Exhibit 99.D(1)
EXHIBIT 23(d)(2)(13)
SUB-ADVISORY AGREEMENT ON BEHALF OF XXXXXXX GROWTH
SUB-ADVISORY AGREEMENT
BETWEEN
AEGON/TRANSAMERICA FUND ADVISERS, INC. AND
BANC OF AMERICA CAPITAL MANAGEMENT, LLC
This Agreement is entered into as of December 5, 2002 between
AEGON/TRANSAMERICA FUND ADVISERS, INC., a Florida corporation (referred to
herein as "ATFA"), and Banc of America Capital Management, LLC, a limited
liability company organized and existing under the laws of the State of North
Carolina (referred to herein as "BACAP").
WHEREAS, ATFA acts as an investment adviser to AEGON/Transamerica
Series Fund, Inc. ("ATSF"), a Maryland corporation which is engaged in business
as an open-end investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"), pursuant to an Investment Advisory Agreement
dated January 1, 1997, as amended ("Advisory Agreement"), with the ATSF.
WHEREAS, ATSF is authorized to issue shares of Xxxxxxx Growth portfolio
(the "Fund"), a separate series of ATSF.
WHEREAS, the Advisory Agreement provides that ATFA may engage BACAP to
furnish investment information and advice to assist ATFA in carrying out its
responsibilities under the Advisory Agreement as investment adviser to the Fund.
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided by
BACAP to ATFA and the terms and conditions under which such services will be
rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. SERVICES OF BACAP. BACAP shall act as investment counsel to ATFA
with respect to the Fund. In this capacity, BACAP shall have the following
responsibilities:
(a) provide a continuous investment program for the Fund including
advice as to the acquisition, holding or disposition of any or
all of the securities or other assets which the Fund may own
or contemplate acquiring from time to time;
(b) to cause its representatives to attend meetings of ATFA or
ATSF (by telephone or otherwise) when reasonably necessary and
to furnish oral or written reports, as ATFA may reasonably
require, in order to keep ATFA and its officers and the
Directors of ATSF and appropriate officers of ATSF fully
informed as to the condition of the investment portfolio of
the Fund, the investment recommendations of BACAP, and the
investment considerations which have given rise to those
recommendations;
(c) to furnish such statistical and analytical information and
reports as may reasonably be required by ATFA from time to
time; and
(d) to supervise the purchase and sale of securities as
sub-adviser as described below;
(e) Investment Sub-Advisory Services. BACAP shall act as the
investment sub-adviser and shall supervise and direct the
investments of the Fund in accordance with the Fund's
investment objective, policies, and restrictions as provided
in the Prospectus and Statement of Additional Information, as
currently in effect and as amended or supplemented from time
to time (hereinafter referred to as the "Prospectus"), and
such other limitations as directed by the appropriate officers
of ATFA or ATSF by notice in writing to BACAP; provided that
BACAP shall be entitled to rely on and comply with the
Prospectus most recently furnished to BACAP by ATFA. BACAP
shall obtain and evaluate such information relating to the
economy, industries, businesses, securities markets, and
securities as it may deem necessary or useful in the discharge
of its obligations hereunder and shall formulate and implement
a continuing program for the management of the assets and
resources of the Fund in a manner consistent with the Fund's
investment objective, policies, and restrictions. In
furtherance of this duty, BACAP, on behalf of the Fund, is
authorized, in its discretion and without prior consultation
with ATSF or ATFA, to:
(1) Buy, sell, exchange, convert, lend, and otherwise
trade in any stocks, bonds and other securities or assets; and
(2) Place orders and negotiate the commissions (if any)
for the execution of transactions in securities or other
assets with or through such brokers, dealers, underwriters or
issuers as BACAP may select.
(f) BACAP will enter into an agreement with its affiliated
company, Xxxxxxx Capital Management, LLC ("MCM"), under which
MCM as a subcontractor to BACAP will provide some or all of
the services to be provided by BACAP under this Agreement. It
is understood and agreed that BACAP shall have full authority
to delegate to MCM any and all of its duties,
responsibilities, power and authority under this Agreement.
ATFA agrees to accept such services from MCM and to cooperate
reasonably with BACAP and MCM to facilitate the subcontracting
arrangement.
