Exhibit (d)(3)
XXXXXXX PATHWAY SERIES
Two International Place
Boston, Massachusetts 02110-4103
April 5, 2002
Deutsche Investment Management Americas Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Investment Management Agreement
Growth Portfolio
Ladies and Gentlemen:
Xxxxxxx Pathway Series (the "Trust"), has been established as a
Massachusetts business Trust to engage in the business of an investment
company. Pursuant to the Trust's Declaration of Trust, as amended from
time-to-time (the "Declaration"), the Board of Trustees may divide the Trust's
shares of beneficial interest, par value $0.01 per share, (the "Shares") into
separate series, or funds, including Growth Portfolio (the "Fund"). Series may
be abolished and dissolved, and additional series established, from time to
time by action of the Trustees.
The Trust, on behalf of the Fund, has selected you to act as the sole
investment manager of the Fund and to provide certain other services, as more
fully set forth below, and you have indicated that you are willing to act as
such investment manager and to perform such services under the terms and
conditions hereinafter set forth. Accordingly, the Trust on behalf of the Fund
agrees with you as follows:
1. Delivery of Documents. The Trust engages in the business of
investing and reinvesting the assets of the Fund in the manner and in
accordance with the investment objectives, policies and restrictions specified
in the currently effective Prospectus (the "Prospectus") and Statement of
Additional Information (the "SAI") relating to the Fund included in the Trust's
Registration Statement on Form N-1A, as amended from time to time (the
"Registration Statement"), filed by the Trust under the Investment Company Act
of 1940, as amended, (the "1940 Act") and the Securities Act of 1933, as
amended. Copies of the documents referred to in the preceding sentence have
been furnished to you by the Trust. The Trust has also furnished you with
copies properly certified or authenticated of each of the following additional
documents related to the Trust and the Fund:
(a) The Declaration dated July 1, 1994, as amended to date.
(b) By-Laws of the Trust as in effect on the date hereof (the "By-Laws").
(c) Resolutions of the Trustees of the Trust and the shareholders of the Fund
selecting you as investment manager and approving the form of this
Agreement.
The Trust will furnish you from time to time with copies, properly
certified or authenticated, of all amendments of or supplements, if any, to the
foregoing, including the Prospectus, the SAI and the Registration Statement.
2. Sublicense to Use the Xxxxxxx Trademarks. As exclusive
licensee of the rights to use and sublicense the use of the "Xxxxxxx," "Xxxxxxx
Investments" and "Xxxxxxx, Xxxxxxx & Xxxxx, Inc." trademarks (together, the
"Xxxxxxx Marks"), you hereby grant the Trust a nonexclusive right and
sublicense to use (i) the "Xxxxxxx" name and mark as part of the Trust's name
(the "Fund Name"), and (ii) the Xxxxxxx Marks in connection with the Trust's
investment products and services, in each case only for so long as this
Agreement, any other investment management agreement between you or any
organization which shall have succeeded to your business as investment manager
("your Successor") and the Trust, or any extension, renewal or amendment hereof
or thereof remains in effect, and only for so long as you are a licensee of the
Xxxxxxx Marks, provided however, that you agree to use your best efforts to
maintain your license to use and sublicense the Xxxxxxx Marks. The Trust agrees
that it shall have no right to sublicense or assign rights to use the Xxxxxxx
Marks, shall acquire no interest in the Xxxxxxx Marks other than the rights
granted herein, that all of the Trust's uses of the Xxxxxxx Marks shall inure
to the benefit of Xxxxxxx Trust Company as owner and licensor of the Xxxxxxx
Marks (the "Trademark Owner"), and that the Trust shall not challenge the
validity of the Xxxxxxx Marks or the Trademark Owner's ownership thereof. The
Trust further agrees that all services and products it offers in connection
with the Xxxxxxx Marks shall meet commercially reasonable standards of duality,
as may be determined by you or the Trademark Owner from time to time, provided
that you acknowledge that the services and products the Trust rendered during
the one-year period preceding the date of this Agreement are acceptable. At
your reasonable request, the Trust shall cooperate with you and the Trademark
Owner and shall execute and deliver any and all documents necessary to maintain
and protect (including but not limited to in connection with any trademark
infringement action) the Xxxxxxx Marks and/or enter the Trust as a registered
user thereof. At such time as this Agreement or any other investment management
agreement shall no longer be in effect between you (or your Successor) and the
Trust, or you no longer are a licensee of the Xxxxxxx Marks, the Trust shall
(to the extent that, and as soon as, it lawfully can) cease to use the Fund
Name or any other name indicating that it is advised by, managed by or
otherwise connected with you (or your Successor) or the Trademark Owner. In no
event shall the Trust use the Xxxxxxx Marks or any other name or mark
confusingly similar thereto (including, but not limited to, any name or mark
that includes the name "Xxxxxxx") if this Agreement or any other investment
advisory agreement between you (or your Successor) and the Fund is terminated.
