<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
[X] Definitive proxy statement. Commissioner only (as
[ ] Definitive additional materials. permitted by Rule 14a-6(e)(2).
[ ] Soliciting material pursuant to
Rule 14a-11(c) or Rule 14a-12.
THE TRAVELERS SERIES TRUST
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
N/A
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies: N/A
(2) Aggregate number of securities to which transaction
applies: N/A
(3) Per unit price or other underlying value of transaction
computed pursuant to Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was
determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: $0
[ ] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
<PAGE> 2
THE TRAVELERS SERIES TRUST
Jurika & Voyles Core Equity Portfolio
NWQ Large Cap Portfolio
One Tower Square
Hartford, Connecticut 06183
October 19, 2000
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Notice is hereby given that a Special Shareholder Meeting (the "Meeting")
of certain portfolios of The Travelers Series Trust (the "Trust") will be held
at the Trust's offices at One Tower Square, Hartford, Connecticut 06183 on
Friday, December 1, 2000 at 9:00 a.m. for the following purposes:
1. To approve a new Investment Subadvisory Agreement and an Interim
Investment Subadvisory Agreement between Travelers Asset Management
International Company LLC and Jurika & Voyles, L.P. on behalf of Jurika
& Voyles Core Equity Portfolio.
2. To approve a new Investment Subadvisory Agreement and an Interim
Investment Subadvisory Agreement between Travelers Asset Management
International Company LLC and NWQ Investment Management Company on
behalf of NWQ Large Cap Portfolio.
3. To act on any and all such other business as may properly come before
the Meeting.
The close of business on October 13, 2000 has been fixed as the record date
for the determination of beneficial Shareholders entitled to notice of, and to
vote at, the Meeting and any adjournments thereof. Please refer to the
accompanying Proxy Statement for more information about the proposals to be
considered and acted upon at the Meeting or any adjournments.
By order of the Board of Trustees.
LOGO
Ernest J. Wright, Secretary
Please complete, date, sign, and return the enclosed proxy card as soon as
possible in the post-paid envelope provided. Your prompt response is
appreciated.
YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT
YOU OWN.
<PAGE> 3
THE TRAVELERS SERIES TRUST
Jurika & Voyles Core Equity Portfolio
NWQ Large Cap Portfolio
One Tower Square
Hartford, Connecticut 06183
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 1, 2000
THE BOARD OF TRUSTEES OF THE TRAVELERS SERIES TRUST (THE "TRUST") SOLICITS
YOUR PROXY FOR USE AT A SPECIAL MEETING OF SHAREHOLDERS OF JURIKA & VOYLES CORE
EQUITY PORTFOLIO AND NWQ LARGE CAP PORTFOLIO (EACH A "FUND," AND TOGETHER, THE
"FUNDS") AND AT ANY ADJOURNMENT OF THE SPECIAL MEETING. This proxy statement is
being furnished in connection with the solicitation of voting instructions, as
further described below, from owners of variable contracts ("beneficial owners")
for use at a special meeting of shareholders of each Fund to be held at the
Trust's offices located at One Tower Square, Hartford, Connecticut 06183, at
9:00 a.m. on December 1, 2000, and any adjournments (the "Meeting"). This proxy
material is expected to be mailed to beneficial owners on or about October 19,
2000.
GENERAL
The purposes of the Meeting are as follows:
(1) to approve a new Investment Subadvisory Agreement and an Interim
Investment Subadvisory Agreement between Travelers Asset Management
International Company LLC and Jurika & Voyles, L.P. on behalf of Jurika
& Voyles Core Equity Portfolio of the Trust; and
(2) to approve a new Investment Subadvisory Agreement and an Interim
Investment Subadvisory Agreement between Travelers Asset Management
International Company LLC and NWQ Investment Management Company on
behalf of NWQ Large Cap Portfolio of the Trust.
<PAGE> 4
The following chart indicates the persons who are entitled to provide
voting instructions on each proposal.
<TABLE>
<S> <C>
---------------------------------------------------------------
DESCRIPTION OF PROPOSAL VOTING PROCEDURE
---------------------------------------------------------------
Approval of the New Shareholders of Jurika & Voyles
Investment Subadvisory Core Equity Portfolio
Agreement and an Interim
Investment Subadvisory
Agreement between Travelers
Asset Management
International Company LLC
and Jurika & Voyles, L.P.
---------------------------------------------------------------
Approval of the New Shareholders of NWQ Large Cap
Investment Subadvisory Portfolio
Agreement and an Interim
Investment Subadvisory
Agreement between Travelers
Asset Management
International Company LLC
and NWQ Investment
Management Company
---------------------------------------------------------------
</TABLE>
VOTE BY PROXY
A voting instruction card is enclosed for use at the Meeting. You may
revoke the voting instruction card at any time before 5:00 p.m. Eastern time on
November 29, 2000, by sending a written notice of revocation to the Trust's
Secretary or by appearing in person to provide instructions at the Meeting. All
voting instruction cards that are properly executed, received in time, and not
so revoked will be voted at the Meeting in accordance with the instructions on
them, if any. Voting instruction cards that are properly executed but provide no
specific instructions will be voted in favor of the Proposals.
COST OF SOLICITATION
All costs and expenses incurred in connection with the solicitation of
voting instructions on behalf of Jurika & Voyles Core Equity Portfolio for use
at the Meeting, including the costs of printing, mailing, and reasonable
expenses of outside counsel and Trust counsel, will be paid by CDC Asset
Management or Nvest Companies, L.P. (Information about Nvest Companies, L.P. and
CDC Asset Manage-
2
<PAGE> 5
ment is set forth under Change in Control of J&V starting on page 5. All costs
and expenses incurred in connection with the solicitation of voting instructions
on behalf of NWQ Large Cap Portfolio for use at the Meeting, including the costs
of printing, mailing, and reasonable expenses of outside counsel and Trust
counsel, will be paid by NWQ Investment Management Company. Certain costs may be
allocated on the basis of each Fund's relative net asset value. The aggregate
cost of soliciting the Funds' beneficial owners is expected to be approximately
$6,000.00.
In addition to the solicitation of voting instructions by mail, the Trust's
trustees, officers, and/or employees of Travelers Asset Management International
Company LLC ("TAMIC") may solicit voting instructions in person or by telephone.
TAMIC, located at One Tower Square, Hartford, Connecticut 06183, serves as
investment adviser to the Funds pursuant to an Investment Advisory Agreement.
SHAREHOLDERS AND THE VOTE
Shareholders may vote only on matters that concern the Fund or Funds in
which they hold shares. Shareholders are entitled to one vote for each full
share owned and fractional votes for fractional shares. Only shareholders of
record of each Fund at the close of business on October 13, 2000 (the record
date) will be entitled to notice of and to vote at the Meeting.
The number of full and fractional votes for which a beneficial owner is
entitled to provide voting instructions is set forth on the enclosed instruction
card(s). Shares owned by two or more persons (whether as joint tenants,
co-fiduciaries, or otherwise) will be voted as follows, unless a written
instrument or court order providing to the contrary has been filed with the
Trust: (1) if only one person votes, that vote will bind all; (2) if more than
one person votes, the vote of the majority will bind all; and (3) if more than
one person votes and the vote is evenly divided, the vote will be cast
proportionately.
As of the record date, separate accounts that fund variable annuity
contracts and variable life insurance contracts issued by The Travelers
Insurance Company and The Travelers Life and Annuity Company (collectively, with
their affiliates, "The Travelers") were the record owners of all of the Funds'
shares.
This proxy material is being mailed to owners of, or participants in,
variable annuities and variable life insurance contracts who had allocated
amounts to one or both Funds through certain separate
3
<PAGE> 6
accounts as of the record date (namely, the beneficial owners of the shares).
The beneficial owners instruct The Travelers how to vote the shares in which the
beneficial owners have a beneficial interest. The Travelers will vote all shares
held by it as instructed by the contract owners or participants. Further, The
Travelers intends to vote all shares for which no instruction cards are received
in the same proportion as the shares for which instructions are received.
To hold the Meeting with respect to a Fund, a majority of that Fund's
shares entitled to vote must be present in person or by proxy at the Meeting. In
the event that a quorum is present but sufficient votes in favor of one or more
Proposals are not received by the Meeting time, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment requires the affirmative vote of a majority of
the shares present in person or by proxy at the Meeting to be adjourned. The
persons named as proxies will vote in favor of such adjournment if they
determine that such adjournment and additional solicitation is reasonable and in
the interests of the particular Fund's shareholders. Each Fund's shareholders
vote separately with respect to each Proposal, pursuant to the Investment
Company Act of 1940, as amended (the "1940 Act") and the Trust's Declaration of
Trust. VOTE REQUIRED: APPROVAL OF EACH PROPOSAL FOR A FUND REQUIRES THE
AFFIRMATIVE VOTE OF THE HOLDERS OF THE LESSER OF: (A) 67% OF THE FUND'S SHARES
PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF MORE THAN 50% OF THE
OUTSTANDING SHARES OF THE FUND ARE PRESENT IN PERSON OR BY PROXY; OR (B) A
MAJORITY OF THE FUND'S OUTSTANDING SHARES.
The Trust's Board of Trustees (the "Board") has approved and recommends
that Fund shareholders approve the following Proposals to approve the respective
Investment Subadvisory Agreements and Interim Investment Subadvisory Agreements
as to each Fund.
PROPOSAL NO. 1
APPROVAL OF INVESTMENT SUBADVISORY AGREEMENT AND AN INTERIM INVESTMENT
SUBADVISORY AGREEMENT BETWEEN TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY
LLC ("TAMIC") AND JURIKA & VOYLES, L.P. ("J&V") ON BEHALF OF JURIKA & VOYLES
CORE EQUITY PORTFOLIO
4
<PAGE> 7
Under Proposal No. 1, shareholders of Jurika & Voyles Core Equity Portfolio
are being asked to approve a new Investment Subadvisory Agreement and an Interim
Investment Subadvisory Agreement between TAMIC and J&V on behalf of the Fund.
The approval is necessary because the current investment subadvisory agreement
between TAMIC and J&V (the "Current J&V Agreement") will terminate automatically
upon the completion of certain transactions described below.
CHANGE IN CONTROL OF J&V
J&V is a limited partnership that has one general partner, Jurika & Voyles,
Inc. (the "J&V General Partner"). Christopher L. Bittman is the principal
executive officer of J&V. Mr. Bittman's principal occupation is his position
with J&V. The address of J&V, the J&V General Partner and Mr. Bittman is 1999
Harrison Street, Suite 700, Oakland, CA 94612. The J&V General Partner is a
direct wholly-owned subsidiary of Nvest Holdings, Inc. ("Nvest Holdings"), which
in turn is a direct wholly-owned subsidiary of Nvest Companies, L.P. ("Nvest").
Nvest's managing general partner, Nvest Corporation, is a direct wholly-owned
subsidiary of MetLife New England Holdings, Inc. MetLife New England Holdings,
Inc. is a direct wholly-owned subsidiary of Metropolitan Life Insurance Company
("MetLife"). Nvest Corporation is also the sole general partner of Nvest, L.P.
Nvest, L.P., Nvest's advising general partner, is a publicly traded company
listed on the New York Stock Exchange. In addition to owning Nvest Corporation,
MetLife owns, directly or indirectly, approximately a 48% limited partnership
interest in Nvest. Nvest, L.P. owns approximately 15% of Nvest. (These
percentages, which are as of June 30, 2000, do not reflect the vesting and
exercise of various options held by personnel of Nvest and of its affiliates,
including J&V, to acquire limited partnership units of Nvest, L.P.) If the
proposed acquisition is completed, Nvest Corporation will cease to be the
managing general partner of Nvest and the general partner of Nvest, L.P., and
MetLife will cease to own any partnership interest in Nvest. MetLife is a
wholly-owned subsidiary of MetLife, Inc., a publicly traded company listed on
the New York Stock Exchange. The address of Nvest, Nvest Corporation, Nvest
Holdings and Nvest, L.P. is 399 Boylston Street, Boston, Massachusetts 02116.
The address of MetLife New England Holdings, Inc., MetLife and MetLife, Inc. is
One Madison Avenue, New York, New York 10010.
5
<PAGE> 8
On June 16, 2000, Nvest and CDC Asset Management ("CDC AM") announced that
they and certain of their respective affiliated companies had entered into an
Agreement and Plan of Merger (the "Merger Agreement"). Under the Merger
Agreement, CDC AM would acquire all of the outstanding units of partnership
interest in both Nvest and Nvest, L.P., Nvest's advising general partner, at a
price of $40 per unit (the "Transaction"). This price is subject to reduction
(but not below $34 per unit) based in part on a formula that takes into account
the investment advisory fees payable to the Adviser and other Nvest affiliates
by their mutual fund and other investment advisory clients that have consented
to the Transaction. Under this formula, the price per unit that CDC AM will pay
to acquire Nvest could be reduced if the shareholders of Jurika & Voyles Core
Equity Portfolio do not approve the New Investment Subadvisory Agreement and/or
Interim Investment Subadvisory Agreement. Assuming a transaction price of $40
per unit, and the number of units and options outstanding as of June 30, 2000,
the aggregate price payable by CDC AM to acquire all of the units of Nvest will
be approximately $1.5 billion, and the aggregate price payable by CDC AM to
acquire all of the units of Nvest, L.P. (including payments with respect to
units subject to options) will be approximately $375 million.
As a result of the Transaction, Nvest and Nvest, L.P. would become indirect
wholly-owned subsidiaries of CDC AM, which in turn is 60% owned by CDC Finance,
a wholly-owned subsidiary of Caisse des depots et Consignations ("CDC"). Founded
in 1816, CDC is a major diversified financial institution with a strong global
presence in the banking, insurance, investment banking, asset management and
global custody industries. In addition to its 60% ownership of CDC AM through
CDC Finance, CDC owns 40% of CNP Assurances, the leading French insurance
company, which itself owns 20% of CDC AM. CDC also owns 35% of Caisse National
des Caisses d'Epargne, which also owns 20% of CDC AM. CDC is 100% owned by the
French state. The main place of business of CDC AM is 7, place des Cinq Martyrs
du Lycee Buffon, 75015 Paris, France. The registered address of CDC Finance is
56 rue de Lille, Paris 75007, France. The registered address of CDC is 56, rue
de Lille, 75007 Paris, France. The registered address of CNP Assurances is 4,
place Raoul Dautry, 75015 Paris, France. The registered address of Caisse
National des Caisses d'Epargne is 5, rue Masseran, 75007 Paris, France.
Following the acquisition, it is expected that Nvest will be renamed CDC Asset
Management-North America.
6
<PAGE> 9
Nvest currently expects that the Transaction will occur during the fourth
calendar quarter of 2000, but the Transaction could be delayed. The Transaction
will not occur unless various conditions are satisfied (or waived by the
parties, if permitted by law). These conditions include certain governmental
approvals of the Transaction, obtaining the consent of the unitholders of Nvest
and Nvest, L.P. and obtaining approval or consent from investment advisory
clients of the Adviser and other Nvest affiliates (including mutual fund
clients) whose advisory fees represent a specified percentage of the total
advisory fee revenues of the Nvest organization. Because of this condition,
approval or disapproval by the Jurika & Voyles Core Equity Portfolio's
shareholders of the New Investment Subadvisory Agreement and Interim Investment
Subadvisory Agreement, taken together with other clients' consents or approvals,
could affect whether or not the Transaction occurs.
Various personnel of Nvest and of its affiliates, including J&V, have
previously been granted options to purchase limited partnership units of Nvest,
L.P. ("Nvest L.P. Units"). The Merger Agreement provides that these options will
vest and become fully exercisable immediately before CDC AM's acquisition of
Nvest and Nvest, L.P., even though some of these options would not otherwise
have vested or been exercisable at that time. Each option will be converted into
the right to receive cash from Nvest in an amount equal to the difference
between the option's exercise price and the transaction price of $40 per unit
(subject to reduction, but not below $34 per unit, as explained above).
The Current J&V Agreement provides that it will terminate automatically in
the event of its assignment. As a result of J&V's change in ownership upon
completion of the Transaction, the Current J&V Agreement will be deemed to be
assigned within the meaning of Section 15 of the 1940 Act and will terminate
automatically. Accordingly, the new Investment Subadvisory Agreement between
TAMIC and J&V (the "New J&V Agreement") on behalf of Jurika & Voyles Core Equity
Portfolio, is proposed for approval by that Fund's shareholders to replace the
Current J&V Agreement. A form of the proposed New J&V Agreement is attached as
APPENDIX A to this Proxy Statement. Except for the date of the New J&V
Agreement, the New J&V Agreement is identical to the Current J&V Agreement in
all material provisions, including the advisory fees payable to J&V and J&V's
duties and responsibilities. If for some reason the Transaction does not occur,
the automatic termination of the Current J&V Agreement will not occur, and the
New J&V Agreement and Interim
7
<PAGE> 10
Subadvisory Agreement will not be entered into, even if they have been approved
by the Funds' shareholders.
In addition, shareholders of Jurika & Voyles Core Equity Portfolio are
being asked to approve an Interim Investment Subadvisory Agreement between TAMIC
and J&V on behalf of the Fund (the "Interim J&V Agreement"). The terms of the
Interim J&V Agreement are identical to the New J&V Agreement, however, the
Interim J&V Agreement would cover an interim period of up to 150 days, beginning
on the date the transaction is closed and continuing until the date when a
majority of the Fund's shareholders have voted to approve the New J&V Agreement
(the "Period"). A form of the Interim J&V Agreement is attached as APPENDIX B to
this Proxy Statement.
Representatives of Nvest and J&V have advised the Trust that currently no
change is expected in investment advisory or other personnel in connection with
the Transaction and that it is currently anticipated the same persons
responsible for management of the Jurika & Voyles Core Equity Portfolio under
the Current J&V Agreement will continue to be responsible under the New J&V
Agreement and the Interim J&V Agreement. J&V does not anticipate either that the
Transaction will cause any reduction in its resources or the quality of services
now provided to the Fund or that it will have any adverse effect on J&V's
ability to fulfill its obligations to the Fund. J&V has agreed to take all
appropriate steps to ensure that the scope and quality of investment subadvisory
services provided to the Fund will be at least equivalent, in the judgment of
the Board, to the scope and quality of services J&V provides under the Current
J&V Agreement.
The Current J&V Agreement dated July 20, 1998 was last approved by a vote
of the sole shareholder of Jurika & Voyles Core Equity Portfolio on August 1,
1998. The Board, including the trustees who were not parties to the Current J&V
Agreement or "interested persons" of any such party (the "Independent
Trustees"), last approved the continuation of the Current J&V Agreement at the
Board meeting held on October 29, 1999.
At a Board meeting held on July 28, 2000, the Board, including the
Independent Trustees, approved unanimously the New J&V Agreement and the Interim
J&V Agreement. Further, the Board and the Independent Trustees approved
unanimously the submission of the New J&V Agreement and the Interim J&V
Agreement for approval by the shareholders of the Fund. Only shareholders of
Jurika & Voyles
8
<PAGE> 11
Core Equity Portfolio vote to approve the New J&V Agreement and the Interim J&V
Agreement for that Fund.
If the Fund's shareholders approve the New J&V Agreement, it will take
effect on the later of the date the Transaction closes or the date on which the
Fund's shareholders approve the New J&V Agreement. The New J&V Agreement will
have an initial term of two years and, thereafter, will continue in effect from
year to year, with respect to the Fund, provided that each such continuance is
approved annually: (1) by the Board or by the vote of a majority of the
outstanding voting securities of the Fund, and, in either case, (2) by a
majority of the Independent Trustees. If the Fund's shareholders fail to approve
the New J&V Agreement, J&V will continue to provide investment advisory services
to the Fund and, in connection with those services, be reimbursed for its actual
out of pocket costs in an amount not to exceed the annual fee in the last
subadvisory agreement approved by the Fund's shareholders until the Board, the
Independent Trustees, and the Fund's shareholders approve an alternative
investment subadvisory agreement for the Fund with either J&V or another
investment subadviser.
