
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a. The Manager shall provide (or cause the Series' Custodian (as defined in
Section 3 hereof) to provide) timely information to the Sub-Adviser regarding
such matters as the composition of assets of the Segment, cash requirements and
cash available for investment in the Segment, and all other information as may
be reasonably necessary for the Sub-Adviser to perform its responsibilities
hereunder.
b. The Manager has furnished the Sub-Adviser a copy of its Form ADV, as
well as a copy of the prospectus and statement of additional information of the
Series, and agrees during the continuance of this Agreement to furnish the
Sub-Adviser copies of any revisions or supplements thereto at, or, if
practicable, before the time the revisions or supplements become effective. The
Manager agrees to furnish the Sub-Adviser with minutes of meetings of the
trustees of the Trust applicable to the Series to the extent they may affect the
duties of the Sub-Adviser, and with copies of any financial statements or
reports made by the Series to its shareholders, and any further materials or
information which the Sub-Adviser may reasonably request to enable it to perform
its functions under this Agreement. Until the Manager delivers any revisions or
supplements to the documents described above to the Sub-Adviser, the Sub-Adviser
shall be
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fully protected in relying on the versions of such documents previously
furnished by the Manager to the Sub-Adviser.
3. Custodian. The Manager shall provide the Sub-Adviser with a copy of the
Series' agreement with the custodian designated to hold the assets of the Series
(the "Custodian") and any modifications thereto (the "Custody Agreement"),
copies of such modifications to be provided to the Sub-Adviser a reasonable time
in advance of the effectiveness of such modifications. The assets of the Segment
shall be maintained in the custody of the Custodian identified in, and in
accordance with the terms and conditions of, the Custody Agreement (or any
sub-custodian properly appointed as provided in the Custody Agreement). The
Sub-Adviser shall have no liability for the acts or omissions of the Custodian,
unless such act or omission is taken in reliance upon instruction given to the
Custodian by a representative of the Sub-Adviser properly authorized to give
such instruction under the Custody Agreement. Any assets added to the Series
shall be delivered directly to the Custodian.
4. Proprietary Rights. The parties agree and acknowledge that the
Sub-Adviser and/or its affiliates is the sole owner of the names and marks
"Xxxxxxx Xxxxx", "Fund Asset Management" and "Mercury Advisors" and that all use
of any designation consisting in whole or in part of such names and/or marks
(each, a "Mercury Advisors Xxxx") under this Agreement shall inure to the
benefit of the Sub-Adviser. The Manager on its own behalf and on behalf of the
Series agrees not to use any Mercury Advisors Xxxx in any advertisement or sales
literature or other materials promoting the Series, except with prior written
consent of the Sub-Adviser. Without the prior written consent of the
Sub-Adviser, neither the Manager nor the Trust shall make representations
regarding the Sub-Adviser and/or its affiliates in any disclosure document,
advertisement or sales literature or other materials relating to the Series.
Upon termination of this Agreement for any reason, the Manager and the Trust
shall cease all use of any Mercury Advisors Xxxx as soon as reasonably
practicable.
5. Expenses. Except for expenses specifically assumed or agreed to be paid
by the Sub-Adviser pursuant hereto, the Sub-Adviser shall not be liable for any
organizational, operational or business expenses of the Manager or the Trust
including, without limitation, (a) interest and taxes, (b) brokerage commissions
and other costs in connection with the purchase or sale of securities or other
investment instruments with respect to the Series, and (c) custodian fees and
expenses. Any reimbursement of advisory fees required by any expense limitation
provision of any law shall be the sole responsibility of the Manager. The
Manager and the Sub-Adviser shall not be considered as partners or participants
in a joint venture. The Sub-Adviser will pay its own expenses incurred in
furnishing the services to be provided by it pursuant to this Agreement. Neither
the Sub-Adviser nor any affiliated person thereof shall be entitled to any
compensation from the Manager or the Trust with respect to service by any
affiliated person of the Sub-Adviser as an officer or trustee of the Trust
(other than the compensation to the Sub-Adviser payable by the Manager pursuant
to Section 7 hereof).