2. OBLIGATIONS OF ATFA. ATFA shall have the following obligations under
this Agreement:
(a) to keep BACAP continuously and fully informed as to the
composition of the Fund's investment portfolio and the nature
of the Fund's assets and liabilities from time to time;
(b) to furnish BACAP with copies of each of the following
documents and all future amendments and supplements to such
documents, if any, as soon as practicable after such documents
become available;
(1) The Articles of Incorporation of ATSF, as filed with
the State of Maryland, as in effect on the date hereof and as
amended from time to time ("Articles");
(2) The By-Laws of ATSF as in effect on the date hereof
and as amended from time to time ("By-Laws");
(3) Certified resolutions of the Board of ATSF
authorizing the appointment of ATFA and BACAP and approving
the form of the Advisory Agreement and this Agreement;
(4) ATSF Registration Statement under the 1940 Act and
the Securities Act of 1933, as amended, on Form N-1A, as filed
with the Securities and Exchange Commission ("SEC") relating
to the Fund and its shares and all amendments thereto
("Registration Statement");
(5) The ATSF Prospectus on behalf of the Fund (as defined
above); and
(6) A certified copy of any publicly available financial
statement or report prepared for ATSF on behalf of the Fund by
certified or independent public accountants, and copies of any
financial statements or reports made by the Fund to its
shareholders or to any government body or securities exchange.
(c) to furnish BACAP with any further materials or information
which BACAP may reasonably request to enable it to perform its
functions under this Agreement;
(d) to compensate BACAP for its services under this Agreement as
set forth in Schedule A. The fee shall accrue daily and be
paid monthly in arrears within 15 days after the end of each
month. In the event that this Agreement shall be effective for
only part of a period, then an appropriate pro-ration of the
fee that would have been payable hereunder shall be made,
based on the number of calendar days in such period and the
number of calendar days during the period in which this
Agreement was in effect.
3. BROKERAGE.
(a) BACAP agrees that, in placing orders with broker-dealers
for the purchase or sale of portfolio securities, it shall attempt to obtain
quality execution at favorable security prices (best price and execution);
provided that, on behalf of the Fund, BACAP may, in its discretion, agree to pay
a broker-dealer that furnishes brokerage or research services as such services
are defined under Section 28(e) of the Securities Exchange Act of 1934, as
amended ("1934 Act"), a higher commission than that which might have been
charged by another broker-dealer for effecting the same transactions, if BACAP
determines in good faith that such commission is reasonable in relation to the
brokerage and research services provided by the broker-dealer, viewed in terms
of either that particular transaction or the overall responsibilities of BACAP
with respect to the accounts as to which it exercises investment discretion (as
such term is defined under Section 3(a)(35) of the 1934 Act). In no instance
will portfolio securities be purchased from or sold to BACAP, or any affiliated
person thereof, except in accordance with the federal securities
laws and the rule and regulations thereunder.
(b) On occasions when BACAP deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients of
BACAP, BACAP, to the extent permitted by applicable laws and regulations, may,
but shall be under no obligation to, aggregate the securities to be purchased or
sold to attempt to obtain a more favorable price or lower brokerage commissions
and efficient execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction, will be
made by BACAP in the manner BACAP considers to be fair and equitable and
consistent with its fiduciary obligations to the Fund and to its other clients.
(c) Without limiting BACAP's discretion in seeking best
execution by placing orders and negotiating commissions with broker-dealers it
selects, BACAP agrees that orders with broker-dealers for the purchase or sale
of portfolio securities by the Fund shall be placed in accordance with
reasonable standards set forth in the Advisory Agreement if ATFA timely brings
them to BACAP's attention, subject to compliance with applicable laws and
procedures adopted by the Directors of ATSF. ATFA may direct BACAP to effect a
portion of all transactions in portfolio securities for the Fund through
broker-dealers in a manner that will generate resources to help pay certain
expenses that the Fund is required to pay or for which the Fund is required to
arrange payment or for any other lawful purposes. BACAP will treat such a
direction as a decision by ATFA to retain, to the extent of the direction, the
discretion that BACAP otherwise would exercise to select broker-dealers and
negotiate commissions for the Fund. There may be occasions when BACAP is unable
to obtain best execution because, for example, BACAP cannot evaluate the
services provided by the selected broker, the selected broker may not be as
efficient in executing transactions as another broker, or the trade cannot be
aggregated with other trades sent to other brokers.
