_AdHocReviewCycleID1667630620_EmailSubjectSub advisory
▇▇▇▇▇▇▇▇▇_▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇_AuthorEmailDisplayNameAdam ▇▇▇▇▇▇
-9-
SUB-ITEM 77Q1(e)
▇▇▇▇▇▇▇▇ PORTFOLIOS, INC.
NEW OR AMENDED REGISTRANT INVESTMENT ADVISORY
SUBADVISORY AGREEMENT
SUBADVISORY AGREEMENT, dated December 5, 2003 between
J. & ▇. ▇▇▇▇▇▇▇▇ & CO.
INCORPORATED, a Delaware corporation (the "Manager") and WELLINGTON MANAGEMENT
COMPANY, LLP., a
Massachusetts limited liability partnership (the "Subadviser").
WHEREAS, the Manager has entered into a Management Agreement,
dated as of the date hereof (the "Management Agreement"), with ▇▇▇▇▇▇▇▇
Portfolios, Inc. (the "Corporation"), an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), to render or contract to obtain assistance in rendering investment
management services to the Corporation, and to administer the business and other
affairs of the Corporation; and
WHEREAS, the Manager desires to retain the Subadviser to
assist in providing investment advisory and other services to the Corporation's
▇▇▇▇▇▇▇▇ Global Growth Portfolio, ▇▇▇▇▇▇▇▇ Global Smaller Companies Portfolio
and ▇▇▇▇▇▇▇▇ International Growth Porfolio (the "Subadvised Funds"), and the
Subadviser is willing to render such services, effective as of the date first
written above (the "Effective Date").
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
1. Duties of the Subadviser. (a) Subject in each case to the
control of the Board of Directors of the Corporation (the "Board") and in
accordance with the objectives, policies and principles set forth in the
Registration Statement and Prospectus(es) of the Subadvised Funds (the
"Registration Statement") and the requirements of the 1940 Act, and in
conjunction with and under the supervision of the Manager, the Subadviser agrees
to furnish the Manager and the Corporation with such investment advice, research
and assistance as the Manager or the Corporation shall from time to time
reasonably request. Without limiting the generality of the foregoing, Subadviser
shall manage the investments of each Subadvised Fund in accordance with the
Registration Statement and in compliance with the requirements applicable to
registered investment companies under applicable laws and those requirements
applicable to regulated investment companies under Subchapter M of the Internal
Revenue Code of 1986, as amended ("Code"), and such other limitations as the
Manager or the Board may institute and inform the Subadviser in writing are
applicable.
(b) Subject to the foregoing, the Subadviser shall (i)
participate in the development of each Subadvised Fund's overall investment
strategy and in the determination of investment allocations, (ii) provide
investment advice and research to each Subadvised Fund with respect to existing
and potential investments in securities, including company visits and meetings
with management, (iii) determine securities and other assets for investment,
(iv) select brokers and dealers, (v) cause the execution of trades, including
foreign exchange dealings and (vi) unless otherwise agreed to by the Manager,
vote proxies solicited by or with respect to issuers of securities in which
assets of the Subadvised Funds may be invested from time to time. In providing
these services, the Subadviser will conduct a continual program of investment,
evaluation and, if appropriate, sale and reinvestment of each Subadvised Fund's
assets. The Subadviser will make available representatives to report in person
to the Board at least semi-annually on investment results, regulatory compliance
with respect to each Subadvised Fund's investments and other matters that the
Manager or the Board may reasonably request. The Subadviser shall also provide
such reports and other information to the Manager or the Board as such persons
may reasonably request.
(c) The Subadviser agrees to provide, subject to any
obligations or undertakings by the Manager reasonably necessary to maintain the
confidentiality of the Subadviser's non-public information, any and all
information, records and supporting documentation about the composite of
accounts and the funds the Subadviser manages that have investment objectives,
policies, and strategies substantially similar to those employed by the
Subadviser in managing the Subadvised Funds which may be reasonably necessary,
under applicable laws, to allow the Corporation or its agent to present
historical performance information concerning the Subadviser's substantially
similarly managed accounts and funds, for inclusion in the Corporation's
Prospectus(es) and any other reports and materials prepared by the Corporation
or its agent, in accordance with regulatory requirements or as requested by
applicable federal or state regulatory authorities.
