Exhibit d(3)
INVESTMENT MANAGEMENT AGREEMENT
June 4, 1999
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
BT Insurance Funds Trust, a business trust organized under the laws of
the Commonwealth of Massachusetts (the "Trust"), hereby confirms its agreement
with Bankers Trust Company (the "Manager") regarding investment management
services to be provided by the Manager to the Small Cap Index Fund, EAFE(R)
Equity Index Fund and Equity 500 Index Fund (each, a "Fund" and collectively,
the "Funds").
1. Investment Description; Appointment
The Trust anticipates that each Fund will employ its capital
by investing and reinvesting in investments of the kind and in accordance with
the investment objective, policies and limitations specified in its Declaration
of Trust, dated January 19, 1996, as amended from time to time (the "Declaration
of Trust"), its By-laws, as amended from time to time, in the Funds'
prospectuses (the "Prospectus") and the statement of additional information (the
"Statement") filed with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act"), and the Securities
Act of 1933, as amended, as part of the Trust's Registration Statement on Form
N-1A, as amended from time to time, and in the manner and to the extent as may
from time to time be approved in the manner set forth in the Declaration of
Trust. Copies of the Funds' Prospectuses, Statement, Declaration of Trust and
By-laws have been or will be submitted to the Manager. Each Fund desires to
employ and hereby appoint the Manager to act as their investment adviser, to
oversee the administration of all aspects of the Funds' business and affairs and
to supervise the performance of professional services provided by others,
including the administrator, transfer agent, custodian and distributor to the
Funds.
2. Services
Subject to the overall supervision and direction of the Board
of Trustees of the Trust, the Manager shall have general responsibility for the
investment and management of the Funds' assets, subject to and in accordance
with each Fund's investment objective, policies and restrictions as stated in
the Prospectus and Statement, as from time to time in effect, and the
Declaration of Trust and By-laws, the 1940 Act and the Investment Advisors Act
of 1940, as the same may from time to time be amended. In discharging its
responsibility, the Manager shall seek to replicate as closely as possible the
performance of the Xxxxxxx 2000 Small Stock Index with respect to the Small Cap
Index Fund, EAFE(R) Index with respect to EAFE(R) Equity Index Fund and Standard
& Poor's 500 Composite Stock Price Index with respect to the Equity 500 Index
Fund, before the deduction of Fund expenses and shall determine and monitor the
investments of the Funds' investment portfolios accordingly.
3. Information Provided to the Trust
The Manager will keep the Funds informed of developments
materially affecting the Funds' portfolios and, in addition to providing the
Trust with whatever statistical or other information the Trust may reasonably
request with respect to its investments, the Manager will, on its own
initiative, furnish the Trust from time to time with whatever information the
Manager believes is appropriate for this purpose.
4. Standard of Care
The Manager shall exercise its best judgment in rendering the
services listed in paragraph 2 above. The Manager shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust 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
Manager against any liability to the Trust or to holders of the Funds' shares
("Shareholders") to which the Manager 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 Manager's reckless disregard of
its obligations and duties under this Agreement.
5. Indemnification/Liability
(a) The Trust shall indemnify and hold the Manager harmless from
and against any and all claims, costs, expenses (including reasonable attorneys'
fees), losses, damages, charges, payments and liabilities of any sort or kind
which may be asserted against the Manager or for which the Manager may be held
to be liable in connection with this Agreement or the Manager's performance
hereunder (a "Claim"), unless such Claim resulted from a grossly negligent act
or omission to act or bad faith by the Manager in the performance of its duties
hereunder.
(b) In any case in which the Trust may be asked to indemnify or
hold the Manager harmless, the Manager will notify the Trust promptly after
identifying any situation which it believes presents or appears likely to
present a claim for indemnification against the Trust, although the failure to
do so shall not prevent recovery by the Manager, and shall keep the Trust
advised with respect to all developments concerning such situation. The Trust
shall have the option to defend the Manager against any Claim which may be the
subject of this indemnification, and, in the event that the Trust so elects,
such defense shall be conducted by counsel chosen by the Trust and satisfactory
to the Manager, and thereupon the Trust shall take over complete defense of the
Claim and the Manager shall sustain no further legal or other expenses in
respect of such Claim. The Manager will not confess any Claim or make any
compromise in any case in which the Trust will be asked to provide
indemnification, except with the Trust's prior written consent. The obligations
of the parties hereto under this Section 5 shall survive the termination of this
Agreement.
