SUBMANAGEMENT AGREEMENT DOMINI SOCIAL INVESTMENT TRUST
Exhibit d(8)
SUBMANAGEMENT AGREEMENT, dated as of November 28, 2008 by and between Domini Social
Investments LLC, a Massachusetts limited liability company (“Domini” or the “Manager”), and
Wellington Management Company, LLP (“Wellington” or the “Submanager”).
WITNESSETH:
WHEREAS, the Domini Social Investment Trust (the “Trust”) engages in business as an open-end
management investment company and is registered as such under the Investment Company Act of 1940,
as amended (collectively with the rules and regulations promulgated thereunder, the “1940 Act”);
and
WHEREAS, Domini has entered into a Management Agreement (the “Management Agreement”) with the
Trust wherein Domini has agreed to serve as Manager to the series of the Trust designated as the
Domini Social Equity Fund, Domini European Social Equity Fund, Domini European PacAsia Social
Equity Fund and Domini PacAsia Social Equity Fund (each a “Fund”); and
WHEREAS, Domini desires to retain the Submanager to furnish it with portfolio investment
advisory services in connection with Domini’s investment advisory activities on behalf of the
Funds, and the Submanager is willing to furnish such services to Domini;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties hereto
as herein set forth, the parties covenant and agree as follows:
1. APPOINTMENT OF WELLINGTON.
In accordance with and subject to the Management Agreement between the Master Trust and the
Manager with respect to the Funds, the Manager hereby retains Wellington to act as the Submanager
for the Funds for the period and on the terms set forth in this Agreement. The Submanager accepts
such appointment and agrees to provide an investment program for the Funds in accordance with the
terms of this Agreement and applicable law and for the compensation provided by this Agreement.
The Submanager is hereby authorized to engage any of its affiliates to provide the Submanager
with investment management or advisory and related services with respect to the Submanager
performing its obligations under this Agreement. The Submanager shall remain liable to the Manager
for performance of the Submanager’s obligations under this Agreement, and for the acts and
omissions of such affiliates and the Manager shall not be responsible for any fees which any
affiliate may charge to the Submanager in connection with such services.
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2. DUTIES OF THE SUBMANAGER.
The Submanager is hereby employed and authorized to select portfolio securities for investment
by the portion of the assets of the Funds as the Manager may designate from time to time (the
“Funds Account”), to determine to purchase and sell securities of the Funds Account, and upon
making any purchase or sale decision, to place orders for the execution of such portfolio
transactions in accordance with this Agreement. Notwithstanding any provision of this Agreement,
the Manager shall retain all rights and ultimate responsibilities to withdraw assets from the Funds
Account and to supervise and, in its discretion, conduct investment activities relating to the
Funds.
The Submanager shall furnish continuously an investment program and shall determine from time
to time what securities shall be purchased, sold or exchanged and what portion of the assets of the
Funds Account shall be held uninvested, subject always to the restrictions of the Trust’s Second
Amended and Restated Declaration of Trust, dated June 7, 1989, as amended and restated as of May
15, 2001, as amended, and By-laws, as each may be amended from time to time (respectively, the
“Declaration” and the “By-Laws”), the provisions of the 1940 Act, and the then-current registration
statement of the Trust with respect to the Funds. The Manager agrees to provide copies of any
amendments to the Declaration of Trust, By-Laws or Funds’ registration statement to the Submanager.
Should the Board of Trustees of the Trust or the Manager at any time, however, make any definite
determination as to an investment policy applicable to the Funds and the Manager notifies the
Submanager thereof in writing, the Submanager shall be bound by such determination for the period,
if any, specified in such notice or until similarly notified that such determination has been
revoked
The Submanager shall take, on behalf of the Funds, all actions which it deems necessary to
implement the investment policies determined as provided above and, in particular, to place all
orders for the purchase or sale of securities for the Funds Account with the brokers or dealers
selected by it, and to that end the Submanager is authorized as the agent of the Funds to give
instructions to the custodian or any subcustodian of the Funds as to deliveries of securities and
payments of cash for the Funds Account. In connection with the selection of such brokers or
dealers and the placing of such orders, and subject to the primary objective of obtaining the best
available prices and execution, 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
1934) to the Funds and/or the other accounts over which the Submanager, the Manager or a respective
“affiliated person” thereof exercises investment discretion. The Submanager shall not be obligated
to solicit competitive bids for each transaction it enters into on behalf of the Funds and is
authorized to pay a broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Funds which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if the Submanager
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
Submanager, the Manager and any “affiliated person” thereof have with respect to accounts over
which they exercise investment discretion notwithstanding the fact that the Funds may not be the
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direct or exclusive beneficiary of any such services. In making purchases or sales of securities
or other property for the Funds Account, the Submanager may deal with itself or with the Trustees
of the Trust or the Funds’ underwriter or distributor to the extent such actions are permitted by
the 1940 Act. The Board of Trustees of the Trust, in its discretion, may instruct the Submanager
to effect all or a portion of its securities transactions with one or more brokers and/or dealers
selected by the Board of Trustees if it determines that the use of such brokers and/or dealers is
in the best interest of the Funds.
