Exhibit 99.d (2)
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of the 25th day of April, 2003 by and among Deutsche
Asset Management, Inc., a Delaware corporation (the `Investment Adviser'), and
Northern Trust Investments, Inc., an Illinois trust company (the `Subadviser').
WHEREAS, Asset Management Portfolio (the `Trust' or the `Portfolio') is
an open-end, management investment company, registered under the Investment
Company Act of 1940, as amended (the `1940 Act');
WHEREAS, the Investment Adviser and the Subadviser are investment
advisers registered under the Investment Advisers Act of 1940 (the `Advisers
Act');
WHEREAS, the Trust has entered into an Investment Advisory Agreement,
dated April 25, 2003 with the Investment Adviser (the `Advisory Agreement')
pursuant to which the Investment Adviser has agreed to provide certain
management services to the Portfolio;
WHEREAS, pursuant to the provisions of the Advisory Agreement, the
Investment Adviser may delegate any or all of its portfolio management
responsibilities under that agreement to one or more subadvisers;
WHEREAS, the Investment Adviser has selected the Subadviser to act as a
sub-investment adviser of the Portfolio and to provide certain other services,
as more fully set forth below, and the Subadviser is willing to act as such
sub-investment adviser and to perform such services under the terms and
conditions hereinafter set forth;
NOW, THEREFORE, the Investment Adviser, the Trust and the Subadviser
agree as follows:
1. Investment Advisory and Management Services. Subject to and in
accordance with the provisions hereof, the Investment Adviser hereby appoints
the Subadviser to serve as sub-investment adviser to perform the various
investment advisory and other services for the Portfolio set forth herein and,
subject to the restrictions set forth herein, hereby delegates to the Subadviser
the authority vested in the Investment Adviser pursuant to the Advisory
Agreement to the extent necessary to enable the Subadviser to perform its
obligations under this Agreement, and the Subadviser hereby accepts such
appointment.
Subject to the supervision and control of the Investment Adviser and
the Board of Trustees, the Subadviser will regularly provide the Portfolio with
investment advice and investment management services concerning the investments
of the Portfolio. The Subadviser will determine what securities shall be
purchased, held, sold or reinvested by the Portfolio and what portion of the
Portfolio's assets shall be held uninvested in cash and cash equivalents,
subject at all times to: (i) the provisions of the Trust's Declaration of Trust
and By-laws, (ii) the requirements of the 1940 Act, and the rules and
regulations thereunder, (iii) the investment objectives, policies and
restrictions applicable to the Portfolio (including, without limitation, the
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provisions of the Internal Revenue Code of 1986, as amended (the `Code')
applicable to regulated investment companies), as each of the same shall be from
time to time in effect or set forth in the Portfolio's Prospectus and Statement
of Additional Information, and (iv) any other investment guidelines, policies or
limitations the Board of Trustees or the Investment Adviser may from time to
time establish and deliver in writing to the Subadviser.
To carry out such determinations the Subadviser will exercise full
discretion, subject to the preceding paragraph, and act for the Portfolio in the
same manner and with the same force and effect as the Trust might or could do
with respect to purchases, sales or other transactions, as well as with respect
to all other things necessary or incidental to the furtherance or conduct of
such purchases, sales or other transactions.
The Subadviser will also make its officers and employees available to
meet with the officers of the Investment Adviser and the Trust's officers and
Trustees on due notice to review the investments and investment program of the
Portfolio in the light of current and prospective economic and market
conditions. In addition, the Subadviser shall, on the Subadviser's own
initiative, and as reasonably requested by the Investment Adviser, for itself
and on behalf of the Portfolio, furnish to the Investment Adviser from time to
time whatever information the Investment Adviser reasonably believes appropriate
for this purpose. From time to time as the Board of Trustees of the Trust or the
Investment Adviser may reasonably request, the Subadviser will furnish to the
Investment Adviser and Trust's officers and to each of its Trustees, at the
Subadviser's expense, reports on portfolio transactions and reports on issuers
of securities held by the Portfolio, all in such detail as the Trust or the
Investment Adviser may reasonably request. In addition, the Subadviser shall
provide advice and assistance to the Investment Adviser as to the determination
of the value of securities held or to be acquired by the Portfolio for valuation
purposes in accordance with the process described in the Portfolio's current
Prospectus or Statement of Additional Information.
