Exhibit 99. - d(ii)
Flag Investors Portfolio Trust
SUB-ADVISORY AGREEMENT
Agreement made as of June 20, 2000 by and among Deutsche Fund
Management, Inc., a Delaware corporation (the "Investment Advisor"), DWS
International Portfolio Management GmbH, a company organized under the laws of
the Federal Republic of Germany (hereinafter called the "DWS Sub-Advisor"),
Deutsche Asset Management Inc., a Delaware corporation (hereinafter called the
"DAMI Sub-Advisor") and Bankers Trust Company (hereinafter called the "BTCo.
Sub-Advisor").
W I T N E S S E T H:
WHEREAS, the Investment Advisor has entered into an Investment Management
Agreement dated as of June 20, 2000 (the "Investment Advisory Agreement") with
the Flag Investors Portfolios Trust (formerly Deutsche Portfolios), an open-end
management investment company registered under the Investment Company Act of
1940 (the "1940 Act") and organized as a trust under the laws of the State of
New York (the "Trust") on behalf of its seven non-diversified sub-trusts named
herein (each such sub-trust, together with each sub-trust hereafter established
by the Trustees of the Trust and made subject to this Agreement in accordance
with Section 11 hereof, individually a "Portfolio" and, collectively, the
"Portfolios"), pursuant to which the Investment Advisor will act as investment
advisor to the sub-trusts named in the Investment Advisory Agreement;
WHEREAS, the Investment Advisory Agreement contemplates that the Investment
Advisor may appoint a sub-advisor to perform certain services relating to the
management of the investment operations of the sub-trusts of the Trust, and each
of the DWS Sub-Advisor, and the DAMI Sub-Advisor and the BTCo. Sub-Advisor is
willing to render such investment advisory services to the respective Portfolios
designated herein; and
WHEREAS, each of the DWS Sub-Advisor and the DAMI Sub-Advisor is registered as
an investment advisor under the Investment Advisers Act of 1940 and the BTCo.
Sub-Advisor is exempt from such registration.
NOW, THEREFORE, in consideration of the premises and mutual promises hereinafter
set forth, the parties hereto agree as follows:
1. The Investment Advisor hereby appoints (a) the DWS Sub-Advisor to act as
sub-advisor to the Portfolios set forth under its name on Schedule A, (b) the
DAMI Sub-Advisor to act as sub-advisor to the Portfolio set forth under its name
on Schedule A and (c) the BTCo. Sub-Advisor to act as sub-advisor to the
Portfolio set forth under its name on Schedule A, in each case for the period
and on the terms set forth in this Agreement. Each of the DWS Sub-Advisor, the
DAMI Sub-Advisor and the BTCo. Sub-Advisor accepts such appointment and agrees
to render the services herein set forth, for the compensation herein provided.
In this Agreement, the term "Sub-Advisor" shall hereinafter refer to the DWS
Sub-Advisor, with respect to the Portfolios for which it is appointed to act as
sub-advisor under this Section 1, the DAMI Sub-Advisor, with respect to the
Portfolio for which it is appointed to act as sub-advisor under this Section 1,
and to the BTCo. Sub-Advisor, with respect to the Portfolio for which it is
appointed to act as sub-advisor under this Section 1.
2. Subject to the general supervision of the Trustees of the Trust and the
Investment Advisor, the Sub-Advisor shall manage the investment operations of
each Portfolio and the composition of each Portfolio's holdings of securities
and other investments, including cash, the purchase, retention and disposition
thereof and agreements relating thereto, in accordance with such Portfolio's
investment objective and policies as stated in the Registration Statement (as
defined in paragraph 3(d) of this Agreement) and subject to the following
understandings:
(a) The Sub-Advisor, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Declaration of
Trust and By-Laws of the Trust and the Registration Statement and with
the instructions and directions of the Trustees of the Trust and will
conform to and comply with the requirements of the 1940 Act and all
other applicable federal and state laws and regulations;
(b) the Sub-Advisor shall use the same skill and care in the management of
each Portfolio's investments as it uses in the administration of other
accounts for which it has investment responsibility as agent;
(c) the Sub-Advisor shall determine the securities or other investments to
be purchased, sold or lent by the Portfolio and as agent for each
Portfolio will effect portfolio transactions pursuant to its
determinations either directly with the issuer or with any broker
and/or dealer in such securities, including a broker affiliated with
the Sub-Advisor; in placing orders with brokers and/or dealers the
Sub-Advisor intends to seek best price and execution for purchases and
sales; the Sub-Advisor shall also determine whether or not a Portfolio
shall enter into repurchase or reverse repurchase agreements;
On occasions when the Sub-Advisor deems the purchase or sale of a security
or other investment to be in the best interest of a Portfolio as well as other
customers of the Sub-Advisor, the Sub-Advisor may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to, aggregate the
securities to be so sold or purchased on behalf of such Portfolio and such other
customer of the Sub-Advisor in order to obtain best execution, including lower
brokerage commissions, if applicable. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Sub-Advisor in the manner it considers to be
the most equitable and consistent with its fiduciary obligations to a Portfolio;
(d) the Sub-Advisor shall maintain a set of books and records with respect
to each Portfolio's securities transactions as required by the
Advisers Act and other applicable laws and regulations and shall
render to the Trustees of the Trust such periodic and special reports
as the Trustees may reasonably request; and
(e) the services of the Sub-Advisor to the Trust under this Agreement are
not to be deemed exclusive, and the Sub-Advisor shall be free to
render similar services to others.
