Exhibit d(1)
INVESTMENT ADVISORY AND
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of March 1, 1999 by and between the Stock Index Fund,
a series of The Diversified Investors Funds Group (herein called the "Fund"),
and Diversified Investment Advisors, Inc. a Delaware corporation (herein called
"Diversified").
WHEREAS, the Fund is registered as a diversified, open-end, management
investment company under the Investment Company Act of 1940 (the "1940 Act");
and
WHEREAS, Diversified has been organized to operate as an investment
advisor registered under the Investment Advisers Act of 1940; and
WHEREAS, the Fund desires to retain Diversified to render investment
advisory services, and Diversified is willing to so render such services on the
terms hereinafter set forth;
NOW, THEREFORE, this Agreement
WITNESSETH:
In consideration of the promises and mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. The Fund hereby appoints Diversified to act as investment advisor and
administrator to the Fund for the period and on the terms set forth in this
Agreement. Diversified accepts such appointment and agrees to render the
services herein set forth for the compensation herein provided.
2. (a) Diversified shall, at its expense (i) identify and monitor an
appropriate investment portfolio to invest all current and future investable
assets in (a "Core Portfolio"), or (ii) employ sub-advisors or associate with
itself such entities as it believes appropriate to assist it in performing its
obligations under this Agreement. Diversified shall provide all services,
equipment and facilities necessary to perform its obligations under this
Agreement.
(b) The Fund shall be responsible for all of its expenses and
liabilities, including, but not limited to: compensation and out-of-pocket
expenses of Trustees not affiliated with any subadvisor or Diversified;
governmental fees; interest charges; taxes;
membership dues; fees and expenses of independent auditors, of legal counsel and
of any transfer agent, administrator, distributor, shareholder servicing agents,
registrar or dividend disbursing agent of the Fund; expenses of distributing and
redeeming shares and servicing shareholder accounts; expenses of preparing,
printing and mailing prospectuses, shareholder reports, notices, proxy
statements and reports to governmental officers and commissions and to
shareholders of the Fund; expenses connected with the execution, recording and
settlement of Fund security transactions; insurance premiums; fees and expenses
of the custodian for all services to the Fund, including safekeeping of funds
and securities and maintaining required books and accounts; expenses of
calculating the net asset value of shares of the Fund; expenses of shareholder
meetings; expenses of litigation and other extraordinary or non-recurring events
and expenses relating to the issuance, registration and qualification of shares
of the Fund.
3. (a) Subject to the general supervision of The Diversified Investors
Funds Group's Board of Trustees, Diversified shall formulate and provide an
appropriate investment program on a continuous basis in connection with the
management of the Fund, including research, analysis, advice, statistical and
economic data and information and judgments of both a macroeconomic and
microeconomic character.
Diversified will determine the securities to be purchased, sold, lent,
exchanged or otherwise disposed of or acquired by the Fund in accordance with
predetermined guidelines as set forth from time to time in the Fund's
then-current prospectus and Statement of Additional Information ("SAI") and will
place orders pursuant to its determinations either directly with the issuer or
with any broker or dealer who deals in such securities. In placing orders with
brokers and dealers, Diversified will use its reasonable best efforts to obtain
the best net price and the most favorable execution of its orders, after taking
into account all factors it deems relevant, including the breadth of the market
in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing basis.
Consistent with this obligation, Diversified may, to the extent permitted by
law, purchase and sell Fund securities to and from brokers and dealers who
provide brokerage and research services (within the meaning of Section 28(e) of
the Securities Exchange Act of 1934) to or for the benefit of the Fund and/or
other accounts over which Diversified or any of its affiliates exercises
investment discretion.
Subject to the review of The Diversified Investors Funds Group's Board
of Trustees from time to time with respect to the extent and continuation of the
policy, Diversified is authorized to pay to a broker or dealer who provides such
brokerage and research services a commission for effecting a securities
transaction for the Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if
Diversified determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by
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such broker or dealer, viewed in terms of either that particular transaction or
the overall responsibilities of Diversified with respect to the accounts as to
which it exercises investment discretion.
In placing orders with brokers and/or dealers, Diversified intends to
seek best price and execution for purchases and sales and may effect
transactions through itself and its affiliates on a securities exchange provided
that the commissions paid by the Fund are "reasonable and fair" compared to
commissions received by other broker-dealers having comparable execution
capability in connection with comparable transactions involving similar
securities and provided that the transactions in connection with which such
commissions are paid are effected pursuant to procedures established by The
Diversified Investors Funds Group's Board of Trustees. All transactions are
effected pursuant to written authorizations from the Fund conforming to the
requirements of Section 11(a) of the Securities Exchange Act of 1934 and Rule
11a2-2(T) thereunder. Pursuant to such authorizations, an affiliated
broker-dealer may transmit, clear and settle transactions for the Fund that are
executed on a securities exchange provided that it arranges for unaffiliated
brokers to execute such transactions.
Diversified shall determine from time to time the manner in which
voting rights, rights to consent to corporate action and any other rights
pertaining to the Fund's securities shall be exercised, provided, however, that
should the Board of Trustees at any time make any definite determination as to
investment policy and notify Diversified thereof in writing, Diversified shall
be bound by such determination for the period, if any, specified in such notice
or until similarly notified that such determination has been revoked.
Diversified will determine what portion of securities owned by the Fund shall be
invested in securities described by the policies of the Fund and what portion,
if any, should be held uninvested. Diversified will determine whether and to
what extent to employ various investment techniques available to the Fund. In
effecting transactions with respect to securities or other property for the
account of the Fund, Diversified may deal with itself and its affiliates, with
the Trustees of The Diversified Investors Funds Group or with other entities to
the extent such actions are permitted by the 0000 Xxx.