The Subadviser shall maintain all accounts, books and records as
required of an investment adviser of a registered investment company pursuant to
the 1940 Act and the rules and regulations thereunder relating to its
responsibilities provided hereunder with respect to the Portfolio, and shall
preserve such records for the periods and in a manner prescribed by under the
1940 Act and the rules and regulations thereunder. The Subadviser shall maintain
and enforce adequate security procedures with respect to all materials, records,
documents and data relating to any of its responsibilities pursuant to this
Agreement including all means for the effecting of securities transactions. The
Subadviser agrees that all such records are the property of the Trust, and will
be surrendered to the Trust promptly upon request. The Subadviser shall permit
the Investment Adviser, the Portfolio's officers and its independent public
accountants to inspect and audit such records pertaining to the Portfolio at
reasonable times during normal business hours upon due notice.
In the performance of its duties hereunder, the Subadviser is and shall
be an independent contractor and, except as expressly provided for herein or
otherwise expressly provided or authorized in writing by the Investment Adviser,
shall have no authority to act for or represent any Portfolio or the Trust in
any way or otherwise be deemed to be an agent of any Portfolio, the Trust or of
the Investment Adviser. If any occasion should arise in which the Subadviser
gives
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any advice to its clients concerning the shares of the Portfolio, the Subadviser
will act solely as investment counsel for such clients and not in any way on
behalf of the Portfolio. The Subadviser's services to the Portfolio pursuant to
this Agreement are not to be deemed to be exclusive, and it is understood that
the Subadviser may render investment advice, management and other services to
others.
Subject to and in accordance with the provisions hereof and any
direction of the Board of Trustees, the Subadviser shall vote, pursuant to
procedures set forth and described to the Trustees, all proxies solicited by or
with respect to issuers of securities in which the assets of the Portfolio may
be invested from time to time.
2. (a) Expenses. The Subadviser will bear its own costs of performing
its obligations under this Agreement, including, but not limited to, the
following: all necessary investment and management facilities, including
salaries of personnel required for it to execute its duties faithfully, and
administrative facilities, including bookkeeping, clerical personnel and
equipment necessary for the efficient conduct of the investment affairs of the
Portfolio.
The Subadviser will not be responsible for expenses of the Investment
Adviser or the Portfolio, including, but not limited to, the following: the
Portfolio's legal, auditing and accounting expenses; expenses of maintenance of
the Portfolio's books and records other than those required to be maintained by
the Subadviser, including computation of the Portfolio's daily net asset value
per share and dividends; interest, taxes, governmental fees and membership dues
incurred by the Portfolio; fees of the Portfolio's custodians, transfer agents,
registrars or other agents; expenses of preparing the Portfolio's share
certificates; expenses relating to the redemption or repurchase of the
Portfolio's shares; expenses of registering and qualifying Portfolio shares for
sale under applicable federal and state laws; expenses of preparing, setting in
print, printing and distributing prospectuses, reports, notices and dividends to
Portfolio investors (except that the Subadviser will be responsible for costs
associated with reprints of or supplements to such documents necessitated solely
by actions of the Subadviser, including, without limitation, a change of control
of the Subadviser or any change in the portfolio manager or managers assigned by
the Subadviser to manage the Portfolio); cost of Portfolio stationery; costs of
Trustee, shareholder and other meetings of the Trust or Portfolio (except that
the Subadviser will be responsible for costs associated with any shareholder
meeting, proxy solicitation or proxy statement or information statement, in each
case, to the extent necessitated by actions or events involving the Subadviser,
including, without limitation, a change of control of the Subadviser); traveling
expenses of officers, Trustees and employees of the Trust or Portfolio; fees of
the Trust's Trustees and salaries of any officers or employees of the Trust or
Portfolio; and the Portfolio's pro rata portion of premiums on any fidelity bond
and other insurance covering the Trust or Portfolio and their officers and
Trustees.
(b) Compensation of Subadviser. (i) Until such time as the Subadviser
is paid pursuant to Section 2(b)(ii) of this Agreement, and during the period
when this Agreement is in effect, as compensation for all investment advisory
and management services to be rendered hereunder, the Investment Adviser will
pay the Subadviser an annual subadvisory fee, paid monthly in arrears, as set
forth on Schedule A to this Agreement. With respect to such
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subadvisory fee, the Portfolio shall be the following `Investment Type,' as set
forth on Schedule A.