The Submanager shall not be responsible for filing class action proofs of claim or the voting
of proxies on behalf of the Funds.
3. DUTIES OF THE MANAGER.
The Manager shall, in accordance with the terms of the Management Agreement, assume
responsibility for voting the proxies of the securities held by the Funds.
The Manager shall screen the securities submitted to it by the Submanager according to the
social and environmental criteria developed for the Funds by the Manager. The Manager shall notify
the Submanager of the results of each screening via email, telecopy or mail to the addresses the
Submanager shall furnish in writing to the Manager from time to time. Any such notice shall be
deemed to have been duly given or made and to have become effective (i) if delivered by hand,
overnight courier, email or telecopy to the person identified above (or to such other person as the
Submanager shall have identified to the Manager in writing), at the time of the receipt thereof by
such person and (ii) if sent by registered or certified first-class mail, postage prepaid, on the
third business day following the mailing thereof.
The Submanager shall not purchase any securities for the Funds that do not meet the social and
environmental criteria applied by the Manager. If the Manager at any time determines that a
security in which the Funds is invested does not meet such social and environmental criteria, the
Manager shall so notify the Submanager in accordance with the notification procedures outlined
above and the Submanager shall, within ninety (90) days of the receipt of such notification, sell
such security from the Funds Account. The Submanager shall not be responsible for compliance with
any notice provided by the Manager under this Section 3 if such notice is not delivered by the
Manager and receipt is acknowledged by the Submanager in accordance with the provisions of this
Section 3.
4. ALLOCATION OF CHARGES AND EXPENSES.
The Submanager shall furnish at its own expense all necessary services, facilities and
personnel in connection with its responsibilities under Section 2 above. Except as provided in the
foregoing sentence, it is understood that the Trust will pay all of its own expenses and the
expenses allocated to the Funds including, without limitation, organization costs of the Funds;
compensation of Trustees who are not “interested persons” of the Trust; governmental fees; interest
charges; loan commitment fees; taxes; membership dues in industry associations allocable to the
Funds; fees and expenses of independent auditors, legal counsel and any transfer agent,
distributor, registrar or dividend disbursing agent of the Funds; expenses relating to the issuance
and redemption of beneficial interests
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in the Funds and servicing investor accounts; expenses of preparing, typesetting, printing and
mailing investor reports, notices, proxy statements and reports to governmental officers and
commissions and to investors in the Funds; expenses connected with the execution, recording and
settlement of security transactions; insurance premiums; fees and expenses of the custodian for all
services to the Funds, including safekeeping of funds and securities and maintaining required books
and accounts; expenses of calculating the net asset value of the Funds (including but not limited
to the fees of independent pricing services; expenses of meetings of the Funds’ investors; and such
non-recurring or extraordinary expenses as may arise, including those relating to actions, suits or
proceedings to which the Trust on behalf of the Funds may be a party and the legal obligation which
the Trust may have to indemnify its Trustees and officers with respect thereto.
5. COMPENSATION OF THE SUBMANAGER.
For the services to be rendered by the Submanager hereunder, the Manager shall pay to the
Submanager a fee computed as specified in the Schedule A which is attached hereto and made a part
of this Agreement. Such compensation shall be paid to the Submanager at the end of each month, and
calculated by applying a daily rate, based on the annual percentage rates as specified in the
attached Schedule A, to the assets. The fee calculation shall be based on the Funds’ average daily
net assets for the month involved. If Wellington serves as Submanager for less than the whole of
any period specified in this Section 5, the compensation to Wellington, as Submanager, shall be
prorated.
6. COVENANTS OF THE SUBMANAGER.
The Submanager agrees that it will not deal with itself, or with the Trustees of the Trust or
the Funds’ principal underwriter or distributor, if any, as principals in making purchases or sales
of securities or other property, except as permitted by the 1940 Act, and will comply with all
provisions of the Declaration and By-Laws and the then-current registration statement of the Trust
applicable to the Funds. The Submanager shall not act as custodian for the Funds or take
possession of any assets thereof.