3. Portfolio Management Services. As manager of the assets of
the Fund, you shall provide continuing investment management of the assets of
the Fund in accordance with the investment objectives, policies and
restrictions set forth in the Prospectus and SAI; the applicable provisions of
the 1940 Act and the Internal Revenue Code of 1986, as amended, (the "Code")
relating to regulated investment companies and all rules and regulations
thereunder; and all other applicable federal and state laws and regulations of
which you have knowledge; subject always to policies and instructions adopted
by the Trust's Board of Trustees. In connection therewith, you shall use
reasonable efforts to manage the Fund so that it will qualify as a regulated
investment company under Subchapter M of the Code and regulations issued
thereunder. The Fund shall have the benefit of the investment analysis and
research, the review of current economic conditions and trends and the
consideration of long-range investment policy generally available to your
investment advisory clients. In managing the Fund in accordance with the
requirements set forth in this section 3, you shall be entitled to receive and
act upon advice of counsel to the Trust or counsel to you. You shall also make
available to the Trust promptly upon request all of the Fund's investment
records and ledgers as are necessary to assist the Trust in complying with the
requirements of the 1940 Act and other applicable laws. To the extent required
by law, you shall furnish to regulatory authorities having the requisite
authority any information or reports in connection with the services provided
pursuant to this Agreement which may be requested in order to ascertain whether
the operations of the Trust are being conducted in a manner consistent with
applicable laws and regulations.
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You shall determine the securities, instruments, investments,
currencies, repurchase agreements, futures, options and other contracts
relating to investments to be purchased, sold or entered into by the Fund and
place orders with broker-dealers, foreign currency dealers, futures commission
merchants or others pursuant to your determinations and all in accordance with
Fund policies as expressed in the Registration Statement. You shall determine
what portion of the Fund's portfolio shall be invested in securities and other
assets and what portion, if any, should be held un-invested.
You shall furnish to the Trust's Board of Trustees periodic reports on
the investment performance of the Fund and on the performance of your
obligations pursuant to this Agreement, and you shall supply such additional
reports and information as the Trust's officers or Board of Trustees shall
reasonably request.
4. Delegation of Portfolio Management Services. Subject to the
prior approval of a majority of the members of the Fund's Board of Trustees,
including a majority of the Trustees who are not "interested persons," as
defined in the 1940 Act, you may, through a sub-advisory agreement or other
arrangement, delegate to any other company that you control, are controlled by,
or are under common control with, or to specified employees of any such
companies, or to more than one such company, to the extent permitted by
applicable law, certain of your duties enumerated in section 3 hereof;
provided, that you shall continue to supervise the services provided by such
company or employees and any such delegation shall not relieve you of any of
your obligations hereunder.
Subject to the provisions of this Agreement, the duties of any
sub-adviser or delegate, the portion of portfolio assets of the Fund that the
sub-adviser or delegate shall manage and the fees to be paid to the sub-adviser
or delegate by you under and pursuant to any sub-advisory agreement or other
arrangement entered into in accordance with this Agreement may be adjusted from
time to time by you, subject to the prior approval of a majority of the members
of the Fund's Board of Trustees, including a majority of the Trustees who are
not "interested persons," as defined in the 1940 Act.
