EXHIBIT 23 (d) (26) SUB-ADVISORY AGREEMENT ON BEHALF OF TRANSAMERICA SMALL/MID
CAP VALUE
SUB-ADVISORY AGREEMENT
BETWEEN
AEGON/TRANSAMERICA FUND ADVISERS, INC.
AND
TRANSAMERICA INVESTMENT MANAGEMENT, LLC
SUB-ADVISORY AGREEMENT, made as of the 1st day of May, 2004, between
AEGON/Transamerica Fund Advisers, Inc. ("Investment Adviser"), a corporation
organized and existing under the laws of the State of Florida and Transamerica
Investment Management, LLC ("Sub-Adviser"), a limited liability company
organized and existing under the laws of the State of Delaware.
WHEREAS, the Investment Adviser acts as an investment adviser to
AEGON/Transamerica Series Fund, Inc. ("ATSF"), a Maryland corporation which is
engaged in business as an open-end management 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 (the
"Advisory Agreement");
WHEREAS, ATSF is authorized to issue shares of Transamerica Small/Mid
Cap Value (the "Fund"), a separate series of ATSF;
WHEREAS, the Sub-Adviser is engaged principally in the business of
rendering investment advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended ("Advisers Act");
and
WHEREAS, the Investment Adviser desires to retain the Sub-Adviser as
sub-adviser to furnish certain investment advisory services to the Investment
Adviser with respect to the Fund and the Sub-Adviser is willing to furnish such
services.
NOW, THEREFORE, in consideration of the premises and mutual promises
herein set forth, the parties hereto agree as follows:
1. APPOINTMENT.
Investment Adviser hereby appoints the Sub-Adviser as its investment
sub-adviser with respect to the Fund for the period and on the terms set forth
in this Agreement. The Sub-Adviser accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.
2. DUTIES OF THE SUB-ADVISER.
A. Investment Sub-Advisory Services. Subject to the
supervision of the ATSF Board of Directors ("Board") and the Investment Adviser,
the Sub-Adviser 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 ATSF 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 the
Investment Adviser or ATSF by notice in writing to the Sub-Adviser. The
Sub-Adviser 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, the
Sub-Adviser, on behalf of the Fund, is authorized, in its discretion and without
prior consultation with the Fund or the Investment Adviser, 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 the Sub-Adviser may select.
B. Additional Duties of Sub-Adviser. In addition to the
above, Sub-Adviser shall:
(1) furnish continuous investment information, advice and
recommendations to ATSF 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;
(2) cause its officers to attend meetings of ATSF and furnish
oral or written reports, as ATSF may reasonably require, in
order to
keep ATSF and its officers and Board fully informed as to the
condition of the investment securities of the Fund, the
investment recommendations of the Sub-Adviser, and the
investment considerations which have given rise to those
recommendations; and
(3) furnish such statistical and analytical information and
reports as may reasonably be required by ATSF from time to
time.
C. Further Duties of Sub-Adviser. In all matters relating
to the performance of this Agreement, the Sub-Adviser shall act in conformity
with the ATSF Articles of Incorporation and By-Laws, as each may be amended or
supplemented, and currently effective Registration Statement (as defined below)
and with the written instructions and directions of the Board and the Investment
Adviser, and shall comply with the requirements of the 1940 Act, the Advisers
Act, the rules thereunder, and all other applicable federal and state laws and
regulations.
3. COMPENSATION.
For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Agreement, the Sub-Adviser shall receive monthly: (i) an
investment management fee as specified in Schedule A of this Agreement. If this
Agreement becomes effective or terminates before the end of any month, the
investment management fee for the period from the effective date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be pro-rated according to the pro-ration which such
period bears to the full month in which such effectiveness or termination
occurs.
4. DUTIES OF THE INVESTMENT ADVISER.
A. The Investment Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to the
Advisory Agreement and shall oversee and review the Sub-Adviser's performance of
its duties under this Agreement. Notwithstanding the Advisory Agreement, the
Sub-Adviser has the authority to buy, sell, exchange, convert, lend, and
otherwise trade in any stocks, bonds and other securities or assets on behalf of
the Fund.
B. The Investment Adviser has furnished the Sub-Adviser
with copies of each of the following documents and will furnish to the
Sub-Adviser at its principal office all future amendments and supplements to
such documents, if any, as soon as practicable after such documents become
available:
(1) The Fund's Prospectus; and
(2) The Advisory and Sub-Advisory Agreements
The Investment Adviser shall furnish the Sub-Adviser with any further
documents, materials or information that the Sub-Adviser may reasonably request
to enable it to perform its duties pursuant to this Agreement.
C. During the term of this Agreement, the Investment
Adviser shall furnish to the Sub-Adviser at its principal office all
prospectuses, proxy statements, reports to shareholders, sales literature, or
other material prepared for distribution to shareholders of the Fund or the
public, which refer to the Fund, the Sub-Adviser or investment companies or
other advisory accounts advised or sponsored by the Sub-Adviser or investment
companies or other advisory accounts advised or sponsored by the Sub-Adviser in
any way, prior to the use thereof, and the Investment Adviser shall not use any
such materials if the Sub-Adviser reasonably objects in writing fifteen business
days (or such other time as may be mutually agreed) after receipt thereof.
5. BROKERAGE.
A. The Sub-Adviser 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, the Sub-Adviser 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 the Sub-Adviser 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 the Sub-Adviser 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). The Sub-Adviser and other clients advised by
Sub-Adviser may benefit from any research and information received from
broker-dealers selected in connection with the Fund. Consistent with its best
execution responsibilities stated herein, Sub-Adviser may also consider the
ability of the broker or dealer to provide client referrals as a factor in
brokerage selection. In no instance will portfolio securities be purchased from
or sold to the Sub-Adviser, or any affiliated person thereof, except in
accordance with the federal securities laws and the rule and regulations
thereunder.
B. On occasions when the Sub-Adviser deems the purchase or
sale of a security to be in the best interest of the Fund, as well as other
clients of the Sub-Adviser, the Sub-Adviser, 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 the Sub-Adviser in the
manner the Sub-Adviser considers to be the most equitable and consistent with
its fiduciary obligations to the Fund and to its other clients.
C. In addition to the foregoing, the Sub-Adviser agrees
that orders with broker-dealers for the purchase or sale of portfolio securities
by the Fund shall be placed in accordance with the standards set forth in the
Advisory Agreement.
6. OWNERSHIP OF RECORDS.
The Sub-Adviser shall maintain all books and records required to be
maintained by the Sub-Adviser pursuant to the 1940 Act and the rules and
regulations promulgated thereunder with respect to transactions on behalf of
ATSF. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-Adviser hereby agrees: (i) that all records that it maintains for the Fund
are the property of ATSF, (ii) to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act any records that it maintains for the Fund and that are
required to be maintained by Rule 31a-1 under the 1940 Act and (iii) agrees to
surrender promptly to ATSF any records that it maintains for the Fund upon
request by ATSF; provided, however, the Sub-Adviser may retain copies of such
records.
7. REPORTS.
The Sub-Adviser shall furnish to the Board or the
Investment Adviser, or both, as appropriate, such information,
reports, evaluations, analyses and opinions as the Sub-Adviser and
the Board or the Investment Adviser, as appropriate, may mutually
agree upon from time to time.
8. SERVICES TO OTHER CLIENTS.
Nothing contained in this Agreement shall limit or restrict (i) the
freedom of the Sub-Adviser, 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 the Sub-Adviser, who
may also be a director, officer, or employee of ATSF, 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.
9. SUB-ADVISER'S USE OF THE SERVICES OF OTHERS.
The Sub-Adviser may (at its cost except as contemplated by Section 5
of this Agreement) employ, retain, or otherwise avail itself of the services or
facilities of 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 occasional transactions in specific
securities, or such other information, advice, or assistance as the Sub-Adviser
may deem necessary, appropriate, or convenient for the discharge of its
obligations hereunder or otherwise helpful to the Sub-Adviser, as appropriate,
or in the discharge of Sub-Adviser's overall responsibilities with respect to
the other accounts that it serves as investment manager or counselor, provided
that the Sub-Adviser shall at all times retain responsibility for making
investment recommendations with respect to the Fund.
10. REPRESENTATIONS OF SUB-ADVISER.
The Sub-Adviser represents, warrants, and agrees as follows:
A. The Sub-Adviser: (i) is registered as an investment
adviser under the Advisers Act 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 Investment Adviser of the
occurrence of any event that would disqualify the Sub-Adviser from serving as an
investment adviser of an investment company pursuant to Section 9 (a) of the
1940 Act or otherwise.
B. The Sub-Adviser 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 ATSF with a copy of
such code of ethics, together with evidence of its
adoption.
C. The Sub-Adviser has provided the Investment Adviser and
ATSF with a copy of its Form ADV as most recently filed with the SEC and will,
promptly after filing any amendment to its Form ADV with the SEC, furnish a copy
of such amendment to the Investment Adviser.
11. 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 members of the Board who are
not parties to this Agreement or interested persons of any such party, cast in
person at a meeting of the Board called for the purpose of voting on such
approval, and (ii) by vote of a majority of the Fund's outstanding voting
securities. Unless sooner terminated as provided herein, this Agreement shall
continue in effect for an initial term of two years. Thereafter, this Agreement
shall continue in effect from year to year, with respect to the Fund, 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
Fund; and (b) in either event, by the vote, cast in person at a meeting of the
Board called for the purpose of voting on such approval, of a majority of the
members of the Board who are not parties to this Agreement or interested persons
of any such party. The Sub-Adviser shall furnish to ATSF, 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.
12. NOTICES.
Any notice shall be sufficiently given when sent by certified U.S.
mail, national expenses deliver service, or facsimile to the parties at the
address below:
If to ATSF:
AEGON/Transamerica Series Fund, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Investment Adviser:
AEGON/Transamerica Fund Advisers, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Sub-Adviser:
Transamerica Investment Management, LLC
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Compliance
Telephone: (000) 000-0000
13. 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. 23379 - under section 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 the Sub-Adviser. This Agreement may also be terminated by the
Investment Adviser: (i) on at least 60 days' prior written notice to the
Sub-Adviser, without the payment of any penalty; or (ii) if the Sub-Adviser
becomes unable to discharge its duties and obligations under this Agreement. The
Sub-Adviser 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 the
Investment Adviser. This Agreement shall terminate automatically in the event of
its assignment or upon termination of the Advisory Agreement.
14. 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 amendment of this Agreement shall be effective until approved by
vote of a majority of the Fund's outstanding voting securities, unless otherwise
permitted in accordance with the 1940 Act.
15. MISCELLANEOUS.
A. Governing Law. This Agreement shall be construed in
accordance with the laws of the state of Maryland 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 Maryland 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 of Incorporation 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 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 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 the Investment Adviser and the Sub-Adviser agree to the contrary.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized signatories as of the date and year first
above written.
ATTEST: AEGON/TRANSAMERICA FUND ADVISERS, INC.
By: _________________________________ By: __________________________________
Name: _______________________________ Name: ________________________________
Title: ______________________________ Title: _______________________________
ATTEST TRANSAMERICA INVESTMENT MANAGEMENT, LLC
By: _________________________________ By: __________________________________
Name: _______________________________ Name: ________________________________
Title: ______________________________ Title: _______________________________
SUB-ADVISORY AGREEMENT
SCHEDULE A
TERMINATION
FUND SUB-ADVISER COMPENSATION DATE
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0.375% of the first $500 million of the fund's
TRANSAMERICA average daily net assets; and 0.325% of assets
SMALL/MID CAP VALUE over $500 million, less 50% of any amount April 30, 2006
reimbursed to the Fund by the Investment Adviser
pursuant to the expense limitation
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