If the Fund's shareholders approve the Interim J&V Agreement within 150
days after the day that the Transaction closes, J&V will be paid the total
amount in the escrow account, including any interest earned on that money. If
the Fund's shareholders should fail to approve the Interim J&V Agreement within
150 days after the day that the Transaction closes, J&V will be paid out of the
escrow account the lesser of (1) the total amount held in the escrow account
discussed above or (2) any costs incurred in performing the interim contract
plus interest earned on that amount while in escrow. PROVISIONS OF THE NEW J&V
AGREEMENT AND THE INTERIM J&V AGREEMENT
The provisions of the New J&V Agreement are the same in all material
respects as those of the Current J&V Agreement. The Interim J&V Agreement is
identical to the New J&V Agreement, except for (1) the maximum 150-day effective
term of the Interim J&V Agreement, and (2) the Interim J&V Agreement's
requirement that compensation be held in an escrow account until shareholders
vote on the New J&V Agreement.
The New J&V Agreement requires J&V to act as the investment subadviser to
Jurika & Voyles Core Equity Portfolio and, subject to the supervision of the
Board and TAMIC, to manage the investment and
9
<PAGE> 12
reinvestment of the assets of the Fund, with full investment discretion and
authority, in a manner consistent with the investment objectives, policies and
restrictions of the Fund. The New J&V Agreement also requires J&V: to perform
investment research and evaluate financial data; to consult with, make
recommendations to, and report regularly to the Board; and to furnish requested
information to appropriate regulatory authorities.
The advisory fees will not increase for the Fund. The annual advisory fees
under the New J&V Agreement with respect to the Fund are 0.375% of the Fund's
average daily net assets. The fees are calculated daily and paid monthly.
Like the Current J&V Agreement, the New J&V Agreement provides that J&V is
not subject to liability to the Trust for any act or omission in the course of,
or connected with, rendering services under the New J&V Agreement, except by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties under the Agreement.
The New J&V Agreement may be terminated with respect to the Fund without
penalty upon sixty (60) days' written notice to J&V by the Board or by a
majority vote of those persons having voting rights in respect of the Fund, or
upon sixty (60) days' written notice to the Board by J&V. The New J&V Agreement
terminates automatically in the event of its "assignment" (within the meaning of
the 1940 Act).
ADDITIONAL INFORMATION ABOUT JURIKA & VOYLES, L.P.
Jurika & Voyles, L.P. is a professional investment management firm founded
in 1983 by William K. Jurika and Glenn C. Voyles. As of August 31, 2000, J&V had
discretionary management authority with respect to approximately $2.7 billion of
assets for various clients including corporations, pension plans, 401(k) plans,
profit sharing plans, trusts and estates, foundations and charitable endowments,
and high net worth individuals.
Under the agreement, TAMIC is obligated to pay J&V a subadvisory fee at the
annual rate of 0.375% of the Fund's average daily net assets. The fee is accrued
daily and paid monthly. For the year ended December 31, 1999, the subadvisory
fees TAMIC paid J&V for Jurika & Voyles Core Equity Portfolio was $28,019.
APPENDIX C provides the name, address, and principal occupation of J&V's
directors and executive officers.
10
<PAGE> 13
From time to time, J&V receives brokerage and research services from
brokers that execute securities transactions for the Fund. The commission paid
by the Fund to a broker that provides such services to J&V may be greater than
the commission would be if the Fund used a broker that does not provide the same
level of brokerage and research services. Additionally, J&V may use such
services for clients other than the Fund from which the related commissions are
derived.
In addition to serving as investment subadviser to the Fund under the
Current J&V Agreement, J&V serves as investment adviser or subadviser to certain
portfolio(s) of other registered investment companies having an investment
objective similar to that of the Fund. The size of such other portfolio(s) and
the rate of J&V's compensation are indicated below:
<TABLE>
<CAPTION>
ASSETS UNDER
FUND FEE RATE MANAGEMENT (8/31/00)
---- -------- --------------------
<S> <C> <C>
Jurika & Voyles Value
& Growth Fund 0.85% $30.4 million
</TABLE>
EVALUATION BY THE BOARD OF TRUSTEES
In determining whether or not to approve the New J&V Agreement and the
Interim J&V Agreement and recommend approval to shareholders, the Board,
including the Independent Trustees, considered various materials and
representations provided by J&V.
The Board considered the following information, among other things: (1)
J&V's representation that the same persons responsible for the Fund's management
under the Current J&V Agreement are currently expected to continue to manage the
Fund under the New J&V Agreement and the Interim J&V Agreement; (2) compensation
to be received by J&V under the New J&V Agreement and the Interim J&V Agreement
being the same as the compensation paid under the Current J&V Agreement; and (3)
the commonality of the provisions of the New J&V Agreement and Current J&V
Agreement.
Further, the Board reviewed the determinations it reached at the July 28,
2000 Board meeting relating to the Current J&V Agreement, including: (1) the
nature and quality of the services rendered by J&V under the Current J&V
Agreement; (2) the fairness of the compensation payable to J&V under the Current
J&V Agreement; (3) the results achieved by J&V for the Fund; and (4) the
personnel, operations and financial condition, and investment management
capabilities, methodologies, and performance of J&V.
11
<PAGE> 14
Based upon its review, the Board determined that by approving the New J&V
Agreement and the Interim J&V Agreement, the Fund can best be assured that J&V
will provide uninterrupted advisory services. The Board also determined that the
New J&V Agreement is in the best interests of the Fund and its shareholders.
Accordingly, after consideration of the above and such other factors and
information it considered relevant, the Board unanimously approved the New J&V
Agreement and the Interim J&V Agreement and voted to recommend their approval by
the Fund's shareholders.
VOTE REQUIRED
Only shareholders of Jurika & Voyles Core Equity Portfolio will vote
whether to approve the New J&V Agreement and the Interim J&V Agreement for that
Fund. Approval of Proposal No. 1 for Jurika & Voyles Core Equity Portfolio
requires an affirmative vote of the lesser of: (1) 67% or more of the Fund's
shares present at the Meeting or represented by proxy if more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (2) more
than 50% of the outstanding shares of the Fund.
THE BOARD OF TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT DIRECTORS,
RECOMMENDS THAT YOU VOTE "FOR" BOTH THE INTERIM AND NEW J&V AGREEMENTS UNDER
PROPOSAL NO. 1.
12
<PAGE> 15
PROPOSAL NO. 2
APPROVAL OF AN INVESTMENT SUBADVISORY AGREEMENT AND AN INTERIM INVESTMENT
SUBADVISORY AGREEMENT BETWEEN TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY
LLC AND NWQ INVESTMENT MANAGEMENT COMPANY ON BEHALF OF NWQ LARGE CAP PORTFOLIO
Under Proposal No. 2, shareholders of NWQ Large Cap Portfolio are being
asked to approve a new Investment Subadvisory Agreement and an interim
Investment Subadvisory Agreement between TAMIC and NWQ Investment Management
Company ("NWQ") on behalf of the Fund. The approval is necessary because the
current investment subadvisory agreement between TAMIC and NWQ (the "Current NWQ
Agreement") may terminate automatically upon the consummation of a transaction
whereby United Asset Management Corporation, the parent company to NWQ, will
undergo a change in ownership. Such change in ownership of NWQ's parent company
results in the assignment and termination of the Current NWQ Agreement.
On June 19, 2000, Old Mutual plc ("Old Mutual") and United Asset Management
Corporation ("UAM") announced an agreement for Old Mutual to acquire UAM in a
cash tender offer. Both companies' board of directors approved the agreement.
Once Old Mutual had purchased 51% of the outstanding shares of UAM (the "UAM
Transaction"), Old Mutual will have assumed ownership of UAM, and, consequently,
all subsidiaries of UAM, including NWQ, also will have experienced a change in
ownership. As of September 18, 2000, Old Mutual had been tendered approximately
71.6% of UAM's common stock. Therefore, as of the date of this proxy statement,
UAM and all its subsidiaries, including NWQ, have experienced a change in
ownership.
NWQ's change in ownership resulting from the UAM Transaction is deemed to
be an assignment of the Current NWQ Agreement within the meaning of the 1940
Act. The Current NWQ Agreement provides that it will terminate automatically in
the event of an assignment. Accordingly, a new Investment Subadvisory Agreement
between TAMIC and NWQ (the "New NWQ Agreement") on behalf of NWQ Large Cap
Portfolio, is proposed for approval by that Fund's shareholders to replace the
Current NWQ Agreement. A form of the proposed New NWQ Agreement is attached as
APPENDIX D to this Proxy Statement. Except for the date of the New NWQ
Agreement, the New NWQ Agreement is identical to the Current NWQ
13
<PAGE> 16
Agreement in all material provisions, including the advisory fees payable to,
and the duties and responsibilities of NWQ.
In addition, shareholders of NWQ Large Cap Portfolio are being asked to
approve an Interim Investment Subadvisory Agreement between TAMIC and NWQ on
behalf of the Fund (the "Interim NWQ Agreement"). The terms of the Interim NWQ
Agreement are identical to the New NWQ Agreement, however, the Interim NWQ
Agreement would cover an interim period of up to 150 days, beginning on
September 26, 2000 and continuing until the date when a majority of the Fund's
shareholders have voted to approve the New NWQ Agreement (the "Period"). A form
of the Interim NWQ Agreement is attached as APPENDIX E to this Proxy Statement.
NWQ has agreed to take all appropriate steps to ensure that the scope and
quality of investment subadvisory services provided during the Period will be at
least equivalent, in the judgment of the Board, to the scope and quality of
services NWQ provides under the Current NWQ Agreement.
Representatives of NWQ have advised the Trust that currently no change is
expected in investment advisory or other personnel in connection with the UAM
Transaction and that it is currently anticipated the same persons responsible
for management of NWQ Large Cap Portfolio under the Current NWQ Agreement will
continue to be responsible under the New NWQ Agreement and the Interim NWQ
Agreement. NWQ does not anticipate that the UAM Transaction will cause any
reduction in NWQ's resources or the quality of services now provided to the Fund
or that it will have any adverse effect on NWQ's ability to fulfill its
obligations to the Fund.
The Current NWQ Agreement dated July 20, 1998 was last approved by a vote
of the sole shareholder of NWQ Large Cap Portfolio on August 1, 1998. The Board,
including the trustees who were not parties to the Current NWQ Agreement or
"interested persons" of any such party (the "Independent Trustees"), last
approved the continuation of the Current NWQ Agreement at the Board meeting held
on October 29, 1999.
At a Board meeting held on July 28, 2000, the Board, including the
Independent Trustees, approved unanimously the New NWQ Agreement and the Interim
NWQ Agreement. Further, the Board and the Independent Trustees approved
unanimously the submission of the New NWQ Agreement and the Interim NWQ
Agreement for approval by the shareholders of the Fund. Only shareholders of
14
<PAGE> 17
NWQ Large Cap Portfolio vote to approve the New NWQ Agreement and the Interim
NWQ Agreement for that Fund.
If the Fund's shareholders approve the New NWQ Agreement, it will take
effect on the later of the date the UAM Transaction occurs or the date on which
the shareholders of the Fund approve the New NWQ Agreement. The New NWQ
Agreement will have an initial term of two years and, thereafter, will continue
in effect from year to year, with respect to the Fund, provided that each such
continuance is approved annually: (1) by the Board or by the vote of a majority
of the outstanding voting securities of the Fund, and, in either case, (2) by a
majority of the Independent Trustees. If the Fund's Shareholders fail to approve
the New NWQ Agreement, NWQ will continue to provide investment advisory services
to the Fund and, in connection with those services, be reimbursed for its actual
out of pocket costs in an amount not to exceed the annual fee in the last
subadvisory agreement approved by the Fund's shareholders until the Board, the
Independent Trustees, and the Fund's shareholders approve an alternative
investment subadvisory agreement for the Fund with either NWQ or another
investment subadviser.
If the Fund's shareholders approve the Interim NWQ Agreement within 150
days after the day that the Transaction closes, NWQ will be paid the total
amount in the escrow account, including any interest earned on that money. If
the Fund's shareholders should fail to approve the Interim NWQ Agreement within
150 days after the day that the Transaction closes, NWQ will be paid out of the
escrow account the lesser of (1) the total amount held in the escrow account
discussed above or (2) any costs incurred in performing the interim contract
plus interest earned on that amount while in escrow.
PROVISIONS OF THE NEW NWQ AGREEMENT AND THE INTERIM NWQ AGREEMENT
The provisions of the New NWQ Agreement are the same in all material
respects as those of the Current NWQ Agreement. The Interim NWQ Agreement is
identical to the New NWQ Agreement except for (1) the maximum 150-day effective
term of the Interim NWQ Agreement, and (2) the Interim NWQ Agreement's
requirement that compensation be held in an escrow account until shareholders
vote on the New NWQ Agreement.
The New NWQ Agreement requires NWQ to act as the investment subadviser to
the NWQ Large Cap Portfolio and, subject to the supervision of the Board and
TAMIC, to manage the investment and
15
<PAGE> 18
reinvestment of the assets of the Fund, with full investment discretion and
authority, in a manner consistent with the investment objectives, policies and
restrictions of the Fund. The New NWQ Agreement also requires NWQ: to perform
investment research and evaluate financial data; to consult with, make
recommendations to, and report regularly to the Board; and to furnish requested
information to appropriate regulatory authorities.
The advisory fees will not increase for the Fund. The annual advisory fees
under the New NWQ Agreement with respect to the Fund are 0.375% of the Fund's
average daily net assets. The fees are calculated daily and paid monthly.
Like the Current NWQ Agreement, the New NWQ Agreement provides that NWQ is
not subject to liability to the Trust for any act or omission in the course of,
or connected with, rendering services under the New NWQ Agreement, except by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties under the Agreement.
The New NWQ Agreement may be terminated with respect to the Fund without
penalty upon sixty (60) days' written notice to NWQ by the Board or by a
majority vote of those persons having voting rights in respect of the Fund, or
upon sixty (60) days' written notice to the Board by NWQ. The New NWQ Agreement
terminates automatically in the event of its "assignment" (within the meaning of
the 1940 Act).
INFORMATION ABOUT NWQ
NWQ Investment Management Company serves as subadviser for NWQ Large Cap
Portfolio. NWQ was founded in 1982 and is located at 2049 Century Park East, 4th
Floor, Los Angeles, California 90067. NWQ is a wholly owned subsidiary of United
Asset Management and provides investment management services to institutional
clients and high net worth individuals. As of the August 31, 2000, NWQ had over
$5.4 billion in assets under management. For the year ended December 31, 1999,
the subadvisory fees TAMIC paid NWQ for the NWQ Large Cap Portfolio was $53,252.
APPENDIX F lists the name, address, and principal occupation of NWQ's directors
and officers.
From time to time, NWQ receives brokerage and research services from
brokers that execute securities transactions for the Fund. The commission paid
by the Fund to a broker that provides such
16
<PAGE> 19
services to NWQ may be greater than the commission would be if the Fund used a
broker that does not provide the same level of brokerage and research services.
Additionally, NWQ may use such services for clients other than the Fund from
which the related commissions are derived.
In addition to serving as investment subadviser to the Fund under the
Current NWQ Agreement, NWQ serves as investment adviser or subadviser to certain
portfolios of other registered investment companies having an investment
objective similar to that of the Fund. The size of such other portfolios and the
rate of NWQ's compensation are as follows:
IDEX MUTUAL FUNDS:
<TABLE>
<CAPTION>
ASSETS UNDER
FUND FEE RATE MANAGEMENT (8/31/00)
---- -------- --------------------
<S> <C> <C>
NWQ Value Equity Portfolio * $21.3 million
</TABLE>
---------------
* IDEX NWQ Value Equity Portfolio receives 0.50% of the fees received by Idex
Management Inc. (0.80% of the first $500 million of average daily net assets,
0.70% of the excess of $500 million), less 50% of reimbursements, with expense
cap of 1.2%
WRL SERIES FUND, INC:
<TABLE>
<CAPTION>
ASSETS UNDER
FUND FEE RATE MANAGEMENT (8/31/00)
---- -------- --------------------
<S> <C> <C>
NWQ Value Equity Portfolio * $134.3 million
</TABLE>
---------------
* WRL NWQ Value Equity Portfolio receives 0.50% of the fees received by the
Advisor, WRL Investment Management Inc. (0.80% of the average daily net
assets) less 50% of reimbursements, with expense cap of 1.0%
EVALUATION BY THE BOARD OF TRUSTEES
In determining whether or not to approve the New NWQ Agreement and the
Interim NWQ Agreement and recommend approval to shareholders, the Board,
including the Independent Trustees, considered various materials and
representations provided by NWQ.
The Board considered the following information, among other things: (1)
NWQ's representation that the same persons responsible
17
<PAGE> 20
for the Fund's management under the Current NWQ Agreement are currently expected
to continue to manage the Fund under the New NWQ Agreement and the Interim NWQ
Agreement; (2) compensation to be received by NWQ under the New NWQ Agreement
and the Interim NWQ Agreement being the same as the compensation paid under the
Current NWQ Agreement; and (3) the commonality of the provisions of the New NWQ
Agreement and Current NWQ Agreement.
Further, the Board reviewed the determinations it reached at the July 28,
2000 Board meeting relating to the Current NWQ Agreement, including: (1) the
nature and quality of the services rendered by NWQ under the Current NWQ
Agreement; (2) the fairness of the compensation payable to NWQ under the Current
NWQ Agreement; (3) the results achieved by NWQ for the Fund; and (4) the
personnel, operations and financial condition, and investment management
capabilities, methodologies, and performance of NWQ.
Based upon its review, the Board determined that by approving the New NWQ
Agreement and the Interim NWQ Agreement, the Fund can best be assured that NWQ
will provide uninterrupted advisory services. The Board also determined that the
New NWQ Agreement is in the best interests of the Fund and its shareholders.
Accordingly, after consideration of the above and such other factors and
information it considered relevant, the Board of Trustees unanimously approved
the New NWQ Agreement and the Interim NWQ Agreement and voted to recommend their
approval by the Fund's shareholders.
VOTE REQUIRED
Only shareholders of NWQ Large Cap Portfolio will vote whether to approve
the New NWQ Agreement and Interim NWQ Agreement for that Fund. Approval of
Proposal No. 2 for the Fund requires an affirmative vote of the lesser of: (1)
67% or more of the Fund's shares present at the Meeting or represented by proxy
if more than 50% of the outstanding shares of the Fund are present or
represented by proxy, or (2) more than 50% of the outstanding shares of the
Fund.
18
<PAGE> 21
THE BOARD OF TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT DIRECTORS,
RECOMMENDS THAT YOU VOTE "FOR" BOTH THE INTERIM AND NEW NWQ AGREEMENTS UNDER
PROPOSAL NO. 2.
GENERAL INFORMATION
OTHER MATTERS TO COME BEFORE THE MEETING
The Trust's Management does not know of any matters to be presented at the
Meeting other than those described in this Proxy Statement. If other business
should properly come before the Meeting, the proxy holders will vote thereon in
accordance with their best judgment.
SECTION 15(f) OF THE INVESTMENT COMPANY ACT
The agreement relating to the acquisition of Nvest by CDC AM provides that
CDC AM and its immediate parent company will (subject to certain
qualifications), use their reasonable best efforts to assure compliance with
Section 15(f) of the Investment Company Act. In addition, UAM and Old Mutual
will use their reasonable best efforts to assure compliance with the conditions
of Section 15(f) of the 1940 Act. Section 15(f) provides a non-exclusive safe
harbor for an investment adviser or any affiliated persons thereof to receive
any amount or benefit in connection with a transaction that results in a change
in control of or identity of the investment adviser to an investment company as
long as two conditions are met. First, no "unfair burden" may be imposed on the
investment company as a result of the transaction relating to the change of
control or any express or implied terms, conditions or understandings applicable
thereto. As defined in the 1940 Act, the term "unfair burden" includes any
arrangement during the two-year period after the change in control whereby the
investment adviser (or predecessor or successor adviser), or any interested
person of any such adviser, receives or is entitled to receive any compensation,
directly or indirectly, from the investment company or its security holders
(other than fees for bona fide investment advisory or other services), or from
any person in connection with the purchase or sale of securities or other
property to, from, or on behalf of the investment company (other than bona fide
ordinary compensation as principal underwriter of the investment company).
Second, during the three-year period immediately following the change of
control, at least 75% of the investment company's board of directors must not be
"interested persons" of the investment
19
<PAGE> 22
adviser or the predecessor investment adviser within the meaning of the 1940
Act.