5. Administrative Services. In addition to the portfolio
management services specified in section 3 hereof, you shall furnish at your
expense for the use of the Fund such office space and facilities in the United
States as the Fund may require for its reasonable needs, and you (or one or
more of your affiliates designated by you) shall render to the Trust
administrative services on behalf of the Fund necessary for operating as an
open-end investment company and not provided by persons not parties to this
Agreement including, but not limited to, preparing reports to and meeting
materials for the Trust's Board of Trustees and reports and notices to Fund
shareholders; supervising, negotiating contractual arrangements with, to the
extent appropriate, and monitoring the performance of, accounting agents,
custodians, depositories, transfer agents and pricing agents, accountants,
attorneys, printers, underwriters, brokers and dealers, insurers and other
persons in any capacity deemed to be necessary or desirable to Fund operations;
preparing and making filings with the Securities and Exchange Commission (the
"SEC") and other regulatory and self-regulatory organizations, including, but
not limited to, preliminary and definitive proxy materials, post-effective
amendments to the Registration Statement, semi-annual reports on Form N-SAR and
notices pursuant to Rule 24f-2 under the 1940 Act; overseeing the tabulation of
proxies by the Fund's transfer agent; assisting in the preparation and filing
of the Fund's federal, state and local tax returns; preparing and filing the
Fund's federal excise tax return pursuant to Section 4982 of the Code;
providing assistance with investor and public relations matters; monitoring the
valuation of portfolio securities and the calculation of net asset value;
monitoring the registration of Shares of the Fund under applicable federal and
state securities laws; maintaining or causing to be maintained for the Fund all
books, records and reports and any other information required under the 1940
Act, to the extent that such books, records and reports and other information
are not maintained by the Fund's custodian or other agents of the Fund;
assisting in establishing the accounting policies of the Fund; assisting in the
resolution of accounting issues that may arise with respect to the Fund's
operations and consulting with the Fund's independent accountants, legal
counsel and the Fund's other agents as necessary in connection
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therewith; establishing and monitoring the Fund's operating expense budgets;
reviewing the Fund's bills; processing the payment of bills that have been
approved by an authorized person; assisting the Fund in determining the amount
of dividends and distributions available to be paid by the Fund to its
shareholders, preparing and arranging for the printing of dividend notices to
shareholders, and providing the transfer and dividend paying agent, the
custodian, and the accounting agent with such information as is required for
such parties to effect the payment of dividends and distributions; and otherwise
assisting the Trust as it may reasonably request in the conduct of the Fund's
business, subject to the direction and control of the Trust's Board of Trustees.
Nothing in this Agreement shall be deemed to shift to you or to diminish the
obligations of any agent of the Fund or any other person not a party to this
Agreement which is obligated to provide services to the Fund.
6. Allocation of Charges and Expenses. Except as otherwise
specifically provided in this section 6, you shall pay the compensation and
expenses of all Trustees, officers and executive employees of the Trust
(including the Fund's share of payroll taxes) who are affiliated persons of
you, and you shall make available, without expense to the Fund, the services of
such of your directors, officers and employees as may duly be elected officers
of the Trust, subject to their individual consent to serve and to any
limitations imposed by law. You shall provide at your expense the portfolio
management services described in section 3 hereof and the administrative
services described in section 5 hereof.
