Exhibit 99(d)(viii)
SUB-ADVISORY AGREEMENT
This Sub-Advisory Agreement is made as of the 1st day of January, 2005, by
and between The NCF Investment Department of New Covenant Trust Company, N.A.
(the "Adviser") and Santa ▇▇▇▇▇▇▇ Asset Management, Inc. (the "Sub-Adviser").
WHEREAS, pursuant to an agreement dated as of June 30th, 1999 (the
"Advisory Agreement") as amended and restated on May 14, 2001, the Adviser
serves as investment adviser to New Covenant Funds, a Delaware business trust
and an open-end management investment company (the "Trust"), which has filed a
registration statement (the "Registration Statement") under the Investment
Company Act of 1940, as amended (the "1940 Act") and the Securities Act of 1933;
and
WHEREAS, the Trust is comprised of four separate investment portfolios, one
of which is New Covenant Growth Fund (the "Fund"); and
WHEREAS, the Adviser desires to avail itself of the services, information,
advice, assistance and facilities of an investment adviser experienced in the
management of a portfolio of securities to assist the Adviser in performing
services for a portion of the Fund; and
WHEREAS, the Sub-Adviser represents that it has the legal power and
authority to perform the services contemplated hereunder without violation of
applicable law (including the Investment Advisers Act of 1940), and desires to
provide such services to the Trust and the Adviser.
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
Section 1. Appointment of the Sub-Adviser. The Adviser hereby appoints the
Sub-Adviser to provide a continuous investment program for that portion of the
Fund designated by the Adviser as assigned to the Sub-Adviser (the "Segment" of
the Fund), subject to such written instructions and supervision as the Adviser
may from time to time furnish. The Sub-Adviser hereby accepts such appointment
and agrees to render the services and to assume the obligations herein set forth
for the compensation herein provided. The Sub-Adviser will provide the services
under this Agreement with respect to the Segment in accordance with the Fund's
investment objective, policies and applicable restrictions as stated in the
Fund's most recent Prospectus and Statement of Additional Information and as the
same may, from time to time, be supplemented or amended and in resolutions of
the Trust's Board of Trustees. The Adviser agrees to furnish to the Sub-Adviser
from time to time copies of all Prospectuses and Statements of Additional
Information and of all amendments of, or supplements to, such Prospectuses and
Statements of Additional Information and of all resolutions of the Trust's Board
of Trustees applicable to the Sub-Adviser's services hereunder. The Sub-Adviser
shall for all purposes herein be deemed to be an independent contractor and
shall, except as expressly provided or authorized (whether herein or otherwise),
have no authority to act for or represent the Adviser, the Fund or the Trust in
any way.
Section 2. Sub-Advisory Services. Subject to such written instructions and
supervision as the Adviser may from time to time furnish, the Sub-Adviser will
provide an investment program for the Segment, including investment research and
management with respect to securities and investments, including cash and cash
equivalents in the Segment, and will determine from time to time what
securities and other investments will be purchased, retained or sold by and
within the Segment. The Sub-Adviser will implement such determinations through
the placement, on behalf of the Fund, of orders for the execution of portfolio
transactions through such brokers or dealers as it may select. The Adviser will
instruct the Trust's Custodian to forward promptly to the Adviser proxy and
other materials relating to the exercise of such shareholder rights and the
Adviser will determine from time to time the manner in which voting rights,
rights to consent to corporate action and other rights pertaining to the Fund's
investments should be exercised.
In fulfilling its responsibilities hereunder, the Sub-Adviser agrees that
it will:
(a) use the same skill and care in providing such services as it uses in
providing services to other fiduciary accounts for which it has
investment responsibilities;
(b) conform with all applicable rules and regulations of the United States
Securities and Exchange Commission ("SEC") and in addition will
conduct its activities under this Agreement in accordance with any
applicable regulations of any government authority pertaining to the
investment advisory activities of the Sub-Adviser and shall furnish
such written reports or other documents substantiating such compliance
as the Adviser reasonably may request from time to time;
(c) not make loans to any person to purchase or carry shares of beneficial
interest in the Trust or make loans to the Trust;
(d) place orders pursuant to investment determinations for the Fund either
directly with the issuer or with an underwriter, market maker or
broker or dealer. In placing orders, the Sub-Adviser will use its
reasonable best efforts to obtain best execution of such orders.