For purposes of determining the applicable fees under this Section
2(b)(i), the assets under management being referred to in the column `Fee Tier
Structure by Assets under Management' of Schedule A shall refer to the average
daily net assets of the Portfolio.
For purposes of this Section 2(b)(i), the value of net assets of the
Portfolio shall be computed as required by the 1940 Act and in accordance with
any procedures approved by the Board of Trustees for the computation of the
value of the net assets of the Portfolio in connection with the determination of
net asset value of its shares. On any day that the net asset value determination
is suspended as specified in the Portfolio's Prospectus, the net asset value for
purposes of calculating the advisory fee shall be calculated as of the date last
determined. The Investment Adviser represents to the Subadviser that, so long as
the subadvisory fee is determined in accordance with this Section 2(b), the same
computation of net asset value shall be used in connection with determining the
investment advisory fee of the Investment Adviser, and the Investment Adviser
shall promptly notify the Subadviser in writing if the two computations of net
asset value ever differ from each other.
(ii) (A) Notwithstanding anything to the contrary thereto in
Section 2(b)(i), at such time as the Adviser determines, as compensation for all
investment advisory and management services to be rendered hereunder during the
period of time beginning as of the day and year first written above and ending
twenty-four (24) months thereafter (such period being the `Initial Period of the
Agreement'), the Adviser shall pay the Subadviser the annual subadvisory fee set
forth on Schedule A to this Agreement. The subadvisory fee will be paid monthly
in arrears. With respect to such fees, the Portfolio shall have the same
`Investment Type' as utilized in Section 2(b)(i) above.
For purposes of determining the applicable fees under this Section
2(b)(ii)(A), the assets under management being referred to in the column `Fee
Tier Structure by Assets under Management' of Schedule A shall refer to assets
under management being calculated by aggregating the assets of the same
Investment Type as the Portfolio for which the Subadviser provides investment
management services to the `DB Group' or the `Preferred Clients,' each as
defined below, pursuant to a subadvisory agreement substantially similar to this
Agreement across all vehicles, structures, funds, etc. (including, without
limitation, mutual funds, commingled funds and separately managed accounts)
within the same Investment Type as the Portfolio.
(B) Following the Initial Period of the Agreement, the investment
management fees paid by the Adviser to the Subadviser hereunder shall be, in the
aggregate, (i) no greater than those which the Subadviser charges to any of its
other clients for `Substantially Similar Mandates' with `Substantially Similar
Levels of Assets under Management,' each as defined below, and (ii) competitive
with the aggregate investment management fees customarily charged by leading
investment advisers that compete in the particular investment management market
for Substantially Similar Mandates with Substantially Similar Levels of Asset
Under Management. Such fees shall be adjusted, beginning as of the first day
following the Initial Period of the
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Agreement and thereafter as of each January 1, so as to comply with the
immediately preceding sentence.
`Substantially Similar Mandate' means a mandate to provide to another
client of a person or entity (other than an affiliate of such person or entity)
investment management services that are substantially similar (including, for
purposes of this definition, on the basis of index, particular category of
client, type of investment vehicle, type and level of service, degree of
customization and domicile) to, and with substantially similar service levels
and performance objectives as, the investment advisory and management services
provided hereunder.
The investment advisory and management services provided hereunder to
the Portfolio shall have a `Substantially Similar Level of Assets Under
Management' as a mandate for another client of a person or entity (other than an
affiliate of such person or entity) if either (a) the then aggregate Fair Market
Value of assets of the Portfolio is substantially similar to or greater than the
then aggregate Fair Market Value of assets under such mandate of such other
client or (b) the then aggregate Fair Market Value of assets under all mandates
for the Subadviser to provide passive equity, passive fixed income and enhanced
equity investment management services for all Preferred Clients, is
substantially similar to or greater than the then aggregate Fair Market Value of
assets for all mandates for passive equity, passive fixed income and enhanced
equity investment management services provided to such other client (other than
the Preferred Clients) of such person or entity and such client's affiliates.
`Fair Market Value' as used herein means the fair market value based on industry
standards reasonably acceptable to the parties hereunder.