(d) Portfolio accounting and pricing for the Subadvised Funds
will be the ultimate responsibility of a third party accounting agent or
administrator; however, in the event that an asset under the supervision of the
Subadviser cannot be priced by a pricing source authorized by the Manager or
market quotations are not readily available (as contemplated in the Fund's
valuation procedures), the Subadviser will provide the third party accounting
agent or administrator with a recommended "fair value" for such asset in
accordance with the Fund's valuation procedures. Notwithstanding the foregoing,
the Subadviser will be responsible for coordinating work with custodians in
respect of assets under the Subadviser's supervision ("Custodians"), including
liaising as required with Custodians in respect of trade settlement, safe
custody of assets, income collection and the processing of corporate actions.
The Subadviser will inform the Manager of material changes in the custody risks
associated with the Subadvised Funds' depository arrangements in a foreign
country, based on the analysis of risk and other information provided by the
foreign custody manager of each Subadvised Fund. With respect to the securities
of issuers under the supervision of the Subadviser, the Subadviser shall provide
executed trade information to Custodians, third party accounting agents or
administrators and/or the Manager (or its designee), which may be done via
computer.
(e) The Subadviser agrees to keep, and to preserve for the
prescribed periods, all records relating to its activities hereunder that are
required by the 1940 Act and the Investment Advisers Act of 1940, as amended
(the "Advisers Act"). The Subadviser hereby agrees that any and all records
which it maintains for each Subadvised Fund are the property of the Corporation
and further agrees to surrender promptly to the Corporation copies of any of
such records upon the Corporation's or the Manager's request, provided, however,
that Subadviser may retain copies of any records. Nothing herein shall prohibit
the Subadviser from using the performance track record of the Subadvised Funds,
including following any termination of this Agreement, to the extent such use is
otherwise consistent with applicable law, rules and regulations.
(f) With respect to any investment company in the ▇▇▇▇▇▇▇▇
Group of Funds, (i) the Subadviser will not consult with any other subadviser to
that investment company (including, in the case of an offering of securities
subject to Section 10(f) of the 1940 Act, any subadviser that is a principal
underwriter or an affiliated person of a principal underwriter of such offering)
concerning transactions for that investment company in securities or other
assets, except, in the case of transactions involving securities of persons
engaged in securities-related businesses, for purposes of complying with the
conditions of paragraphs (a) and (b) of Rule 12d3-1 under the 1940 Act; and (ii)
if the Subadviser and any other subadviser are providing investment advice to
that investment company, the investment advice provided by Subadviser to that
investment company will be limited to the assets for which Subadviser is
responsible. The Manager shall provide a current list of all subadvisers to the
▇▇▇▇▇▇▇▇ Group of Funds to the Subadviser and shall update such list promptly
upon any additions or departures of subadvisers to the ▇▇▇▇▇▇▇▇ Group of Funds.
(g) The Subadviser shall exercise its best judgment in
rendering its services described in this Agreement. However, subject to Section
36 of the 1940 Act, the Subadviser shall not be liable to the Corporation 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 performance of its duties under
this Agreement 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 under this Agreement; provided, however, that the
Subadviser shall be liable for any loss incurred by the Corporation, a
Subadvised Fund, the Manager or their respective affiliates to the extent such
losses arise out of any act or omission directly attributable to the Subadviser
which results, directly or indirectly, in a material error in the net asset
value of a Subadvised Fund.
2. Expenses. The Subadviser shall pay all of its expenses
arising from the performance of its obligations hereunder, other than the cost
of securities including brokerage commissions and similar fees and charges for
the acquisition, disposition, lending or borrowing of each Subadvised Fund's
investments.
3. Compensation. (a) As compensation for the services
performed by the Subadviser pursuant to Section 1, the Manager will pay to the
Subadviser each month a fee calculated on each day during such month as
indicated on the attached Fee Schedule. Such compensation shall be paid by the
Manager to the Subadviser as soon as practicable following receipt by the
Manager of its investment management fees from the Corporation (but no later
than 10 business days following such receipt).
(b) If the Subadviser shall serve hereunder for less than the
whole of any month, the fee hereunder shall be prorated.
(c) Any fee payable to the Subadviser under this Agreement
shall be paid to the Subadviser or to an affiliate of the Subadviser at an
address or to an account designated by the Subadviser.