Consistent with this obligation, the Sub-Adviser may, to the extent
permitted by law, effect portfolio securities transactions through
brokers and dealers who provide brokerage and research services
(within the meaning of Section 28(e) of the Securities Exchange Act of
1934) to or for the benefit of the Fund and/or other accounts over
which the Sub-Adviser exercises investment discretion. Subject to the
review of the Trust's Board of Trustees from time to time with respect
to the extent and continuation of the policy, the Sub-Adviser is
authorized to cause the Fund to pay a broker or dealer who provides
such brokerage and research services a commission for effecting a
securities transaction for the Fund which is in excess of the amount
of commission another broker or dealer would have charged for
effecting that transaction if the Sub-Adviser determines in good faith
that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the overall
responsibilities of the Sub-Adviser with respect to the accounts as to
which it exercises investment discretion. The Trust or the Adviser
may, from time to time in writing, direct the Sub-Adviser to place
orders through one or more brokers or dealers and, thereafter, the
Sub-Adviser will have no responsibility for ensuring best execution
with respect to such orders. In no instance will portfolio securities
be purchased from or sold to the Sub-Adviser or any affiliated person
of the Sub-Adviser as principal except as may be permitted by the 1940
Act or an exemption therefrom. If the Sub-Adviser determines in good
faith that the transaction is in the best interest of each client,
securities may be purchased on behalf of the Fund from,
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or sold on behalf of the Fund to, another client of the Sub-Adviser in
compliance with Rule 17a-7 under the 1940 Act;
(e) maintain all necessary or appropriate records with respect to the
Fund's securities transactions for the Segment in accordance with all
applicable laws, rules and regulations, including but not limited to
Section 31 (a) of the 1940 Act, and will furnish the Trust's Board of
Trustees and the Adviser such periodic and special reports as the
Board and Adviser reasonably may request;
(f) treat confidentially and as proprietary information of the Adviser and
the Trust all records and other information relative to the Adviser
and the Trust and prior, present, or potential shareholders, and will
not use such records and information for any purpose other than the
performance of its responsibilities and duties hereunder, except that
subject to prompt notification to the Trust and the Adviser, the
Sub-Adviser may divulge such information to its independent auditors
and regulatory authorities, or when so requested by the Adviser and
the Trust; provided, however, that nothing contained herein shall
prohibit the Sub-Adviser from (1) advertising or soliciting the public
generally with respect to other products or services, regardless of
whether such advertisement or solicitation may include prior, present
or potential shareholders of the Fund or (2) including the Adviser and
Trust on its general list of disclosable clients.
(g) maintain its policy and practice of conducting its fiduciary functions
independently. In making investment decisions for the Fund, the
Sub-Adviser's personnel will not inquire or take into consideration
whether the issuers of securities proposed for purchase or sale for
the Fund's account are customers of the Adviser, other sub-advisers,
the Sub-Adviser or of their respective parents, subsidiaries or
affiliates. In dealing with such customers, the Sub-Adviser and its
subsidiaries and affiliates will not inquire or take into
consideration whether securities of those customers are held by the
Trust; and
(h) render, upon request of the Adviser or the Trust's Board of Trustees,
written reports concerning the investment activities of the
Sub-Adviser with respect to the Sub-Adviser's Segment of the Fund.
Section 3. Expense. During the term of this Agreement, the Sub-Adviser will
pay all expenses incurred by it in performing its services under this Agreement.
The Sub-Adviser shall not be liable for any expenses of the Adviser or the
Trust, including without limitation (a) their 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 Fund and (c)
custodian fees and expenses.
Section 4. Records. In compliance with the requirements of Rule 3la-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records, if any, which it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Adviser or the Trust any such records upon the
Adviser's or the Trust's request and that such records shall be available for
inspection by the SEC. The Sub-Adviser further agrees to preserve for the
periods and at the places prescribed by Rule 3la-2 under the 1940 Act the
records required to be maintained by Rule 31a-1 under the 1940 Act.
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Section 5. Compensation of the Sub-Adviser.
(a) In consideration of services rendered pursuant to this Agreement, the
Adviser will pay the Sub-Adviser a fee, in arrears, equal to an annual rate in
accordance with Schedule A hereto, paid quarterly.
