Exhibit No. Ex-99.d(4)
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY INVESTMENTS JAPAN LIMITED
AND
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AGREEMENT made this 7th day of October, 2002, by and between Fidelity
International Investment Advisors, a Bermuda company with principal offices at
Pembroke Hall, ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇, ▇▇▇▇▇▇▇ (hereinafter called the
"Sub-Advisor"), and Fidelity Investments Japan Limited, a Japanese company with
principal offices at Across Shinkawa ▇▇▇▇. ▇-▇, ▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇-▇▇, ▇▇▇▇▇
▇▇▇-▇▇▇▇, ▇▇▇▇▇ (hereinafter called the "Japan Sub-Advisor").
WHEREAS, Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Advisor"), has entered into an Advisory
Agreement with The Japan Fund, Inc. (the "Advisory Agreement") (hereinafter
called the "Portfolio"); and
WHEREAS, the Sub-Advisor has entered into a Sub-Advisory Agreement with
the Advisor (the "Sub-Advisory Agreement") pursuant to which the Sub-Advisor,
directly or through certain of its subsidiaries or other affiliated persons,
shall provide investment advice or investment management and order execution
services to the Portfolio; and
WHEREAS, the Japan Sub-Advisor has personnel in Japan and has been formed
in part for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries, and
securities of issuers located outside of North America, principally in Japan and
the Far East;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Sub-Advisor and the Japan Sub-Advisor agree as
follows:
1. Duties: The Sub-Advisor may, in its discretion, appoint the Japan Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio, in connection with the
Sub-Advisor's duties under the Sub-Advisory Agreement. The services and the
portion of the investments of the Portfolio to be advised or managed by the
Japan Sub-Advisor shall be as agreed upon from time to time by the Sub-Advisor
and the Japan Sub-Advisor. The Japan Sub-Advisor shall pay the salaries and fees
of all personnel of the Japan Sub-Advisor performing services for the Portfolio
relating to research, statistical and investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the Sub-Advisor,
the Japan Sub-Advisor shall provide investment advice to the Sub-Advisor with
respect to all or a portion of the investments of the Portfolio, and in
connection with such advice shall furnish the Sub-Advisor such factual
information, research reports and investment recommendations as the Sub-Advisor
may reasonably require. Such information may include written and oral reports
and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the Sub-
Advisor, the Japan Sub-Advisor shall, subject to the supervision of the
Sub-Advisor, manage all or a portion of the investments of the Portfolio in
accordance with the investment objective, policies and limitations provided in
the Portfolio's Prospectus or other governing instruments, as amended from time
to time, the Investment Company Act of 1940 (the"1940 Act") and rules
thereunder, as amended from time to time, and such other limitations as the
Portfolio or the Advisor may impose with respect to the Portfolio by notice to
the Japan Sub-Advisor. With respect to the portion of the investments of the
Portfolio under its management, the Japan Sub-Advisor is authorized to make
investment decisions on behalf of the Portfolio with regard to any stock, bond,
other security or investment instrument, and to place orders for the purchase
and sale of such securities through such broker-dealers as the Japan Sub-Advisor
may select. The Japan Sub-Advisor may also be authorized, but only to the extent
such duties are delegated in writing by the Sub-Advisor, to provide additional
investment management services to the Portfolio, including but not limited to
services such as managing foreign currency investments, purchasing and selling
or writing futures and options contracts, borrowing money, or lending securities
on behalf of the Portfolio. All investment management and any other activities
of the Japan Sub-Advisor shall at all times be subject to the control and
direction of the Sub-Advisor, the Advisor and the Portfolio's Board of
Directors.
(c) SUBSIDIARIES AND AFFILIATES: The Japan Sub-Advisor may perform any or
all of the services contemplated by this Agreement directly or through such of
its subsidiaries or other affiliated persons as the Japan Sub-Advisor shall
determine; provided, however, that performance of such services through such
subsidiaries or other affiliated persons shall have been approved by the
Portfolio to the extent required pursuant to the 1940 Act and rules thereunder.
2. Information to be Provided to the Portfolio and the Advisor: The Japan
Sub-Advisor shall furnish such reports, evaluations, information or analyses to
the Portfolio, the Advisor and the Sub-Advisor as the Portfolio's Board of
Directors, the Advisor or the Sub-Advisor may reasonably request from time to
time, or as the Japan Sub-Advisor may deem to be desirable.
3. Brokerage: In connection with the services provided under subparagraph (b) of
paragraph 1 of this Agreement, the Japan Sub-Advisor shall place all orders for
the purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Japan Sub-Advisor, which may include brokers
or dealers affiliated with the Advisor, the Sub-Advisor or the Japan
Sub-Advisor. The Japan Sub-Advisor shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the Portfolio and at
commission rates which are reasonable in relation to the benefits received. In
selecting brokers or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the Securities Exchange
Act of l934) to the Portfolio and/or to the other accounts over which the Japan
Sub-Advisor,
the Sub-Advisor or the Advisor exercise investment discretion. The Japan
Sub-Advisor is authorized to pay a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio transaction for the
Portfolio which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the Japan
Sub-Advisor determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer. This determination may be viewed in terms of
either that particular transaction or the overall responsibilities which the
Japan Sub-Advisor, the Sub-Advisor or the Advisor have with respect to accounts
over which they exercise investment discretion. The Directors of the Portfolio
shall periodically review the commissions paid by the Portfolio to determine if
the commissions paid over representative periods of time were reasonable in
relation to the benefits to the Portfolio.