VOTING RIGHTS
This Proxy Statement, and the accompanying solicitation of voting
instructions, is being sent to variable life insurance policyholders and
variable annuity contract holders whose policies or contracts are funded by the
separate accounts that invest in the Trust's Jurika & Voyles Core Equity
Portfolio or NWQ Large Cap Portfolio. The number of shares as to which voting
instructions may be given under a policy or contract is determined by the number
of full and fractional shares of each Fund held in a separate account with
respect to that particular policy or contract.
Each Fund's shareholders of record (which are the insurance companies that
invest in the shares) at the close of business on October 13, 2000 (the "Record
Date") will be entitled to be present and vote at the Meeting with respect to
shares of the Fund owned as of such Record Date. For each Fund, as of the Record
Date, the total number of shares outstanding and entitled to vote was:
<TABLE>
<S> <C>
Jurika & Voyles Core Equity
Portfolio:.................... 3,687,837.169 shares
NWQ Large Cap Portfolio:........ 16,200,449.484 shares
</TABLE>
A majority of the outstanding shares of each Fund on the Record Date,
represented in person or by proxy, must be present to constitute a quorum. If a
quorum is not present at the Meeting, or if a quorum is present but, at the
Meeting, sufficient votes to approve any or all of the Proposals are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies. A shareholder vote may be
taken on one or more of the Proposals in this Proxy Statement prior to any
adjournment if sufficient votes have been received with respect to a Proposal.
Any adjournment will require the affirmative vote of a majority of the shares
represented at the Meeting in person or by proxy. The persons named in the
enclosed proxies will vote in favor of such adjournment those proxies which they
are entitled to vote in favor of any Proposal that has not been adopted, will
vote against any adjournments those proxies required to be voted against any
Proposal that has not been adopted, and will not vote any proxies that direct
them to abstain from voting on such Proposals.
The Travelers, through certain of its separate accounts, own all of the
shares of each Fund and has undertaken to vote its shares in
20
<PAGE> 23
accordance with voting instructions received on a timely basis from the holders
of variable life insurance policies and variable annuity contracts who have
allocated amounts to one or more of the separate account subdivisions, or
sub-accounts, that invest in each Fund. Each insurance company will vote the
shares of a Fund for which no timely instructions are received, and any shares
owned by separate accounts funding qualified plans, in proportion to the voting
instructions that are received with respect to all policies and contracts
participating in the Fund. Voting Instruction Forms that are properly executed
and returned but that have no voting designation with respect to a Proposal will
be voted "For" the Proposal.
Voting instructions may be revoked at any time prior to close of business
on November 29, 2000 (the deadline set forth above for timely receipt of voting
instructions), by executing and delivering later-dated signed voting
instructions to your insurance company.
To the knowledge of management of the Trust, as of the Record Date, no
trustee of the Trust owned 1% or more of the outstanding shares of any Fund, and
the officers and trustees of the Trust own, as a group, less than 1% of the
shares of each Fund.
SERVICE PROVIDERS
The Trust has no underwriter or distributor. The Travelers Insurance
Company, One Tower Square, Hartford, Connecticut 06183 serves as the Trust's
administrator. SSB Citi Fund Management LLC, an affiliate of Travelers
Insurance, serves as subadministrator to the Trust and is compensated by The
Travelers Insurance Company.
SHAREHOLDER PROPOSALS
The Trusts do not have annual or any other regularly scheduled meetings of
Shareholders, and currently have no plans to hold another meeting of
Shareholders of the Trusts. Special Meetings of the Shareholders may be called
by the Trustees upon the written request of Shareholders owning at least 25% of
the outstanding shares entitled to vote and such written Shareholder requests
must be received by the Trusts' Secretary at One Tower Square, Hartford,
Connecticut 06183 within a reasonable time before the solicitation is made.
It is suggested that beneficial shareholders submit their proposals for a
subsequent shareholder meeting by Certified Mail -- Return Receipt Requested by
December 31, 2000. The Securities and Ex-
21
<PAGE> 24
change Commission has adopted certain requirements that apply to any proposals
of shareholders.
AFFILIATED BROKERAGE
During the last fiscal year, the Trust on behalf of the NWQ Large Cap
Portfolio paid Broker commissions to an affiliated broker-dealer in the amount
shown, which constituted the percentage of the Account's total brokerage
commissions for the fiscal year shown:
<TABLE>
<CAPTION>
AGGREGATE AMOUNT OF % OF AGGREGATE
TOTAL COMMISSIONS PAID TO COMMISSIONS PAID TO
FUND NAME COMMISSION AN AFFILIATED BROKER AFFILIATED BROKER
--------------------- ---------- -------------------- -------------------
<S> <C> <C> <C>
NWQ Large Cap
Portfolio $29,467 $ 318.00(1) .82%
</TABLE>
---------------
(1) Salomon Smith Barney Inc. is affiliated with TAMIC, the investment adviser
to the Trust.
The Jurika & Voyles Core Equity Portfolio did not pay any commission to an
affiliated broker dealer during the last fiscal year.
REPORTS TO SHAREHOLDERS
The Trust will furnish, without charge, a copy of its Annual Report and
Semi-Annual Report upon request. To request a copy of either report, please
contact the Trust at its address specified above.
OFFICERS OF THE TRUST
<TABLE>
<CAPTION>
NAME TITLE POSITION HELD SINCE
---- ----- -------------------
<S> <C> <C>
Heath B. McLendon Chairman and President January 27, 1995
Ernest J. Wright Secretary October 21, 1994
Kathleen A. McGah Assistant Secretary January 27, 1995
Lewis E. Daidone Treasurer October 25, 1996
Irving David Controller October 25, 1996
Barbara Brinn Assistant Controller October 25, 1996
James Crowley Assistant Controller April 19, 2000
Paul Brook Assistant Treasurer April 19, 2000
Marianne Motley Assistant Treasurer October 25, 1996
</TABLE>
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED,
PROMPT EXECUTION AND RETURN OF THE ENCLOSED VOTING INSTRUCTION FORM IS
REQUESTED. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE.
22
<PAGE> 25
APPENDIX A
FORM OF
INVESTMENT SUB-ADVISORY AGREEMENT
ENTERED INTO BETWEEN
TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY LLC
AND
JURIKA & VOYLES, L.P.
This Investment Sub-Advisory Agreement (the "Agreement") is entered into as
of the day of , 2000, by and between Travelers Asset
Management International Company LLC a limited liability company duly organized
and existing under the laws of the state of New York ("TAMIC"), and Jurika &
Voyles, L.P., a limited partnership duly organized and existing under the laws
of the state of Delaware (the "Sub-Adviser").
WHEREAS, TAMIC has entered into an Investment Advisory Agreement dated
July 20, 1998, (the "Investment Advisory Agreement") with The Travelers Series
Trust (a Massachusetts business trust, hereinafter referred to as the "Trust").
A copy of such agreement is attached as Exhibit A hereto, pursuant to which
TAMIC provides investment management and advisory services to the Trust; and
WHEREAS, the Investment Advisory Agreement provides that TAMIC may engage
a duly organized sub-adviser, to furnish investment information, services and
advice to assist TAMIC in carrying out its responsibilities under the Investment
Advisory Agreement; and
WHEREAS, TAMIC desires to retain Sub-Adviser to render investment advisory
services to TAMIC in the manner and on the terms set forth in this Agreement,
and the Sub-Adviser desires to provide such investment advisory services.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, TAMIC and Sub-Adviser agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF TAMIC
TAMIC represents and warrants to the Sub-Adviser as follows:
a. TAMIC is registered with the SEC as an investment adviser under the
Advisers Act;
A-1
<PAGE> 26
b. TAMIC is registered and licensed as an investment adviser under the laws
of all jurisdictions in which its activities require it to be so
licensed, except in such jurisdictions where the failure to be so
licensed would not have a material effect on its business;
c. TAMIC is a corporation duly organized and validly existing under the
laws of the State of New York with the power to own and possess its
assets and carry on its business as it is now being conducted;
d. The execution, delivery and performance by TAMIC of this Agreement are
within TAMIC's powers and have been duly authorized by all necessary
action on the part of its directors, and no action by or in respect of,
or filing with, any governmental body, agency or official is required on
the part of TAMIC for the execution, delivery and performance of this
Agreement by the parties hereto, and the execution, delivery and
performance of this Agreement by the parties hereto does not contravene
or constitute a default under (i) any provision of applicable law, rule
or regulation, (ii) TAMIC's Limited Liability Agreement, or (iii) any
agreement, judgment, injunction, order, decree or other instruments
binding upon TAMIC;
e. This Agreement is a valid and binding Agreement of TAMIC;
f. TAMIC has provided the Sub-Adviser with a copy of its Form ADV as most
recently filed with the SEC and will, within a reasonable time after
filing any amendment to its Form ADV with the SEC, furnish a copy of
such amendments to the Sub-Adviser. The information contained in TAMIC's
Form ADV is accurate and complete in all material respects and does not
omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under this they were
made, not misleading;
g. TAMIC acknowledges that it received a copy of the Sub-Adviser's Form ADV
at least 48 hours prior to the execution of this Agreement and has
delivered a copy of the same to the Trust; and
A-2
<PAGE> 27
2. REPRESENTATIONS AND WARRANTIES OF SUB-ADVISER
The Sub-Adviser hereby represents and warrants to TAMIC that:
a. The Sub-Adviser is registered with the SEC as an investment adviser
under the Advisers Act;
b. The Sub-Adviser is registered or licensed as an investment adviser under
the laws of jurisdictions in which its activities require it to be so
registered or licensed, except where the failure to be so licensed would
not have a material adverse effect on its business;
c. The Sub-Adviser is a limited partnership duly organized and validly
existing under the laws of the State of Delaware with the power to own
and possess its assets and carry on its business as it is now being
conducted;
d. The execution, delivery and performance by the Sub-Adviser of this
Agreement are within the Sub-Adviser's powers and have been duly
authorized by all necessary action on the part of its directors, and no
action by or in respect of, or filing with, any governmental body,
agency or official is required on the part of the Sub-Adviser for the
execution, delivery and performance of this Agreement by the parties
hereto, and the execution, delivery and performance of this Agreement by
the parties hereto does not contravene or constitute a default under (i)
any provision of applicable law, rule or regulation, (ii) the
Sub-Adviser's Limited Partnership Agreement, or (iii) any agreement,
judgment, injunction, order, decree or other instruments binding upon
the Sub-Adviser;
e. This Agreement is a valid and binding Agreement of the Sub-Adviser;
f. The Sub-Adviser has provided TAMIC with a copy of its Form ADV as most
recently filed with the SEC and will, promptly after filing any
amendment to its Form ADV with the SEC, furnish a copy of such
amendments to the Adviser. The information contained in the
Sub-Adviser's Form ADV is accurate and complete in all material respects
and does not omit to state any material fact necessary in order to make
the statements made, in light of the circumstances under which they were
made, not misleading;
A-3
<PAGE> 28
g. The Sub-Adviser acknowledges that it received a copy of TAMIC's Form ADV
at least 48 hours prior to the execution of this Agreement.
3. INVESTMENT DESCRIPTION APPOINTMENT
The Trust, which is divided into series including the segment known as the
Jurika & Voyles Core Equity Portfolio ( the "Portfolio") desires to employ its
capital relating to the Portfolio by investing and reinvesting in investments of
the kind and in accordance with the investment(s), policies and limitations
specified in the prospectus (the "Prospectus") and the statement of additional
information (the "SAI") filed with the Securities and Exchange Commission (the
"SEC") as part of the Trust's Registration Statement on Form N-1A, as amended or
supplemented from time to time, and in the manner and to the extent as may from
time to time be approved by the Board of Trustees of the Trust (the "Board").
TAMIC will supply copies of the Prospectus and the SAI to the Sub-Adviser
promptly after the Trust's Registration Statement is declared effective. TAMIC
agrees promptly to provide copies of all amendments and supplements to the
current Prospectus and the SAI, and copies of any procedures adopted by the
Board applicable to the Sub-Adviser and any amendments thereto (the "Board
Procedures"), to the Sub-Adviser on an on-going basis. Until TAMIC delivers any
such amendment or supplement or Board Procedures, the Sub-Adviser shall be fully
protected in relying on the Prospectus and SAI and any Board Procedures, if any,
as previously furnished to the Sub-Adviser. In addition, TAMIC shall furnish the
Sub-Adviser with a certified copy of any financial statement or report prepared
for the Trust with respect to the Portfolio by certified or independent public
accountants, and with copies of any financial statements or reports made by the
Trust to shareholders or to any state or federal regulatory agency. TAMIC shall
also inform the Sub-Adviser of the results of any audits or examinations by
regulatory authorities pertaining to the Portfolio. TAMIC further agrees to
furnish the Sub-Adviser with any materials or information that the Sub-Adviser
may reasonably request to enable it to perform its functions under this
Agreement.
TAMIC and the Trust desire to employ and hereby appoint the Sub-Adviser to
act as the sub-investment adviser to the Portfolio. Subject to the terms and
conditions of this Agreement, Sub-Adviser accepts the appointment and agrees to
furnish the services for the compensation and for the term set forth below.
Except as specified herein, the Sub-Adviser agrees that it shall not delegate
any material
A-4
<PAGE> 29
obligation assumed pursuant to this Agreement to any third party without first
obtaining the written consent of both the Trust and TAMIC.
4. SERVICES AS SUB-ADVISER
Subject to the supervision, direction and approval of the Board and TAMIC,
the Sub-Adviser shall conduct a continual program of investment, evaluation and,
if appropriate in its view, the sale and reinvestment of the Portfolio's assets.
The Sub-Adviser is authorized, in its sole discretion and without prior
consultation with TAMIC, to: (a) obtain and evaluate pertinent economic,
financial, and other information affecting the economy generally and certain
companies as such information relates to securities which are purchased for or
considered for purchase in the Portfolio; (b) manage the Portfolio's assets in
accordance with the Portfolio's investment objective(s) and policies as stated
in the Prospectus and the SAI; (c) make investment decisions for the Portfolio;
(d) place purchase and sale orders for portfolio transactions on behalf of the
Portfolio and manage otherwise uninvested cash assets of the Portfolio; (e)
price such Portfolio securities as TAMIC and Sub-Adviser shall mutually agree
upon from time to time; (f) execute account documentation, agreements, contracts
and other documents as the Sub-Adviser deems appropriate and are requested by
brokers, dealers, counterparties and other persons in connection with its
management of the assets of the Portfolio (in such respect, and only for this
limited purpose, the Sub-Adviser shall act as TAMIC's and the Trust's agent and
attorney-in-fact); (g) employ professional portfolio managers and securities
analysts who provide research services to the Portfolio; and (h) regularly
report to TAMIC and to the Board with respect to its subadvisory activities. The
Sub-Adviser shall execute trades, and in general take such action as is
appropriate to effectively manage the Portfolio's investment practices.
In addition, (i) the Sub-Adviser shall furnish TAMIC daily information
concerning portfolio transactions and quarterly and annual reports concerning
transactions and performance of the Portfolio in such form as may be mutually
agreed upon, and the Sub-Adviser agrees to review the Portfolio and discuss the
management of it with TAMIC and the Board as either or both shall from time to
time reasonably request.
(ii) Unless TAMIC gives the Sub-Adviser written instructions to the
contrary, the Sub-Adviser shall use its good faith judgment in a
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manner which it reasonably believes best serves the interests of the Portfolio's
shareholders to vote or abstain from voting all proxies solicited by or with
respect to the issuers of securities in which assets of the Portfolio may be
invested, but shall not be liable to TAMIC for the votes cast or the failure to
vote.
(iii) The Sub-Adviser shall maintain and preserve such records related to
the Portfolio's transactions as are required to be maintained by an invetment
adviser under any applicable state or federal securities law or regulation
including: the Investment Company Act of 1940, as amended (the "1940 Act"), the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the Investment
Advisers Act of 1940, as amended (the "Advisers Act"). TAMIC shall maintain and
preserve all books and other records not related to the Portfolio's transactions
as required under such rules. The Sub-Adviser shall timely furnish to TAMIC all
information relating to the Sub-Adviser's services hereunder reasonably
requested by TAMIC to keep and preserve the books and records of the Trust. The
Sub-Adviser agrees that all records which it maintains for the Portfolio are the
property of the Trust and the Sub-Adviser will surrender promptly to the Trust
copies of any of such records.
(iv) The Sub-Adviser shall maintain compliance procedures for the Portfolio
that it reasonably believes are adequate to ensure the Portfolio's compliance
with: (i) the 1940 Act and the rules and regulations promulgated thereunder; and
(ii) the Portfolio's investment objective(s) and policies as stated in the
Prospectus and SAI. TAMIC will provide periodic checklists upon which
Sub-Adviser will rely. The Sub-Adviser shall notify TAMIC immediately upon
detection of any material breach of such compliance procedures. The Sub-Adviser
shall maintain compliance procedures that it reasonably believes are adequate to
ensure its compliance with the Investment Advisers Act of 1940.
(v) The Sub-Adviser shall maintain a written code of ethics (the "Code of
Ethics") that it reasonably believes complies with the requirements of Rule
17j-1 under the 1940 Act, a copy of which it will provide to TAMIC or the Trust
upon any reasonable request. The Sub-Adviser shall follow such Code of Ethics in
performing its services under this Agreement. Further, the Sub-Adviser
represents that it has policies and procedures regarding the detection and
prevention of the misuse of material, nonpublic information by the Sub-Adviser
and its employees as required by the Insider Trading and Securities Fraud
Enforcement Act of 1988. The Sub-Adviser shall submit on a quarterly
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basis to the Board and TAMIC a written certificate of compliance with the Code
of Ethics.
(vi) The Sub-Adviser shall manage the investment and reinvestment of the
assets of the Portfolio in a manner consistent with the diversification
requirements of Section 817 and Section 851 of the Internal Revenue Code of
1986, as amended (the "IRC"). The Sub-Adviser will also manage the investments
of the Portfolio in a manner consistent with any and all investment restrictions
(including diversification requirements) contained in the 1940 Act and any
applicable state securities law or regulation. TAMIC will provide periodic
checklists upon which Sub-Adviser will rely.
(viii) The Sub-Adviser shall submit on a quarterly basis to the Board and
TAMIC a written certification detailing any variation from applicable investment
objectives, practices, policies or procedures, or from its Code of Ethics.
5. BROKERAGE
In selecting brokers or dealers (including, if permitted by applicable law
and appropriate Board Procedures, any broker or dealer affiliated with either
TAMIC or the Sub-Adviser) to execute transactions on behalf of the Portfolio,
the Sub-Adviser will seek the best overall terms available. In assessing the
best overall terms available for any transaction, the Sub-Adviser will consider
factors it deems relevant, including, but not limited to, the breadth and nature
of the market in the security, the price of the security, the size of the order,
the timing of the transaction, the difficulty of the transaction, the
reputation, experience, financial condition and execution capability of the
broker or dealer, the quality of the service and the reasonableness of the
commission, if any, for the specific transaction and on a continuing basis. In
selecting brokers or dealers to execute a particular transaction, and in
evaluating the best overall terms available, the Sub-Adviser is authorized to
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the 1934 Act) provided to the Portfolio and/or other accounts
over which the Sub-Adviser or its affiliates exercise investment discretion.
Nothing in this paragraph shall be deemed to prohibit the Sub-Adviser from
paying an amount of commission for effecting a securities transaction in excess
of the amount of commission another member of an exchange, broker, or dealer
would have charged for effecting that transaction, if the Sub-Adviser determined
in good faith that such amount of commission was reasonable in relation to the
value of the
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brokerage and research services provided by such member, broker, or dealer,
viewed in terms of either that particular transaction or its overall
responsibilities with respect to the Portfolio and/or other accounts over which
the Sub-Adviser or its affiliate exercise investment discretion.
To the extent consistent with the applicable law, Sub-Adviser may aggregate
purchase or sell orders for the Portfolio with contemporaneous purchase or sell
orders of other clients of Sub-Adviser or its affiliated persons. In such event,
allocation of Securities so purchased or sold, as well as the expenses incurred
in the transaction, will be made by Sub-Adviser in the manner Sub-Adviser
considers to be the most equitable and consistent with its and its affiliates'
fiduciary obligations to the Portfolio and to such other clients. TAMIC hereby
acknowledges that such aggregations of orders may not result in a more favorable
price or lower brokerage commissions in all instances.
6. INFORMATION AND REPORTS
(a) TAMIC will provide Sub-Adviser with a list, to the best of TAMIC's
knowledge, of all affiliated persons of TAMIC (and any affiliated
person of such an affiliated person) and will promptly update the list
whenever TAMIC becomes aware of any additional affiliated persons.