`Preferred Client' means (a) any person or entity that is a member of
the `DB Group,' i.e., Deutsche Bank AG and its affiliates, or a client of any
member of the DB Group, for which the Subadviser begins to provide passive
equity, passive fixed income or enhanced equity investment management services
after January 31, 2003 and (b) any person who receives passive equity, passive
fixed income or enhanced equity investment management services from the
Subadviser pursuant to a subadvisory agreement substantially similar to this
Agreement and to which a member of the DB Group is a party; provided that
`Preferred Client' shall not include a client of the DB Group (except a person
or entity to the extent a party to, or otherwise covered by, a subadvisory
agreement of the type described in clause (b)) whose annualized revenues are
included in the purchase price paid by the Subadviser to Deutsche Bank AG in
accordance with the Amended and Restated Sale and Purchase Agreement dated as of
January 31, 2003.
(iii) The Portfolio shall have no responsibility to pay any investment
management fee to the Subadviser pursuant to this Agreement, and the
Subadviser's fee shall be payable solely by the Investment Adviser from its fee
as investment adviser. For any period less than a full fiscal month during which
the payment of the annual fee to the Subadviser pursuant to this Section 2(b) is
in effect, the fee shall be prorated according to the proportion which such
period bears to a full fiscal month.
3. Obligations of the Investment Adviser.
(a) The Investment Adviser shall provide (or cause the Trust's
custodian to provide) timely information to the Subadviser regarding such
matters as the composition of
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assets in the Portfolio, cash requirements and cash available for investment in
the Portfolio, and all other information as may be reasonably necessary for the
Subadviser to perform its responsibilities hereunder.
(b) The Investment Adviser has furnished the Subadviser copies
of the Portfolio's Prospectus and Statement of Additional Information,
provisions of the Trust's Declaration of Trust and bylaws that are relevant to
the services contemplated by this Agreement, and all investment guidelines,
policies or limitations the Board of Trustees or the Investment Adviser has from
time to time established that are applicable to the Portfolio, and agrees during
the continuance of this Agreement to furnish the Subadviser copies of any
revisions or supplements thereto at, or, if practicable, before the time the
revisions or supplements become effective.
4. Brokerage Transactions. Subject to the provisions of this Section 4
and absent instructions from the Investment Adviser or the Trust, the Subadviser
will have full discretionary authority to place orders for the purchase and sale
of securities for the account of the Portfolio with such brokers or dealers as
it may select. In the selection of such brokers or dealers and the placing of
such orders, the Subadviser is directed at all times to seek for the Portfolio
the most favorable best execution and net price available. In assessing the best
execution and net price available for any transaction, the Subadviser shall
consider all factors it deems relevant, including, without limitation, the
breadth of the market in and the price of the security, the financial condition
and execution capability of the broker or dealer, the quality of research
provided and the reasonableness of the commission, if any, with respect to the
specific transaction and on a continuing basis.
It is also understood, however, that it is desirable for the Portfolio
that the Subadviser have access to supplemental investment and market research
and security and economic analyses provided by certain brokers who may execute
brokerage transactions at higher commissions to the Portfolio than another
broker may have charged. Therefore, the Subadviser is authorized to place orders
for the purchase and sale of securities for the Portfolio with such brokers upon
a good faith determination that the commission paid is reasonable in relation to
the value of the brokerage and research services provided by such broker or
dealer, subject to applicable laws and regulations and review and direction by
the Investment Adviser and the Trust's Board of Trustees from time to time with
respect to the extent and continuation of this practice. The Subadviser shall
provide such information as the Investment Adviser or the Trustees shall from
time to time request concerning the commissions paid by the Portfolio and
research and other services provided to the Subadviser by brokers executing
transactions on behalf of the Portfolio.
On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interests of the Portfolio as well as other clients
of the Subadviser, the Subadviser, to the extent permitted by applicable laws
and regulations, may, but shall be under no obligation to, aggregate the
securities to be sold or purchased in order to obtain the most favorable price
or lower brokerage commissions and efficient execution. In such event,
allocation of securities so sold or purchased, as well as the expenses incurred
in the transaction, will be made by the Subadviser in the manner the Subadviser
considers to be the most equitable and consistent with its fiduciary obligations
to the Portfolio and to such other clients.
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The Subadviser may buy securities for the Portfolio at the same time it
is selling such securities for another client account and may sell securities
for the Portfolio at the time it is buying such securities for another client
account. In such cases, subject to applicable legal and regulatory requirements,
and in compliance with such procedures of the Trust as may be in effect from
time to time, the Subadviser may effectuate cross transactions between the
Portfolio and such other account if it deems this to be advantageous to both of
the accounts involved.