(c) A copy of the Declaration of Trust of the Funds is on file
with the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Funds as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or Shareholders individually but are
binding only upon the assets and property of the Funds.
6. Compensation
In consideration of the services rendered pursuant to this Agreement,
each Fund will pay the Manager a fee at the annual rate of ** based on the
Funds' average daily net assets. These fees shall be computed daily and shall be
payable on the first business day of each month for services performed the
preceding month. 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 Manager, the value of the Funds' net assets
shall be computed at the times and in the manner specified in the Funds'
Prospectuses and/or the Statement."
7. Expenses
The Manager will bear all expenses in connection with the
performance of its services under this Agreement. The Trust will bear certain
other expenses to be incurred in its operation, including: (a) payment of the
fees payable to the Manager under paragraph 6 hereof; (b) organization expenses;
(c) brokerage fees and commissions; (d) taxes; (e) interest charges on
borrowings; (f) the costs of liability insurance or fidelity bond coverage for
the Trust's officers and employees, and directors' and officers' errors and
omissions insurance coverage; (g) legal, auditing and accounting fees and
expenses; (h) charges of the Trust's Custodian and Transfer and Dividend
Disbursing Agent; (i) the Trust's pro rata portion of dues, fees and charges of
any trade association of which the Trust is a member; (j) the expenses of
printing, preparing, distributing and mailing proxies, stock certificates and
all reports required by the Securities and Exchange Commission and State
securities administrations, including the Funds' prospectuses, Statements, and
notices to shareholders; (k) filing fees for the registration or qualification
of the Funds and their shares under federal or state securities laws; (l) the
fees and expenses involved in registering and maintaining registration of the
Funds' shares with the Securities and Exchange Commission and State securities
administrations; (m) the expenses of holding shareholder meetings; (n) the
compensation, including fees, of any of the Trust's unaffiliated directors,
officers or employees; (o) all expenses of computing the Funds' net asset value
per share, including any equipment or services obtained solely for the purpose
of pricing shares or valuing the Funds' investment portfolios; (p) expenses of
personnel performing shareholder servicing functions; and (q) litigation and
other extraordinary or non-recurring expenses and other expenses properly
payable by the Trust or the Funds.
8. Service to Other Companies or Accounts
The Trust understands that the Manager and its affiliates may
act as investment manager to fiduciary and other managed accounts and to one or
more other investment companies, and the Trust has no objection to their so
acting, provided that whenever the Trust and one or more other clients advised
by the Manager and its affiliates have available funds for investment,
investments suitable and appropriate for each will be allocated in a manner
believed by the Manager to be equitable to each client. The Trust recognizes
that in some cases this procedure may adversely affect whether a particular
security is available to the Trust, the size of the position obtainable for the
Trust or the price at which that position may be obtained or disposed. In
addition, the Trust understands that the persons employed by the Manager to
assist in the performance of the Manager'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 Manager or any affiliate
of the Manager to engage in and devote time and attention to other businesses or
to render services of any kind or nature.
9. Term of Agreement
This Agreement shall become effective on the date hereof,
shall continue in effect for two years and thereafter shall continue for
successive annual periods, provided such continuance is specifically approved at
least annually by (i) the Trust's Trustees or (ii) a vote of a "majority" (as
defined in the 0000 Xxx) of each Fund's outstanding voting securities (as
defined in the 1940 Act), provided that in either event the continuance is also
approved by a majority of the Trustees who are not "interested persons" (as
defined in the 0000 Xxx) of any party to this Agreement, by vote cast in person
at a meeting called for the purpose of voting on such approval. This Agreement
is terminable with respect to each Fund, without penalty, on 60 days' written
notice, by the Trust's Trustees or by vote of holders of a majority of each
Fund's outstanding voting securities, or upon 60 days' written notice, by the
Manager. This Agreement will also terminate automatically in the event of its
assignment (as defined in the 1940 Act).
10. Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York giving effect to the conflict
of law rules thereof.
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance of this Agreement by signing and returning the
enclosed copy of this Agreement.
Very truly yours,
BT INSURANCE FUNDS TRUST
By: /s/Xxxxxx X. Xxxxxxx
AGREED TO AND ACCEPTED:
BANKERS TRUST COMPANY
By: /s/Xxxx X. Xxxxxxxx