(d) BACAP is authorized to place orders on behalf of the Fund
through BACAP or any affiliate thereof if BACAP or its affiliate is registered
as a broker or dealer with the SEC or as a FCM with the Commodities Futures
Trading Commission ("CFTC"), to any of its affiliates that are brokers or
dealers or FCBs or such other entities which provide similar services in foreign
countries, or to such brokers or dealers that also provide research or
statistical research and material, or other services to the Funds or BACAP. Such
allocation shall be in such amounts and proportions as BACAP shall determine
consistent with the above standards, and, upon, request, BACAP will report on
said allocation to ATFA and Board of Directors of ATSF, indicating the brokers,
dealers or FCBs to which such allocations have been made and the basis therefor.
(e) In particular, BACAP may use Banc of America Securities,
LLC ("BAS"), or any other broker or dealer affiliated with BACAP ("affiliated
broker"), to execute trades for the Fund, provided that BACAP seeks best
execution in using the affiliated broker. An affiliated broker will not act as
principal for its own account, but may execute transactions as agent for the
Fund on an exchange floor, and receive and retain all commissions, fees, and
benefits without complying further with Section 11(a) of the Securities Exchange
Act. An affiliated broker also may execute agency cross trades, in which it
simultaneously acts as broker for the Fund and for another customer on the other
side of the trade. Agency cross trades may enable BACAP to purchase or sell a
block of securities for the Fund at a set price, and to avoid unfavorable price
movements caused by trading a large order on the market. BACAP will comply with
all legal requirements concerning the use of an affiliated broker, including
Rules 10f-3 and 17e-1 under the Investment Company Act and Rule 206(3)-2 under
the Investment Advisers Act. ATFA is aware that BACAP's affiliation with an
affiliated broker could give BACAP an indirect interest in commissions received
by the affiliated broker, and that agency cross trades could create potentially
conflicting divisions of loyalties and responsibilities because the affiliated
broker acts for both sides of the trade. ATFA may at any time revoke its consent
to the execution of agency cross trades for the Fund by giving written notice to
BACAP or the affiliated broker.
4. PURCHASES BY AFFILIATES. Although BACAP will not purchase
securities issued by the Fund, BACAP's officers, directors,
and employees may purchase from the Fund shares issued by the
Fund at the current price available to the public, or at such
price with reductions in sales charge as may be permitted in
the current ATSF prospectus in accordance with Section 22(d)
of the Investment Company Act of 1940, as amended (the "1940
Act").
5. SERVICES TO OTHER CLIENTS. Nothing contained in this Agreement
shall limit or restrict (i) the freedom of BACAP, or any
affiliated person thereof, to render investment management and
corporate administrative services to other investment
companies, to act as investment manager or investment
counselor to other persons, firms, or corporations, or to
engage in any other business activities, or (ii) the right of
any director, officer, or employee of BACAP, to engage in any
other business or to devote his or her time and attention in
part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.
6. SUB-ADVISER'S USE OF THE SERVICES OF OTHERS. BACAP may, as
noted above in section 1(f), (at its cost) employ, retain, or
otherwise avail itself of the services or facilities of
subcontractors such as MCM, or other persons or
organizations for the purpose of obtaining such statistical
and other factual information, such advice regarding economic
factors and trends, such advice as to transactions in specific
securities, or such other information, advice, or assistance
as BACAP may deem necessary, appropriate, or convenient for
discharge of its obligations hereunder or otherwise helpful to
the Fund, as appropriate, or in the discharge of BACAP overall
responsibilities with respect to the other accounts that it
serves as investment manager or counselor.
7. LIMITATION OF LIABILITY OF THE SUB-ADVISER. Neither BACAP, MCM
nor any of their respective officers, directors, or employees,
or any other person performing executive, administrative,
trading, or other functions for BACAP or MCM, the Fund (at the
direction or request of BACAP) or ATFA in connection with
BACAP's discharge of its obligations undertaken or reasonably
assumed with respect to this Agreement, shall be liable for
any error of judgment or mistake of law or for any loss
suffered by ATFA or the Fund, or for any error of facts or
mistake of law contained in any report or date provided by
BACAP or MCM, except for any error, mistake or loss resulting
from willful misfeasance, bad faith or gross negligence in the
performance of its duties on behalf of the Fund or from
reckless disregard by BACAP, MCM or any such person of the
duties of BACAP pursuant to this Agreement.
No statement in this Agreement or any other document
constitutes a representation by BACAP regarding the rate of
growth or return of the Fund. Neither BACAP nor any of its
officers, directors, or employees make any representations or
warranties, express or implied, that any level of performance
or investment results will be achieved by the Fund or that the
Fund will perform comparably with any standard or index,
including other BACAP client accounts.