Notwithstanding the foregoing, the Subadviser agrees that the
Investment Adviser shall have the right by written notice to identify securities
that may not be purchased on behalf of the Portfolio and/or brokers and dealers
through or with which portfolio transactions on behalf of the Portfolio may not
be effected, including, without limitation, brokers or dealers affiliated with
the Investment Adviser. The Subadviser shall refrain from purchasing such
securities for the Portfolio or directing any portfolio transaction to any such
broker or dealer on behalf of the Portfolio, unless and until the written
approval of the Investment Adviser or the Board of Trustees, as the case may be,
is so obtained. In addition, the Subadviser agrees that it shall not direct
portfolio transactions for the Portfolio with or through the Subadviser or any
broker or dealer that is an `affiliated person' of the Subadviser (as defined in
the 1940 Act or interpreted under applicable rules and regulations of the
Securities and Exchange Commission) without the prior written approval of the
Board of Trustees and the Investment Adviser and then only as permitted under
the 1940 Act.
In connection with purchases or sales of portfolio securities for the
account of the Portfolio, neither the Subadviser nor any of its affiliated
persons, will act as a principal in connection with the purchase or sale of
investment securities by the Portfolio, except as permitted by applicable law
and with the express written consent of the Board of Trustees and the Investment
Adviser.
The Subadviser will advise the Portfolio's custodian on a prompt basis
of each purchase and sale of a portfolio security, specifying the name of the
issuer, the description and amount or number of shares of the security purchased
or sold, the market price, commission and gross or net price, trade date,
settlement date and identity of the effecting broker or dealer, and such other
information as may be reasonably required.
5. Standard of Care and Liability of Subadviser. The Subadviser will
not be liable for any loss sustained by reason of the adoption of any investment
policy or the purchase, sale, or retention of any security on the recommendation
of the Subadviser, whether or not such recommendation shall have been based upon
its own investigation and research or upon investigation and research made by
any other individual, firm or corporation, if such recommendation shall have
been made and such other individual, firm, or corporation shall have been
selected with due care and in good faith; but nothing herein contained will be
construed to protect the Subadviser against any liability to the Investment
Adviser, the Portfolio or its shareholders by reason of: (a) the Subadviser's
causing the Portfolio to be in violation of any applicable federal or state law,
rule or regulation or any investment policy or restriction set forth in the
Portfolio's Prospectus or Statement of Additional Information or any written
guidelines, policies or instruction provided in writing by the Trust's Board of
Trustees or the Investment Adviser, (b) the Subadviser's causing the Portfolio
to fail to satisfy the diversification or source
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of income requirements of Subchapter M of the Code or (c) the Subadviser's
willful misfeasance, bad faith or gross negligence generally in the performance
of its duties hereunder or its reckless disregard of its obligations and duties
under this Agreement.
6. Term and Termination. This Agreement shall remain in force until two
(2) years from the day and year first written above, and from year to year
thereafter, but only so long as such continuance, and the continuance of the
Investment Adviser as investment adviser of the Portfolio, is specifically
approved at least annually by the vote of a majority of the Trustees who are not
interested persons of the Subadviser or the Investment Adviser of the Portfolio,
cast in person at a meeting called for the purpose of voting on such approval
and by a vote of the Board of Trustees or of a majority of the outstanding
voting securities of the Portfolio. The aforesaid requirement that continuance
of this Agreement be `specifically approved at least annually' shall be
construed in a manner consistent with the 1940 Act and the rules and regulations
thereunder. This Agreement may, upon 60 days' written notice to the Subadviser,
be terminated at any time without the payment of any penalty, (a) by the
Portfolio, by the Board of Trustees or by vote of a majority of the outstanding
voting securities of the Portfolio, or (b) by the Investment Adviser. This
Agreement may, upon 120 days' written notice to the Trust and the Investment
Adviser, be terminated at any time, without payment of any penalty, by the
Subadviser. This Agreement shall automatically terminate in the event of its
assignment or in the event of the termination of the Advisory Agreement. The
Investment Adviser agrees that it shall promptly notify the Subadviser in
writing upon the termination of the Advisory Agreement. In addition, the
Investment Adviser shall have the right to terminate this Agreement upon
immediate written notice if the Subadviser becomes statutorily disqualified from
performing its duties under this Agreement or otherwise is legally prohibited
from operating as an investment adviser. Upon the effective date of termination
of this Agreement, the Subadviser shall deliver all books and records of the
Trust and the Portfolio to such entity as the Trust may designate as a successor
subadviser, or to the Investment Adviser. The provisions of Sections 5, 13, 14,
15, 16, 18 and 19 shall survive termination of this Agreement. In addition, the
obligation to pay to the Subadviser any compensation earned by the Subadviser
under this Agreement but not paid as of the termination of this Agreement shall
survive termination of this Agreement.