7. LIMITATION OF LIABILITY OF THE SUBMANAGER.
The Submanager shall not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the execution of securities
transactions for the Funds, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its obligations and duties
hereunder. As used in this Section 7, the term “Submanager” shall include directors, partners,
officers and employees of the Submanager as well as the Submanager itself. The Trust is expressly
made a third party beneficiary of this Agreement and may enforce any obligations of the Submanager
under this Agreement and recover directly from the Submanager for any liability the Submanager may
have hereunder.
8. ACTIVITIES OF THE SUBMANAGER.
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The services of the Submanager to the Funds are not to be deemed to be exclusive, the
Submanager and its affiliates being free to render investment advisory, administrative and/or other
services to others (“Affiliated Accounts”). The Manager agrees that the Submanager or its
affiliates may give advice or exercise investment responsibility and take such other action with
respect to other Affiliated Accounts which may differ from advice given or the timing or nature of
action taken with respect to the Funds Account, provided that the Submanager acts in good faith,
and provided, further, that it is the Submanager’s policy to allocate, within its reasonable
discretion and consistent with its fiduciary obligations to the Funds and the Affiliated Accounts,
investment opportunities to the Funds Account over a period of time on a fair and equitable basis
relative to the Affiliated Accounts, taking into account the investment objectives and policies of
the Funds Account and any specific investment restrictions or other factors applicable thereto.
The Manager acknowledges that as permitted by applicable law one or more of the Affiliated Accounts
may at any time hold, acquire, increase, decrease, dispose of or otherwise deal with positions in
investments in which the Funds Account may have an interest from time to time, whether in
transactions which may involve the Funds Account or otherwise. The Submanager shall have no
obligation to acquire for the Funds Account a position in any investment which any Affiliated
Account may acquire, and the Manager shall have no first refusal, coinvestment or other rights in
respect of any such investment, either for the Funds Account or otherwise. It is understood that
Trustees and officers of the Trust and investors of the Funds or the Manager are or may be or may
become interested in the Submanager as directors, partners, officers, employees or otherwise and
that directors, partners, officers and employees of the Submanager are or may become similarly
interested in the Trust or the Funds or the Manager and that the Submanager may be or may become
interested in the Trust or the Funds as an investor or otherwise.
9. CONFIDENTIAL RELATIONSHIP.
All information and recommendations furnished by the Submanager shall be regarded as
confidential and for use only by the Manager or such persons as the Manager may designate, and only
in connection with the management of the Funds. The Submanager shall regard as confidential all
information furnished to it hereunder concerning the affairs of the Funds and the Manager. All
confidential information provided by a party hereto shall be used by the other party hereto solely
for the purpose of rendering or obtaining services pursuant to this Agreement and, except as may be
required in carrying out this Agreement, shall not be disclosed to any third party without the
prior written consent of such providing party. The foregoing shall not be applicable to any
information that is publicly available when provided or thereafter becomes publicly available other
than through a breach of this Agreement, known to the receiving party prior to entering into this
Agreement, is received from some other source not a party to this Agreement, or is required to be
disclosed by or to any regulatory authority, any auditor of the parties hereto, or by judicial or
administrative process or otherwise by applicable law.
10. RECEIPT OF DISCLOSURE DOCUMENT.
The Manager acknowledges that it has received a copy of the Submanager’s disclosure document
under Rule 204-3 of the Investment Advisers Act of 1940 at least 48 hours prior to entering into
this Agreement.
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11. REPRESENTATIONS AND WARRANTIES.
Each party represents and warrants that: (a) the person(s) executing this Agreement on behalf
of the party has full power and authority to execute this Agreement on behalf of the party and (b)
the party’s execution, delivery and performance of this Agreement will be binding upon the party in
accordance with the terms hereof, and will not violate any obligations by which the party is bound,
whether arising by contract, operation of law or otherwise. The Manager represents, warrants and
agrees that it will deliver to the Submanager a true and complete copy of the Funds’ current
registration statement as effective from time to time and such other documents or instruments
governing the investments of the Funds Account.
12. USE OF NAMES.
Neither party shall use the name, trademark or trade name of the other party or any of its
affiliates or refer to the existence of this Agreement in any advertising, promotional or other
material, whether in written, electronic or other form, distributed to any unaffiliated third party
without obtaining specific prior written approval of the non-disclosing party; provided, that such
consent shall not be unreasonably withheld or delayed.