(b) The Sub-Adviser will maintain books and records relating to its
management of the Portfolio under its customary procedures and in
compliance with applicable regulations under the 1940 Act and the
Advisers Act. Sub-Adviser will permit TAMIC to inspect such books and
records at all reasonable times during normal business hours, upon
reasonable notice. Sub-Adviser agrees that all records which it
maintains for the Portfolio are the property of the Trust and Sub-
Adviser will surrender promptly to the Trust copies of any such records
upon request by the Trust or TAMIC.
(c) Prior to each Board meeting, Sub-Adviser will provide TAMIC and the
Board with reports regarding its management of the Portfolio during the
interim period, in such form as may be mutually agreed upon by
Sub-Adviser and TAMIC. Sub-Adviser will also provide TAMIC with any
information regarding its management of the Portfolio required for any
Board Meeting, any shareholder report, amended registration statement
or prospectus supplement filed by the
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Portfolio with the SEC. Sub-Adviser will submit on a quarterly basis to
the Board and TAMIC a written certification detailing any variation
from applicable investment policies or procedure, or any material
violation from its Code of Ethics.
7. COMPENSATION
In consideration of the services rendered pursuant to this Agreement, TAMIC
will pay the Sub-Adviser an annual fee calculated at the rate of .375% of the
Portfolio's average daily net assets. These fees are calculated daily and paid
monthly. The Sub-Adviser shall have no right to obtain compensation directly
from the Trust or the Portfolio for services provided hereunder and agrees to
look solely to TAMIC for payment of fees due. The fee for the period from the
Effective Date (defined below) of the Agreement to the end of the month during
which the Effective Date occurs shall be prorated according to the proportion
that such period bears to the full monthly period. Upon any termination of this
Agreement before the end of a month, the fee for such part of that month shall
be prorated according to the proportion that such period bears to the full
monthly period and shall be payable upon the date of termination of this
Agreement. For the purpose of determining fees payable to the Sub-Adviser, the
value of the Portfolio's net assets shall be computed at the times and in the
manner specified in the Prospectus and/or the SAI.
8. EXPENSES
The Sub-Adviser shall bear all expenses in connection with the performance
of its services under this Agreement. In no event will the Sub-Adviser bear
brokerage costs, custodian fees, auditors fees or other expenses to be borne by
the Portfolio or the Trust. The Portfolio will bear certain other expenses to be
incurred in its operation, including, but not limited to, (i) interest and
taxes; (ii) brokerage commissions and other costs in connection with the
purchase or sale of securities and other investment instruments; (iii) fees and
expenses of the Trust's trustees other than those who are "interested persons"
of the Trust, TAMIC, the Sub-Adviser; (iv) legal and audit expenses; (v)
custodian, registrar and transfer agent fees and expenses; (vi) fees and
expenses related to the registration and qualification of the Trust and the
Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of
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the Portfolio's shareholders, including proxy solicitations therefor; (ix)
insurance premiums for fidelity bond and other coverage; (x) investment
management fees; (xi) expenses of typesetting for printing prospectuses and
statements of additional information and supplements thereto; (xii) expense of
printing and mailing prospectuses and statements of additional information and
supplements thereto; and (xiii) such non-recurring or extraordinary expenses as
may arise, including those relating to actions, suits or proceedings to which
the Portfolio is a party and legal obligations that the Portfolio may have to
indemnify the Trust's trustees, officers and/or employees or agents with respect
thereto. The Portfolio shall assume all other expenses not specifically assumed
by the Sub-Adviser or by TAMIC under the Investment Advisory Agreement entered
into between TAMIC and the Trust.
9. STANDARD OF CARE
The Sub-Adviser shall exercise reasonable care and in a manner consistent
with applicable federal and state laws and regulations in rendering the services
it agrees to provide under this Agreement. Neither the Sub-Adviser nor its
officers, directors, employees, agents, partners, affiliated person, legal
representatives or persons controlled by it (collectively, the "Related
Persons") shall be liable for or subject to any damages, expenses, or losses in
connection with any error of judgment or mistake of law or for any loss suffered
by the Trust, the Portfolio or TAMIC or any shareholder, director, trustee or
officer thereof, in connection with the matters to which this Agreement relates,
provided that nothing in this Agreement shall be deemed to protect or purport to
protect the Sub-Adviser against any liability to TAMIC, the Trust or to the
shareholders of the Trust to which the Sub-Adviser would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Sub-Adviser's disregard of its
obligations and duties under this Agreement.
10. LIMITATION OF LIABILITY
Except as may otherwise be provided by the 1940 Act or federal securities
laws, neither TAMIC or Sub-Adviser, nor any of their officers, directors,
employees, agents or partners shall be subject to any liability or subject to
any damages, expenses, or losses in connection with any error of judgment,
mistake of law, or any loss to each other or the Trust arising out of any
investment or other act or omission in the course of, connected with, or arising
out of any
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services to be rendered under this Agreement, except by reason of willful
misfeasance, bad faith, or gross negligence in the performance if its duties or
by reason of reckless disregard of its obligations and duties under this
Agreement. TAMIC shall hold harmless and indemnify Sub-Adviser against any loss,
liability, claim, cost, damage or expense (including reasonable investigation
and defense costs and reasonable attorneys fees and costs) arising by reason of
any matter to which this Agreement relates unless the Sub-Adviser is gross
negligent in the performance of its duties or it has reckless disregard of its
obligations and duties under this Agreement. The Sub-Adviser shall hold harmless
the Trust and TAMIC for any loss, liability, cost, damage, or expenses arising
from any claim resulting from the Sub-Adviser's gross negligence in connection
with the performance of its duties or the reckless disregard of its obligations
and duties under this Agreement.
Promptly after receipt of notice of the commencement of any action by a
party seeking to be indemnified under this Section 10 (the "Indemnified Party"),
the Indemnified Party shall, if a claim in respect thereof is to be made against
a party against whom indemnification is sought under this Section 10 (the
"Indemnifying Party"), notify the Indemnifying Party in writing of the
commencement thereof; but the omission to notify the Indemnifying Party shall
not relieve the Indemnifying Party from any liability which it may have to any
Indemnified Party otherwise than under the provisions hereof, and shall relieve
it from liability hereunder only to the extent that such omission results in the
forfeiture by the Indemnifying Party of rights or defenses with respect to such
action.
In any action or proceeding, following provision of proper notice by the
Indemnified Party of the existence of such action, the Indemnifying Party shall
be entitled to participate in any such action and, to the extent that it shall
wish, participate jointly with any other Indemnifying Party similarly notified,
to assume the defense thereof, with counsel of its choice (unless any conflict
of interest requires the appointment of separate counsel), and after notice from
the Indemnifying Party to such Indemnified Party of its election to assume the
defense of the action, the Indemnifying Party shall not be liable to such
Indemnified Party hereunder for any legal expense of the other counsel
subsequently incurred without the Indemnifying Party's consent by such
Indemnified Party in connection with the defense thereof. The Indemnified Party
shall cooperate in the defense or settlement of claims so assumed. The
Indemnifying Party shall not be liable hereunder for the settlement by the
Indemnified Party for any
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claim or demand unless it has previously approved the settlement or it has been
notified of such claim or demand and has failed to provide a defense in
accordance with the provisions hereof. In the event that any proceeding against
the Indemnifying Party shall be commenced by the Indemnified Party in connection
with this Agreement, or the transactions contemplated hereunder, and such
proceeding shall be finally determined by a court of competent jurisdiction in
favor of the Indemnifying Party, the Indemnified Party shall be liable to the
Indemnifying Party for any reasonable attorney's fees and court costs relating
to such proceedings.
The indemnifications provided in this Section 10 shall survive the
termination of this Agreement.
11. TERM OF AGREEMENT
This Agreement shall become effective as of the date first written above,
(the "Effective Date") and shall continue for an initial two-year term and shall
continue thereafter so long as such continuance is specifically approved at
least annually as required by the 1940 Act. This Agreement is terminable,
without penalty, on 60 days' written notice, by the Board or by vote of holders
of a majority (as defined in the 1940 Act and the rules thereunder) of the
outstanding voting securities of the Portfolio, or upon 60 days' written notice,
by the Sub-Adviser. This Agreement will also terminate automatically in the
event of its assignment (as defined in the 1940 Act and the rules thereunder).
If the Board of Trustees, or the holders of a majority (as defined in the
1940 Act and the rules thereunder) of the outstanding voting securities of the
Portfolio, fails to approve the Agreement or any continuance of the Agreement,
Sub-Adviser will continue to act as investment Sub-Adviser with respect to the
Portfolio pending the required approval of the Agreement or its continuance or
of any contract with Sub-Adviser or a different adviser or subadviser or other
definitive action, provided that the compensation received by Sub-Adviser in
respect of such Portfolio during such period is in compliance with Rule 15a-4
under the Investment Company Act.
12. SERVICES TO OTHER COMPANIES OR ACCOUNTS
TAMIC understands that the Sub-Adviser and its affiliates act, will
continue to act and may act in the future as investment manager or adviser to
fiduciary and other managed accounts, as an investment manager or adviser to
other investment companies, including any
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offshore entities, or accounts. TAMIC has no objection to the Sub-Adviser and
its affiliates so acting, provided that whenever the Portfolio and one or more
other investment companies or accounts managed or advised by the Sub-Adviser and
its affiliates have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a formula believed to
be equitable to each company and account. TAMIC recognizes that in some cases
this procedure may adversely affect the size of the position obtainable for the
Portfolio. In addition, TAMIC understands that the persons employed by the
Sub-Adviser to assist in the performance of the Sub-Adviser's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement shall be deemed to limit or restrict the right of the
Sub-Adviser or any affiliate of the Sub-Adviser to engage in and devote time and
attention to other businesses or to render services of whatever kind or nature.
This Agreement shall not in any way limit or restrict 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 will not adversely affect or otherwise impair the performance by Sub-
Adviser of its duties and obligations under this Agreement.
13. COOPERATION WITH REGULATORY AUTHORITIES OR OTHER ACTIONS
The parties to this Agreement each agree to cooperate in a reasonable
manner with each other in the event that any of them should become involved in a
legal, administrative, judicial or regulatory action, claim, or suit as a result
of performing its obligations under this Agreement.
14. COMPLIANCE WITH APPLICABLE LAW
The Sub-Adviser agrees to conduct itself in a manner consistent with
applicable laws and regulations, including but not limited to Sections 5(b), 12,
17, 18, and 36 of the 1940 Act. The Sub-Adviser shall ensure that its activities
are conducted in a manner consistent with a Code of Ethics maintained pursuant
to Section 17j-1 of the 1940 Act.
15. MISCELLANEOUS
This Agreement may be signed in one or more counterpart.
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Each party to this Agreement represents and warrants that it is validly
existing and taken all necessary action to obtain the requisite authority to
enter into this Agreement and to perform the duties contemplated herein.
The Trust represents that a copy of the Declaration of Trust is on file
with the Secretary of the Commonwealth of Massachusetts.
This Agreement shall be governed by the laws of the State of Connecticut.
Each party agrees to comply with all applicable reporting requirements
pursuant to state and federal laws and regulations.
All representations and warranties made by the Sub-Adviser and TAMIC herein
shall survive for the duration of this Agreement and the parties hereto shall
immediately notify, but in no event later than five (5) days, each other in
writing upon becoming aware that any of the foregoing representations and
warranties are no longer true.
16. USE OF NAME
The Trust and TAMIC, together with its subsidiaries and affiliates may use
the names "Jurika & Voyles, L.P." or "Jurika & Voyles" or any derivative thereof
or logo associated therewith in offering materials of the Portfolio only with
the prior approval of the Sub-Adviser and only for so long as this Agreement or
any extension, renewal, or amendment hereof remains in effect. At such time as
this Agreement shall no longer be in effect, the Trust and TAMIC together with
its subsidiaries and affiliates each agree that they shall cease to use such
names or any other name indicating that it is advised by or otherwise connected
with the Sub-Adviser and shall promptly change its name accordingly. The Trust
acknowledges that it has adopted the name "Jurika & Voyles L.P." or "Jurika &
Voyles" or any derivative thereof or logo associated therewith in offering
materials of the Portfolio only with the prior approval of the Sub-Adviser and
through permission of the Sub-Adviser, and agrees that the Sub-Adviser reserves
to itself and any successor to its business the right to grant the non-exclusive
right to use the aforementioned names or any similar names to any other
corporation or entity, including but not limited to any investment company of
which the Sub-Adviser or any subsidiary or affiliate thereof or any successor to
the business of any thereof shall be the investment advisor.
IN WITNESS WHEREOF, the parties hereto have caused this Investment
Sub-Advisory Agreement to be signed by their respective
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officials thereunto duly authorized as of the day and year first above written.
TRAVELERS ASSET MANAGEMENT INTERNATIONAL
COMPANY LLC
By:
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Its:
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JURIKA & VOYLES, L.P.
By:
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Its:
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APPENDIX B
FORM OF
INTERIM INVESTMENT SUB-ADVISORY AGREEMENT
ENTERED INTO BETWEEN
TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY LLC
AND
JURIKA & VOYLES, L.P.
This Interim Investment Sub-Advisory Agreement (the "Agreement") is entered
into as of the day of , 2000, by and between Travelers Asset
Management International Company LLC a limited liability company duly organized
and existing under the laws of the state of New York ("TAMIC"), and Jurika &
Voyles, L.P., a limited partnership duly organized and existing under the laws
of the state of Delaware (the "Sub-Adviser").
WHEREAS, TAMIC has entered into an Investment Advisory Agreement dated July
20, 1998, (the "Investment Advisory Agreement") with The Travelers Series Trust
(a Massachusetts business trust, hereinafter referred to as the "Trust"). A copy
of such agreement is attached as Exhibit A hereto, pursuant to which TAMIC
provides investment management and advisory services to the Trust; and
WHEREAS, the Investment Advisory Agreement provides that TAMIC may engage a
duly organized sub-adviser, to furnish investment information, services and
advice to assist TAMIC in carrying out its responsibilities under the Investment
Advisory Agreement; and
WHEREAS, TAMIC desires to retain Sub-Adviser to render investment advisory
services to TAMIC in the manner and on the terms set forth in this Agreement,
and the Sub-Adviser desires to provide such investment advisory services.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, TAMIC and Sub-Adviser agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF TAMIC
TAMIC represents and warrants to the Sub-Adviser as follows:
a. TAMIC is registered with the SEC as an investment adviser under the
Advisers Act;
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b. TAMIC is registered and licensed as an investment adviser under the laws
of all jurisdictions in which its activities require it to be so
licensed, except in such jurisdictions where the failure to be so
licensed would not have a material effect on its business;
c. TAMIC is a corporation duly organized and validly existing under the
laws of the State of New York with the power to own and possess its
assets and carry on its business as it is now being conducted;
d. The execution, delivery and performance by TAMIC of this Agreement are
within TAMIC's powers and have been duly authorized by all necessary
action on the part of its directors, and no action by or in respect of,
or filing with, any governmental body, agency or official is required on
the part of TAMIC for the execution, delivery and performance of this
Agreement by the parties hereto, and the execution, delivery and
performance of this Agreement by the parties hereto does not contravene
or constitute a default under (i) any provision of applicable law, rule
or regulation, (ii) TAMIC's Limited Liability Agreement, or (iii) any
agreement, judgment, injunction, order, decree or other instruments
binding upon TAMIC;
e. This Agreement is a valid and binding Agreement of TAMIC;
f. TAMIC has provided the Sub-Adviser with a copy of its Form ADV as most
recently filed with the SEC and will, within a reasonable time after
filing any amendment to its Form ADV with the SEC, furnish a copy of
such amendments to the Sub-Adviser. The information contained in TAMIC's
Form ADV is accurate and complete in all material respects and does not
omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under this they were
made, not misleading;
g. TAMIC acknowledges that it received a copy of the Sub-Adviser's Form ADV
at least 48 hours prior to the execution of this Agreement and has
delivered a copy of the same to the Trust; and
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2. REPRESENTATIONS AND WARRANTIES OF SUB-ADVISER
The Sub-Adviser hereby represents and warrants to TAMIC that:
a. The Sub-Adviser is registered with the SEC as an investment adviser
under the Advisers Act;
b. The Sub-Adviser is registered or licensed as an investment adviser under
the laws of jurisdictions in which its activities require it to be so
registered or licensed, except where the failure to be so licensed would
not have a material adverse effect on its business;
c. The Sub-Adviser is a limited partnership duly organized and validly
existing under the laws of the State of Delaware with the power to own
and possess its assets and carry on its business as it is now being
conducted;
d. The execution, delivery and performance by the Sub-Adviser of this
Agreement are within the Sub-Adviser's powers and have been duly
authorized by all necessary action on the part of its directors, and no
action by or in respect of, or filing with, any governmental body,
agency or official is required on the part of the Sub-Adviser for the
execution, delivery and performance of this Agreement by the parties
hereto, and the execution, delivery and performance of this Agreement by
the parties hereto does not contravene or constitute a default under (i)
any provision of applicable law, rule or regulation, (ii) the
Sub-Adviser's Limited Partnership Agreement, or (iii) any agreement,
judgment, injunction, order, decree or other instruments binding upon
the Sub-Adviser;
e. This Agreement is a valid and binding Agreement of the Sub-Adviser;
f. The Sub-Adviser has provided TAMIC with a copy of its Form ADV as most
recently filed with the SEC and will, promptly after filing any
amendment to its Form ADV with the SEC, furnish a copy of such
amendments to the Adviser. The information contained in the
Sub-Adviser's Form ADV is accurate and complete in all material respects
and does not omit to state any material fact necessary in order to make
the statements made, in light of the circumstances under which they were
made, not misleading;
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g. The Sub-Adviser acknowledges that it received a copy of TAMIC's Form ADV
at least 48 hours prior to the execution of this Agreement.
3. INVESTMENT DESCRIPTION APPOINTMENT
The Trust, which is divided into series including the segment known as the
Jurika & Voyles Core Equity Portfolio ( the "Portfolio") desires to employ its
capital relating to the Portfolio by investing and reinvesting in investments of
the kind and in accordance with the investment(s), policies and limitations
specified in the prospectus (the "Prospectus") and the statement of additional
information (the "SAI") filed with the Securities and Exchange Commission (the
"SEC") as part of the Trust's Registration Statement on Form N-1A, as amended or
supplemented from time to time, and in the manner and to the extent as may from
time to time be approved by the Board of Trustees of the Trust (the "Board").
TAMIC will supply copies of the Prospectus and the SAI to the Sub-Adviser
promptly after the Trust's Registration Statement is declared effective. TAMIC
agrees promptly to provide copies of all amendments and supplements to the
current Prospectus and the SAI, and copies of any procedures adopted by the
Board applicable to the Sub-Adviser and any amendments thereto (the "Board
Procedures"), to the Sub-Adviser on an on-going basis. Until TAMIC delivers any
such amendment or supplement or Board Procedures, the Sub-Adviser shall be fully
protected in relying on the Prospectus and SAI and any Board Procedures, if any,
as previously furnished to the Sub-Adviser. In addition, TAMIC shall furnish the
Sub-Adviser with a certified copy of any financial statement or report prepared
for the Trust with respect to the Portfolio by certified or independent public
accountants, and with copies of any financial statements or reports made by the
Trust to shareholders or to any state or federal regulatory agency. TAMIC shall
also inform the Sub-Adviser of the results of any audits or examinations by
regulatory authorities pertaining to the Portfolio. TAMIC further agrees to
furnish the Sub-Adviser with any materials or information that the Sub-Adviser
may reasonably request to enable it to perform its functions under this
Agreement.
TAMIC and the Trust desire to employ and hereby appoint the Sub-Adviser to
act as the sub-investment adviser to the Portfolio. Subject to the terms and
conditions of this Agreement, Sub-Adviser accepts the appointment and agrees to
furnish the services for the compensation and for the term set forth below.
Except as specified herein, the Sub-Adviser agrees that it shall not delegate
any material
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obligation assumed pursuant to this Agreement to any third party without first
obtaining the written consent of both the Trust and TAMIC.
4. SERVICES AS SUB-ADVISER
Subject to the supervision, direction and approval of the Board and TAMIC,
the Sub-Adviser shall conduct a continual program of investment, evaluation and,
if appropriate in its view, the sale and reinvestment of the Portfolio's assets.