(b) Such fee for each calendar quarter shall be calculated based on the
average of the market value of the assets under management as of the end of each
of the three months in the quarter just ended, as provided by the Adviser.
(c) If the Sub-Adviser should serve for less than the whole of any calendar
quarter, its compensation shall be determined as provided above on the basis of
the ending market value of the assets managed in the month in which the
termination occurs and shall be payable on a pro rata basis for the period of
the calendar quarter for which it has served as Sub-Adviser hereunder.
Section 6. Services Not Exclusive. The services of the Sub-Adviser
hereunder are not to be deemed exclusive, and the Sub-Adviser shall be free to
render similar services to others and to engage in other activities, so long as
the services rendered hereunder are not impaired. It is understood that the
action taken by the Sub-Adviser under this Agreement may differ from the advice
given or the timing or nature of action taken with respect to other clients of
the Sub-Adviser, and that a transaction in a specific security may not be
accomplished for all clients of the Sub-Adviser at the same time or at the same
price.
Section 7. Use of Names. The Adviser shall not use the name, logo, trade or
service ▇▇▇▇ or derivative of the foregoing of the Sub-Adviser or any of the
Sub-Adviser's affiliates in any prospectus, sales literature or other materials
whether or not relating to the Trust in any manner not approved prior thereto by
the Sub-Adviser; provided, however, that the Sub-Adviser shall approve all uses
of its or its affiliate's name which merely refer in accurate terms to its
appointment hereunder or which are required by the SEC or a state securities
commission; and, provided further, that in no event shall such approval be
unreasonably withheld. The Sub-Adviser shall not use the name of the Trust, the
Fund or the Adviser in any materials relating to the Sub-Adviser in any manner
not approved prior thereto by the Adviser; provided, however, that the Adviser
shall approve all uses of its and the Fund's or the Trust's name which merely
refer in accurate terms to the appointment of the Sub-Adviser hereunder,
including placing the Trust's or the Adviser's name on the Sub-Adviser's list of
representative clients, or which are required by the SEC or a state securities
commission, and, provided further, that in no event shall such approval be
unreasonably withheld.
Section 8. Liability of the Sub-Adviser. Absent willful misfeasance, bad
faith, gross negligence, or reckless disregard of obligations or duties
hereunder on the part of the Sub-Adviser, or loss resulting from breach of
fiduciary duty, the Sub-Adviser shall not be liable for any act or omission in
the course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
Notwithstanding the foregoing, neither the Adviser nor the Trust shall be deemed
to have waived any rights it may have against the Sub-Adviser under federal or
state securities laws.
The Sub-Adviser shall indemnify and hold harmless the Trust and the Adviser
(and its affiliated companies and their respective officers, directors and
employees) from any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) arising
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out of or in connection with the willful misfeasance, bad faith, gross
negligence, or reckless disregard of obligations or duties including breach of
fiduciary duty, hereunder of the Sub-Adviser.
The Adviser shall hold harmless and indemnify the Sub-Adviser for any loss,
liability, cost, damage or expense (including reasonable attorney's fees and
costs) arising from any claim or demand by any person that is based upon (i) the
obligations of any other sub-adviser to the Fund, (ii) any obligation of the
Adviser under the Advisory Agreement that has not been delegated to the
Sub-Adviser under this Agreement or (iii) any matter for which the Sub-Adviser
does not have liability in accordance with the first sentence of this Section 8.
Section 9. Limitation of Trust's Liability. The Sub-Adviser acknowledges
that it has received notice of and accepts the limitations upon the Trust's and
the Fund's liability set forth in its Trust Instrument and under Delaware law.
The Sub-Adviser agrees that any of the Trust's obligations shall be limited to
the assets of the Fund and that the Sub-Adviser shall not seek satisfaction of
any such obligation from the shareholders of the Trust nor from any Trustee,
officer, employee or agent of the Trust.
The names "New Covenant Funds" and "Trustees of New Covenant Funds" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under the Trust Instrument
dated as of September 30, 1998, to which reference is hereby made and a copy of
which is on file at the office of the Secretary of State of the State of
Delaware and elsewhere as required by law, and to any and all amendments thereto
so filed or hereafter filed. The obligations of "New Covenant Funds" entered
into in the name or on behalf thereof, or in the name or on behalf of any series
or class of shares of the Trust, by any of the Trustees, representatives or
agents are made not individually, but in such capacities, and are not binding
upon any of the Trustees, shareholders or representatives of the Trust
personally, but bind only the assets of the Trust, and all persons dealing with
any series or class of shares of the Trust must look solely to the assets of the
Trust belonging to such series or class for the enforcement of any claims
against the Trust.