4. Purchase and Sale of Assets. (a) The Subadviser shall
purchase securities and other assets from or through and sell securities or
other assets to or through such persons, brokers or dealers as the Subadviser
shall deem appropriate in order to carry out the policy with respect to
allocation of portfolio transactions as set forth in the Registration Statement
and Prospectus(es) of the Subadvised Funds and as the Board may direct from time
to time. In providing the Subadvised Funds with investment management and
supervision, it is recognized that the Subadviser will seek best execution and,
consistent with such policy, may give consideration to the research, statistical
and other services furnished by brokers or dealers to the Subadviser for its
use, to the general attitude of brokers or dealers toward investment companies
and their support of them, and to such other considerations as the Board may
direct or authorize from time to time.
Notwithstanding the above, it is understood that it may be
desirable for the Subadvised Funds that the Subadviser have access to
supplemental investment and market research and security and economic analysis
provided by brokers who execute brokerage transactions at a higher cost to the
Subadvised Funds than may result when allocating brokerage to other brokers.
Therefore, the Subadviser is authorized to place orders for the purchase and
sale of securities of the Subadvised Funds with such brokers, subject to review
by the Board from time to time with respect to the extent and continuation of
this practice. It is understood that the services provided by such brokers may
be useful to the Subadviser in connection with its services to other clients as
well as the Subadvised Funds.
(b) Subadviser will not be responsible for any act or omission
by brokers and dealers selected by the Subadviser in accordance with Section
1(g) of this Agreement, provided that such brokers or dealers were selected with
reasonable care.
(c) Subadviser may, to the extent permitted by applicable laws
and regulations, but shall be under no obligation to, aggregate securities to be
sold or purchased on behalf of the Subadvised Funds with those of other clients.
5. Subadviser's Representations. Subadviser represents,
warrants and covenants to Corporation and the Manager that:
(a) It is duly formed, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts and has full power and
authority to enter into and perform its obligations under this Agreement;
(b) It has duly authorized, executed and delivered this
Agreement and intends that it shall constitute a valid and binding agreement
enforceable in accordance with its terms, except to the extent limited by the
principles of equity and public policy;
(c) It is registered as an investment adviser under the
Advisers Act;
(d) Its entry into, and performance of any duties or actions
under, this Agreement shall at all times be in accordance with all applicable
laws and regulations;
(e) It shall deliver to the Corporation and the Manager (i) a
copy of Subadviser's Form ADV, Part II (or similar disclosure document) and each
material update thereof, (ii) Subadviser's proxy voting policies and each update
thereof, (iii) Subadviser's Code of Ethics, including any code adopted under
Rule 17j-1 of the 1940 Act, and each update thereof and (iv) such other
information (e.g., disclosures, policies, violations of Code of Ethics or other
materials) as reasonably requested by the Manager or the Board to the extent
such information is required to be delivered or made available under the 1940
Act or Advisers Act or rules and regulations promulgated thereunder or in
connection therewith;
(f) Its Form ADV and each investment performance composite and
accompanying disclosures provided by the Subadviser to the Manager or the Board
include all material information that is required to be stated therein or
necessary to make the statements therein not misleading;
(g) It shall not execute trades with broker-dealers who are
"affiliated persons" (within the meaning of the ▇▇▇▇ ▇▇▇) of the Subadviser,
without the prior approval of the Manager and, to the extent necessary to comply
with the 1940 Act, the Board, provided that the Manager shall notify the
Subadviser in writing of all broker-dealers who are "affiliated persons" of a
Subadvised Fund other than broker-dealers that are "affiliated persons" of a
Subadvised Fund based solely of the ownership or control of such broker-dealer
by the Subadviser;
(h) It shall notify the Manager of any change in the
membership of its partnership within a reasonable time after such change;
(i) It has adopted procedures reasonable necessary to prevent
"access persons" (within the meaning of Rule 17j-1) from violating its Code of
Ethics; and
(j) It will promptly notify the Manager in writing in the
event that any of the foregoing ceases to be true.