4. Compensation: The Sub-Advisor shall compensate the Japan Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) SUB-ADVISORY FEE: For services provided under subparagraph (a) of
paragraph 1 of this Agreement, the Sub-Advisor agrees to pay the Japan
Sub-Advisor a monthly sub-advisory fee (the "Japan Sub-Advisory Fee"). The Japan
Sub-Advisory Fee shall be equal to 105% of the Japan Sub-Advisor's costs
incurred in connection with rendering the services referred to in subparagraph
1(a) of this Agreement. The Japan Sub-Advisory Fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Sub-Advisor or the Advisor,
if any, in effect from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph of
paragraph 1 of this Agreement, the Sub-Advisor agrees to pay the Japan
Sub-Advisor a monthly investment management fee (the "Japan Investment
Management Fee"). The Japan Investment Management Fee shall be equal to a
percentage of the monthly average net assets of the Portfolio managed by the
Japan Sub-Advisor pursuant to subparagraph 1(b) of this Agreement, calculated on
a cumulative basis based upon a monthly average of the aggregate of all net
assets managed by the Japan Sub-Advisor on behalf of the Sub-Advisor pursuant to
sub-advisory arrangements ("Average Group Assets") in accordance with the
following fee schedule:
ANNUALIZED FEE RATE
AVERAGE GROUP ASSETS (FOR EACH LEVEL)
-------------------- ------------------
$0 - $200 million 0.30 %
$200 million - $500 million 0.25 %
over $500 million 0.20 %
, provided that in no event shall the Japan Investment Management Fee exceed 50%
of the sub-advisory fees received by the Sub-Advisor in respect of the Portfolio
from the Advisor pursuant to the Sub-Advisory Agreement, and provided further
that, for purposes of calculating the fee rates set forth above, any assets
managed by the Japan Sub-Advisor on behalf of the Sub-Advisor pursuant to a
sub-advisory arrangement where a fee cap is being applied to reduce the Japan
Sub-Advisor's fee to less than the rates set forth above shall be excluded from
Average Group Assets.
(c) PROVISION OF MULTIPLE SERVICES: If the Japan Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and investment
management services under subparagraph (b) of paragraph 1 for the same portion
of the investments of the Portfolio for the same period, the fees paid to the
Japan Sub-Advisor with respect to such investments shall be calculated
exclusively under subparagraph (b) of this paragraph 4.
5. Expenses: It is understood that the Portfolio will pay all of its expenses
other than those expressly stated to be payable by the Japan Sub-Advisor
hereunder, by the Sub-Advisor under the Sub-Advisory Agreement, or by the
Advisor under the Advisory Agreement with the Portfolio
6. Interested Persons: It is understood that Directors, officers, and
shareholders of the Portfolio are or may be or become interested in the Advisor,
the Sub-Advisor or the Japan Sub-Advisor as directors, officers or otherwise and
that directors, officers and stockholders of the Advisor, the Sub-Advisor or the
Japan Sub-Advisor are or may be or become similarly interested in the Portfolio,
and that the Sub-Advisor, the Advisor or the Japan Sub-Advisor may be or become
interested in the Portfolio as a shareholder or otherwise.
7. Services to Other Companies or Accounts: The services of the Japan
Sub-Advisor to the Sub-Advisor are not to be deemed to be exclusive, the Japan
Sub-Advisor being free to render services to others and engage in other
activities, provided, however, that such other services and activities do not,
during the term of this Agreement, interfere, in a material manner, with the
Japan Sub-Advisor's ability to meet all of its obligations hereunder. The Japan
Sub-Advisor shall for all purposes be an independent contractor and not an agent
or employee of the Advisor, the Sub-Advisor or the Portfolio.
8. Standard of Care: In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Japan Sub-Advisor, the Japan Sub-Advisor shall not be subject to
liability to the Sub-Advisor, the Advisor, the Portfolio or to any shareholder
of the Portfolio 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.
9. Duration and Termination of Agreement; Amendments:
(a) Subject to prior termination as provided in subparagraph (d) of this
paragraph 9, this Agreement shall continue in force until October 7, 2004 and
indefinitely thereafter, but only so long as the continuance after such period
shall be specifically approved at least annually by vote of the Portfolio's
Board of Directors or by vote of a majority of the outstanding voting securities
of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor, the
Sub-Advisor, the Japan Sub-Advisor and the Portfolio subject to the provisions
of Section 15 of the 1940 Act, as modified by or interpreted by any applicable
order or orders of the Securities and Exchange Commission (the "Commission") or
any rules or regulations adopted by, or interpretative releases of, the
Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of this
paragraph 9, the terms of any continuance or modification of this Agreement must
have been approved by the vote of a majority of those Directors of the Portfolio
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.
(d) Either the Advisor, the Sub-Advisor, the Japan Sub-Advisor or the
Portfolio may, at any time on sixty (60) days' prior written notice to the other
parties, terminate this Agreement, without payment of any penalty, by action of
its Board of Directors, or with respect to the Portfolio by vote of a majority
of its outstanding voting securities. This Agreement shall terminate
automatically in the event of its assignment.
10. Governing Law: This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof. The terms "registered
investment company," "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act as now in effect or as hereafter
amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
all as of the date written above.
FIDELITY INVESTMENTS JAPAN
LIMITED
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By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
FIDELITY INTERNATIONAL
INVESTMENT ADVISORS
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By:
Title: