INVESTMENT SUBADVISORY AGREEMENT
INVESTMENT SUBADVISORY AGREEMENT, dated as of March 18, 2004 by and
between Diversified Investment Advisors, Inc., a Delaware corporation
("Diversified") and LSV Asset Management ("Subadvisor").
WITNESSETH:
WHEREAS, Diversified has been organized to operate as an investment
advisor registered under the Investment Advisers Act of 1940 and has been
retained to provide investment advisory services to the International Equity
Portfolio ("Portfolio"), a series of Diversified Investors Portfolios, a
diversified open-end management investment company registered under the
Investment Company Act of 1940 ("1940 Act");
WHEREAS, Diversified desires to retain the Subadvisor to furnish it
with portfolio investment advisory services in connection with Diversified's
investment advisory activities on behalf of the Portfolio, and the Subadvisor is
willing to furnish such services to Diversified;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of the Subadvisor. In accordance with the Investment Advisory
Agreement between the Portfolio and Diversified, attached hereto as Schedule A
(the "Advisory Agreement"), Diversified hereby appoints the Subadvisor to
perform the discretionary portfolio investment advisory services described
herein for the investment and reinvestment of such amount of the Portfolio's
assets ("Assets"), subject to the control and direction of Diversified and the
Diversified Investors Portfolios' Board of Trustees, for the period and on the
terms hereinafter set forth.
The Subadvisor shall provide Diversified with such investment advice
and supervision as the latter may from time to time consider necessary for the
proper supervision of the Assets. The Subadvisor shall furnish an investment
program and shall determine from time to time what securities shall be
purchased, sold or exchanged, subject always to the provisions of the 1940 Act
and to the Portfolio's then-current Registration Statement on Form N-1A.
In particular, the Subadvisor shall, without limiting the foregoing:
(i) continuously review, supervise and implement the investment program for the
Assets; (ii) monitor regularly the relevant securities for the Assets to
determine if adjustments are warranted and, if so, to make such adjustments;
(iii) determine, in the Subadvisor's discretion, the securities to be purchased
or sold or exchanged in order to keep the Assets in balance with the designated
investment strategy; (iv) determine, in the Subadvisor's discretion, whether to
exercise warrants or other rights with respect to the Assets; (v) as promptly as
practicable after the end of each calendar month, furnish a report showing: (a)
all transactions during such month, (b) all Assets on the last day of such
month, rates of return, and (c) such other information relating to the Assets as
Diversified may reasonably request; (vi) meet at least four times per year with
Diversified and with such other persons as may be designated on reasonable
notice and at reasonable locations, at the request of Diversified, to discuss
general economic conditions, performance, investment strategy, and other matters
relating to the Assets; (vii) provide the Portfolio, as reasonably requested by
Diversified, with records concerning the Subadvisor's activities which the
Portfolio is required by law to maintain with respect to the Assets; and (viii)
render regular reports to the Portfolio's officers and Directors concerning the
Subadvisor's discharge of the foregoing responsibilities.
Subadvisor will send Diversified an inventory of the investments of the
Portfolio as soon as reasonably possible after the end of each monthly or
quarterly period. This report will also contain investment results. The
calculation of investment results will commence on the earlier of (a) the last
business day of the month following the month in which the funds are received or
(b) the last business day of the month in which the Assets have been structured
by Subadvisor in accordance with Diversified's investment guidelines and
objectives. Copies of confirmations of transactions executed will be sent
promptly to Diversified's custodian. Subadvisor does not assume responsibility
for the accuracy of information furnished by Diversified or any other party.
Should the Board of Trustees at any time establish an investment policy
with respect to the Assets and notify the Subadvisor thereof in writing, the
Subadvisor shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such policy has been
revoked.
The Subadvisor shall take, on behalf of the Assets, all actions which
it deems necessary to implement the investment policies determined as provided
above with respect to the Assets, and in particular to place all orders for the
purchase or sale of securities for the Portfolio's account with brokers or
dealers selected by it, and to that end the Subadvisor is authorized as an agent
of the Portfolio to give instructions to the custodian of the Portfolio as to
deliveries of securities and payments of cash for the account of the Portfolio.