Section 10. Duration Renewal Termination and Amendment. This Agreement will
become effective as of the date first written above, provided that it shall have
been approved by vote of a majority of the Trustees, including a majority of the
disinterested Trustees cast in person at a meeting called for the purpose of
voting on such approval, and, unless sooner terminated as provided herein, shall
continue in effect for an initial period of one (1) year.
Thereafter, if not terminated, this Agreement shall continue in effect with
respect to the Fund for successive one year periods provided such continuance is
specifically approved at least annually (a) by the vote of a majority of the
disinterested Trustees cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the vote of a majority of the Trust's Board
of Trustees or by the vote of a majority of all votes attributable to the
outstanding Shares of the Fund. This Agreement may be terminated as to the Fund
at any time, without payment of any penalty, by the Trust's Board of Trustees,
by the Adviser, or by a vote of a majority of the outstanding voting securities
of the Fund, upon 60 days' prior written notice to the Sub-Adviser, or by the
Sub-Adviser upon 60 days' prior written notice to the Adviser and the Trust's
Board of Trustees, or upon such shorter notice as may be mutually agreed upon.
This Agreement shall terminate automatically and immediately upon
termination of the Advisory Agreement. This Agreement shall terminate
automatically and immediately in the event
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of its assignment. No assignment of this Agreement shall be made by the
Sub-Adviser without the consent of the Adviser and the Board of Trustees of the
Trust.
This Agreement may be amended at any time by the Adviser and the
Sub-Adviser, subject to approval by the Trust's Board of Trustees and, if
required by the 1940 Act and applicable SEC rules and regulations, a vote of a
majority of the Fund's outstanding voting securities. Notwithstanding the
foregoing, the Trust shall be under no obligation to obtain shareholder approval
to materially amend this Agreement unless required to obtain such approval
pursuant to any orders or rules and regulations which may have been issued by
the Securities and Exchange Commission.
Section 11. Confidential Relationship. Any information and advice furnished
by either party to this Agreement to the other shall be treated as confidential
and shall not be disclosed to third parties except as required by law or as
required or permitted by this Agreement.
Section 12. Severability. 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 thereby.
Section 13. Miscellaneous. This Agreement constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof and
each party agrees to perform such further actions and execute such further
documents as are necessary to effectuate the purposes hereof. To the extent not
preempted by federal law, this Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Indiana. The captions
in this Agreement are included for convenience only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed in several counterparts, all of which
together shall for all purposes constitute one Agreement, binding on all
parties.
Section 14. Notices. All notices and other communications hereunder shall
be in writing (including telex or similar writing) and shall be deemed given if
delivered in person or by messenger, cable, telegram or telex or facsimile
transmission or by a reputable overnight delivery service which provides
evidence of receipt to the parties at the following addresses or telex or
facsimile transmission numbers (or at such other address or number for a party
as shall be specified by like notice):
(a) if to the Sub-Adviser, to:
Santa ▇▇▇▇▇▇▇ Asset Management, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile transmission number: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Adviser, to:
The NCF Investment Department of
New Covenant Trust Company, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile transmission number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Each such notice or other communication shall be effective (i) if given by
telex or facsimile transmission, when such telex or facsimile is transmitted to
the number specified in this section and the appropriate answer back or
confirmation is received, and (ii) if given by any other means, when delivered
at the address specified in this section.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.
THE NCF INVESTMENT DEPARTMENT OF
NEW COVENANT TRUST COMPANY, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President
SANTA ▇▇▇▇▇▇▇ ASSET MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
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SCHEDULE A
To the Sub-Advisory Agreement between
The NCF Investment Department of New Covenant Trust Company, N.A. and
Santa ▇▇▇▇▇▇▇ Asset Management, Inc.
Name of Fund Compensation Date
------------ ------------ ----
New Covenant Growth Fund 1.00% on first $2 million in January 1, 2005
assets;
0.90% on next $3 million in
assets;
0.75% on next $5 million in
assets;
0.65% on next $5 million in
assets; and
0.50% on assets over $15
million.
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