7. Interpretation of Terms; Captions. In interpreting the provisions of
this Agreement, the definitions contained in Section 2(a) of the 1940 Act and
the rules and regulations thereunder (including specifically the definitions of
`interested person,' `affiliated person,' `assignment,' `control' and `vote of a
majority of the outstanding voting securities'), shall be applied, subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation or order. Captions used herein are for
reference only and shall not limit or otherwise affect the meaning of any
provision of this Agreement.
8. Registration Statement, Prospectus and Statement of Additional
Information Concerning Subadviser; Compliance Procedures and Information. The
Subadviser has reviewed the most recent amendment to the Registration Statement
of the Trust, relating to the Portfolio as filed with the Securities and
Exchange Commission under the 1940 Act (File No. 811-06699) and the current
Prospectus and Statement of Additional Information relating to the Portfolio,
and represents and warrants that with respect to disclosure about the Subadviser
or information relating directly or indirectly to the Subadviser, such
Registration Statement, Prospectus and
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Statement of Additional Information contain, on and after the effective date
thereof, no untrue statement of any material fact and do not omit any statement
of material fact which was required to be stated therein or necessary to make
the statements contained therein not misleading.
The Subadviser shall promptly provide such information as is necessary
to enable the Trust to prepare and update the Trust's Registration Statement
(and any supplement thereto) and the Portfolio's financial statements, and shall
notify the Trust promptly in the event any information contained therein
relating to the Subadviser or the Subadviser's management of the Portfolio
becomes inaccurate or incomplete under applicable law. The Subadviser
understands that the Trust and the Investment Adviser will rely on such
information in the preparation of the Trust's Registration Statement and the
Portfolio's financial statements, and hereby covenants that any such information
approved by the Subadviser expressly for use in such registration and/or
financial statements shall be true and complete in all material respects.
The Subadviser and Investment Adviser each shall establish compliance
procedures reasonably calculated to ensure compliance at all times with: all
applicable provisions of the 1940 Act and the Advisers Act, and any rules and
regulations adopted thereunder; Subchapter M of the Code; the provisions of the
Registration Statement; the governing documents of the Portfolio and other
written policies, guidelines and instructions; and any other applicable
provisions of state, federal or foreign law. The Subadviser shall provide to the
Investment Adviser and/or the Trustees such information as it or they may
reasonably request in order to review the adequacy of the Subadviser's
compliance procedures. The Investment Adviser shall provide to the Subadviser
such information as the Subadviser may reasonably request in order to review the
adequacy of the compliance procedures of the Investment Adviser.
The Subadviser and Investment Adviser each shall maintain and enforce a
Code of Ethics which in form and substance is consistent with industry norms
existing from time to time. The Subadviser and Investment Adviser each agree to
report to the other party hereto any material violations of the Code of Ethics
affecting the Portfolio of which its senior management becomes aware. The
Subadviser shall promptly notify the Investment Adviser and the Trustees upon
the adoption of any material change to its Code of Ethics and provide copies
thereof to the Investment Adviser and the Trustees so that the Trustees,
including a majority of the Trustees who are not interested persons of the
Portfolio, may consider approval of such change promptly after its adoption by
the Subadviser. The Subadviser shall also provide the Portfolio with a copy of
any amendments to its Code of Ethics that do not represent a material change to
such Code of Ethics. The Investment Adviser shall provide the Subadviser with a
copy of any amendment to its Code of Ethics if such amendment concerns providing
investment advisory services to the Portfolio.
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9. Insurance. The Subadviser and Investment Adviser each shall maintain
for the duration hereof, with an insurer acceptable to the other party hereto, a
blanket bond and professional liability or errors and omissions insurance in an
amount or amounts reasonably acceptable to the other party hereto.