Subject to the primary objective of obtaining the
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best available prices and execution, the Subadvisor may place orders for the
purchase and sale of portfolio securities with such broker/dealers who provide
research and brokerage services to the Portfolio within the meaning of Section
28(e) of the Securities Exchange Act of 1934, to the Subadvisor, or to any other
fund or account for which the Subadvisor provides investment advisory services
and may place such orders with broker/dealers who sell shares of the Portfolio
or who sell shares of any other fund for which the Subadvisor provides
investment advisory services. Broker/dealers who sell shares of the funds of
which LSV Asset Management is investment advisor (but not a Subadvisor) shall
only receive orders for the purchase or sale of portfolio securities to the
extent that the placing of such orders is in compliance with the Rules of the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc.
Notwithstanding the provisions of the previous paragraph and subject to
such policies and procedures as may be adopted by the Board of Trustees and
officers of the Portfolio, the Subadvisor may pay a member of an exchange,
broker or dealer an amount of commission for effecting a securities transaction
in excess of the amount of commission another member of an exchange, broker or
dealer would have charged for effecting that transaction, in such instances
where the Subadvisor has determined in good faith that such amount of commission
was reasonable in relation to the value of the brokerage and research services
provided by such member, broker or dealer, viewed in terms of either that
particular transaction or the Subadvisor's overall responsibilities with respect
to the Portfolio and to other funds and clients for which the Subadvisor
exercises investment discretion.
Diversified authorizes Subadvisor to combine orders for the Portfolio
with orders for other clients of Subadvisor. Under this procedure, purchases or
sales of a particular security for the Portfolio may be combined with purchases
or sales of the same security for other clients on the same day. In such cases,
the price shown on the confirmation of the Portfolio's purchase or sale will be
the average execution price on all of the purchases and sales so aggregated that
day.
2. Allocation of Charges and Expenses. The Subadvisor shall furnish at
its own expense all necessary services, facilities and personnel in connection
with its responsibilities under Section 1 above. It is understood that the
Portfolio will pay all of its own expenses and liabilities including, without
limitation, compensation and out-of-pocket expenses of Trustees not affiliated
with the 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 Portfolio; 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 Portfolio; expenses connected with the
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execution, recording and settlement of Portfolio security transactions;
insurance premiums; fees and expenses of the custodian for all services to the
Portfolio, including safekeeping of funds and securities and maintaining
required books and accounts; expenses of calculating the net asset value of
shares of the Portfolio; 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 Portfolio.
3. Compensation of the Subadvisor. For the services to be rendered,
Diversified shall pay to the Subadvisor an investment advisory fee computed in
accordance with the terms of Schedule B herewith attached. If the Subadvisor
serves for less than the whole of any period specified, its compensation shall
be prorated.
4. Covenants and Representations of the Subadvisor. The Subadvisor
agrees that it will not deal with itself, or with the Trustees of the Portfolio
or with Diversified, or the Portfolio's principal underwriter or distributor as
principals in making purchases or sales of securities or other property for the
account of the Portfolio, except as permitted by the 1940 Act, and will comply
with all other provisions of the Declaration of Trust and any current
Registration Statement on Form N-1A of the Portfolio relative to the Subadvisor,
Advisor and its Trustees and officers.
5. Limits on Duties. The Subadvisor shall be responsible only for
managing the Assets in good faith and in accordance with the investment
objectives, fundamental policies and restrictions, and shall have no
responsibility whatsoever for, and shall incur no liability on account of (i)
diversification, selection or establishment of such investment objectives,
fundamental policies and restrictions (ii) advice on, or management of, any
other assets for Diversified or the Portfolio, (iii) filing of any tax or
information returns or forms, withholding or paying any taxes, or seeking any
exemption or refund, (iv) registration of the Portfolio with any government or
agency, or (v) administration of the plans and trusts investing through the
Portfolio, or (vi) overall Portfolio compliance with the requirements of the
1940 Act, which requirements are outside of the Subadvisor's control, and
Subchapter M of the Internal Revenue Code of 1986, as amended. Diversified
agrees that requirements imposed by the 1940 Act, Subchapter M, or any other
applicable laws, that are outside Subadvisor's control include compliance with
any percentage limitations applicable to the Portfolio's assets that would
require knowledge of the Portfolio's holdings other than the Assets subject to
this Agreement. Subadvisor shall be indemnified and held harmless by Diversified
for any loss in carrying out the terms and provisions of this Agreement,
including reasonable attorney's fees, indemnification to the Portfolio, or any
shareholder thereof and, brokers and commission merchants, fines, taxes,
penalties and interest. Subadvisor, however, shall be liable for any liability,
damages, or expenses of Diversified arising out of the
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gross negligence, malfeasance or violation of applicable law by any of its
employees in providing management under this Agreement; and, in such cases, the
indemnification by Diversified, referred to above, shall be inapplicable.