6. Manager's Representations. Manager represents, warrants and
covenants to Subadviser that:
(a) It is duly formed, validly existing and in good standing
under the laws of the State of Delaware and has full power and authority to
enter into and perform its obligations under this Agreement;
(b) It has duly authorized, executed and delivered this
Agreement and intends that it shall constitute a valid and binding agreement
enforceable in accordance with its terms, except to the extent limited by the
principles of equity and public policy;
(c) It is registered as an investment adviser under the
Advisers Act;
(d) Its entry into, and performance of any duties or actions
under, this Agreement shall at all times be in accordance with all applicable
laws and regulations;
(e) Assuming the accuracy of the representations, warranties
and covenants of the Subadviser contained herein and the due performance of the
Subadviser of its obligations hereunder, the Fund's Registration Statement, to
Manager's best knowledge, is in compliance in all material respects with
applicable federal and state laws and regulations.
(f) It will promptly notify the Subadviser in writing in the
event that any of the foregoing ceases to be true.
7. Service to Other Clients. The services of the Subadviser
are not to be deemed exclusive to the Corporation, it being understood that the
Subadviser may perform investment advisory services for various other clients,
and it is acknowledged that the Subadviser may give advice and take action with
respect to any of its other clients which may differ or be contrary to, advice
given, or from timing or nature of actions taken, with respect to the assets of
a Subadvised Fund. To the extent permitted by applicable law, Subadviser may
purchase, or recommend for purchase, for a Subadvised Fund securities owned by
the Subadviser, its partners or affiliates, securities of companies for which an
affiliate or Subadviser acts as financial adviser or performs other investment
banking services, or securities of companies where partners or employees of
Subadviser, or its affiliates, serve on the board of directors.
8. Delivery of Documents and Notice of Events. The Manager
agrees to promptly furnish the Subadviser with the Management Agreement, the
Corporation's Articles of Incorporation and Bylaws, the Subadvised Funds'
Registration Statement, prospectus(es) and Statement of Additional Information,
proxy statements, reports to shareholders, any policies properly Board
authorized affecting management and any other items reasonably requested by the
Subadviser. The Manager further agrees to promptly provide the Subadviser with
copies of all amendments of or supplements to all of the foregoing.
9. Indemnification. (a) Subadviser agrees to hold harmless and
indemnify the Manager from and against any loss or damages arising out of
Subadviser's breach of this Agreement or arising out of the willful misfeasance,
bad faith or gross negligence on Subadviser's part in the performance of its
duties, or from reckless disregard of its obligations and duties, under this
Agreement.
(b) The Manager agrees to hold harmless and indemnify
Subadviser from and against any loss or damages arising out of the Manager's
breach of this Agreement or arising out of the willful misfeasance, bad faith or
gross negligence on the Manager's part in the performance of its duties, or from
reckless disregard of its obligations and duties, under this Agreement.
10. Cooperation and Provision of Certain Information. The
Subadviser shall promptly notify the Manager (1) in the event the SEC or other
governmental authority has censured the Subadviser; placed limitations upon its
activities, functions or operations; suspended or revoked its registration, if
any, as an investment adviser; or has commenced proceedings or an investigation
that may result in any of these actions or (2) upon having a reasonable basis
for believing that a Subadvised Fund has ceased to qualify or might not qualify
as a regulated investment company under Subchapter M of the Code. The Manager
shall promptly notify the Subadviser (1) in the event the SEC or other
governmental authority has censured the Manager; placed limitations upon its
activities, functions or operations; suspended or revoked its registration, if
any, as an investment adviser; or has commenced proceedings or an investigation
that may result in any of these actions or (2) upon having a reasonable basis
for believing that a Subadvised Fund has ceased to qualify or might not qualify
as a regulated investment company under Subchapter M of the Code. The Subadviser
further agrees to notify the Manager promptly of any material fact known to the
Subadviser respecting or relating to the Subadviser that is not contained in a
Prospectus for a Subadvised Fund, and is required to be stated therein or
necessary to make the statements therein not misleading, or of any statement
relating to Subadviser contained therein that becomes untrue in any material
respect. As reasonably requested by the Manager or the Board and in accordance
with the scope of Subadviser's obligations and responsibilities contained in
this Agreement, Subadviser will cooperate with, and provide assistance to, the
Manager or the Corporation as needed in order for the Manager and the
Corporation to comply with applicable laws, rules and regulations, including,
but not limited to, compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules and
regulations promulgated by the SEC thereunder.