The Sub-Adviser is authorized, in its sole discretion and without prior
consultation with TAMIC, to: (a) obtain and evaluate pertinent economic,
financial, and other information affecting the economy generally and certain
companies as such information relates to securities which are purchased for or
considered for purchase in the Portfolio; (b) manage the Portfolio's assets in
accordance with the Portfolio's investment objective(s) and policies as stated
in the Prospectus and the SAI; (c) make investment decisions for the Portfolio;
(d) place purchase and sale orders for portfolio transactions on behalf of the
Portfolio and manage otherwise uninvested cash assets of the Portfolio; (e)
price such Portfolio securities as TAMIC and Sub-Adviser shall mutually agree
upon from time to time; (f) execute account documentation, agreements, contracts
and other documents as the Sub-Adviser deems appropriate and are requested by
brokers, dealers, counterparties and other persons in connection with its
management of the assets of the Portfolio (in such respect, and only for this
limited purpose, the Sub-Adviser shall act as TAMIC's and the Trust's agent and
attorney-in-fact); (g) employ professional portfolio managers and securities
analysts who provide research services to the Portfolio; and (h) regularly
report to TAMIC and to the Board with respect to its subadvisory activities. The
Sub-Adviser shall execute trades, and in general take such action as is
appropriate to effectively manage the Portfolio's investment practices.
In addition, (i) the Sub-Adviser shall furnish TAMIC daily information
concerning portfolio transactions and quarterly and annual reports concerning
transactions and performance of the Portfolio in such form as may be mutually
agreed upon, and the Sub-Adviser agrees to review the Portfolio and discuss the
management of it with TAMIC and the Board as either or both shall from time to
time reasonably request.
(ii) Unless TAMIC gives the Sub-Adviser written instructions to the
contrary, the Sub-Adviser shall use its good faith judgment in a
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manner which it reasonably believes best serves the interests of the Portfolio's
shareholders to vote or abstain from voting all proxies solicited by or with
respect to the issuers of securities in which assets of the Portfolio may be
invested, but shall not be liable to TAMIC for the votes cast or the failure to
vote.
(iii) The Sub-Adviser shall maintain and preserve such records related to
the Portfolio's transactions as are required to be maintained by an invetment
adviser under any applicable state or federal securities law or regulation
including: the Investment Company Act of 1940, as amended (the "1940 Act"), the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the Investment
Advisers Act of 1940, as amended (the "Advisers Act"). TAMIC shall maintain and
preserve all books and other records not related to the Portfolio's transactions
as required under such rules. The Sub-Adviser shall timely furnish to TAMIC all
information relating to the Sub-Adviser's services hereunder reasonably
requested by TAMIC to keep and preserve the books and records of the Trust. The
Sub-Adviser agrees that all records which it maintains for the Portfolio are the
property of the Trust and the Sub-Adviser will surrender promptly to the Trust
copies of any of such records.
(iv) The Sub-Adviser shall maintain compliance procedures for the Portfolio
that it reasonably believes are adequate to ensure the Portfolio's compliance
with: (i) the 1940 Act and the rules and regulations promulgated thereunder; and
(ii) the Portfolio's investment objective(s) and policies as stated in the
Prospectus and SAI. TAMIC will provide periodic checklists upon which
Sub-Adviser will rely. The Sub-Adviser shall notify TAMIC immediately upon
detection of any material breach of such compliance procedures. The Sub-Adviser
shall maintain compliance procedures that it reasonably believes are adequate to
ensure its compliance with the Investment Advisers Act of 1940.
(v) The Sub-Adviser shall maintain a written code of ethics (the "Code of
Ethics") that it reasonably believes complies with the requirements of Rule
17j-1 under the 1940 Act, a copy of which it will provide to TAMIC or the Trust
upon any reasonable request. The Sub-Adviser shall follow such Code of Ethics in
performing its services under this Agreement. Further, the Sub-Adviser
represents that it has policies and procedures regarding the detection and
prevention of the misuse of material, nonpublic information by the Sub-Adviser
and its employees as required by the Insider Trading and Securities Fraud
Enforcement Act of 1988. The Sub-Adviser shall submit on a quarterly
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basis to the Board and TAMIC a written certificate of compliance with the Code
of Ethics.
(vi) The Sub-Adviser shall manage the investment and reinvestment of the
assets of the Portfolio in a manner consistent with the diversification
requirements of Section 817 and Section 851 of the Internal Revenue Code of
1986, as amended (the "IRC"). The Sub-Adviser will also manage the investments
of the Portfolio in a manner consistent with any and all investment restrictions
(including diversification requirements) contained in the 1940 Act and any
applicable state securities law or regulation. TAMIC will provide periodic
checklists upon which Sub-Adviser will rely.
(viii) The Sub-Adviser shall submit on a quarterly basis to the Board and
TAMIC a written certification detailing any variation from applicable investment
objectives, practices, policies or procedures, or from its Code of Ethics.
5. BROKERAGE
In selecting brokers or dealers (including, if permitted by applicable law
and appropriate Board Procedures, any broker or dealer affiliated with either
TAMIC or the Sub-Adviser) to execute transactions on behalf of the Portfolio,
the Sub-Adviser will seek the best overall terms available. In assessing the
best overall terms available for any transaction, the Sub-Adviser will consider
factors it deems relevant, including, but not limited to, the breadth and nature
of the market in the security, the price of the security, the size of the order,
the timing of the transaction, the difficulty of the transaction, the
reputation, experience, financial condition and execution capability of the
broker or dealer, the quality of the service and the reasonableness of the
commission, if any, for the specific transaction and on a continuing basis. In
selecting brokers or dealers to execute a particular transaction, and in
evaluating the best overall terms available, the Sub-Adviser is authorized to
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the 1934 Act) provided to the Portfolio and/or other accounts
over which the Sub-Adviser or its affiliates exercise investment discretion.
Nothing in this paragraph shall be deemed to prohibit the Sub-Adviser from
paying an amount of commission for effecting a securities transaction in excess
of the amount of commission another member of an exchange, broker, or dealer
would have charged for effecting that transaction, if the Sub-Adviser determined
in good faith that such amount of commission was reasonable in relation to the
value of the
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<PAGE> 47
brokerage and research services provided by such member, broker, or dealer,
viewed in terms of either that particular transaction or its overall
responsibilities with respect to the Portfolio and/or other accounts over which
the Sub-Adviser or its affiliate exercise investment discretion.
To the extent consistent with the applicable law, Sub-Adviser may aggregate
purchase or sell orders for the Portfolio with contemporaneous purchase or sell
orders of other clients of Sub-Adviser or its affiliated persons. In such event,
allocation of Securities so purchased or sold, as well as the expenses incurred
in the transaction, will be made by Sub-Adviser in the manner Sub-Adviser
considers to be the most equitable and consistent with its and its affiliates'
fiduciary obligations to the Portfolio and to such other clients. TAMIC hereby
acknowledges that such aggregations of orders may not result in a more favorable
price or lower brokerage commissions in all instances.
6. INFORMATION AND REPORTS
(a) TAMIC will provide Sub-Adviser with a list, to the best of TAMIC's
knowledge, of all affiliated persons of TAMIC (and any affiliated
person of such an affiliated person) and will promptly update the list
whenever TAMIC becomes aware of any additional affiliated persons.
(b) The Sub-Adviser will maintain books and records relating to its
management of the Portfolio under its customary procedures and in
compliance with applicable regulations under the 1940 Act and the
Advisers Act. Sub-Adviser will permit TAMIC to inspect such books and
records at all reasonable times during normal business hours, upon
reasonable notice. Sub-Adviser agrees that all records which it
maintains for the Portfolio are the property of the Trust and Sub-
Adviser will surrender promptly to the Trust copies of any such records
upon request by the Trust or TAMIC.
(c) Prior to each Board meeting, Sub-Adviser will provide TAMIC and the
Board with reports regarding its management of the Portfolio during the
interim period, in such form as may be mutually agreed upon by
Sub-Adviser and TAMIC. Sub-Adviser will also provide TAMIC with any
information regarding its management of the Portfolio required for any
Board Meeting, any shareholder report, amended registration statement
or prospectus supplement filed by the
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Portfolio with the SEC. Sub-Adviser will submit on a quarterly basis to
the Board and TAMIC a written certification detailing any variation
from applicable investment policies or procedure, or any material
violation from its Code of Ethics.
7. COMPENSATION
(a) In consideration of the services rendered pursuant to this Agreement,
TAMIC will pay the Sub-Adviser a fee calculated at the annual rate of
.375% of the Portfolio's average daily net assets. These fees are
calculated daily and paid monthly. The Sub-Adviser shall have no right
to obtain compensation directly from the Trust or the Portfolio for
services provided hereunder and agrees to look solely to TAMIC for
payment of fees due. The fee for the period from the Effective Date
(defined below) of the Agreement to the end of the month during which
the Effective Date occurs shall be prorated according to the proportion
that such period bears to the full monthly period. Upon any termination
of this Agreement before the end of a month, the fee for such part of
that month shall be prorated according to the proportion that such
period bears to the full monthly period and shall be payable upon the
date of termination of this Agreement. For the purpose of determining
fees payable to the Sub-Adviser, the value of the Portfolio's net
assets shall be computed at the times and in the manner specified in
the Prospectus and/or the SAI.
(b) For payment purposes under this Interim Investment Sub-Advisory
Agreement and pursuant to the requirements of Rule 15a-4(b)(2)(vi)(A),
(B), and (C), the fee payable under paragraph (a) of this Section shall
be held in an interest-bearing escrow account with the Trust's
custodian or a bank, and
(i) if a majority of the Portfolio's outstanding voting securities
approve the Interim Agreement between TAMIC and the Sub-Adviser by
the end of the 150-day period, the amount in the escrow account
(including interest earned) will be paid to the Sub-Adviser;
(ii) if a majority of the Portfolio's outstanding voting securities do
not approve the Interim Agreement with the Sub-Adviser, the
Sub-Adviser will be paid, out of the
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escrow account, the lesser of: (A) any actual costs incurred in
performing the Interim Agreement (plus interest earned on that
amount while in escrow) (with any remaining amount reverting to
the Portfolio; or (B) the total amount in the escrow account
(plus interest earned).
8. EXPENSES
The Sub-Adviser shall bear all expenses in connection with the performance
of its services under this Agreement. In no event will the Sub-Adviser bear
brokerage costs, custodian fees, auditors fees or other expenses to be borne by
the Portfolio or the Trust. The Portfolio will bear certain other expenses to be
incurred in its operation, including, but not limited to, (i) interest and
taxes; (ii) brokerage commissions and other costs in connection with the
purchase or sale of securities and other investment instruments; (iii) fees and
expenses of the Trust's trustees other than those who are "interested persons"
of the Trust, TAMIC, the Sub-Adviser; (iv) legal and audit expenses; (v)
custodian, registrar and transfer agent fees and expenses; (vi) fees and
expenses related to the registration and qualification of the Trust and the
Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefor; (ix) insurance premiums for fidelity bond and other coverage; (x)
investment management fees; (xi) expenses of typesetting for printing
prospectuses and statements of additional information and supplements thereto;
(xii) expense of printing and mailing prospectuses and statements of additional
information and supplements thereto; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and legal obligations that the
Portfolio may have to indemnify the Trust's trustees, officers and/or employees
or agents with respect thereto. The Portfolio shall assume all other expenses
not specifically assumed by the Sub-Adviser or by TAMIC under the Interim
Investment Advisory Agreement entered into between TAMIC and the Trust.
9. STANDARD OF CARE
The Sub-Adviser shall exercise reasonable care and in a manner consistent
with applicable federal and state laws and regulations in
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rendering the services it agrees to provide under this Agreement. Neither the
Sub-Adviser nor its officers, directors, employees, agents, partners, affiliated
person, legal representatives or persons controlled by it (collectively, the
"Related Persons") shall be liable for or subject to any damages, expenses, or
losses in connection with any error of judgment or mistake of law or for any
loss suffered by the Trust, the Portfolio or TAMIC or any shareholder, director,
trustee or officer thereof, in connection with the matters to which this
Agreement relates, provided that nothing in this Agreement shall be deemed to
protect or purport to protect the Sub-Adviser against any liability to TAMIC,
the Trust or to the shareholders of the Trust to which the Sub-Adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or by reason of the
Sub-Adviser's disregard of its obligations and duties under this Agreement.
10. LIMITATION OF LIABILITY
Except as may otherwise be provided by the 1940 Act or federal securities
laws, neither TAMIC or Sub-Adviser, nor any of their officers, directors,
employees, agents or partners shall be subject to any liability or subject to
any damages, expenses, or losses in connection with any error of judgment,
mistake of law, or any loss to each other or the Trust arising out of any
investment or other act or omission in the course of, connected with, or arising
out of any services to be rendered under this Agreement, except by reason of
willful misfeasance, bad faith, or gross negligence in the performance if its
duties or by reason of reckless disregard of its obligations and duties under
this Agreement. TAMIC shall hold harmless and indemnify Sub-Adviser against any
loss, liability, claim, cost, damage or expense (including reasonable
investigation and defense costs and reasonable attorneys fees and costs) arising
by reason of any matter to which this Agreement relates unless the Sub-Adviser
is gross negligent in the performance of its duties or it has reckless disregard
of its obligations and duties under this Agreement. The Sub-Adviser shall hold
harmless the Trust and TAMIC for any loss, liability, cost, damage, or expenses
arising from any claim resulting from the Sub-Adviser's gross negligence in
connection with the performance of its duties or the reckless disregard of its
obligations and duties under this Agreement.
Promptly after receipt of notice of the commencement of any action by a
party seeking to be indemnified under this Section 10 (the "Indemnified Party"),
the Indemnified Party shall, if a claim in respect
B-11
<PAGE> 51
thereof is to be made against a party against whom indemnification is sought
under this Section 10 (the "Indemnifying Party"), notify the Indemnifying Party
in writing of the commencement thereof; but the omission to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
which it may have to any Indemnified Party otherwise than under the provisions
hereof, and shall relieve it from liability hereunder only to the extent that
such omission results in the forfeiture by the Indemnifying Party of rights or
defenses with respect to such action.
In any action or proceeding, following provision of proper notice by the
Indemnified Party of the existence of such action, the Indemnifying Party shall
be entitled to participate in any such action and, to the extent that it shall
wish, participate jointly with any other Indemnifying Party similarly notified,
to assume the defense thereof, with counsel of its choice (unless any conflict
of interest requires the appointment of separate counsel), and after notice from
the Indemnifying Party to such Indemnified Party of its election to assume the
defense of the action, the Indemnifying Party shall not be liable to such
Indemnified Party hereunder for any legal expense of the other counsel
subsequently incurred without the Indemnifying Party's consent by such
Indemnified Party in connection with the defense thereof. The Indemnified Party
shall cooperate in the defense or settlement of claims so assumed. The
Indemnifying Party shall not be liable hereunder for the settlement by the
Indemnified Party for any claim or demand unless it has previously approved the
settlement or it has been notified of such claim or demand and has failed to
provide a defense in accordance with the provisions hereof. In the event that
any proceeding against the Indemnifying Party shall be commenced by the
Indemnified Party in connection with this Agreement, or the transactions
contemplated hereunder, and such proceeding shall be finally determined by a
court of competent jurisdiction in favor of the Indemnifying Party, the
Indemnified Party shall be liable to the Indemnifying Party for any reasonable
attorney's fees and court costs relating to such proceedings.
The indemnifications provided in this Section 10 shall survive the
termination of this Agreement.
11. TERM OF AGREEMENT
This Agreement shall become effective as of the day that the change of
control with respect to the Sub-Adviser becomes effective and shall continue
thereafter for the earlier of no more than 150 days
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<PAGE> 52
or until the date when a majority of the shareholders of the Portfolio have
voted to approve this interim and the new Investment Sub-Advisory Agreement
between TAMIC and the Sub-Adviser. This Agreement is terminable, without
penalty, on no more than 10 calendar days' written notice to the Sub-Adviser, by
the Board or by a vote of the holders of a majority (as defined in the 1940 Act
and the rules thereunder) of the outstanding voting securities of the Portfolio,
or upon 60 days' written notice, by the Sub-Adviser. This Agreement will also
terminate automatically in the event of its assignment (as defined in the 1940
Act and the rules thereunder).
If the Board of Trustees, or the holders of a majority (as defined in the
1940 Act and the rules thereunder) of the outstanding voting securities of the
Portfolio, fails to approve the Interim Agreement, the Sub-Adviser will continue
to act as investment subadviser with respect to the Portfolio pending the
required approval of the Agreement or of any agreement with the Sub-Adviser or a
different adviser or subadviser or other definitive action, provided that the
compensation received by the Sub-Adviser or another subadviser in respect of
such Portfolio during such period is in compliance with Rule 15a-4 under the
Investment Company Act.
12. SERVICES TO OTHER COMPANIES OR ACCOUNTS
TAMIC understands that the Sub-Adviser and its affiliates act, will
continue to act and may act in the future as investment manager or adviser to
fiduciary and other managed accounts, as an investment manager or adviser to
other investment companies, including any offshore entities, or accounts. TAMIC
has no objection to the Sub-Adviser and its affiliates so acting, provided that
whenever the Portfolio and one or more other investment companies or accounts
managed or advised by the Sub-Adviser and its affiliates have available funds
for investment, investments suitable and appropriate for each will be allocated
in accordance with a formula believed to be equitable to each company and
account. TAMIC recognizes that in some cases this procedure may adversely affect
the size of the position obtainable for the Portfolio. In addition, TAMIC
understands that the persons employed by the Sub-Adviser to assist in the
performance of the Sub-Adviser's duties under this Agreement will not devote
their full time to such service and nothing contained in this Agreement shall be
deemed to limit or restrict the right of the Sub-Adviser or any affiliate of the
Sub-Adviser to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature. This Agreement shall not in any way
limit or
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restrict 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 will not adversely affect or
otherwise impair the performance by Sub-Adviser of its duties and obligations
under this Agreement.
13. COOPERATION WITH REGULATORY AUTHORITIES OR OTHER ACTIONS
The parties to this Agreement each agree to cooperate in a reasonable
manner with each other in the event that any of them should become involved in a
legal, administrative, judicial or regulatory action, claim, or suit as a result
of performing its obligations under this Agreement.
14. COMPLIANCE WITH APPLICABLE LAW
The Sub-Adviser agrees to conduct itself in a manner consistent with
applicable laws and regulations, including but not limited to Sections 5(b), 12,
17, 18, and 36 of the 1940 Act. The Sub-Adviser shall ensure that its activities
are conducted in a manner consistent with a Code of Ethics maintained pursuant
to Section 17j-1 of the 1940 Act.
15. MISCELLANEOUS
This Agreement may be signed in one or more counterpart.
Each party to this Agreement represents and warrants that it is validly
existing and taken all necessary action to obtain the requisite authority to
enter into this Agreement and to perform the duties contemplated herein.
The Trust represents that a copy of the Declaration of Trust is on file
with the Secretary of the Commonwealth of Massachusetts.
This Agreement shall be governed by the laws of the State of Connecticut.
Each party agrees to comply with all applicable reporting requirements
pursuant to state and federal laws and regulations.
All representations and warranties made by the Sub-Adviser and TAMIC herein
shall survive for the duration of this Agreement and the parties hereto shall
immediately notify, but in no event later than five (5) days, each other in
writing upon becoming aware that any of the foregoing representations and
warranties are no longer true.
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<PAGE> 54
16. USE OF NAME
The Trust and TAMIC, together with its subsidiaries and affiliates may use
the names "Jurika & Voyles, L.P." or "Jurika & Voyles" or any derivative thereof
or logo associated therewith in offering materials of the Portfolio only with
the prior approval of the Sub-Adviser and only for so long as this Agreement or
any extension, renewal, or amendment hereof remains in effect. At such time as
this Agreement shall no longer be in effect, the Trust and TAMIC together with
its subsidiaries and affiliates each agree that they shall cease to use such
names or any other name indicating that it is advised by or otherwise connected
with the Sub-Adviser and shall promptly change its name accordingly. The Trust
acknowledges that it has adopted the name "Jurika & Voyles L.P." or "Jurika &
Voyles" or any derivative thereof or logo associated therewith in offering
materials of the Portfolio only with the prior approval of the Sub-Adviser and
through permission of the Sub-Adviser, and agrees that the Sub-Adviser reserves
to itself and any successor to its business the right to grant the non-exclusive
right to use the aforementioned names or any similar names to any other
corporation or entity, including but not limited to any investment company of
which the Sub-Adviser or any subsidiary or affiliate thereof or any successor to
the business of any thereof shall be the investment advisor.