Diversified shall appoint a custodian to take and have possession of
the Assets of the Portfolio. Subadvisor shall not be custodian. Subadvisor shall
have no obligation or liabilities with respect to the custodial arrangements.
The Subadvisor may apply to Diversified at any time for instructions
and may consult counsel for Diversified or its own counsel with respect to any
matter arising in connection with the duties of the Subadvisor. Also, the
Subadvisor shall be protected in acting upon advice of Diversified and/or
Diversified's counsel and upon any document which Subadvisor reasonably believes
to be genuine and to have been signed by the proper person or persons.
Subadvisor shall not be responsible for voting proxies related to
securities held by the Portfolio. Subadvisor will not advise Diversified or the
Portfolio or act for Diversified or the Portfolio in any legal proceedings,
including bankruptcies, involving securities held or previously held by the
Portfolio or the issuers of those securities.
6. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and, unless
terminated earlier as provided below, shall remain in force for two years, on
which date it will terminate unless its continuance thereafter is specifically
approved at least annually (a) by the vote of a majority of the Trustees of the
Portfolio who are not "interested persons" with respect to this Agreement or of
the Subadvisor or Diversified at an in person meeting specifically called for
the purpose of voting on such approval, and (b) by the Board of Trustees of the
Portfolio or by vote of a majority of the outstanding voting securities of the
Portfolio. However, if the shareholders of the Portfolio fail to approve the
Agreement as provided herein, the Subadvisor may continue to serve hereunder in
the manner and to the extent permitted by the Investment Company Act of 1940 and
Rules thereunder.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees, or by the vote of a majority of the outstanding voting
securities of the Portfolio, or by Diversified. The Subadvisor may terminate the
Agreement only upon giving 90 days' advance written notice to Diversified. This
Agreement shall automatically terminate in the event of its assignment.
This Agreement may be amended only if such amendment is approved by the
vote of a majority of the outstanding voting securities of the Portfolio and by
vote of a majority of the Board of 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
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for the purpose of voting on such approval.
The terms "specifically approved at least annually", "vote of a
majority of the outstanding voting securities", "assignment", "affiliated
person", and "interested persons", when used in this Agreement, shall have the
respective meanings specified in, and shall be construed in a manner consistent
with, the 1940 Act, subject, however, to such exemptions as may be granted by
the Securities and Exchange Commission under said Act.
7. Certain Records. Any records to be maintained and preserved pursuant
to the provisions of Rule 31a-1 and Rule 31a-2 adopted under the 1940 Act which
are prepared or maintained by the Subadvisor with respect to the Assets and will
be made available promptly to the Portfolio on request.
8. Survival of Compensation Rates. All rights to compensation under
this Agreement shall survive the termination of this Agreement.
9. Entire Agreement. This Agreement states the entire agreement of the
parties with respect to investment advisory services to be provided to the
Portfolio by the Subadvisor and may not be amended except in a writing signed by
the parties hereto and approved in accordance with Section 6 hereof.
10. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
11. Change of Management and Pending Litigation. Subadvisor represents
to Diversified that it will disclose to Diversified promptly after it has
knowledge of any change or variation in its management structure or personnel or
any significant change or variation in its management style or investment
philosophy that is material to this Agreement. In addition, Subadvisor
represents to Diversified that it will similarly disclose to Diversified,
promptly after it has knowledge, the existence of any pending legal action being
brought against it whether in the form of a lawsuit which has the potential to
impact the Subadvisor's ability to provide services or a non-routine
investigation by any federal or state governmental agency.
Diversified represents to Subadvisor that any information received by
Diversified pursuant to this section will be kept strictly confidential and will
not be disclosed to any third party.
12. Communications. Instructions with respect to securities
transactions may be given orally and, where deemed necessary, may be confirmed
in writing as soon as practicable.
