Exhibit(d)(ii)
INVESTMENT SUB-ADVISORY AGREEMENT
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THIS AGREEMENT is made as of the day of , 2002 by and between
INTERNATIONAL EQUITY PORTFOLIO, a New York trust (the `Trust' or `Portfolio'),
DEUTSCHE ASSET MANAGEMENT, INC., a Delaware corporation (the `Advisor') and
Deutsche Asset Management Investment Services Limited, a United Kingdom
corporation (the `Sub-Advisor').
WHEREAS, the Trust is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the `1940 Act')
WHEREAS, the Advisor and the Sub-Advisor are each registered as an
investment advisor under the Investment Advisers Act of 1940, as amended, and
engages in the business of acting as an investment advisor; and
WHEREAS, the Advisor desires to retain the Sub-Advisor to perform
certain of the Advisor's duties under this Agreement, and the Sub-Advisor is
willing to so render such services on the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Investment Sub-Advisor. The Advisor hereby appoints
the Sub-Advisor to act as the investment sub-advisor of the Portfolio. The
Sub-Advisor, subject to the supervision of the Advisor, shall manage the
Portfolio's affairs and shall supervise all aspects of a the Portfolio's
operations (except as otherwise set forth herein), including the investment and
reinvestment of the cash, securities or other properties comprising the
Portfolio's assets, subject at all times to the policies and control of the
Board of Trustees. The Sub-Advisor shall give the Portfolio the benefit of its
best judgment, efforts and facilities in rendering its services as Sub-Advisor.
2. Delivery of Documents. The Advisor has furnished the Sub-Advisor
with copies properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, filed with the State of
New York on December 11, 1991 and all amendments thereto (such
Declaration of Trust, as presently in effect and as it shall from time
to time be amended, is herein called the `Declaration of Trust');
(b) Resolutions of the Portfolio's Board of Trustees and
shareholders authorizing the appointment of the Sub-Advisor and
approving this Agreement;
(c) The Portfolio's Registration Statement on Form N-1A under
the Investment Company Act of 1940, as amended (the `1940 Act') (File
No. 811-6702) offering shares of the Portfolio, and all amendments
thereto.
The Advisor will furnish the Sub-Advisor from time to time with copies,
properly certified or authenticated, of all amendments or supplements to the
foregoing, if any, and all documents, notices and reports filed with the SEC.
The Sub-Advisor will provide the Portfolio with copies of its Form ADV,
including all amendments thereto, as filed with the SEC.
3. Duties of Investment Sub-Advisor. In carrying out its obligations
under Section 1 hereof, the Sub-Advisor, subject to the supervision of the
Advisor, shall:
(a) supervise and manage all aspects of the Portfolio's
operations, except for distribution services;
(b) formulate and implement continuing programs for the
purchases and sales of securities, consistent with the investment
objective and policies of the Portfolio;
(c) provide the Portfolio with, or obtain for it, adequate
office space and all necessary office equipment and services, including
telephone service, utilities, stationery, supplies and similar items
for the Portfolio's principal office;
(d) obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy generally
or the Portfolio, and whether concerning the individual issuers whose
securities are included in a portfolio or the activities in which they
engage, or with respect to securities which the Sub-Advisor considers
desirable for inclusion in a portfolio;
(e) determine which issuers and securities shall be
represented in the portfolio and regularly report thereon to the
Portfolio's Board of Trustees; and
(f) take all actions necessary to carry into effect the
Portfolio's purchase and sale programs.
4. Portfolio Transactions. The Sub-Advisor is authorized to select the
brokers or dealers that will execute the purchases and sales of portfolio
securities for the Portfolio and is directed to use its reasonable best efforts
to obtain the best net results as described from time to time in the Portfolio's
prospectus and statement of additional information. The Sub-Advisor will
promptly communicate to the Administrator and to the officers and the Trustees
of the Portfolio such information relating to portfolio transactions as they may
reasonably request.
It is understood that the Sub-Advisor will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Portfolio or be in
breach of any obligation owing to the Portfolio under this Agreement, or
otherwise, solely by reason of its having directed a securities transaction on
behalf of the Portfolio to a broker-dealer in compliance with the provisions of
Section 28(e) of the Securities Exchange Act of 1934 or as otherwise permitted
from time to time by the Portfolio's prospectus and statement of additional
information.
Subject to the policies established by the Board in compliance with
applicable law, the Sub-Advisor may direct DB Securities, Inc. (`DB Securities')
or any of its affiliates to execute portfolio transactions for the Portfolio on
an agency basis. The commissions paid to DB Securities or any of its affiliates
must be, as required by Rule 17e-1 under the 1940 Act, `reasonable and fair
compared to the commission, fee or other remuneration received or to be received
by other brokers in connection with comparable transactions involving similar
securities . . . during a comparable period of time.' If the purchase or sale of
securities consistent with the investment policies of the Portfolio or one or
more other accounts of the Sub-Advisor is considered at or about the same time,
transactions in such securities will be allocated among the accounts in a manner
deemed equitable by the Sub-Advisor. DB Securities or any of its affiliates and
the Sub-Advisor may combine such transactions, in accordance with applicable
laws and regulations, in order to obtain the best net price and most favorable
execution.