11. Use of Names. The Subadviser shall not use the name, logo,
insignia, or other identifying ▇▇▇▇ of the Corporation, the Subadvised Funds or
the Manager or any of their affiliates or any derivative or logo or trade or
service ▇▇▇▇ thereof, or disclose information related to the business of the
Manager or any of its affiliates in material relating to the Subadviser in any
manner not approved prior thereto by the Manager; provided, however, that the
Manager shall approve all uses of its or the Corporation's name and the
Subadvised Funds' names and that of their affiliates which merely refer in
accurate terms to the appointment of the Subadviser 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 Manager shall
not use the name, logo, insignia, or other identifying ▇▇▇▇ of the Subadviser or
any of its affiliates in any prospectus, sales literature or other material
relating to the Corporation in any manner not approved prior thereto by the
Subadviser; provided, however, that the Subadviser shall approve all uses of its
name which merely refer in accurate terms to the appointment of the Subadviser
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.
12. Notices. Any notice required or permitted hereunder shall,
unless expressly permitted otherwise hereunder, be in writing and shall be given
by personal service, mail, or facsimile to the other party as set forth below.
Notice shall be effective upon receipt if by mail, on the date of personal
delivery (by private messenger, courier service or otherwise), or upon receipt
of telex or facsimile, whichever occurs first.
Notice to the Manager shall be to:
J. & ▇. ▇▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Notice to the Subadviser shall be to:
Wellington Management Company, LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Services
Notice to the Corporation shall be to:
Seligman Portfolios, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Secretary
A party may change its notice address at any time by written
communication to the other parties.
13. Term of Agreement. This Agreement shall become effective
on the Effective Date and shall continue in full force and effect until December
31, 2004, and from year to year thereafter if such continuance is approved in
the manner required by the 1940 Act. This Agreement may be terminated at any
time, with respect to a Subadvised Fund, without payment of penalty, by the
Corporation on 60 days' written notice to the Subadviser by vote of the Board or
by vote of a majority of the outstanding voting securities (as defined by the
▇▇▇▇ ▇▇▇) of the applicable Subadvised Fund. This Agreement also may be
terminated, with respect to a Subadvised Fund, by the Subadviser or the Manager
at any time upon not less than 6 months' written notice to the other and to the
Corporation. This Agreement will automatically terminate, with respect to a
Subadvised Fund, in the event of its assignment (within the meaning of the ▇▇▇▇
▇▇▇) with respect to that Subadvised Fund or upon the termination of the
Management Agreement with respect to that Subadvised Fund. Notwithstanding the
foregoing, the Subadviser may terminate this for cause, on 60 days' written
notice to the Corporation and the Manager.
14. Amendments. This Agreement may be amended by consent of
the parties hereto provided that the consent of the Fund is obtained in
accordance with the requirements of the 1940 Act.
15. Miscellaneous. (a) Entire Agreement. This Agreement shall
constitute the entire agreement between the parties with respect to the subject
matter hereof and shall supersede any and all prior agreements and
understandings, whether written or verbal.
(b) Governing Law. This Agreement shall be construed and
interpreted under the laws of the State of New York applicable to contracts
executed and performed entirely in the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon, either of the parties to do anything in violation of
any applicable laws or regulations.
(c) Waiver. Failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered to be a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
(d) Enforceability. If any provision of this Agreement is
invalid or unenforceable, the balance of the Agreement shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which taken together shall constitute one and the
same instrument.
(f) Headings. The section and paragraph headings contained in
this Agreement are for reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the Manager and the Subadviser have caused
this Agreement to be executed by their duly authorized officers as of the date
first above written.
J. & ▇. ▇▇▇▇▇▇▇▇ & CO.
INCORPORATED
By
-------------------------------------------------------
Name:
Title:
WELLINGTON MANAGEMENT COMPANY, LLP.
By
-------------------------------------------------------
Name:
Title:
FEE SCHEDULE
SUBADVISED FUND ANNUAL RATE
(as a percentage of average daily
net assets)
▇▇▇▇▇▇▇▇ Global Growth Portfolio 0.45% of net assets up to
$50 million
0.40% of net assets over
$50 million
▇▇▇▇▇▇▇▇ Global Smaller Companies 0.75% of net assets up to
Portfolio $100 million
0.65% of net assets over
$100 million
▇▇▇▇▇▇▇▇ International Growth Portfolio 0.45% of net assets up to
$50 million
0.40% of net assets over
$50 million