Notices required to be given under this Agreement shall be sent by
certified mail and shall be deemed effective when received; and, as to the
custodian, at such
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address as it may specify to Subadvisor in writing, or at such other address as
a party to receive notice may specify in a notice given in accordance with this
provision. Subadvisor may rely on any notice from any person reasonably believed
to be genuine and authorized. Diversified will, upon inception of this Agreement
and from time-to-time as needed, provide Subadvisor with a list of authorized
signatures for those persons from whom the Subadvisor may accept direction.
13. Disclosure Statement - Form ADV. Diversified hereby acknowledges
receipt simultaneously with the execution of this Agreement of the currently
effective Form ADV Part II for the purpose of disclosure about services, fees,
and other matters of importance related to a decision of becoming a client of
the Subadvisor. Accordingly, Diversified shall have the option to terminate this
Agreement without penalty within five business days after that date of
execution, provided, however, that any investment action taken by Subadvisor
with respect to the Portfolio prior to the effective date of such termination
shall be at Diversified's risk.
14. Use of Name. Subadvisor hereby agrees that Diversified may use the
Subadvisor's name in its marketing or advertising materials. Diversified agrees
to allow the Subadvisor to examine and approve any such materials prior to use.
Diversified agrees that Subadvisor may include Diversified's name in
Subadvisor's list of clients used in Subadvisor's marketing materials.
IN WITNESS WHEREOF, the parties thereto have caused this Agreement to
be executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
Diversified Investment Advisors, Inc.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Xxxx X. Xxxxxx
Vice President & Senior Counsel
LSV Asset Management
By: /s/ Xxxxxxxx Xxxxxxxx
--------------------------------
Xxxxxxxx Xxxxxxxx
COO
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Schedule A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of September 28, 1995 by and between the
International Equity Portfolio, a series of Diversified Investors Portfolios'
(herein called the "Portfolio"), and Diversified Investment Advisors, Inc. a
Delaware corporation (herein called "Diversified").
WHEREAS, the Portfolio 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 Portfolio 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 Portfolio hereby appoints Diversified to act as investment advisor
to the Portfolio 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) employ sub-advisors or
associate with itself such entities as it believes appropriate to assist it in
performing its obligations under this Agreement and (ii) provide all services,
equipment and facilities necessary to perform its obligations under this
Agreement.
(b) The Portfolio 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 Portfolio; 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 Portfolio;
expenses connected with the execution, recording and settlement of Portfolio
security transactions; insurance premiums; fees and expenses of the custodian
for all services to the Portfolio, including safekeeping of funds and securities
and maintaining required books and accounts; expenses of calculating the net
asset value of shares of the Portfolio; 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 Portfolio.
3. (a) Subject to the general supervision of the Board of Trustees of
the Portfolio, Diversified shall formulate and provide an appropriate investment
program on a continuous basis in connection with the management of the Portfolio
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 Portfolio in accordance
with predetermined guidelines as set forth from time to time in the Portfolio'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 Portfolio 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 Portfolio
and/or other accounts over which Diversified or any of its affiliates exercises
investment discretion.
Subject to the review of the Portfolio'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 Portfolio
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 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.
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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 Portfolio 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
Board of the Trustees of the Portfolio. All transactions are effected pursuant
to written authorizations from the Portfolio 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 Portfolio 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 Portfolio'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 Portfolio
shall be invested in securities described by the policies of the Portfolio 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 Portfolio. In effecting transactions with respect to securities or other
property for the account of the Portfolio, Diversified may deal with itself and
its affiliates, with the Trustees of the Portfolio or with other entities to the
extent such actions are permitted by the 0000 Xxx.
(b) Diversified also shall provide to the Portfolio administrative
assistance in connection with the operation of the Portfolio, which shall
include compliance with all reasonable requests of the Portfolio for
information, including information required in connection with the Portfolio's
filings with the Securities and Exchange Commission and state securities
commissions.
(c) As manager of the assets of the Portfolio, Diversified shall make
investments for the account of the Portfolio in accordance with Diversified's
best judgment and within the Portfolio'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.
(d) Diversified shall furnish to the Board of Trustees periodic reports
on the investment performance of the Portfolio and on the performance of its
obligations
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under this Agreement and shall supply such additional reports and information as
the Portfolio'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 Portfolio 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 Portfolio and to such other customers.