The Portfolio will not deal with the Sub-Advisor or DB Securities or
any of its affiliates in any transaction in which the Sub-Advisor or DB
Securities or any of its affiliates acts as a principal with respect to any part
of the Portfolio's order, except in compliance with rules of the SEC. If DB
Securities or any of its affiliates is participating in an underwriting or
selling group, the Portfolio may not buy portfolio securities from the group
except in accordance with policies established by the Board in compliance with
rules of the SEC.
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5. Control by Board of Trustees. Any management or supervisory
activities undertaken by the Sub-Advisor pursuant to this Agreement, as well as
any other activities undertaken by the Sub-Advisor on behalf of the Portfolio
pursuant thereto, shall at all times be subject to any applicable directives of
the Board.
6. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Sub-Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules
and regulations adopted thereunder;
(b) the provisions of the Registration Statement of the Trust
the 1940 Act;
(c) the provisions of the Declaration of Trust; and
(d) any other applicable provisions of state and federal law.
7. Expenses. The expenses connected with the Portfolio shall be
allocable between the Portfolio and the Sub-Advisor as follows:
(a) The Sub-Advisor shall furnish, at its expense and without
cost to the Portfolio, the services of one or more officers of the
Sub-Advisor, to the extent that such officers may be required by the
Portfolio for the proper conduct of its affairs.
(b) The Portfolio assumes and shall pay or cause to be paid
all other expenses of the Portfolio, including, without limitation:
payments to the Portfolio's distributor under the Portfolio's plan of
distribution; the charges and expenses of any registrar, any custodian
or depository appointed by the Portfolio for the safekeeping of the
Portfolio's cash, portfolio securities and other property, and any
transfer, dividend or accounting agent or agents appointed by the
Portfolio; brokers' commissions chargeable to the Portfolio in
connection with portfolio securities transactions to which the
Portfolio is a party; all taxes, including securities issuance and
transfer taxes, and fees payable by the Portfolio to Federal, State or
other governmental agencies; the costs and expenses of engraving or
printing of certificates representing shares of the Portfolio; all
costs and expenses in connection with the registration and maintenance
of registration of the Portfolio and its shares with the SEC and
various states and other jurisdictions (including filing fees, legal
fees and disbursements of counsel); the costs and expenses of printing,
including typesetting, and distributing prospectuses and statements of
additional information of the Portfolio and supplements thereto to the
Portfolio's shareholders; all expenses of shareholders' and Trustees'
meetings and of preparing, printing and mailing of proxy statements and
reports to shareholders; fees and travel expenses of Trustees or
Trustee members of any advisory board or committee; all expenses
incident to the payment of any dividend, distribution, withdrawal or
redemption, whether in shares or in cash; charges and expenses of any
outside service used for pricing of the Portfolio's shares; charges and
expenses of legal counsel, including counsel to the Trustees of the
Portfolio who are not interested persons (as defined in the 0000 Xxx)
of the Portfolio and of independent certified public accountants, in
connection with any matter relating to the Portfolio; membership dues
of industry associations; interest payable on Portfolio borrowings;
postage; insurance premiums on property or personnel (including
officers and Trustees) of the Portfolio which inure to its benefit;
extraordinary expenses (including but not limited to, legal claims and
liabilities and litigation costs and any indemnification related
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thereto); and all other charges and costs of the Portfolio's operation
unless otherwise explicitly provided herein.
8. Delegation of Sub-Advisory Services. Subject to the provisions of
this Agreement, the duties of the Sub-Advisor, the portion of portfolio assets
of the Portfolio that the Sub-Advisor shall manage and the fees to be paid to
the Sub-Advisor by the Advisor under and pursuant to the Sub-Advisory Agreement
or other arrangement entered into in accordance with this Agreement may be
adjusted from time to time by the Advisor, subject to the prior approval of the
members of the Portfolio's Board of Trustees who are not `interested persons,'
as defined in the 1940 Act.
9. Compensation. For the services to be rendered and the expenses
assumed by the Sub-Advisor, the Advisor shall pay the Sub-Advisor monthly
compensation in accordance with Schedule A.
Except as hereinafter set forth, compensation under this Agreement
shall be calculated and accrued daily and the amounts of the daily accruals
shall be paid monthly. If this Agreement becomes effective subsequent to the
first day of a month, compensation for that part of the month this Agreement is
in effect shall be prorated in a manner consistent with the calculation of the
fees as set forth above.
In the event of termination of this Agreement, the sub-advisory fee
shall be computed on the basis of the period ending on the last business day on
which this Agreement is in effect subject to a pro rata adjustment based on the
number of days elapsed in the current month as a percentage of the total number
of days in such month.
In addition to the foregoing, the Sub-Advisor may from time to time
agree not to impose all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or a portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Advisor for all or a portion of its expenses
not otherwise required to be borne or reimbursed by the Sub-Advisor. Any such
fee reduction or undertaking may be discontinued or modified by the Advisor at
any time.
All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this Agreement.