6. Purchase and Sale of Assets. Absent instructions from the Manager to the
contrary, the Sub-Adviser shall place all orders for the purchase and sale of
securities for the Segment with brokers or dealers selected by the Sub-Adviser,
which may include brokers or dealers affiliated with the Sub-Adviser, provided
such orders comply with Rule 17e-1 under the 1940 Act in all respects. To the
extent consistent with applicable law, purchase or
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sell orders for the Segment may be aggregated with contemporaneous purchase or
sell orders of other clients of the Sub-Adviser. The Sub-Adviser shall use its
best efforts to obtain execution of transactions for the Segment at prices which
are advantageous to the Series and at commission rates that are reasonable in
relation to the benefits received. However, the Sub-Adviser may select brokers
or dealers on the basis that they provide brokerage, research or other services
or products to the Series and/or other accounts serviced by the Sub-Adviser. To
the extent consistent with applicable law, including Section 28(e) of the
Securities Exchange Act of 1934 (as amended), the Sub-Adviser may pay a broker
or dealer an amount of commission for effecting a securities transaction in
excess of the amount of commission or dealer spread another broker or dealer
would have charged for effecting that transaction if the Sub-Adviser determines
in good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research products and/or services provided by such
broker or dealer. This determination, with respect to brokerage and research
services or products, may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Adviser and its
affiliates have with respect to the Series or to accounts over which they
exercise investment discretion. Not all such services or products need be used
by the Sub-Adviser in managing the Segment.
To the extent permitted by applicable law, and in all instances subject to
the foregoing policy of best execution, the Sub-Adviser may allocate brokerage
transactions in a manner that takes into account the sale of shares of one or
more funds distributed by CDC IXIS Asset Management Distributors, L.P. ("CDC
IXIS Distributors"). In addition, the Sub-Adviser may allocate brokerage
transactions to broker-dealers (including affiliates of CDC IXIS Distributors)
that have entered into arrangements in which the broker-dealer allocates a
portion of the commissions paid by a fund toward the reduction of that fund's
expenses, subject to the policy of best execution.
The Manager agrees that, subject to its fiduciary duties to the Series
arising from its position as Manager of the Series, the Manager shall not
dictate brokerage allocation or selection decisions or investment decisions to
or for the Series, either directly or pursuant to directions given to the
Sub-Adviser by the Manager; provided, however, that nothing in this paragraph
shall prohibit officers of the Trust (who may also be officers or employees of
the Manager) from exercising authority conferred upon them as officers of the
Trust by the Board of Trustees of the Trust in connection with policies
established by the Board of Trustees of the Trust.
7. Compensation of the Sub-Adviser. As full compensation for all services
rendered, facilities furnished and expenses borne by the Sub-Adviser hereunder,
the Sub-Adviser shall be paid at the annual rate of 0.55% of the first $300
million of the Segment's average daily net assets and 0.50% of such assets in
excess of $300 million. Such compensation shall be paid by the Trust (except to
the extent that the Trust, the Sub-Adviser and the Manager otherwise agree in
writing from time to time). Such compensation shall be payable monthly in
arrears or at such other intervals, not less frequently than quarterly, as the
Manager is paid by the Series pursuant to the Advisory Agreement.
8. Non-Exclusivity. The Manager and the Series agree that the services of
the Sub-Adviser are not to be deemed exclusive and that the Sub-Adviser and its
affiliates are free to act as investment manager and provide other services to
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various investment companies and other managed accounts, except as the
Sub-Adviser and the Manager or the Administrator may otherwise agree from time
to time in writing before or after the date hereof. This Agreement shall not in
any way limit or restrict the Sub-Adviser or any of its directors, officers,
employees or agents from buying, selling or trading any securities or other
investment instruments for its or their own account or for the account of others
for whom it or they may be acting, provided that such activities do not
adversely affect or otherwise impair the performance by the Sub-Adviser of its
duties and obligations under this Agreement. The Manager and the Series
recognize and agree that the Sub-Adviser may provide advice to or take action
with respect to other clients, which advice or action, including the timing and
nature of such action, may differ from or be identical to advice given or action
taken with respect to the Series. The Sub-Adviser shall for all purposes hereof
be deemed to be an independent contractor and shall, unless otherwise provided
or authorized, have no authority to act for or represent the Series or the
Manager in any way or otherwise be deemed an agent of the Series or the Manager.
9. Liability. Except as may otherwise be provided by the 1940 Act or other
federal securities laws, neither the Sub-Adviser, its affiliates, nor any of
their officers, directors, partners, employees or agents (the "Indemnified
Parties") shall be subject to any liability to the Manager, the Trust, the
Series or any past, present or future shareholder of the Series for any error of
judgment, any mistake of law or any loss arising out of any investment or other
act or omission in the course of, connected with, or arising out of any service
to be rendered under this Agreement, except by reason of willful misfeasance,
bad faith or gross negligence in the performance of the Sub-Adviser's duties or
by reason of reckless disregard by the Sub-Adviser of its obligations and duties
hereunder. The Manager shall hold harmless and indemnify the Indemnified Parties
for any loss, liability, cost, damage or expense (including reasonable attorneys
fees and costs) arising from any claim or demand that is not based upon the
obligations of the Sub-Adviser with respect to the Segment under this Agreement.