(f) Diversified shall also provide the Portfolio with the following
services as may be required:
(i) providing office space, equipment and clerical personnel
necessary for maintaining the organization of the Portfolio
and for performing administrative and management functions;
(ii) supervising the overall administration of the Portfolio,
including negotiation of contracts and fees with and the
monitoring of performance and xxxxxxxx of the Portfolio's
transfer agent, custodian and other independent contractors or
agents;
(iii) preparing and, if applicable, filing all documents required
for compliance by the Portfolio 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 Portfolio.
4. Diversified shall give the Portfolio 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 Portfolio
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 Portfolio or its investors to which Diversified would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Adviser's duties
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under this Agreement or by reason of the Adviser's reckless disregard of its
obligations and duties hereunder.
5. In consideration of the services to be rendered by Diversified under
this Agreement, the Portfolio shall pay Diversified a fee accrued daily and paid
monthly at an annual rate equal to 75% of total net assets. If the fees
payable to Diversified pursuant to this paragraph 5 begin to accrue before the
end of any month or if this Agreement terminates before the end of any month,
the fees for the period from that date to the end of that month or from the
beginning of that month to the date of termination, as the case may be, shall be
prorated according to the proportion which the period bears to the full month
in which the effectiveness or termination occurs. For purposes of calculating
the monthly fees, the value of the net assets of the Portfolio shall be computed
in the manner specified in its Regulation Statement on Form N-1A for the
computation of net asset value. For purposes of this Agreement, a "business day"
is any day the New York Stock Exchange is open for trading.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Diversified hereby agrees that all records which it maintains for the Portfolio
are property of the Portfolio and further agrees to surrender promptly to the
Portfolio any such records upon the Portfolio'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 Portfolio as of the date
the Portfolio commences investment operations after this Agreement shall have
been approved by the Board of Trustees of the Portfolio and the investor(s) in
the Portfolio 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 Portfolio 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 Board of 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 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
Portfolio; provided, however, that this Agreement may be terminated by the
Portfolio at any time, without the payment of any penalty, by the Board of
Trustees of the Portfolio or by vote of a majority of the outstanding voting
securities of the Portfolio on 60 days' written notice to Diversified, or by
Diversified as to the Portfolio at any time, without payment of any penalty, on
90 days' written notice to the Portfolio. 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.)
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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 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 Portfolio
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 Portfolio.
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.
6
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: Diversified Investors Portfolios
/s/ Xxxx X. Xxxxxx By: /s/ Xxx Xxxxxxxxxxx
----------------- --------------------------------
Xxxx X. Xxxxxx Xxx Xxxxxxxxxxx
Chairman and President
Attest: Diversified Investment Advisors, Inc.
/s/ Xxxxxxxxx X. Xxxx By /s/ Xxxxxx X. Xxxx
-------------------- --------------------------------
Xxxxxxxxx X. Xxxx Xxxxxx X. Xxxx
Vice President and CFO
7
SCHEDULE B
The Subadvisor shall be compensated for its services under this Agreement on the
basis of the below-described annual fee schedule. The fee schedule shall only be
amended by agreement between the parties.
FEE SCHEDULE
45 BASIS POINTS OF THE FIRST $100M OF NET ASSETS
40 BASIS POINTS OF THE NEXT $100M OF NET ASSETS
37 BASIS POINTS OF THE NEXT $400M OF NET ASSETS
35 BASIS POINTS OF THE NEXT $200M OF NET ASSETS
33 BASIS POINTS OF ANY AMOUNT IN EXCESS OF $800M OF NET ASSETS
Net assets are equal to the market value of the Portfolio. Fees will be
calculated by multiplying the arithmetic average of the beginning and ending
monthly net assets by the fee schedule and dividing by twelve. The fee will be
paid quarterly.
LSV Asset Management agrees that if at anytime during the term of this
Subadvisory Agreement, LSV offers another of its clients (other than a client
that is an affiliated person of LSV) a lower fee than that set forth in this
Schedule B for the management of a similarly structured International Equity
Portfolio then Diversified will also be charged the lower rate. Diversified will
benefit from the lower rate from the first day that it is in effect for LSV's
other client. The foregoing shall not include Subadvisor's fee arrangements: (a)
negotiated prior to the execution of this Agreement; (b) with clients with
investments in more than one of Subadvisor's products; (c) with clients with a
greater level of assets invested with Subadvisor; and (d) with clients whose
fees are based on investment performance.