Notwithstanding the foregoing, the Sub-Advisor is not authorized, and shall
not be deemed to have assumed any duties under this Agreement, to make any
business, operational or management decisions on behalf of the Trust or any
Portfolio other than with respect to the investment operations and composition
of a Portfolio's holdings of securities and other investments as set forth
herein.
3. The Investment Advisor has delivered copies of each of the following
documents to the Sub-Advisor and will promptly notify and deliver to it all
future amendments and supplements, if any:
(a) Declaration of Trust of the Trust (such Declaration of Trust, as
presently in effect and as amended from time to time, is herein called
the "Declaration of Trust");
(b) By-laws of the Trust (such By-laws, as presently in effect and as
amended from time to time, are herein called the "By-laws");
(c) Certified resolutions of the Trustees of the Trust authorizing the
appointment of the Adviser and approving the form of this Agreement;
(d) The Trust's Notification of Registration on Form N-8A under the 1940
Act, its Registration Statement on Form N-1A under the 1940 Act (No.
811-8375) and the Registration Statement on Form N-1A of Deutsche
Funds, Inc. (No. 333-27709) under the Securities Act of 1933, as
amended, and the 1940 Act, as filed with the Securities and Exchange
Commission (the "Commission") on May 23, 1997, including all
amendments thereto (together with the Registration Statement of the
Trust, the "Registration Statement").
4. The Sub-Advisor shall keep the books and records required to be maintained by
it pursuant to paragraph 2(e) of this Agreement. The Sub-Advisor agrees that all
records that it maintains for the Trust are the property of the Trust and it
will promptly surrender any of such records to the Trust or to the Investment
Advisor upon request. The Sub-Advisor further agrees to preserve for the periods
prescribed by Rule 31a-2 of the Commission under the 1940 Act any such records
as are required to be maintained by the Adviser with respect to the Portfolios
by Rule 31a-2 of the Commission under the 1940 Act.
5. During the term of this Agreement, the Sub-Advisor will pay all expenses,
including personnel costs and overhead, incurred by it in connection with its
activities under this Agreement, other than the cost of securities and
investments purchased or sold for the Portfolios (including taxes and brokerage
commissions, if any) and extraordinary expenses.
6. The Investment Advisor shall continue to have responsibility for all services
to be provided to the Portfolios pursuant to the Investment Advisory Agreement
and shall oversee and review the Sub-Advisor's performance of its duties under
this Agreement.
7. For the services provided and the expenses borne pursuant to this Agreement,
the Investment Advisor will pay to the Sub-Advisor, as full compensation
therefor a fee, calculated daily and payable monthly in arrears, at an annual
rate equal to the percentage of the average daily net assets of each Portfolio
specified in Schedule A hereto.
Subject to the provisions of this Agreement, the duties of each Sub-Advisor, the
portion of Portfolio assets that such Sub-Advisor shall manage and the fees to
be paid such Sub-Advisor by the Investment Advisor under and pursuant to this
Agreement may be adjusted from time to time by the Investment Advisor with and
upon the approval of such Sub-Advisor and the members of the Trust's Board of
Trustees who are not "interested persons" (as defined in the 0000 Xxx) of any
party to this Agreement.