IN WITNESS WHEREOF, the parties hereto have caused this Interim Investment
Sub-Advisory Agreement to be signed by their respective officials thereunto duly
authorized as of the day and year first above written.
TRAVELERS ASSET MANAGEMENT
INTERNATIONAL COMPANY LLC
By:
---------------------------------------------------------------------
Its:
---------------------------------------------------------------------
JURIKA & VOYLES, L.P.
By:
---------------------------------------------------------------------
Its:
---------------------------------------------------------------------
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<PAGE> 55
APPENDIX C
Jurika & Voyles Directors and Executive Officers:
<TABLE>
<CAPTION>
NAME J&V TITLE PRINCIPAL OCCUPATION
---- ------------------------------- --------------------------------
<S> <C> <C>
William K. Jurika Chairman Same
Karl O. Mills Vice Chairman and
Portfolio Manager Same
Glenn C. Voyles Director and
Portfolio Manager Same
Christopher L. Bittman Director, President and
Chief Executive Officer Same
Mark J. Nuti Senior Vice President and
Chief Operating Officer Same
Address for above: Jurika & Voyles, L.P.
1999 Harrison Street, Suite 700
Oakland, CA 94612
Peter S. Voss Director Chairman and Chief Executive
Officer of Nvest, L.P.
G. Neal Ryland Director Executive Vice President and
Chief Financial Officer of
Nvest,
L.P.
Address for above: Nvest, L.P.
399 Boylston Street
Boston, MA 02116
</TABLE>
C-1
<PAGE> 56
APPENDIX D
FORM OF
INVESTMENT SUB-ADVISORY AGREEMENT
ENTERED INTO BETWEEN
TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY LLC
AND
NWQ INVESTMENT MANAGEMENT COMPANY
This Investment Sub-Advisory Agreement (the "Agreement") is entered into as
of , 2000, by and between Travelers Asset Management
International Company LLC, a limited liability company duly organized and
existing under the laws of the state of New York ("TAMIC"), and NWQ Investment
Management Company, a corporation duly organized and existing under the laws of
the state of Massachusetts (the "Sub-Adviser").
WHEREAS, TAMIC has entered into an Investment Advisory Agreement dated July
20, 1998, (the "Investment Advisory Agreement") with The Travelers Series Trust
(a Massachusetts business trust, hereinafter referred to as the "Trust"). A copy
of such agreement is attached as Exhibit A hereto, pursuant to which TAMIC
provides investment management and advisory services to the Trust; and
WHEREAS, the Investment Advisory Agreement provides that TAMIC may engage a
duly organized sub-adviser, to furnish investment information, services and
advice to assist TAMIC in carrying out its responsibilities under the Investment
Advisory Agreement; and
WHEREAS, TAMIC desires to retain Sub-Adviser to render investment advisory
services to TAMIC in the manner and on the terms set forth in this Agreement,
and the Sub-Adviser desires to provide such investment advisory services.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, TAMIC and Sub-Adviser agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF TAMIC
TAMIC represents and warrants to the Sub-Adviser as follows:
a. TAMIC is registered with the SEC as an investment adviser under the
Advisers Act;
D-1
<PAGE> 57
b. TAMIC is registered and licensed as an investment adviser under the laws
of all jurisdictions in which its activities require it to be so
licensed, except in such jurisdictions where the failure to be so
licensed would not have a material effect on its business;
c. TAMIC is a corporation duly organized and validly existing under the
laws of the State of New York with the power to own and possess its
assets and carry on its business as it is now being conducted;
d. The execution, delivery and performance by TAMIC of this Agreement are
within TAMIC's powers and have been duly authorized by all necessary
action on the part of its directors, and no action by or in respect of,
or filing with, any governmental body, agency or official is required on
the part of TAMIC for the execution, delivery and performance of this
Agreement by the parties hereto, and the execution, delivery and
performance of this Agreement by the parties hereto does not contravene
or constitute a default under (i) any provision of applicable law, rule
or regulation, (ii) TAMIC's Limited Liability Agreement, or (iii) any
agreement, judgment, injunction, order, decree or other instruments
binding upon TAMIC;
e. This Agreement is a valid and binding Agreement of TAMIC;
f. TAMIC has provided the Sub-Adviser with a copy of its Form ADV as most
recently filed with the SEC and will, within a reasonable time after
filing any amendment to its Form ADV with the SEC, furnish a copy of
such amendments to the Sub-Adviser. The information contained in TAMIC's
Form ADV is accurate and complete in all material respects and does not
omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under this they were
made, not misleading;
g. TAMIC acknowledges that it received a copy of the Sub-Adviser's Form ADV
at least 48 hours prior to the execution of this Agreement and has
delivered a copy of the same to the Trust
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<PAGE> 58
2. REPRESENTATIONS AND WARRANTIES OF SUB-ADVISER
The Sub-Adviser hereby represents and warrants to TAMIC that:
a. The Sub-Adviser is registered with the SEC as an investment adviser
under the Advisers Act;
b. The Sub-Adviser is registered or licensed as an investment adviser under
the laws of jurisdictions in which its activities require it to be so
registered or licensed, except where the failure to be so licensed would
not have a material adverse effect on its business;
c. The Sub-Adviser is a corporation duly organized and validly existing
under the laws of the State of Massachusetts with the power to own and
possess its assets and carry on its business as it is now being
conducted;
d. The execution, delivery and performance by the Sub-Adviser of this
Agreement are within the Sub-Adviser's powers and have been duly
authorized by all necessary action on the part of its directors, and no
action by or in respect of, or filing with, any governmental body,
agency or official is required on the part of the Sub-Adviser for the
execution, delivery and performance of this Agreement by the parties
hereto, and the execution, delivery and performance of this Agreement by
the parties hereto does not contravene or constitute a default under (i)
any provision of applicable law, rule or regulation, (ii) the
Sub-Adviser's Articles of Incorporation or By-Laws, or (iii) any
agreement, judgment, injunction, order, decree or other instruments
binding upon the Sub-Adviser;
e. This Agreement is a valid and binding Agreement of the Sub-Adviser;
f. The Sub-Adviser has provided TAMIC with a copy of its Form ADV as most
recently filed with the SEC and will, promptly after filing any
amendment to its Form ADV with the SEC, furnish a copy of such
amendments to the Sub-Adviser. The information contained in the
Sub-Adviser's Form ADV is accurate and complete in all material
respects and does not omit to state any material fact necessary in
order to make the statements made, in light of the circumstances under
which they were made, not misleading;
D-3
<PAGE> 59
g. The Sub-Adviser acknowledges that it received a copy of TAMIC's Form ADV
at least 48 hours prior to the execution of this Agreement.
3. INVESTMENT DESCRIPTION APPOINTMENT
The Trust, which is divided into series including the segment known as the
NWQ Large Cap Portfolio (the "Portfolio") desires to employ its capital relating
to the Portfolio by investing and reinvesting in investments of the kind and in
accordance with the investment(s), policies and limitations specified in the
prospectus (the "Prospectus") and the statement of additional information (the
"SAI") filed with the Securities and Exchange Commission (the "SEC") as part of
the Trust's Registration Statement on Form N-1A, as amended or supplemented from
time to time, and in the manner and to the extent as may from time to time be
approved by the Board of Trustees of the Trust (the "Board"). TAMIC will supply
copies of the Prospectus and the SAI to the Sub-Adviser promptly after the
Trust's Registration Statement is declared effective. TAMIC agrees promptly to
provide copies of all amendments and supplements to the current Prospectus and
the SAI, and copies of any procedures adopted by the Board applicable to the
Sub-Adviser and any amendments thereto (the "Board Procedures"), to the
Sub-Adviser on an on-going basis. Until TAMIC delivers any such amendment or
supplement or Board Procedures, the Sub-Adviser shall be fully protected in
relying on the Prospectus and SAI and any Board Procedures, if any, as
previously furnished to the Sub-Adviser. In addition, TAMIC shall furnish the
Sub-Adviser with a certified copy of any financial statement or report prepared
for the Trust with respect to the Portfolio by certified or independent public
accountants, and with copies of any financial statements or reports made by the
Trust to shareholders or to any state or federal regulatory agency. TAMIC shall
also inform the Sub-Adviser of the results of any audits or examinations by
regulatory authorities pertaining to the Portfolio. TAMIC further agrees to
furnish the Sub-Adviser with any materials or information that the Sub-Adviser
may reasonably request to enable it to perform its functions under this
Agreement.
TAMIC and the Trust desire to employ and hereby appoint the Sub-Adviser to
act as the sub-investment adviser to the Portfolio. Subject to the terms and
conditions of this Agreement, Sub-Adviser accepts the appointment and agrees to
furnish the services for the compensation and for the term set forth below.
Except as specified herein, the Sub-Adviser agrees that it shall not delegate
any material
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obligation assumed pursuant to this Agreement to any third party without first
obtaining the written consent of both the Trust and TAMIC.
4. SERVICES AS SUB-ADVISER
Subject to the supervision, direction and approval of the Board and TAMIC,
the Sub-Adviser shall conduct a continual program of investment, evaluation and,
if appropriate in its view, the sale and reinvestment of the Portfolio's assets.
The Sub-Adviser is authorized, in its sole discretion and without prior
consultation with TAMIC, to: (a) obtain and evaluate pertinent economic,
financial, and other information affecting the economy generally and certain
companies as such information relates to securities which are purchased for or
considered for purchase in the Portfolio; (b) manage the Portfolio's assets in
accordance with the Portfolio's investment objective(s) and policies as stated
in the Prospectus and the SAI; (c) make investment decisions for the Portfolio;
(d) place purchase and sale orders for portfolio transactions on behalf of the
Portfolio and manage otherwise uninvested cash assets of the Portfolio; (e)
price such Portfolio securities as TAMIC and Sub-Adviser shall mutually agree
upon from time to time; (f) execute account documentation, agreements, contracts
and other documents as the Sub-Adviser shall be requested by brokers, dealers,
counterparties and other persons in connection with its management of the assets
of the Portfolio (in such respect, and only for this limited purpose, the
Sub-Adviser shall act as TAMIC's and the Trust's agent and attorney-in-fact);
(g) employ professional portfolio managers and securities analysts who provide
research services to the Portfolio; and (h) regularly report to TAMIC and to the
Board with respect to its subadvisory activities. The Sub-Adviser shall execute
trades, and in general take such action as is appropriate to effectively manage
the Portfolio's investment practices.
In addition, (i) the Sub-Adviser shall furnish TAMIC daily information
concerning portfolio transactions and quarterly and annual reports concerning
transactions and performance of the Portfolio in such form as may be mutually
agreed upon, and the Sub-Adviser agrees to review the Portfolio and discuss the
management of it with TAMIC and the Board as either or both shall from time to
time reasonably request.
(ii) Unless TAMIC gives the Sub-Adviser written instructions to the
contrary, the Sub-Adviser shall use its good faith judgment in a manner which it
reasonably believes best serves the interests of the
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Portfolio's shareholders to vote or abstain from voting all proxies solicited by
or with respect to the issuers of securities in which assets of the Portfolio
may be invested.
(iii) The Sub-Adviser shall maintain and preserve such records related to
the Portfolio's transactions as are required under any applicable state or
federal securities law or regulation including: the Investment Company Act of
1940, as amended (the "1940 Act"), the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the Investment Advisers Act of 1940, as amended
(the "Advisers Act"). TAMIC shall maintain and preserve all books and other
records not related to the Portfolio's transactions as required under such
rules. The Sub-Adviser shall timely furnish to TAMIC all information relating to
the Sub-Adviser's services hereunder reasonably requested by TAMIC to keep and
preserve the books and records of the Trust. The Sub-Adviser agrees that all
records which it maintains for the Portfolio are the property of the Trust and
the Sub-Adviser will surrender promptly to the Trust copies of any of such
records.
(iv) The Sub-Adviser shall comply with Board Procedures and any amendments
thereto. The Sub-Adviser shall notify TAMIC immediately upon detection of any
material breach of such Board Procedures.
(v) The Sub-Adviser shall maintain a written code of ethics (the "Code of
Ethics") that it reasonably believes complies with the requirements of Rule
17j-1 under the 1940 Act, a copy of which it will provide to TAMIC or the Trust
upon any reasonable request. The Sub-Adviser shall follow such Code of Ethics in
performing its services under this Agreement. Further, the Sub-Adviser
represents that it has policies and procedures regarding the detection and
prevention of the misuse of material, nonpublic information by the Sub-Adviser
and its employees as required by the Insider Trading and Securities Fraud
Enforcement Act of 1988.
(vi) The Sub-Adviser shall manage the investment and reinvestment of the
assets of the Portfolio in a manner consistent with the diversification
requirements of Section 817 and Section 851 of the Internal Revenue Code of
1986, as amended (the "IRC"). The Sub-Adviser will also manage the investments
of the Portfolio in a manner consistent with any and all investment restrictions
(including diversification requirements) contained in the 1940 Act, any SEC
No-Action Letter or order applicable to the Company, and any applicable state
securities law or regulation; TAMIC shall provide Sub-Adviser with copies of any
such SEC No-Action Letter or Order.
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(viii) The Sub-Adviser shall submit on a quarterly basis to the Board and
TAMIC a written certification detailing any variation from applicable investment
objectives, practices, policies or procedures, or from its Code of Ethics.
5. BROKERAGE
In selecting brokers or dealers (including, if permitted by applicable law
and appropriate Board Procedures, any broker or dealer affiliated with either
TAMIC or the Sub-Adviser) to execute transactions on behalf of the Portfolio,
the Sub-Adviser will seek the best overall terms available. In assessing the
best overall terms available for any transaction, the Sub-Adviser will consider
factors it deems relevant, including, but not limited to, the breadth and nature
of the market in the security, the price of the security, the size of the order,
the timing of the transaction, the difficulty of the transaction, the
reputation, experience, financial condition and execution capability of the
broker or dealer, the quality of the service and the reasonableness of the
commission, if any, for the specific transaction and on a continuing basis. In
selecting brokers or dealers to execute a particular transaction, and in
evaluating the best overall terms available, the Sub-Adviser is authorized to
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the 1934 Act) provided to the Portfolio and/or other accounts
over which the Sub-Adviser or its affiliates exercise investment discretion.
Nothing in this paragraph shall be deemed to prohibit the Sub-Adviser from
paying an amount of commission for effecting a securities transaction in excess
of the amount of commission another member of an exchange, broker, or dealer
would have charged for effecting that transaction, if the Sub-Adviser determined
in good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such member, broker, or
dealer, viewed in terms of either that particular transaction or its overall
responsibilities with respect to the Portfolio and/or other accounts over which
the Sub-Adviser or its affiliate exercise investment discretion.
To the extent consistent with the applicable law, Sub-Adviser may aggregate
purchase or sell orders for the Portfolio with contemporaneous purchase or sell
orders of other clients of Sub-Adviser or its affiliated persons. In such event,
allocation of Securities so purchased or sold, as well as the expenses incurred
in the transaction, will be made by Sub-Adviser in the manner Sub-Adviser
considers to be the most equitable and consistent with its and its affiliates'
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fiduciary obligations to the Portfolio and to such other clients. TAMIC hereby
acknowledges that such aggregations of orders may not result in a more favorable
price or lower brokerage commissions in all instances.
6. INFORMATION AND REPORTS
(a) TAMIC will provide Sub-Adviser with a list, to the best of TAMIC's
knowledge, of all affiliated persons of TAMIC (and any affiliated
person of such an affiliated person) and will promptly update the list
whenever TAMIC becomes aware of any additional affiliated persons.
(b) The Sub-Adviser will maintain books and records relating to its
management of the Portfolio under its customary procedures and in
compliance with applicable regulations under the 1940 Act and the
Advisers Act. Sub-Adviser will permit TAMIC to inspect such books and
records at all reasonable times during normal business hours, upon
reasonable notice. Sub-Adviser agrees that all records which it
maintains for the Portfolio are the property of the Trust and Sub-
Adviser will surrender promptly to the Trust copies of any such records
upon request by the Trust or TAMIC.
(c) Prior to each Board meeting, Sub-Adviser will provide TAMIC and the
Board with reports regarding its management of the Portfolio during the
interim period, in such form as may be mutually agreed upon by
Sub-Adviser and TAMIC. Sub-Adviser will also provide TAMIC with any
information regarding its management of the Portfolio required for any
Board Meeting, any shareholder report, amended registration statement
or prospectus supplement filed by the Portfolio with the SEC.
Sub-Adviser will submit on a quarterly basis to the Board and TAMIC a
written certification detailing any variation from applicable
investment policies or procedure, or from its Code of Ethics.
7. COMPENSATION
In consideration of the services rendered pursuant to this Agreement, TAMIC
will pay the Sub-Adviser an annual fee calculated at the rate of .375% of the
Portfolio's average daily net assets. These fees are calculated daily and paid
monthly. The Sub-Adviser shall have no right to obtain compensation directly
from the Trust or the Portfolio for services provided hereunder and agrees to
look solely to TAMIC
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for payment of fees due. The fee for the period from the Effective Date (defined
below) of the Agreement to the end of the month during which the Effective Date
occurs shall be prorated according to the proportion that such period bears to
the full monthly period. Upon any termination of this Agreement before the end
of a month, the fee for such part of that month shall be prorated according to
the proportion that such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. For the purpose of
determining fees payable to the Sub-Adviser, the value of the Portfolio's net
assets shall be computed at the times and in the manner specified in the
Prospectus and/or the SAI.
8. EXPENSES
The Sub-Adviser shall bear all expenses in connection with the performance
of its services under this Agreement. In no event will the Sub-Adviser bear
brokerage costs, custodian fees, auditors fees or other expenses to be borne by
the Portfolio or the Trust. The Portfolio will bear certain other expenses to be
incurred in its operation, including, but not limited to, (i) interest and
taxes; (ii) brokerage commissions and other costs in connection with the
purchase or sale of securities and other investment instruments; (iii) fees and
expenses of the Trust's trustees other than those who are "interested persons"
of the Trust, TAMIC, the Sub-Adviser; (iv) legal and audit expenses; (v)
custodian, registrar and transfer agent fees and expenses; (vi) fees and
expenses related to the registration and qualification of the Trust and the
Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefor; (ix) insurance premiums for fidelity bond and other coverage; (x)
investment management fees; (xi) expenses of typesetting for printing
prospectuses and statements of additional information and supplements thereto;
(xii) expense of printing and mailing prospectuses and statements of additional
information and supplements thereto; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and legal obligations that the
Portfolio may have to indemnify the Trust's trustees, officers and/or employees
or agents with respect thereto. The Portfolio shall assume all other expenses
not specifically assumed by the Sub-Adviser or by TAMIC under the
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Investment Advisory Agreement entered into between TAMIC and the Trust.
9. STANDARD OF CARE
The Sub-Adviser shall exercise reasonable care and in a manner consistent
with applicable federal and state laws and regulations in rendering the services
it agrees to provide under this Agreement. Neither the Sub-Adviser nor its
officers, directors, employees, agents, affiliated person, legal representatives
or persons controlled by it (collectively, the "Related Persons") shall be
liable for or subject to any damages, expenses, or losses in connection with any
error of judgment or mistake of law or for any loss suffered by the Trust, the
Portfolio or TAMIC or any shareholder, director, trustee or officer thereof, in
connection with the matters to which this Agreement relates, provided that
nothing in this Agreement shall be deemed to protect or purport to protect the
Sub-Adviser against any liability to TAMIC, the Trust or to the shareholders of
the Trust to which the Sub-Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Sub-Adviser's disregard of its
obligations and duties under this Agreement.