10. Representations of the Investment Adviser. The Investment Adviser
represents, warrants and agrees that:
(i) the Investment Adviser is a corporation duly incorporated
under the laws of Delaware;
(ii) the Investment Adviser is duly registered as an
investment adviser under the Advisers Act;
(iii) the Investment Adviser has been duly appointed by the
Trustees and shareholders of the Portfolio to provide investment services to the
Portfolio as contemplated by the Advisory Agreement;
(iv) the execution, delivery and performance of this Agreement
are within the Investment Adviser's powers, have been and remain duly authorized
by all necessary action and will not violate or constitute a default under any
applicable law or regulation or of any decree, order, judgment, agreement or
instrument binding on the Investment Adviser;
(v) no consent of any applicable governmental authority or
body is necessary, except for such consents as have been obtained and are in
full force and effect, and all conditions of which have been duly complied with;
and
(vi) this agreement constitutes a legal, valid and binding
obligation enforceable against the Investment Adviser.
The Investment Adviser agrees to notify the Subadviser promptly and in
writing in the event that any of the above ceases to be correct while this
Agreement is in effect.
11. Representations of the Subadviser. The Subadviser represents,
warrants and agrees that:
(i) the Subadviser is a trust company established pursuant to
the laws of Illinois;
(ii) the Subadviser is duly registered as an investment
adviser under the Advisers Act;
(iii) the execution, delivery and performance of this
Agreement are within the Subadviser's powers, have been and remain duly
authorized by all necessary action and will not violate or constitute a default
under any applicable law or regulation or of any decree, order, judgment,
agreement or instrument binding on the Subadviser;
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(iv) no consent of any applicable governmental authority or
body is necessary, except for such consents as have been obtained and are in
full force and effect, and all conditions of which have been duly complied with;
and
(v) this agreement constitutes a legal, valid and binding
obligation enforceable against the Subadviser.
The Subadviser agrees to notify the Investment Adviser promptly and in
writing in the event that any of the above ceases to be correct while this
Agreement is in effect.
12. a. Certain Covenants of the Subadviser. The Subadviser will
promptly notify the Trust and Investment Adviser in writing of the occurrence of
any event which could have a material impact on the performance of its
obligations pursuant to this Agreement, including without limitation:
(i) the occurrence of any event which could disqualify the
Subadviser from serving as an investment adviser of a registered investment
company pursuant to the 1940 Act and the rules and regulations thereunder and
the Advisers Act and the rules and regulations thereunder;
(ii) any change in the Subadviser's overall business
activities that may have a material adverse affect on the Subadviser's ability
to perform under its obligations under this Agreement;
(iii) any event that would constitute a change in control of
the Subadviser or an assignment by the Subadviser of this Agreement;
(iv) any change in the portfolio manager of the Portfolio; and
(v) except to the extent prohibited by applicable law or
order, the existence of any pending or threatened audit, investigation,
complaint, examination or other inquiry relating to the Portfolio conducted by
any state or federal governmental regulatory authority.
b. Certain Covenants of the Investment Adviser. The Investment Adviser
will promptly notify the Subadviser in writing of the occurrence of any event
which could have a material impact on the performance of its obligations to the
Portfolio, including without limitation:
(i) the occurrence of any event which could disqualify the
Investment Adviser from serving as an investment adviser of a registered
investment company pursuant to the 1940 Act and the rules and regulations
thereunder and the Advisers Act and the rules and regulations thereunder;
(ii) any change in the overall business activities of the
Investment Adviser that may have a material adverse affect on its ability to
perform investment advisory services to the Portfolio;
11
(iii) any event that would constitute a change in control of
the Investment Adviser or an assignment of the Advisory Agreement; and
(iv) except to the extent prohibited by applicable law or
order, the existence of any pending or threatened audit, investigation,
complaint, examination or other inquiry relating to the Portfolio conducted by
any state or federal governmental regulatory authority.