8. REPRESENTATIONS.
The parties hereto represent, warrant, and agree as follows:
(a) ATFA and BACAP each: (i) is registered as an
investment adviser under the Advisers Act and any applicable
state laws and will continue to be so registered for so long
as this Agreement remains in effect; (ii) is not prohibited by
the 1940 Act or the Advisers Act from performing the services
contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in
effect, any applicable federal or state requirements, or the
applicable requirements of any regulatory or industry
self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has
the authority to enter into and perform the services
contemplated by this Agreement; and (v) will immediately
notify the other party of the occurrence of any event that
would disqualify such other party from serving as an
investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise.
(b) BACAP has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and, if
it has not already done so, will provide the Investment
Adviser and the Fund with a copy of such code of ethics,
together with evidence of its adoption.
(c) BACAP has provided ATFA and ATSF with a copy of its
Form ADV as most recently filed with the SEC and will annually
furnish a copy of Part 2 of Form ADV to ATFA.
(d) Any subcontractor such as MCM will also meet the
requirements of this section 8.
9. TERM OF AGREEMENT.
This Agreement shall become effective upon the date first above
written, provided that this Agreement shall not take effect unless it has first
been approved (i) by a vote of a majority of those Directors of the Fund who are
not parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by vote of a majority of the Portfolios' outstanding voting securities. Unless
sooner terminated as provided herein, this Agreement shall continue in effect
for two years from its effective date. Thereafter, this Agreement shall continue
in effect from year to year, with respect to each Portfolio, subject to the
termination provisions and all other terms and conditions hereof, so long as
such continuation shall be specifically approved at least annually (a) by either
the Board, or by vote of a majority of the outstanding voting securities of the
Portfolio; and (b) in either event, by the vote, cast in person at a meeting
called for the purpose of voting on such approval, of a majority of the
Directors of the Fund who are not parties to this Agreement or interested
persons of any such party. The Sub-Adviser shall furnish to the Fund, promptly
upon its request such information as may reasonably be necessary to evaluate the
terms of this Agreement or any extension, renewal, or amendment hereof.
10. TERMINATION OF AGREEMENT.
Notwithstanding the foregoing, this Agreement may be terminated at
any time, without the payment of any penalty, by vote of the Board
or by a vote of a majority of the outstanding voting securities of
the Fund, or per the terms of the exemptive order-Release No.
00000-xxxxx Xxxxxxx 6(c) of the Act from Section 15(a) and Rule
18f-2 under the Act, on at least 60 days' prior written notice to
BACAP. This Agreement may also be terminated by ATFA: (i) on at
least 60 days' prior written notice to BACAP, without the payment
of any penalty; or (ii) if BACAP becomes unable to discharge its
duties and obligations under this Agreement. BACAP may terminate
this Agreement at any time, or preclude its renewal without the
payment of any penalty, on at least 60 days' prior notice to ATFA.
This Agreement shall terminate automatically in the event of its
assignment or upon termination of the Advisory Agreement. Upon any
termination, fees shall be payable to BACAP through the effective
date on a pro-rated basis in accordance with section 2(d).
11. AMENDMENT OF AGREEMENT.
No provision of this Agreement may be changed, waived,
discharged, or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the
change, waiver, discharge, or termination is sought, and no
material amendment of this Agreement shall be effective until
approved by vote or a majority of the Fund outstanding voting
securities and a vote of a majority of those Directors of ATSF who
are no 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, unless otherwise permitted in accordance with
the 1940 Act.
12. MISCELLANEOUS.
(a). Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York without giving
effect to the conflicts of laws principles thereof, and the 1940
Act. To the extent that the applicable laws of the State of New
York conflict with the applicable provisions of the 1940 Act, the
latter shall control.
(b). Captions. The captions contained in this Agreement
are included for convenience of reference only and in no way define
or delimit any of the provisions hereof or otherwise affect their
construction or effect.
(c). Entire Agreement. This Agreement represents the
entire agreement and understanding of the parties hereto and shall
supersede any prior agreements between the parties relating to the
subject matter hereof, and all such prior agreements shall be
deemed terminated upon the effectiveness of this Agreement.