You shall not be required to pay any expenses of the Fund other than
those specifically allocated to you in this section 6. In particular, but
without limiting the generality of the foregoing, you shall not be responsible,
except to the extent of the reasonable compensation of such of the Fund's
Trustees and officers as are directors, officers or employees of you whose
services may be involved, for the following expenses of the Fund: organization
expenses of the Fund (including out-of-pocket expenses, but not including your
overhead or employee costs); fees payable to you and to any other Fund advisors
or consultants; legal expenses; auditing and accounting expenses; maintenance
of books and records which are required to be maintained by the Fund's
custodian or other agents of the Trust; telephone, telex, facsimile, postage
and other communications expenses; taxes and governmental fees; fees, dues and
expenses incurred by the Fund in connection with membership in investment
company trade organizations; fees and expenses of the Fund's accounting agent,
custodians, subcustodians, transfer agents, dividend disbursing agents and
registrars; payment for portfolio pricing or valuation services to pricing
agents, accountants, bankers and other specialists, if any; expenses of
preparing share certificates and, except as provided below in this section 6,
other expenses in connection with the issuance, offering, distribution, sale,
redemption or repurchase of securities issued by the Fund; expenses relating to
investor and public relations; expenses and fees of registering or qualifying
Shares of the Fund for sale; interest charges, bond premiums and other
insurance expense; freight, insurance and other charges in connection with the
shipment of the Fund's portfolio securities; the compensation and all expenses
(specifically including travel expenses relating to Trust business) of
Trustees, officers and employees of the Trust who are not affiliated persons of
you; brokerage commissions or other costs of acquiring or disposing of any
portfolio securities of the Fund; expenses of printing and distributing
reports, notices and dividends to shareholders; expenses of printing and
mailing Prospectuses and SAIs of the Fund and supplements thereto; costs of
stationery; any litigation expenses; indemnification of Trustees and officers
of the Trust; costs of shareholders' and other meetings; and travel expenses
(or an appropriate portion thereof) of Trustees and officers of the Trust who
are Trustees, officers or employees of you to the extent that such expenses
relate to attendance at meetings of the Board of Trustees of the Trust or any
committees thereof or advisors thereto held outside of Boston, Massachusetts or
New York, New York.
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You shall not be required to pay expenses of any activity which is
primarily intended to result in sales of Shares of the Fund if and to the
extent that (i) such expenses are required to be borne by a principal
underwriter which acts as the distributor of the Fund's Shares pursuant to an
underwriting agreement which provides that the underwriter shall assume some or
all of such expenses, or (ii) the Trust on behalf of the Fund shall have
adopted a plan in conformity with Rule 12b-1 under the 1940 Act providing that
the Fund (or some other party) shall assume some or all of such expenses. You
shall be required to pay such of the foregoing sales expenses as are not
required to be paid by the principal underwriter pursuant to the underwriting
agreement or are not permitted to be paid by the Fund (or some other party)
pursuant to such a plan.
7. Management Fee and Payment of Certain Expenses. As you
expect to receive additional compensation under investment management
agreements currently in effect between you and the Underlying Funds due to
growth in the assets of the Underlying Funds resulting from investments in the
Underlying Funds by the Portfolios, you will not be paid a fee for the services
described in sections 3 and 5 hereof.
8. Avoidance of Inconsistent Position; Services Not Exclusive.
In connection with purchases or sales of portfolio securities and other
investments for the account of the Fund, neither you nor any of your directors,
officers or employees shall act as a principal or agent or receive any
commission. You or your agent shall arrange for the placing of all orders for
the purchase and sale of portfolio securities and other investments for the
Fund's account with brokers or dealers selected by you in accordance with Fund
policies as expressed in the Registration Statement. If any occasion should
arise in which you give any advice to clients of yours concerning the Shares of
the Fund, you shall act solely as investment counsel for such clients and not
in any way on behalf of the Fund.
Your services to the Fund pursuant to this Agreement are not to be
deemed to be exclusive and it is understood that you may render investment
advice, management and services to others. In acting under this Agreement, you
shall be an independent contractor and not an agent of the Trust. Whenever the
Fund and one or more other accounts or investment companies advised by you have
available funds for investment, investments suitable and appropriate for each
shall be allocated in accordance with procedures believed by you to be
equitable to each entity. Similarly, opportunities to sell securities shall be
allocated in a manner believed by you to be equitable. The Fund recognizes that
in some cases this procedure may adversely affect the size of the position that
may be acquired or disposed of for the Fund.