10. Non-Exclusivity. The services of the Sub-Advisor to the Portfolio
are not to be deemed to be exclusive, and the Sub-Advisor shall be free to
render investment advisory or other services to others (including other
investment companies) and to engage in other activities, so long as its services
under this Agreement are not impaired thereby. It is understood and agreed that
officers or directors of the Sub-Advisor may serve as officers or Trustees of
the Portfolio, and that officers or Trustees of the Portfolio may serve as
officers or directors of the Sub-Advisor to the extent permitted by law; and
that the officers and directors of the Sub-Advisor are not prohibited from
engaging in any other business activity or from rendering services to any other
person, or from serving as partners, officers, trustees or directors of any
other firm, trust or corporation, including other investment companies.
12. Duration and Termination. This Agreement, unless sooner terminated
as provided herein, shall remain in effect with respect to the Portfolio until
two years from the date first set forth above, and thereafter, for periods of
one year so long as such continuance thereafter is specifically approved at
least annually (a) by the vote of a majority of those Trustees of the Portfolio
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 (b) by the Trustees of the Portfolio or by vote of a majority of the
outstanding voting securities of a Portfolio, subject to the right of the
Portfolio and the Sub-Advisor to terminate this contract as provided in this
Section 12; provided, however, that if the shareholders of the Portfolio fail to
approve the Agreement as provided herein, the Sub-Advisor may continue to serve
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hereunder in the manner and to the extent permitted by the 1940 Act as modified
or interpreted by any applicable order or orders of the SEC or any rules or
regulations adopted by, or interpretative releases of, the SEC thereunder. The
foregoing requirement that continuance of this Agreement be `specifically
approved at least annually' shall be construed in a manner consistent with the
1940 Act as modified or interpreted by any applicable order or orders of the SEC
or any rules or regulations adopted by, or interpretative releases of, the SEC
thereunder.
This Agreement may be terminated as to the Portfolio at any time,
without the payment of any penalty by vote of a majority of the Trustees of the
Portfolio or by vote of a majority of the outstanding voting securities of the
Portfolio on not less than 60 days' written notice to the Sub-Advisor, or by the
Sub-Advisor at any time without the payment of any penalty, on 90 days written
notice to the Advisor. This Agreement will automatically and immediately
terminate in the event of its assignment. Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed postpaid, to the other
party at any office of such party.
As used in this Section 12, the term `assignment' shall have the
meaning as set forth in the 1940 Act as modified or interpreted by any
applicable order or orders of the SEC or any rules or regulations adopted by, or
interpretative releases of, the SEC.
13. Limitation of Liability of the Sub-Advisor; Indemnification.
The Sub-Advisor shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Portfolio in connection with
the matters to which this Agreement relates, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Sub-Advisor in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
14. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice.
Currently such addresses are as follows: if to the Portfolio, Xxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000; if to the Sub-Advisor, Xxx Xxxxxx Xx., Xxxxxx XX0X
0XX, Xxxxxxx.
15. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
16. Entire Agreement. This Agreement states the entire agreement of the
parties hereto, and is intended to be the complete and exclusive statement of
the terms hereof. It may not be added to or changed orally, and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act as modified or interpreted by any applicable order
or orders of the SEC or any rules or regulations adopted by, or interpretative
releases of, the SEC, when applicable.
17. Reports. The Advisor and the Sub-Advisor agree to furnish to each
other, if applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and such other
information with regard to their affairs as each may reasonably request.
18. Certain Records. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act which are prepared or maintained by the Sub-Advisor on behalf
of the Portfolio are the property of the Portfolio and will be surrendered
promptly to the Portfolio on request.
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19. Questions of Interpretation. 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 interpretations 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 issued pursuant to the 1940
Act. In addition, where the effect of a requirement of the 1940 Act reflected in
any provision of this Agreement is modified or interpreted by any applicable
order or orders of the SEC or any rules or regulations adopted by, or
interpretative releases of, the SEC thereunder, such provision shall be deemed
to incorporate the effect of such order, rule, regulation or interpretative
release. Otherwise the provisions of this Agreement shall be interpreted in
accordance with the laws of Maryland.
20. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
[SEAL] INTERNATIONAL EQUITY PORTFOLIO
Attest: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxxxxx Name: Xxxxxx X. Xxxxxx
Title: Secretary
[SEAL] DEUTSCHE ASSET MANAGEMENT, INC.
Attest: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxx X. Xxxxxxxxx Name: Xxxxxxx X. Xxxx
Title: Vice President
[SEAL] DEUTSCHE ASSET MANAGEMENT INVESTMENT
SERVICES LIMITED
Attest: By:
-------------------------- -----------------------------
Name: Name:
Title:
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SCHEDULE A
TO INVESTMENT SUB-ADVISORY AGREEMENT
MADE AS OF
AMONG
INTERNATIONAL EQUITY PORTFOLIO, DEUTSCHE ASSET MANAGEMENT, INC. and
DEUTSCHE ASSET MANAGEMENT INVESTMENT SERVICES LIMITED
Trust Fee
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International Equity Portfolio 0.56% on first $250 million
0.55% on next $250 million
0.53% on next $500 million
0.49% on over $1 billion
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