(d). Interpretation. Nothing herein contained shall be
deemed to require ATSF to take any action contrary to its Articles
or By-Laws, or any applicable statutory or regulatory requirement
to which it is subject or by which it is bound, or to relieve or
deprive the Board of its responsibility for and control of the
conduct of the affairs of ATSF.
(e). Definitions. Any question of interpretation of any
term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of
the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any,
by the United States courts or, in the absence of any controlling
decision of any such court, by rules, regulations, or orders of
the SEC validly issued pursuant to the 1940 Act. As used in this
Agreement, the terms "majority of the outstanding voting
securities," "affiliated person," "interested person,"
"assignment," "broker," "investment adviser," "net assets,"
"sale," "sell," and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be
granted by the SEC by any rule, regulation, or order. Where the
effect of a requirement of the federal securities laws reflected
in any provision of this Agreement is made less restrictive by a
rule, regulation, or order of the SEC, whether of special or
general application, such provision shall be deemed to incorporate
the effect of such rule, regulation, or order, unless ATFA and
BACAP agree to the contrary.
(f). BACAP/Xxxxxxx Name: ATSF may use any name including
or derived from the name "BACAP" or "Xxxxxxx" in connection with a
fund only for so long as this Agreement, or any extension, renewal
or amendment hereof remains in effect, including any similar
agreement with any organization which shall succeed to BACAP's or
Xxxxxxx'x business as investment adviser or distributor. Upon
termination of this Agreement, ATFA and ATSF (to the extent that
it lawfully can) will cause the fund to cease to use such a name
or any other name indicating that it is advised by or otherwise
connected with BACAP or Xxxxxxx or any organization which shall
have so succeeded to BACAP's or Xxxxxxx'x business.
13. COMPLIANCE WITH LAWS.
(a) In all matters relating to the performance of this Agreement,
BACAP will act in conformity with the ATSF Articles, Bylaws, and
current prospectus and with the instructions and direction of ATFA
and the Fund's Directors.
(b) BACAP shall conform with (1) the 1940 Act and all rules and
regulations thereunder, and releases and interpretations thereto
(including any no-action letters and exemptive orders which have
been granted by the SEC to ATSF, ATFA and/or BACAP and (2) with
all other applicable federal and state laws and regulations
pertaining to management of investment companies.
(c) ATFA shall perform quarterly and annual tax compliance tests to
ensure that the Fund is in compliance with Subchapter M of the
Internal Revenue Code ("IRC"). In connection with such compliance
tests, ATFA shall prepare and provide reports to BACAP within 10
business days of a calendar quarter end relating to the
diversification of the Fund under Subchapter M. BACAP shall review
such reports for purposes of determining compliance with such
diversification requirements. If it is determined that the Fund is
not in compliance with the requirements noted above, BACAP, in
consultation with ATFA, will take prompt action to bring the Fund
back into compliance within the time permitted under the IRC.
14. REFERENCE TO SUB-ADVISER. Neither ATFA nor ATSF will publish
or distribute any information, including but not limited to
registration statements, advertising or promotional material,
regarding the provision of investment advisory services by BACAP
pursuant to this Agreement, or use in advertising, publicity or
otherwise the name of BACAP or any of its affiliates, or any trade
name, trademark, trade device, service xxxx, symbol or any
abbreviation, contraction or simulation thereof of BACAP or its
affiliates, without the prior written consent of BACAP.
Notwithstanding the foregoing, ATFA may distribute information
regarding the provision of investment advisory services by BACAP
to the Fund's Board of Directors ("Board Materials") without the
prior written consent of BACAP.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ATTEST: BANC OF AMERICA CAPITAL MANAGEMENT, LLC
By: ________________________________ By: ___________________________________
Name: ______________________________ Name: _________________________________
Title: _____________________________ Title: ________________________________
ATTEST: AEGON/TRANSAMERICA FUND ADVISERS, INC.
By: /s/ xxxxx X. Morden_____ By: /s/ Xxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx Name: Xxxx X. Xxxxxx
Title: Assistant Vice President Title: Vice President, General
and Assistant Secretary Counsel, Compliance Officer
and Secretary
SCHEDULE A
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FUND ANNUAL PERCENTAGE OF MONTHLY AVERAGE DAILY NET ASSETS TERMINATION DATE
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Xxxxxxx Growth 0.40% of the first $250 million of the Fund's average December 4, 2004
daily net assets; 0.375% of the next $250 million; 0.35%
of the next $500 million in assets; and 0.30% of assets
in excess of $1 billion
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