10. LIMITATION OF LIABILITY
Except as may otherwise be provided by the 1940 Act or federal securities
laws, neither TAMIC or Sub-Adviser, nor any of their officers, directors,
employees or agent, shall be subject to any liability or subject to any damages,
expenses, or losses in connection with any error of judgment, mistake of law, or
any loss to each other or the Trust arising out of any investment or other act
or omission in the course of, connected with, or arising out of any services to
be rendered under this Agreement, except by reason of 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. TAMIC
shall hold harmless and indemnify Sub-Adviser against any loss, liability,
claim, cost, damage or expense (including reasonable investigation and defense
costs and reasonable attorneys fees and costs) arising by reason of any matter
to which this Agreement relates unless the Sub-Adviser is negligent in the
performance of its duties or it has reckless disregard of its obligations and
duties under this Agreement. The Sub-Adviser shall hold harmless the Trust and
TAMIC for any loss, liability, cost, damage, or expenses arising from any claim
resulting from the Sub-Adviser's negligence in
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connection with the performance of its duties or the reckless disregard of its
obligations and duties under this Agreement.
Promptly after receipt of notice of the commencement of any action by a
party seeking to be indemnified under this Section 10 (the "Indemnified Party"),
the Indemnified Party shall, if a claim in respect thereof is to be made against
a party against whom indemnification is sought under this Section 10 (the
"Indemnifying Party"), notify the Indemnifying Party in writing of the
commencement thereof; but the omission to notify the Indemnifying Party shall
not relieve the Indemnifying Party from any liability which it may have to any
Indemnified Party otherwise than under the provisions hereof, and shall relieve
it from liability hereunder only to the extent that such omission results in the
forfeiture by the Indemnifying Party of rights or defenses with respect to such
action.
In any action or proceeding, following provision of proper notice by the
Indemnified Party of the existence of such action, the Indemnifying Party shall
be entitled to participate in any such action and, to the extent that it shall
wish, participate jointly with any other Indemnifying Party similarly notified,
to assume the defense thereof, with counsel of its choice (unless any conflict
of interest requires the appointment of separate counsel), and after notice from
the Indemnifying Party to such Indemnified Party of its election to assume the
defense of the action, the Indemnifying Party shall not be liable to such
Indemnified Party hereunder for any legal expense of the other counsel
subsequently incurred without the Indemnifying Party's consent by such
Indemnified Party in connection with the defense thereof. The Indemnified Party
shall cooperate in the defense or settlement of claims so assumed. The
Indemnifying Party shall not be liable hereunder for the settlement by the
Indemnified Party for any claim or demand unless it has previously approved the
settlement or it has been notified of such claim or demand and has failed to
provide a defense in accordance with the provisions hereof. In the event that
any proceeding against the Indemnifying Party shall be commenced by the
Indemnified Party in connection with this Agreement, or the transactions
contemplated hereunder, and such proceeding shall be finally determined by a
court of competent jurisdiction in favor of the Indemnifying Party, the
Indemnified Party shall be liable to the Indemnifying Party for any reasonable
attorney's fees and court costs relating to such proceedings.
The indemnifications provided in this Section 10 shall survive the
termination of this Agreement.
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11. TERM OF AGREEMENT
This Agreement shall become effective as of the date first written above,
(the "Effective Date") and shall continue for an initial two-year term and shall
continue thereafter so long as such continuance is specifically approved at
least annually as required by the 1940 Act. This Agreement is terminable,
without penalty, on 60 days' written notice, by the Board or by vote of holders
of a majority (as defined in the 1940 Act and the rules thereunder) of the
outstanding voting securities of the Trust, or upon 60 days' written notice, by
the Sub-Adviser. This Agreement will also terminate automatically in the event
of its assignment (as defined in the 1940 Act and the rules thereunder).
If the Board of Trustees or the holders of a majority (as defined in the
1940 Act and the rules thereunder) of the outstanding voting securities of the
Portfolio, fails to approve the Agreement or any continuance of the Agreement,
Sub-Adviser will continue to act as investment subadviser with respect to the
Portfolio pending the required approval of the Agreement or its continuance or
of any contract with Sub-Adviser or a different adviser or subadviser or other
definitive action, provided that the compensation received by Sub-Adviser in
respect of such Portfolio during such period is in compliance with Rule 15a-4
under the Investment Company Act.
12. SERVICES TO OTHER COMPANIES OR ACCOUNTS
TAMIC understands that the Sub-Adviser and its affiliates act, will
continue to act and may act in the future as investment manager or adviser to
fiduciary and other managed accounts, as an investment manager or adviser to
other investment companies, including any offshore entities, or accounts. TAMIC
has no objection to the Sub-Adviser and its affiliates so acting, provided that
whenever the Portfolio and one or more other investment companies or accounts
managed or advised by the Sub-Adviser and its affiliates have available funds
for investment, investments suitable and appropriate for each will be allocated
in accordance with a formula believed to be equitable to each company and
account. TAMIC recognizes that in some cases this procedure may adversely affect
the size of the position obtainable for the Portfolio. In addition, TAMIC
understands that the persons employed by the Sub-Adviser to assist in the
performance of the Sub-Adviser's duties under this Agreement will not devote
their full time to such service and nothing contained in this Agreement shall be
deemed to limit or restrict the right of the
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Sub-Adviser or any affiliate of the Sub-Adviser to engage in and devote time and
attention to other businesses or to render services of whatever kind or nature.
This Agreement shall not in any way limit or restrict 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 will not adversely affect or otherwise impair the performance by Sub-
Adviser of its duties and obligations under this Agreement.
13. COOPERATION WITH REGULATORY AUTHORITIES OR OTHER ACTIONS
The parties to this Agreement each agree to cooperate in a reasonable
manner with each other in the event that any of them should become involved in a
legal, administrative, judicial or regulatory action, claim, or suit as a result
of performing its obligations under this Agreement.
14. COMPLIANCE WITH APPLICABLE LAW
The Sub-Adviser agrees to conduct itself in a manner consistent with
applicable laws and regulations, including but not limited to Sections 2a-7,
5(b), 12, 17, 18, and 36 of the 1940 Act. The Sub-Adviser shall ensure that its
activities are conducted in a manner consistent with a Code of Ethics maintained
pursuant to Section 17j-1 of the 1940 Act. The Subadviser also agrees that it
shall conduct its activities in a manner consistent with any No-Action Letter,
order or rule promulgated by the SEC applicable to the Trust or any of the
Portfolio that TAMIC or the Trust has sent Sub-Adviser.
15. MISCELLANEOUS
This Agreement may be signed in one or more counterpart.
Each party to this Agreement represents and warrants that it is validly
existing and taken all necessary action to obtain the requisite authority to
enter into this Agreement and to perform the duties contemplated herein.
The Trust represents that a copy of the Declaration of Trust is on file
with the Secretary of the Commonwealth of Massachusetts.
This Agreement shall be governed by the laws of the State of Connecticut.
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Each party agrees to comply with all applicable reporting requirements
pursuant to state and federal laws and regulations.
All representations and warranties made by the Sub-Adviser and TAMIC herein
shall survive for the duration of this Agreement and the parties hereto shall
immediately notify, but in no event later than five (5) days, each other in
writing upon becoming aware that any of the foregoing representations and
warranties are no longer true.
16. USE OF NAME
The Trust and TAMIC, together with its subsidiaries and affiliates may use
the names "NWQ Investment Management Company." or "NWQ" or any derivative
thereof or logo associated therewith in offering materials of the Portfolio only
with the prior approval of the Sub-Adviser and only for so long as this
Agreement or any extension, renewal, or amendment hereof remains in effect. At
such time as this Agreement shall no longer be in effect, the Trust and TAMIC
together with its subsidiaries and affiliates each agree that they shall cease
to use such names or any other name indicating that it is advised by or
otherwise connected with the Sub-Adviser and shall promptly change its name
accordingly. The Trust acknowledges that it has adopted the name "NWQ Investment
Management Company" or "NWQ" or any derivative thereof or logo associated
therewith in offering materials of the Portfolio only with the prior approval of
the Sub-Adviser and through permission of the Sub-Adviser, and agrees that the
Sub-Adviser reserves to itself and any successor to its business the right to
grant the non-exclusive right to use the aforementioned names or any similar
names to any other corporation or entity, including but not limited to any
investment company of which the Sub-Adviser or any subsidiary or affiliate
thereof or any successor to the business of any thereof shall be the investment
advisor.
IN WITNESS WHEREOF, the parties hereto have caused this Investment
Sub-Advisory Agreement to be signed by their respective officials thereunto duly
authorized as of the day and year first above written.
<TABLE>
<S> <C>
TRAVELERS ASSET MANAGEMENT NWQ INVESTMENT
INTERNATIONAL COMPANY LLC MANAGEMENT COMPANY
By: By:
Its: Its:
</TABLE>
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APPENDIX E
FORM OF
INTERIM INVESTMENT SUB-ADVISORY AGREEMENT
ENTERED INTO BETWEEN
TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY LLC
AND
NWQ INVESTMENT MANAGEMENT COMPANY
This Investment Sub-Advisory Agreement (the "Agreement") is entered into as
of September 26, 2000, by and between Travelers Asset Management International
Company LLC, a limited liability company duly organized and existing under the
laws of the state of New York ("TAMIC"), and NWQ Investment Management Company,
a corporation duly organized and existing under the laws of the state of
Massachusetts (the "Sub-Adviser").
WHEREAS, TAMIC has entered into an Investment Advisory Agreement dated July
20, 1998, (the "Investment Advisory Agreement") with The Travelers Series Trust
(a Massachusetts business trust, hereinafter referred to as the "Trust"). A copy
of such agreement is attached as Exhibit A hereto, pursuant to which TAMIC
provides investment management and advisory services to the Trust; and
WHEREAS, the Investment Advisory Agreement provides that TAMIC may engage a
duly organized sub-adviser, to furnish investment information, services and
advice to assist TAMIC in carrying out its responsibilities under the Investment
Advisory Agreement; and
WHEREAS, TAMIC desires to retain Sub-Adviser to render investment advisory
services to TAMIC in the manner and on the terms set forth in this Agreement,
and the Sub-Adviser desires to provide such investment advisory services.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, TAMIC and Sub-Adviser agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF TAMIC
TAMIC represents and warrants to the Sub-Adviser as follows:
a. TAMIC is registered with the SEC as an investment adviser under the
Advisers Act;
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b. TAMIC is registered and licensed as an investment adviser under the laws
of all jurisdictions in which its activities require it to be so
licensed, except in such jurisdictions where the failure to be so
licensed would not have a material effect on its business;
c. TAMIC is a corporation duly organized and validly existing under the
laws of the State of New York with the power to own and possess its
assets and carry on its business as it is now being conducted;
d. The execution, delivery and performance by TAMIC of this Agreement are
within TAMIC's powers and have been duly authorized by all necessary
action on the part of its directors, and no action by or in respect of,
or filing with, any governmental body, agency or official is required on
the part of TAMIC for the execution, delivery and performance of this
Agreement by the parties hereto, and the execution, delivery and
performance of this Agreement by the parties hereto does not contravene
or constitute a default under (i) any provision of applicable law, rule
or regulation, (ii) TAMIC's Limited Liability Agreement, or (iii) any
agreement, judgment, injunction, order, decree or other instruments
binding upon TAMIC;
e. This Agreement is a valid and binding Agreement of TAMIC;
f. TAMIC has provided the Sub-Adviser with a copy of its Form ADV as most
recently filed with the SEC and will, within a reasonable time after
filing any amendment to its Form ADV with the SEC, furnish a copy of
such amendments to the Sub-Adviser. The information contained in TAMIC's
Form ADV is accurate and complete in all material respects and does not
omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under this they were
made, not misleading;
g. TAMIC acknowledges that it received a copy of the Sub-Adviser's Form ADV
at least 48 hours prior to the execution of this Agreement and has
delivered a copy of the same to the Trust
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2. REPRESENTATIONS AND WARRANTIES OF SUB-ADVISER
The Sub-Adviser hereby represents and warrants to TAMIC that:
a. The Sub-Adviser is registered with the SEC as an investment adviser
under the Advisers Act;
b. The Sub-Adviser is registered or licensed as an investment adviser under
the laws of jurisdictions in which its activities require it to be so
registered or licensed, except where the failure to be so licensed would
not have a material adverse effect on its business;
c. The Sub-Adviser is a corporation duly organized and validly existing
under the laws of the State of Massachusetts with the power to own and
possess its assets and carry on its business as it is now being
conducted;
d. The execution, delivery and performance by the Sub-Adviser of this
Agreement are within the Sub-Adviser's powers and have been duly
authorized by all necessary action on the part of its directors, and no
action by or in respect of, or filing with, any governmental body,
agency or official is required on the part of the Sub-Adviser for the
execution, delivery and performance of this Agreement by the parties
hereto, and the execution, delivery and performance of this Agreement by
the parties hereto does not contravene or constitute a default under (i)
any provision of applicable law, rule or regulation, (ii) the
Sub-Adviser's Articles of Incorporation or By-Laws, or (iii) any
agreement, judgment, injunction, order, decree or other instruments
binding upon the Sub-Adviser;
e. This Agreement is a valid and binding Agreement of the Sub-Adviser;
f. The Sub-Adviser has provided TAMIC with a copy of its Form ADV as most
recently filed with the SEC and will, promptly after filing any
amendment to its Form ADV with the SEC, furnish a copy of such
amendments to the Sub-Adviser. The information contained in the
Sub-Adviser's Form ADV is accurate and complete in all material respects
and does not omit to state any material fact necessary in order to make
the statements made, in light of the circumstances under which they were
made, not misleading;
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g. The Sub-Adviser acknowledges that it received a copy of TAMIC's Form ADV
at least 48 hours prior to the execution of this Agreement.
3. INVESTMENT DESCRIPTION APPOINTMENT
The Trust, which is divided into series including the segment known as the
NWQ Large Cap Portfolio ( the "Portfolio") desires to employ its capital
relating to the Portfolio by investing and reinvesting in investments of the
kind and in accordance with the investment(s), policies and limitations
specified in the prospectus (the "Prospectus") and the statement of additional
information (the "SAI") filed with the Securities and Exchange Commission (the
"SEC") as part of the Trust's Registration Statement on Form N-1A, as amended or
supplemented from time to time, and in the manner and to the extent as may from
time to time be approved by the Board of Trustees of the Trust (the "Board").
TAMIC will supply copies of the Prospectus and the SAI to the Sub-Adviser
promptly after the Trust's Registration Statement is declared effective. TAMIC
agrees promptly to provide copies of all amendments and supplements to the
current Prospectus and the SAI, and copies of any procedures adopted by the
Board applicable to the Sub-Adviser and any amendments thereto (the "Board
Procedures"), to the Sub-Adviser on an on-going basis. Until TAMIC delivers any
such amendment or supplement or Board Procedures, the Sub-Adviser shall be fully
protected in relying on the Prospectus and SAI and any Board Procedures, if any,
as previously furnished to the Sub-Adviser. In addition, TAMIC shall furnish the
Sub-Adviser with a certified copy of any financial statement or report prepared
for the Trust with respect to the Portfolio by certified or independent public
accountants, and with copies of any financial statements or reports made by the
Trust to shareholders or to any state or federal regulatory agency. TAMIC shall
also inform the Sub-Adviser of the results of any audits or examinations by
regulatory authorities pertaining to the Portfolio. TAMIC further agrees to
furnish the Sub-Adviser with any materials or information that the Sub-Adviser
may reasonably request to enable it to perform its functions under this
Agreement.
TAMIC and the Trust desire to employ and hereby appoint the Sub-Adviser to
act as the sub-investment adviser to the Portfolio. Subject to the terms and
conditions of this Agreement, Sub-Adviser accepts the appointment and agrees to
furnish the services for the compensation and for the term set forth below.
Except as specified herein, the Sub-Adviser agrees that it shall not delegate
any material
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<PAGE> 74
obligation assumed pursuant to this Agreement to any third party without first
obtaining the written consent of both the Trust and TAMIC.
4. SERVICES AS SUB-ADVISER
Subject to the supervision, direction and approval of the Board and TAMIC,
the Sub-Adviser shall conduct a continual program of investment, evaluation and,
if appropriate in its view, the sale and reinvestment of the Portfolio's assets.
The Sub-Adviser is authorized, in its sole discretion and without prior
consultation with TAMIC, to: (a) obtain and evaluate pertinent economic,
financial, and other information affecting the economy generally and certain
companies as such information relates to securities which are purchased for or
considered for purchase in the Portfolio; (b) manage the Portfolio's assets in
accordance with the Portfolio's investment objective(s) and policies as stated
in the Prospectus and the SAI; (c) make investment decisions for the Portfolio;
(d) place purchase and sale orders for portfolio transactions on behalf of the
Portfolio and manage otherwise uninvested cash assets of the Portfolio; (e)
price such Portfolio securities as TAMIC and Sub-Adviser shall mutually agree
upon from time to time; (f) execute account documentation, agreements, contracts
and other documents as the Sub-Adviser shall be requested by brokers, dealers,
counterparties and other persons in connection with its management of the assets
of the Portfolio (in such respect, and only for this limited purpose, the
Sub-Adviser shall act as TAMIC's and the Trust's agent and attorney-in-fact);
(g) employ professional portfolio managers and securities analysts who provide
research services to the Portfolio; and (h) regularly report to TAMIC and to the
Board with respect to its subadvisory activities. The Sub-Adviser shall execute
trades, and in general take such action as is appropriate to effectively manage
the Portfolio's investment practices.
In addition, (i) the Sub-Adviser shall furnish TAMIC daily information
concerning portfolio transactions and quarterly and annual reports concerning
transactions and performance of the Portfolio in such form as may be mutually
agreed upon, and the Sub-Adviser agrees to review the Portfolio and discuss the
management of it with TAMIC and the Board as either or both shall from time to
time reasonably request.
(ii) Unless TAMIC gives the Sub-Adviser written instructions to the
contrary, the Sub-Adviser shall use its good faith judgment in a manner which it
reasonably believes best serves the interests of the
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<PAGE> 75
Portfolio's shareholders to vote or abstain from voting all proxies solicited by
or with respect to the issuers of securities in which assets of the Portfolio
may be invested.
(iii) The Sub-Adviser shall maintain and preserve such records related to
the Portfolio's transactions as are required under any applicable state or
federal securities law or regulation including: the Investment Company Act of
1940, as amended (the "1940 Act"), the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the Investment Advisers Act of 1940, as amended
(the "Advisers Act"). TAMIC shall maintain and preserve all books and other
records not related to the Portfolio's transactions as required under such
rules. The Sub-Adviser shall timely furnish to TAMIC all information relating to
the Sub-Adviser's services hereunder reasonably requested by TAMIC to keep and
preserve the books and records of the Trust. The Sub-Adviser agrees that all
records which it maintains for the Portfolio are the property of the Trust and
the Sub-Adviser will surrender promptly to the Trust copies of any of such
records.
(iv) The Sub-Adviser shall comply with Board Procedures and any amendments
thereto. The Sub-Adviser shall notify TAMIC immediately upon detection of any
material breach of such Board Procedures.
(v) The Sub-Adviser shall maintain a written code of ethics (the "Code of
Ethics") that it reasonably believes complies with the requirements of Rule
17j-1 under the 1940 Act, a copy of which it will provide to TAMIC or the Trust
upon any reasonable request. The Sub-Adviser shall follow such Code of Ethics in
performing its services under this Agreement. Further, the Sub-Adviser
represents that it has policies and procedures regarding the detection and
prevention of the misuse of material, nonpublic information by the Sub-Adviser
and its employees as required by the Insider Trading and Securities Fraud
Enforcement Act of 1988.
(vi) The Sub-Adviser shall manage the investment and reinvestment of the
assets of the Portfolio in a manner consistent with the diversification
requirements of Section 817 and Section 851 of the Internal Revenue Code of
1986, as amended (the "IRC"). The Sub-Adviser will also manage the investments
of the Portfolio in a manner consistent with any and all investment restrictions
(including diversification requirements) contained in the 1940 Act, any SEC
No-Action Letter or order applicable to the Company, and any applicable state
securities law or regulation; TAMIC shall provide Sub-Adviser with copies of any
such SEC No-Action Letter or Order.
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<PAGE> 76
(viii) The Sub-Adviser shall submit on a quarterly basis to the Board and
TAMIC a written certification detailing any variation from applicable investment
objectives, practices, policies or procedures, or from its Code of Ethics.