13. DURATION, TERMINATION AND AMENDMENTS OF THIS AGREEMENT.
This Agreement shall become effective as of the date and year first above written, shall
govern the relations between the parties hereto thereafter and shall remain in force for two years,
on which date it will terminate unless its continuance thereafter is “specifically approved at
least annually” (a) by the vote of a majority of the Trustees of the Funds who are not “interested
persons” of the Trust or of Domini or the Submanager at a meeting specifically called for the
purpose of voting on such approval and (b) by the Board of Trustees of the Trust or by “vote of a
majority of the outstanding voting securities” of the Funds. However, if the investors of the
Funds fail to approve the Agreement as provided herein, the Submanager may continue to serve
hereunder in the manner and to the extent permitted by the 1940 Act.
This Agreement may be terminated at any time without the payment of any penalty by (i) the
Trustees of the Trust, (ii) the “vote of a majority of the outstanding voting securities” of the
Funds or (iii) Domini with the prior consent of the Trustees of the Trust, in each case on not more
than 60 days’ nor less than 30 days’ written notice to the other party. This Agreement may be
terminated at any time without the payment of any penalty by the Submanager on not less than 90
days’ written notice to the Manager and the Trustees of the Trust. This Agreement shall
automatically terminate in the event of its “assignment.”
This Agreement constitutes the entire agreement between the parties and, except as otherwise
permitted by applicable law, may be amended only if such amendment is approved by the parties
hereto, the Trustees of the Trust and the “vote of a majority of the outstanding voting securities”
of the Funds.
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The Agreement may be executed simultaneously in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute one and the same
instrument.
The terms “specifically approved at least annually,” “vote of a majority of the outstanding
voting securities,” “assignment,” “affiliated person” and “interested persons,” when used in this
Agreement, shall have the respective meanings specified in, and shall be construed in a manner
consistent with, the 1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under the 1940 Act.
14. GOVERNING LAW.
This Agreement shall be construed and the provisions thereof interpreted under and in
accordance with the laws of the Commonwealth of Massachusetts; provided, however, that nothing
herein will be construed in a manner inconsistent with the 1940 Act, the Investment Advisers Act of
1940 or any rules or regulations of the Securities and Exchange Commission thereunder.
15. NOTICES.
Any notice, advice or report to be given pursuant to the Agreement (other than pursuant to
Section 3 hereof) shall be deemed to have been duly given or made as of the date delivered or
transmitted, and shall be effective upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested) to the following addresses, or sent by
electronic transmission to the telecopier number specified below:
To the Submanager at:
Wellington Management Company, LLP
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Attention: Legal Services Department
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Attention: Legal Services Department
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To the Manager at:
Domini Social Investments LLC
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Attention: President
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Attention: President
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[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered
in their names and on their behalf by the undersigned, thereunto duly authorized, all as of the day
and year first above written.
| WELLINGTON MANAGEMENT COMPANY, LLP |
||||
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Title: | Senior Vice President | |||
| DOMINI SOCIAL INVESTMENTS LLC | ||||
| By: | /s/ ▇▇▇ ▇▇▇▇▇▇ | |||
| Title: | Manager | |||
Acknowledged:
on behalf of Domini Social Equity Fund, Domini European Social Equity Fund, Domini European PacAsia
Social Equity Fund and Domini PacAsia Social Equity Fund
By:
|
/s/ ▇. ▇. ▇▇▇▇▇▇ | |||
Title:
|
Schedule A
Pursuant to Section 5, the Manager shall pay the Submanager compensation at the following annual
rates:
| Fund | Submanagement Fee | Effective Date | ||
Domini Social Equity Fund
|
0.30% of the first $250 million of net assets managed | 11/28/2008 | ||
| 0.25% of the next $750 million of net assets managed | ||||
| 0.225% of net assets managed in excess of $1 billion | ||||
Domini European Social
Equity Fund
|
0.75% of the first $25 million of net assets managed 0.65% of the next $25 million of net assets managed 0.50% of the next $250 million of net assets managed 0.45% of net assets managed in excess of $300 million |
11/28/2008 | ||
Domini PacAsia Social
Equity Fund
|
0.75% of the first $25 million of net assets managed 0.65% of the next $25 million of net assets managed 0.50% of the next $250 million of net assets managed 0.45% of net assets managed in excess of $300 million |
11/28/2008 | ||
Domini EuroPacific
Social Equity Fund
|
0.75% of the first $25 million of net assets managed 0.65% of the next $25 million of net assets managed 0.50% of the next $250 million of net assets managed 0.45% of net assets managed in excess of $300 million |
11/28/2008 |