8. The Sub-Advisor shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Investment Advisor, the Trust or any
Portfolio in connection with the matters to which this Agreement relates, except
a loss resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
9. This Agreement shall continue in effect until the date two years after the
date of its execution and shall continue in effect from year to year thereafter
with respect to each Portfolio if such continuance is specifically approved at
least annually in conformity with the requirements of the 1940 Act; provided,
however, that this Agreement may be terminated with respect to the Trust in its
entirety or with respect to any Portfolio, at any time, without the payment of
any penalty, (a) by the Investment Advisor or (b) by the Trust, by vote of a
majority of all the Trustees of the Trust or by vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of the Trust or such
Portfolio, as the case may be, in each case on 60 days' written notice to the
Sub-Advisor, or by the Sub-Advisor with respect to its respective Portfolios, at
any time, without the payment of any penalty, on 60 days' written notice to the
Investment Advisor and to the Trust. This Agreement will automatically and
immediately terminate in the event of its "assignment" (as defined in the 0000
Xxx) or upon termination of the Investment Advisory Agreement.
10. The Sub-Advisor shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided herein or authorized
by the Trustees of the Trust and the Investment Advisor from time to time, have
no authority to act for or represent the Trust or any Portfolio in any way or
otherwise be deemed an agent of the Trust or any Portfolio.
11. This Agreement may be amended by the mutual consent of the parties. Any such
amendment shall also require the consent of the Trust, which must be approved
(a) by vote of a majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such amendment, and (b) by vote of a
majority of the outstanding voting securities of the Trust or, in the case of
any such amendment affecting only one or several Portfolios, a majority of the
outstanding voting securities of each such Portfolio. In the event that the
Trustees of the Trust establish one or more additional sub-trusts with respect
to which they retain the Investment Advisor to act as investment advisor, the
Investment Advisor and the DWS Sub-Advisor, the DAMI Sub-Advisor or the BTCo.
Sub-Advisor, as the case may be, may amend Schedule A hereto to add each such
sub-trust and specify the fee payable to such Sub-Advisor in respect thereof, in
which event such sub-trust shall become subject to the provisions of this
Agreement and be deemed a "Portfolio" hereunder to the same extent as the
existing Portfolios, except to the extent that such provisions may be modified
with respect to any additional Portfolio in writing by the Investment Advisor
and such Sub-Advisor at the time of the addition of the Portfolio.
12. Notices of any kind to be given hereunder shall be in writing and shall be
duly given if mailed or delivered as follows: (a) to the DWS Sub-Advisor at
Xxxxxxxxxxxxx 000-000, Xxxxxxxxx xx Xxxx 00000, Xxxxxxx, Attention: President,
with a copy to the Investment Advisor; (b) to the DAMI Sub-Advisor at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President and Managing Director,
with a copy to the Investment Advisor; (c) to the BTCo. Sub-Advisor at One
Bankers Trust Plaza, 31st Floor, New York, New York 10006, Attention: Deputy
General Counsel - Asset Management, with a copy to the Investment Advisor; (d)
to the Investment Advisor at Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: President; (e) to the Trust at Cardinal Avenue, Xxxxxx Town, Grand
Cayman, Cayman Islands, BWI; or (f) at such other address or to such other
individual as any of the foregoing shall designate by notice to the others.
13. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original.
14. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the date set forth above.
DEUTSCHE FUND MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxx
------------------------------
By: /s/ Xxxx Xxxxxxxx
------------------------------
DWS INTERNATIONAL PORTFOLIO
MANAGEMENT GmbH
By: /s/ Xxxxxx Xxxxxxx
------------------------------
By: /s/ Udo Behrenwaldt
------------------------------
DEUTSCHE ASSET MANAGEMENT INC.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------
By:
------------------------------
BANKERS TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
By:
------------------------------
Acknowledged and Confirmed.
FLAG INVESTORS PORTFOLIOS TRUST
By: /s/ Xxxxxxx X. Xxxx
---------------------------
Schedule A
Portfolio Fee
-------------------------------------------------------------------------
(annualized % of average
daily net assets)
DWS ADVISER
Top 50 World Portfolio 0.75%
Top 50 Europe Portfolio 0.75%
Top 50 Asia Portfolio 0.75%
Provesta Portfolio 0.60%
Japanese Equity Portfolio 0.60%
DAMI ADVISER
Top 50 US Portfolio 0.60%
BTCo. ADVISER
US Money Market Portfolio 0.1125%