(b) Diversified also shall provide to the Fund administrative assistance in
connection with the operation of the Fund, which shall include compliance with
all reasonable requests of the Fund for information, including information
required in connection with the Fund's filings with the Securities and Exchange
Commission and state securities commissions.
(c) As manager of the assets of the Fund, Diversified shall make
investments for the account of the Fund in accordance with Diversified's best
judgment and within the Fund's investment objectives, guidelines, and
restrictions, the 1940 Act and the provisions of the Internal Revenue Code of
1986 relating to regulated investment companies subject to policy decisions
adopted by the Board of Trustees.
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(d) Diversified shall furnish to the Board of Trustees periodic reports on
the investment performance of the Fund and on the performance of its obligations
under this Agreement and shall supply such additional reports and information as
the Fund's officers or Board of Trustees shall reasonably request.
(e) On occasions when Diversified deems the purchase or sale of a security
to be in the best interest of the Fund as well as other customers, Diversified,
to the extent permitted by applicable law, may aggregate the securities to be so
sold or purchased in order to obtain the best execution or lower brokerage
commissions, if any. Diversified may also on occasion purchase or sell a
particular security for one or more customers in different amounts. On either
occasion, and to the extent permitted by applicable law and regulations,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by Diversified in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Fund and to such other customers.
(f) Diversified shall also provide the Fund with the following services as
may be required:
(i) providing office space, equipment and clerical personnel
necessary for maintaining the organization of the Fund
and for performing administrative and management
functions;
(ii) supervising the overall administration of the Fund,
including negotiation of contracts and fees with and the
monitoring of performance and xxxxxxxx of the Fund's
transfer agent, custodian and other independent
contractors or agents;
(iii) preparing and, if applicable, filing all documents
required for compliance by the Fund with applicable laws
and regulations, including registration statements,
registration fee filings, semi-annual and annual reports
to investors, proxy statements and tax returns;
(iv) preparation of agendas and supporting documents for and
minutes of meeting of Trustees, committees of Trustees
and investors; and
(v) maintaining books and records of the Fund.
4. Diversified shall give the Fund the benefit of Diversified's best
judgment and efforts in rendering services under this Agreement. As an
inducement to Diversified's undertaking to render these services, the Fund
agrees that Diversified shall not be liable under this Agreement for any mistake
in judgment or in any other event whatsoever provided that nothing in this
Agreement shall be deemed to protect or purport to protect Diversified against
any liability to the Fund or its investors to which Diversified would
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otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Advisor's duties under this Agreement or by
reason of the Advisor's reckless disregard of its obligations and duties
hereunder.
5. For the services to be rendered and the facilities to be provided by
Diversified hereunder, the Fund shall pay to Diversified from the assets of the
Fund a fee computed daily and paid monthly at an annual rate equal to .40% of
the Fund's average daily net assets for the Fund's then-current fiscal year
minus the aggregate investment management fees allocated to the Fund for the
Fund's then-current fiscal year from any Core Portfolios in which it invests. If
Diversified provides services hereunder for less than the whole of any period
specified in this Section 5, the compensation to Diversified shall be
accordingly adjusted and prorated.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Diversified hereby agrees that all records which it maintains for the Fund are
property of the Fund and further agrees to surrender promptly to the Fund any
such records upon the Fund's request. Diversified further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act any such records
required to be maintained by Rule 31a-1 under the 1940 Act.
6. This Agreement shall be effective as to the Fund as of the date the Fund
commences investment operations after this Agreement shall have been approved by
The Diversified Investors Funds Group's Board of Trustees and the investor(s) in
the Fund in the manner contemplated by Section 15 of the 1940 Act and, unless
sooner terminated as provided herein, shall continue until the second
anniversary of the date hereof. Thereafter, if not terminated, this Agreement
shall continue in effect as to the Fund for successive periods of 12 months
each, provided such continuance is specifically approved at least annually by
the vote of a majority of those members of The Diversified Investors Funds
Group's Board of Trustees 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 either (a) by the vote of a majority of the full
Board of Trustees or (b) by vote of a majority of the outstanding voting
securities of the Fund; provided, however, that this Agreement may be terminated
by the Fund at any time, without the payment of any penalty, by The Diversified
Investors Funds Group's Board of Trustees or by vote of a majority of the
outstanding voting securities on 60 days' written notice to Diversified, or by
Diversified as to the Fund at any time, without payment of any penalty, on 90
days' written notice to the Fund. This Agreement will immediately terminate in
the event of its assignment. (As used in this Agreement, the terms "majority of
the outstanding voting securities", "interested person" and "assignment" shall
have the same meanings as such terms have in the 1940 Act and the rule and
regulatory constructions thereunder.)
7. Except to the extent necessary to perform Diversified's obligations
under this Agreement, nothing herein shall be deemed to limit or restrict the
right of Diversified, or
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any affiliate of Diversified, or any employee of Diversified, to engage in any
other business or devote time and attention to the management or other aspects
of any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other trust, corporation, firm, individual or
association.
8. The investment management services of Diversified to the Fund under this
Agreement are not to be deemed exclusive as to Diversified and Diversified will
be free to render similar services to others.
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
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 of the holders of a majority of the outstanding voting
securities of the Fund.
This Agreement embodies the entire agreement and understanding between
the parties hereto and supersedes all prior agreements and understandings
relating to the subject matter hereof. The captions 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.
Should any part of this Agreement be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding and shall inure to the benefit
of the parties hereto and their respective successors, to the extent permitted
by law.
9. This Agreement shall be construed in accordance with the laws of the
State of New York provided that nothing herein shall be construed in a
manner inconsistent with the requirements of 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
Attest: Stock Index Fund, a series of
Diversified Investors Funds Group
By:
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Attest: Diversified Investment Advisors, Inc.
By:
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STCKINDX
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