Without limiting the foregoing, it is expressly understood and agreed that
the Manager and the Series shall hold harmless and indemnify the Indemnified
Parties for any loss, liability, cost, damage or expense (including reasonable
attorneys fees and cost) arising from any claim or demand that is based upon the
obligations of the Sub-Adviser with respect to the Segment under this Agreement,
except for losses arising out of the Sub-Adviser's willful misfeasance, bad
faith or gross negligence in the performance of its duties or out of the
Sub-Adviser's reckless disregard of its obligations and duties hereunder.
The Manager acknowledges and agrees that the Sub-Adviser makes no
representation or warranty, expressed or implied, that any level of performance
or investment result will be achieved by the Series or the Segment or that the
Series or the Segment will perform comparably with any standard or index,
including other clients of the Sub-Adviser, whether public or private.
10. Effective Date and Termination. This Agreement shall become effective
as of the date of its execution, and
a. unless otherwise terminated, this Agreement shall continue in effect for
two years from the date of execution, and from year to year thereafter so long
as such continuance is specifically approved at least annually (i) by the Board
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of Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the Series, and (ii) by vote of a majority of the trustees of the
Trust who are not interested persons of the Trust, the Manager or the
Sub-Adviser, cast in person at a meeting called for the purpose of voting on
such approval;
b. this Agreement may at any time be terminated on sixty days' written
notice to the Sub-Adviser either by vote of the Board of Trustees of the Trust
or by vote of a majority of the outstanding voting securities of the Series;
c. this Agreement shall automatically terminate in the event of its
assignment or upon the termination of the Advisory Agreement; and
d. this Agreement may be terminated by the Sub-Adviser on ninety days'
written notice to the Manager and the Trust, or by the Manager on ninety days'
written notice to the Sub-Adviser.
Termination of this Agreement pursuant to this Section 10 shall be without
the payment of any penalty.
11. Amendment. This Agreement may be amended at any time by mutual consent
of the Manager and the Sub-Adviser, provided that, if required by law, such
amendment shall also have been approved by vote of a majority of the outstanding
voting securities of the Series and by vote of a majority of the trustees of the
Trust who are not interested persons of the Trust, the Manager or the
Sub-Adviser, cast in person at a meeting called for the purpose of voting on
such approval.
12. Certain Definitions. For the purpose of this Agreement, the terms "vote
of a majority of the outstanding voting securities," "interested person,"
"affiliated person" and "assignment" shall have their respective meanings
defined in the 1940 Act, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under the 1940 Act.
13. General.
a. The Sub-Adviser may perform its services through any employee, officer
or agent of the Sub-Adviser, and the Manager shall not be entitled to the
advice, recommendation or judgment of any specific person; provided, however,
that the persons identified in the prospectus of the Series shall perform the
day-to-day portfolio management duties described therein until the Sub-Adviser
notifies the Manager that one or more other employees, officers or agents of the
Sub-Adviser, identified in such notice, shall assume such duties as of a
specific date.
b. If any term or provision of this Agreement or the application thereof to
any person or circumstances is held to be invalid or unenforceable to any
extent, the remainder of this Agreement or the application of such provision to
other persons or circumstances shall not be affected thereby and shall be
enforced to the fullest extent permitted by law.
c. In accordance with Regulation S-P, if non-public personal information
regarding either party's customers or consumers is disclosed to the other party
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in connection with this Agreement, the party receiving such information will not
disclose or use that information other than as necessary to carry out the
purposes of this Agreement.
d. This Agreement shall be governed by and interpreted in accordance with
the laws of the Commonwealth of Massachusetts.
CDC IXIS ASSET MANAGEMENT ADVISERS, L.P.
By CDC IXIS Asset Management Distribution Corporation, its general partner
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: President
FUND ASSET MANAGEMENT, L.P., doing business as MERCURY ADVISORS
By Princeton Services, Inc.,
its general partner
By:/s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Executive Vice President
CDC NVEST FUNDS TRUST I,
on behalf of its CDC Nvest Star Advisers Fund series
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: President
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NOTICE
A copy of the Agreement and Declaration of Trust establishing CDC Nvest
Funds Trust I (the "Fund") is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed with
respect to the Fund's CDC Nvest Star Advisers Fund series (the "Series") on
behalf of the Fund by officers of the Fund as officers and not individually and
that the obligations of or arising out of this Agreement are not binding upon
any of the trustees, officers or shareholders individually but are binding only
upon the assets and property belonging to the Series.
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