5. BROKERAGE
In selecting brokers or dealers (including, if permitted by applicable law
and appropriate Board Procedures, any broker or dealer affiliated with either
TAMIC or the Sub-Adviser) to execute transactions on behalf of the Portfolio,
the Sub-Adviser will seek the best overall terms available. In assessing the
best overall terms available for any transaction, the Sub-Adviser will consider
factors it deems relevant, including, but not limited to, the breadth and nature
of the market in the security, the price of the security, the size of the order,
the timing of the transaction, the difficulty of the transaction, the
reputation, experience, financial condition and execution capability of the
broker or dealer, the quality of the service and the reasonableness of the
commission, if any, for the specific transaction and on a continuing basis. In
selecting brokers or dealers to execute a particular transaction, and in
evaluating the best overall terms available, the Sub-Adviser is authorized to
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the 1934 Act) provided to the Portfolio and/or other accounts
over which the Sub-Adviser or its affiliates exercise investment discretion.
Nothing in this paragraph shall be deemed to prohibit the Sub-Adviser from
paying an amount of commission for effecting a securities transaction in excess
of the amount of commission another member of an exchange, broker, or dealer
would have charged for effecting that transaction, if the Sub-Adviser determined
in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
member, broker, or dealer, viewed in terms of either that particular transaction
or its overall responsibilities with respect to the Portfolio and/or other
accounts over which the Sub-Adviser or its affiliate exercise investment
discretion.
To the extent consistent with the applicable law, Sub-Adviser may aggregate
purchase or sell orders for the Portfolio with contemporaneous purchase or sell
orders of other clients of Sub-Adviser or its affiliated persons. In such event,
allocation of Securities so purchased or sold, as well as the expenses incurred
in the transaction, will be made by Sub-Adviser in the manner Sub-Adviser
considers to be the most equitable and consistent with its and its affiliates'
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<PAGE> 77
fiduciary obligations to the Portfolio and to such other clients. TAMIC hereby
acknowledges that such aggregations of orders may not result in a more favorable
price or lower brokerage commissions in all instances.
6. INFORMATION AND REPORTS
(a) TAMIC will provide Sub-Adviser with a list, to the best of TAMIC's
knowledge, of all affiliated persons of TAMIC (and any affiliated
person of such an affiliated person) and will promptly update the list
whenever TAMIC becomes aware of any additional affiliated persons.
(b) The Sub-Adviser will maintain books and records relating to its
management of the Portfolio under its customary procedures and in
compliance with applicable regulations under the 1940 Act and the
Advisers Act. Sub-Adviser will permit TAMIC to inspect such books and
records at all reasonable times during normal business hours, upon
reasonable notice. Sub-Adviser agrees that all records which it
maintains for the Portfolio are the property of the Trust and Sub-
Adviser will surrender promptly to the Trust copies of any such records
upon request by the Trust or TAMIC.
(c) Prior to each Board meeting, Sub-Adviser will provide TAMIC and the
Board with reports regarding its management of the Portfolio during the
interim period, in such form as may be mutually agreed upon by
Sub-Adviser and TAMIC. Sub-Adviser will also provide TAMIC with any
information regarding its management of the Portfolio required for any
Board Meeting, any shareholder report, amended registration statement
or prospectus supplement filed by the Portfolio with the SEC.
Sub-Adviser will submit on a quarterly basis to the Board and TAMIC a
written certification detailing any variation from applicable
investment policies or procedure, or from its Code of Ethics.
7. COMPENSATION
(a) In consideration of the services rendered pursuant to this Agreement,
TAMIC will pay the Sub-Adviser a fee calculated at the annual rate of
.375% of the Portfolio's average daily net assets. These fees are
calculated daily and paid monthly. The Sub-Adviser shall have no right
to obtain compensation directly from the Trust or the Portfolio for
services provided
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<PAGE> 78
hereunder and agrees to look solely to TAMIC for payment of fees due.
The fee for the period from the Effective Date (defined below) of the
Agreement to the end of the month during which the Effective Date
occurs shall be prorated according to the proportion that such period
bears to the full monthly period. Upon any termination of this
Agreement before the end of a month, the fee for such part of that
month shall be prorated according to the proportion that such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees
payable to the Sub-Adviser, the value of the Portfolio's net assets
shall be computed at the times and in the manner specified in the
Prospectus and/or the SAI.
(b) For payment purposes under this Interim Investment Sub-Advisory
Agreement and pursuant to the requirements of Rule 15a-4(b)(2)(vi)(A),
(B), and (C), the fee payable under paragraph (a) of this Section shall
be held in an interest-bearing escrow account with the Trust's
custodian or a bank, and
(i) if a majority of the Portfolio's outstanding voting securities
approve the Interim Agreement between TAMIC and the Sub-Adviser by
the end of the 150-day period, the amount in the escrow account
(including interest earned) will be paid to the Sub-Adviser;
(ii) if a majority of the Portfolio's outstanding voting securities do
not approve the Interim Agreement with the Sub-Adviser, the
Sub-Adviser will be paid, out of the escrow account, the lesser
of: (A) any actual costs incurred in performing the Interim
Agreement (plus interest earned on that amount while in escrow)
(with any remaining amount reverting to the Portfolio; or (B) the
total amount in the escrow account (plus interest earned).
8. EXPENSES
The Sub-Adviser shall bear all expenses in connection with the performance
of its services under this Agreement. In no event will the Sub-Adviser bear
brokerage costs, custodian fees, auditors fees or other expenses to be borne by
the Portfolio or the Trust. The Portfolio will bear certain other expenses to be
incurred in its operation,
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<PAGE> 79
including, but not limited to, (i) interest and taxes; (ii) brokerage
commissions and other costs in connection with the purchase or sale of
securities and other investment instruments; (iii) fees and expenses of the
Trust's trustees other than those who are "interested persons" of the Trust,
TAMIC, the Sub-Adviser; (iv) legal and audit expenses; (v) custodian, registrar
and transfer agent fees and expenses; (vi) fees and expenses related to the
registration and qualification of the Trust and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of printing
and mailing reports and notices and proxy material to shareholders of the
Portfolio; (viii) all other expenses incidental to holding meetings of the
Portfolio's shareholders, including proxy solicitations therefor; (ix) insurance
premiums for fidelity bond and other coverage; (x) investment management fees;
(xi) expenses of typesetting for printing prospectuses and statements of
additional information and supplements thereto; (xii) expense of printing and
mailing prospectuses and statements of additional information and supplements
thereto; and (xiii) such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the Portfolio
is a party and legal obligations that the Portfolio may have to indemnify the
Trust's trustees, officers and/or employees or agents with respect thereto. The
Portfolio shall assume all other expenses not specifically assumed by the
Sub-Adviser or by TAMIC under the Investment Advisory Agreement entered into
between TAMIC and the Trust.
9. STANDARD OF CARE
The Sub-Adviser shall exercise reasonable care and in a manner consistent
with applicable federal and state laws and regulations in rendering the services
it agrees to provide under this Agreement. Neither the Sub-Adviser nor its
officers, directors, employees, agents, affiliated person, legal representatives
or persons controlled by it (collectively, the "Related Persons") shall be
liable for or subject to any damages, expenses, or losses in connection with any
error of judgment or mistake of law or for any loss suffered by the Trust, the
Portfolio or TAMIC or any shareholder, director, trustee or officer thereof, in
connection with the matters to which this Agreement relates, provided that
nothing in this Agreement shall be deemed to protect or purport to protect the
Sub-Adviser against any liability to TAMIC, the Trust or to the shareholders of
the Trust to which the Sub-Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of
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<PAGE> 80
its duties or by reason of the Sub-Adviser's disregard of its obligations and
duties under this Agreement.
10. LIMITATION OF LIABILITY
Except as may otherwise be provided by the 1940 Act or federal securities
laws, neither TAMIC or Sub-Adviser, nor any of their officers, directors,
employees or agent, shall be subject to any liability or subject to any damages,
expenses, or losses in connection with any error of judgment, mistake of law, or
any loss to each other or the Trust arising out of any investment or other act
or omission in the course of, connected with, or arising out of any services to
be rendered under this Agreement, except by reason of 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. TAMIC
shall hold harmless and indemnify Sub-Adviser against any loss, liability,
claim, cost, damage or expense (including reasonable investigation and defense
costs and reasonable attorneys fees and costs) arising by reason of any matter
to which this Agreement relates unless the Sub-Adviser is negligent in the
performance of its duties or it has reckless disregard of its obligations and
duties under this Agreement. The Sub-Adviser shall hold harmless the Trust and
TAMIC for any loss, liability, cost, damage, or expenses arising from any claim
resulting from the Sub-Adviser's negligence in connection with the performance
of its duties or the reckless disregard of its obligations and duties under this
Agreement.
Promptly after receipt of notice of the commencement of any action by a
party seeking to be indemnified under this Section 10 (the "Indemnified Party"),
the Indemnified Party shall, if a claim in respect thereof is to be made against
a party against whom indemnification is sought under this Section 10 (the
"Indemnifying Party"), notify the Indemnifying Party in writing of the
commencement thereof; but the omission to notify the Indemnifying Party shall
not relieve the Indemnifying Party from any liability which it may have to any
Indemnified Party otherwise than under the provisions hereof, and shall relieve
it from liability hereunder only to the extent that such omission results in the
forfeiture by the Indemnifying Party of rights or defenses with respect to such
action.
In any action or proceeding, following provision of proper notice by the
Indemnified Party of the existence of such action, the Indemnifying Party shall
be entitled to participate in any such action and, to the extent that it shall
wish, participate jointly with any other Indem-
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<PAGE> 81
nifying Party similarly notified, to assume the defense thereof, with counsel of
its choice (unless any conflict of interest requires the appointment of separate
counsel), and after notice from the Indemnifying Party to such Indemnified Party
of its election to assume the defense of the action, the Indemnifying Party
shall not be liable to such Indemnified Party hereunder for any legal expense of
the other counsel subsequently incurred without the Indemnifying Party's consent
by such Indemnified Party in connection with the defense thereof. The
Indemnified Party shall cooperate in the defense or settlement of claims so
assumed. The Indemnifying Party shall not be liable hereunder for the settlement
by the Indemnified Party for any claim or demand unless it has previously
approved the settlement or it has been notified of such claim or demand and has
failed to provide a defense in accordance with the provisions hereof. In the
event that any proceeding against the Indemnifying Party shall be commenced by
the Indemnified Party in connection with this Agreement, or the transactions
contemplated hereunder, and such proceeding shall be finally determined by a
court of competent jurisdiction in favor of the Indemnifying Party, the
Indemnified Party shall be liable to the Indemnifying Party for any reasonable
attorney's fees and court costs relating to such proceedings.
The indemnifications provided in this Section 10 shall survive the
termination of this Agreement.
11. TERM OF AGREEMENT
This Agreement shall become effective as of the day that the change of
control with respect to the Sub-Adviser becomes effective and shall continue
thereafter for the earlier of no more than 150 days or until the date when a
majority of the shareholders of the Portfolio have voted to approve this interim
and the new Investment Sub-Advisory Agreement between TAMIC and the Sub-Adviser.
This Agreement is terminable, without penalty, on no more than 10 calendar days'
written notice to the Sub-Adviser, by the Board or by a vote of the holders of a
majority (as defined in the 1940 Act and the rules thereunder) of the
outstanding voting securities of the Portfolio, or upon 60 days' written notice,
by the Sub-Adviser. This Agreement will also terminate automatically in the
event of its assignment (as defined in the 1940 Act and the rules thereunder).
If the Board of Trustees, or the holders of a majority (as defined in the
1940 Act and the rules thereunder) of the outstanding voting securities of the
Portfolio, fails to approve the Interim Agreement, the
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Sub-Adviser will continue to act as investment subadviser with respect to the
Portfolio pending the required approval of the Agreement or of any agreement
with the Sub-Adviser or a different adviser or subadviser or other definitive
action, provided that the compensation received by the Sub-Adviser or another
subadviser in respect of such Portfolio during such period is in compliance with
Rule 15a-4 under the Investment Company Act.
12. SERVICES TO OTHER COMPANIES OR ACCOUNTS
TAMIC understands that the Sub-Adviser and its affiliates act, will
continue to act and may act in the future as investment manager or adviser to
fiduciary and other managed accounts, as an investment manager or adviser to
other investment companies, including any offshore entities, or accounts. TAMIC
has no objection to the Sub-Adviser and its affiliates so acting, provided that
whenever the Portfolio and one or more other investment companies or accounts
managed or advised by the Sub-Adviser and its affiliates have available funds
for investment, investments suitable and appropriate for each will be allocated
in accordance with a formula believed to be equitable to each company and
account. TAMIC recognizes that in some cases this procedure may adversely affect
the size of the position obtainable for the Portfolio. In addition, TAMIC
understands that the persons employed by the Sub-Adviser to assist in the
performance of the Sub-Adviser's duties under this Agreement will not devote
their full time to such service and nothing contained in this Agreement shall be
deemed to limit or restrict the right of the Sub-Adviser or any affiliate of the
Sub-Adviser to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature. This Agreement shall not in any way
limit or restrict 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 will not adversely
affect or otherwise impair the performance by Sub-Adviser of its duties and
obligations under this Agreement.
13. COOPERATION WITH REGULATORY AUTHORITIES OR OTHER ACTIONS
The parties to this Agreement each agree to cooperate in a reasonable
manner with each other in the event that any of them should become involved in a
legal, administrative, judicial or regulatory action, claim, or suit as a result
of performing its obligations under this Agreement.
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<PAGE> 83
14. COMPLIANCE WITH APPLICABLE LAW
The Sub-Adviser agrees to conduct itself in a manner consistent with
applicable laws and regulations, including but not limited to Sections 2a-7,
5(b), 12, 17, 18, and 36 of the 1940 Act. The Sub-Adviser shall ensure that its
activities are conducted in a manner consistent with a Code of Ethics maintained
pursuant to Section 17j-1 of the 1940 Act. The Subadviser also agrees that it
shall conduct its activities in a manner consistent with any No-Action Letter,
order or rule promulgated by the SEC applicable to the Trust or any of the
Portfolio that TAMIC or the Trust has sent Sub-Adviser.
15. MISCELLANEOUS
This Agreement may be signed in one or more counterpart.
Each party to this Agreement represents and warrants that it is validly
existing and taken all necessary action to obtain the requisite authority to
enter into this Agreement and to perform the duties contemplated herein.
The Trust represents that a copy of the Declaration of Trust is on file
with the Secretary of the Commonwealth of Massachusetts.
This Agreement shall be governed by the laws of the State of Connecticut.
Each party agrees to comply with all applicable reporting requirements
pursuant to state and federal laws and regulations.
All representations and warranties made by the Sub-Adviser and TAMIC herein
shall survive for the duration of this Agreement and the parties hereto shall
immediately notify, but in no event later than five (5) days, each other in
writing upon becoming aware that any of the foregoing representations and
warranties are no longer true.
16. USE OF NAME
The Trust and TAMIC, together with its subsidiaries and affiliates may use
the names "NWQ Investment Management Company." or "NWQ" or any derivative
thereof or logo associated therewith in offering materials of the Portfolio only
with the prior approval of the Sub-Adviser and only for so long as this
Agreement or any extension, renewal, or amendment hereof remains in effect. At
such time as this Agreement shall no longer be in effect, the Trust and TAMIC
together with its subsidiaries and affiliates each agree that they shall cease
to use such names or any other name indicating that it is advised by or
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<PAGE> 84
otherwise connected with the Sub-Adviser and shall promptly change its name
accordingly. The Trust acknowledges that it has adopted the name "NWQ Investment
Management Company" or "NWQ" or any derivative thereof or logo associated
therewith in offering materials of the Portfolio only with the prior approval of
the Sub-Adviser and through permission of the Sub-Adviser, and agrees that the
Sub-Adviser reserves to itself and any successor to its business the right to
grant the non-exclusive right to use the aforementioned names or any similar
names to any other corporation or entity, including but not limited to any
investment company of which the Sub-Adviser or any subsidiary or affiliate
thereof or any successor to the business of any thereof shall be the investment
advisor.
IN WITNESS WHEREOF, the parties hereto have caused this Interim Investment
Sub-Advisory Agreement to be signed by their respective officials thereunto duly
authorized as of the day and year first above written.
TRAVELERS ASSET MANAGEMENT
INTERNATIONAL COMPANY LLC
By:
-------------------------------------------------------------------------
Its:
-------------------------------------------------------------------------
NWQ INVESTMENT MANAGEMENT COMPANY
By:
-------------------------------------------------------------------------
Its:
-------------------------------------------------------------------------
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<PAGE> 85
APPENDIX F
NWQ Investment Management Company Directors and Executive Officers:
<TABLE>
<CAPTION>
NAME TITLE PRINCIPAL OCCUPATION
---- ------------------------- -----------------------------
<S> <C> <C>
David A. Polak* Chairman, Chief Executive Same
Officer, Director
Michael C. Mendez, CIMA* President and Director Same
Edward C. Friedel, CFA* Director
Keven P. O'Brien** Director Senior Vice President of
United Asset Management Corp.
</TABLE>
---------------
* Located at 2049 Century Park East, 4th Floor, Los Angeles, CA 90067
** Located at 211 Congress Street, 4th Floor, Boston, MA 02110
F-1
<PAGE> 86
TRAVELERS LIFE & ANNUITY
[Please fold and detach card at perforation before mailing]
TRAVELERS SERIES TRUST INSTRUCTION CARD FOR THE SPECIAL SHAREHOLDERS
FUND NAME PRINTS HERE MEETING TO BE HELD ON DECEMBER 1, 2000
The undersigned, revoking all instruction cards heretofore given, hereby
appoints Heath B. McLendon and Robert C. McGill III, or either one of them, as
proxies, with full power of substitution, to vote on behalf of the undersigned
all shares of the Travelers Series Trust that the undersigned is entitled to
vote at the Special Shareholders Meeting to be held at 9:00 a.m. on Friday,
December 1, 2000 at One Tower Square, Hartford, Connecticut, and at any
adjournment thereof, in the manner directed below with respect to the matters
described in the Proxy Statement for the Special Meeting, receipt of which is
hereby acknowledged, and, in their discretion, upon such other matters as may
properly come before the Special Meeting or any adjournment thereof.
--------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS
INSTRUCTION CARD PROMPTLY USING THE
ENCLOSED PRE-ADDRESSED, POSTAGE-PAID
ENVELOPE.
--------------------------------------------
PLEASE SIGN EXACTLY AS NAME APPEARS AT LEFT.
DATE:___________________,2000
--------------------------------------------
--------------------------------------------
Signature(s) if held jointly (Title(s), if
required)
If signing in a representative capacity (as
attorney, executor or administrator, trustee,
guardian or custodian, corporate officer or
general partner), please indicate such
capacity following signature. Instiruction
cards for custodian accounts must be signed
by the named custodian, not by the minor.
<PAGE> 87
[Please fold and detach card at perforation before mailing]
THIS INSTRUCTION CARD IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. THE
BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH PROPOSAL. THE SHARES REPRESENTED
HEREBY WILL BE VOTED BY THE PROXIES IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED BENEFICIAL OWNER. IF NO DIRECTION IS MADE, THIS INSTRUCTION CARD
WILL BE VOTED FOR EACH PROPOSAL.
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOX(ES) BELOW.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1.A FOR JURIKA & VOYLES CORE EQUITY [ ] [ ] [ ] 1
PORTFOLIO ONLY: Proposal to approve
a new Investment Subadvisory
Agreement between Travelers Asset
Management International Company LLC
and Jurika & Voyles, L.P. on behalf of
Jurika & Voyles Core Equity
Portfolio.
FOR AGAINST ABSTAIN
<C> <C> <C>
1.B FOR JURIKA & VOYLES CORE EQUITY
PORTFOLIO ONLY: Proposal to approve [ ] [ ] [ ] 1
an Interim Investment Subadvisory
Agreement between Travelers Asset
Management International Company LLC
and Junika & Voyles, L.P. on behalf of
Jurika & Voyles Core Equity
Portfolio.
FOR AGAINST ABSTAIN
<C> <C> <C>
2.A FOR NWQ LARGE CAP PORTFOLIO ONLY: [ ] [ ] [ ] 1
Proposal to approve a new
Investment Subadvisory Agreement
between Travelers Asset Management
International Company LLC and NWQ
Investment Management Company on
behalf of NWQ Large Cap Portfolio.
2.B FOR NWQ LARGE CAP PORTFOLIO ONLY: [ ] [ ] [ ] 2
Proposal to approve an interim
Investment Subadvisory Agreement
between Travelers Asset Management
International Company LLC and NWQ
Investment Management Company on
behalf of NWQ Large Cap Portfolio.
</TABLE>