9. Limitation of Liability of Manager. As an inducement to your
undertaking to render services pursuant to this Agreement, the Trust agrees
that you shall not be liable under this Agreement for any error of judgment or
mistake of law or for any loss suffered by the Fund 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 you against any
liability to the Trust, the Fund or its shareholders to which you would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties, or by reason of your reckless
disregard of your obligations and duties hereunder. Any person, even though
also employed by you, who may be or become an employee of and paid by the Fund
shall be deemed, when acting within the scope of his or her employment by the
Fund, to be acting in such employment solely for the Fund and not as your
employee or agent.
10. Duration and Termination of This Agreement. This Agreement
shall remain in force until September 30, 2002 and continue in force from year
to year thereafter, but only so long as such continuance is specifically
approved at least annually (a) by the vote of a majority of the Trustees who
are not parties to this Agreement or interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Trustees of the Trust, or by the vote of a majority of
the outstanding voting securities of the Fund. The aforesaid requirement that
continuance of this Agreement be "specifically approved at least annually"
shall be construed in a
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manner consistent with the 1940 Act and the rules and regulations thereunder and
any applicable SEC exemptive order therefrom.
This Agreement may be terminated with respect to the Fund at any time,
without the payment of any penalty, by the vote of a majority of the
outstanding voting securities of the Fund or by the Trust's Board of Trustees
on 60 days' written notice to you, or by you on 60 days' written notice to the
Trust. This Agreement shall terminate automatically in the event of its
assignment.
11. Amendment of this 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 whom enforcement of the
change, waiver, discharge or termination is sought, and no amendment of this
Agreement shall be effective until approved in a manner consistent with the
1940 Act and rules and regulations thereunder and any applicable SEC exemptive
order therefrom.
12. Limitation of Liability for Claims. The Declaration, a copy
of which, together with all amendments thereto, is on file in the Office of the
Secretary of The Commonwealth of Massachusetts, provides that the name "Xxxxxxx
Pathway Series" refers to the Trustees under the Declaration collectively as
Trustees and not as individuals or personally, and that no shareholder of the
Fund, or Trustee, officer, employee or agent of the Trust, shall be subject to
claims against or obligations of the Trust or of the Fund to any extent
whatsoever, but that the Trust estate only shall be liable.
You are hereby expressly put on notice of the limitation of liability
as set forth in the Declaration and you agree that the obligations assumed by
the Trust on behalf of the Fund pursuant to this Agreement shall be limited in
all cases to the Fund and its assets, and you shall not seek satisfaction of
any such obligation from the shareholders or any shareholder of the Fund or any
other series of the Trust, or from any Trustee, officer, employee or agent of
the Trust. You understand that the rights and obligations of each Fund, or
series, under the Declaration are separate and distinct from those of any and
all other series.
13. Miscellaneous. The captions in this Agreement are included
for convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. 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 interpreting the provisions of this Agreement, the definitions
contained in Section 2(a) of the 1940 Act (particularly the definitions of
"affiliated person," "assignment" and "majority of the outstanding voting
securities"), as from time to time amended, shall be applied, subject, however,
to such exemptions as may be granted by the SEC by any rule, regulation or
order.
This Agreement shall be construed in accordance with the laws of The
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause
the Fund to fail to comply with the requirements of Subchapter M of the Code.
This Agreement shall supersede all prior investment advisory or
management agreements entered into between you and the Trust on behalf of the
Fund.
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If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
XXXXXXX PATHWAY SERIES, on
behalf of Growth Portfolio
By: /s/Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
Vice President
The foregoing Agreement is hereby accepted as of the date hereof.
DEUTSCHE INVESTMENT MANAGEMENT
AMERICAS INC.
By: /s/Xxxx X. Xxxxxx
------------------------------
Xxxx X. Xxxxxx
Managing
Director
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