13. Regulation. Except to the extent prohibited by applicable law or
order, the Subadviser agrees that it will immediately forward, upon receipt, to
the Investment Adviser, for itself and as agent for the Portfolio, any
correspondence from the Securities and Exchange Commission or other regulatory
authority that relates to the Portfolio including routine regulatory
examinations or inspections. Similarly, except to the extent prohibited by
applicable law or order, the Investment Adviser agrees that it will immediately
forward, upon receipt, to the Subadviser nay correspondence from the Securities
and Exchange Commission or other regulatory authority that relates to the
Portfolio, including routine regulatory examinations or inspections. Subject to
Section 18 hereof, the Subadviser shall submit to all regulatory and
administrative bodies having jurisdiction over the services provided pursuant to
this Agreement any information, reports or other material which any such body by
reason of this Agreement may reasonably request or require pursuant to
applicable laws and regulations, and shall cooperate with the Trust and the
Investment Adviser in responding to requests or investigations of such
regulatory or administrative bodies or any internal investigation conducted by
the Trust or the Investment Adviser.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland without giving effect to the
choice of law principles thereof, except to the extent the laws of the State of
Maryland are in conflict with U.S. federal law, in which event U.S. federal law
will control.
15. Entire Agreement; Amendments. 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 or pursuant to applicable
orders or interpretations of the Securities and Exchange Commission.
16. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
17. Use of Name. The Subadviser shall not use the name of the
Investment Adviser, the Trust or the Portfolio in any advertisement, sales
literature or other communication to the public except in accordance with such
policies and procedures as shall be mutually agreed to in writing by the
Subadviser and the Investment Adviser. Similarly, the Investment Adviser agrees
that it shall not use the name of the Subadviser in any advertisement, sales
literature or other
12
communication to the public except in accordance with such polices and
procedures as shall be mutually agreed to in writing by the Investment Adviser
and the Subadviser.
18. Confidentiality. Each party agrees that it shall hold in strict
confidence all data and information obtained from another party hereto (unless
such information is or becomes readily ascertainable from public or published
information or trade sources) and shall ensure that its officers, employees and
authorized representatives do not disclose such information to others without
the prior written consent of the party from whom it was obtained, unless such
disclosure is required by the Securities and Exchange Commission, other
regulatory body with applicable jurisdiction, or the Portfolio's auditors, or in
the opinion of its counsel, applicable law, and then only with as much prior
written notice to the other party as is practicable under the circumstances.
19. Notices. Any notice under this Agreement shall be delivered, mailed
or faxed to the addresses or fax numbers set forth below, as the case may be, or
such other address or number as any party may specify in writing to the others:
If to the Investment Adviser:
Name: Deutsche Asset Management, Inc.
Address: Xxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Secretary
Tel: 000-000-0000
Fax: 000-000-0000
If to the Subadviser:
Name: Northern Trust Investments, Inc.
Address: 00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Senior Vice President
Tel: (000) 000-0000
Fax: (000) 000-0000
If delivered, such notices shall be deemed given upon receipt by the other party
or parties. If mailed, such notices shall be deemed given seven (7) days after
being mailed. If faxed, notices shall be deemed given on the next business day
after confirmed transmission to the correct fax number.
20. Execution in 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.
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
DEUTSCHE ASSET MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Its: Vice President
----------------------------------
NORTHERN TRUST INVESTMENTS, INC.
By: Xxxxxx Xxxxxx
----------------------------------
Its: Senior Vice President
----------------------------------
14
SCHEDULE A
FEES
================================================================================
Fee Tier Structure by Applicable
Portfolio Investment Type Assets under Management Fee
================================================================================
N/A S&P 500 On the first $2 billion 1.5 bps
-------------------------------------------
On the next $2 billion 1 bps
-------------------------------------------
Over $4 billion 0.5 bps
--------------------------------------------------------------------------------
N/A US Bond On the first $100 million 4 bps
-------------------------------------------
On the next $400 million 2 bps
-------------------------------------------
Over $500 million 1 bps
--------------------------------------------------------------------------------
N/A EAFE On the first $100 million 9 bps
-------------------------------------------
On the next $400 million 6.75 bps
-------------------------------------------
Over $500 million 3 bps
--------------------------------------------------------------------------------
N/A Small Cap On the first $100 million 8 bps
-------------------------------------------
On the next $400 million 4 bps
-------------------------------------------
Over $500 million 2 bps
--------------------------------------------------------------------------------
Asset Management Enhanced Domestic On the first $200 million 20 bps
Portfolio Equity -------------------------------------------
On the next $300 million 15 bps
-------------------------------------------
Over $500 million 12 bps
================================================================================
15
