Exhibit d(2)
INVESTMENT MANAGEMENT AGREEMENT
April 30, 2001
Deutsche Asset Management, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Deutsche Asset Management VIT Funds, a business trust organized under the
laws of the Commonwealth of Massachusetts (the "Trust"), hereby confirms its
agreement with Deutsche Asset Management, Inc. (the "Manager") regarding
investment management services to be provided by the Manager to those portfolios
of the Trust listed on Appendix A attached hereto (each, a "Fund" and
collectively, the "Funds").
1. Investment Description; Appointment
-----------------------------------
The Trust anticipates that each Fund will employ its capital by
investing and reinvesting in investments of the kind and in accordance with the
investment objective, policies and limitations specified in its Declaration of
Trust, dated January 19, 1996, as amended from time to time (the "Declaration of
Trust"), its By-laws, as amended from time to time, in the Funds' prospectuses
(the "Prospectus") and the statement of additional information (the "Statement")
filed with the Securities and Exchange Commission under the Investment Company
Act of 1940, as amended (the "1940 Act"), and the Securities Act of 1933, as
amended, as part of the Trust's Registration Statement on Form N-1A, as amended
from time to time, and in the manner and to the extent as may from time to time
be approved in the manner set forth in the Declaration of Trust. Copies of the
Funds' Prospectuses, Statement, Declaration of Trust and By-laws have been or
will be submitted to the Manager. Each Fund desires to employ and hereby appoint
the Manager to act as their investment adviser, to oversee the administration of
all aspects of the Funds' business and affairs and to supervise the performance
of professional services provided by others, including the administrator,
transfer agent, custodian and distributor to the Funds.
2. Services
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Subject to the overall supervision and direction of the Board of
Trustees of the Trust, the Manager shall have general responsibility for the
investment and management of the Funds' assets, subject to and in accordance
with each Fund's investment objective, policies and restrictions as stated in
the Prospectus and Statement, as from time to time in effect, and the
Declaration of Trust and By-laws, the 1940 Act and the Investment Advisors Act
of 1940, as the same may from time to time be amended. In discharging its
responsibility, the Manager shall, with respect to the index Funds, seek to
replicate as closely as possible the performance of the benchmark index, before
the deduction of Fund expenses and, with respect to all the Funds, shall
determine and monitor the investments of each of the Funds' investment
portfolios. In addition, the Manager shall have full authority to implement its
determinations by selecting and placing individual transactions on behalf of
each Fund.
3. Information Provided to the Trust
---------------------------------
The Manager will keep the Funds informed of developments materially
affecting the Funds' portfolios and, in addition to providing the Trust with
whatever statistical or other information the Trust may reasonably request with
respect to its investments, the Manager will, on its own initiative, furnish the
Trust from time to time with whatever information the Manager believes is
appropriate for this purpose.
4. Standard of Care
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The Manager shall exercise its best judgment in rendering the
services listed in paragraph 2 above. The Manager shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust 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 the
Manager against any liability to the Trust or to holders of the Funds' shares
("Shareholders") to which the Manager would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Manager's reckless disregard of
its obligations and duties under this Agreement.
5. Indemnification/Liability
-------------------------
(a) The Trust shall indemnify and hold the Manager harmless from and
against any and all claims, costs, expenses (including reasonable attorneys'
fees), losses, damages, charges, payments and liabilities of any sort or kind
which may be asserted against the Manager or for which the Manager may be held
to be liable in connection with this Agreement or the Manager's performance
hereunder (a "Claim"), unless such Claim resulted from a grossly negligent act
or omission to act or bad faith by the Manager in the performance of its duties
hereunder.
(b) In any case in which the Trust may be asked to indemnify or hold the
Manager harmless, the Manager will notify the Trust promptly after identifying
any situation which it believes presents or appears likely to present a claim
for indemnification against the Trust, although the failure to do so shall not
prevent recovery by the Manager, and shall keep the Trust advised with respect
to all developments concerning such situation. The Trust shall have the option
to defend the Manager against any Claim which may be the subject of this
indemnification, and, in the event that the Trust so elects, such defense shall
be conducted by counsel chosen by the Trust and satisfactory to the Manager, and
thereupon the Trust shall take over complete defense of the Claim and the
Manager shall sustain no further legal or other expenses in respect of such
Claim. The Manager will not confess any Claim or make any compromise in any
case in which the Trust will be asked to provide indemnification, except with
the Trust's prior written consent. The obligations of the parties hereto under
this Section 5 shall survive the termination of this Agreement.
(c) A copy of the Declaration of Trust of the Funds is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Trustees of the Funds as Trustees
and not individually and that the obligations of this instrument are not binding
upon any of the Trustees or Shareholders individually but are binding only upon
the assets and property of the Funds.
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6. Compensation
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In consideration of the services rendered pursuant to this Agreement, each
Fund will pay the Manager a fee at annual rates based on the Fund's average
daily net assets as set forth on Appendix A. These fees shall be computed daily
and shall be payable on the first business day of each month for services
performed the preceding month. Upon any termination of this Agreement before
the end of a month, the fee for such part of that month shall be prorated
according to the proportion that such period bears to the full monthly period
and shall be payable upon the date of termination of this Agreement. For the
purpose of determining fees payable to the Manager, the value of the Funds' net
assets shall be computed at the times and in the manner specified in the Funds'
Prospectuses and/or the Statement."
7. Expenses
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The Manager will bear all expenses in connection with the performance
of its services under this Agreement. The Trust will bear certain other expenses
to be incurred in its operation, including: (a) payment of the fees payable to
the Manager under paragraph 6 hereof; (b) organization expenses; (c) brokerage
fees and commissions; (d) taxes; (e) interest charges on borrowings; (f) the
costs of liability insurance or fidelity bond coverage for the Trust's officers
and employees, and directors' and officers' errors and omissions insurance
coverage; (g) legal, auditing and accounting fees and expenses; (h) charges of
the Trust's Custodian and Transfer and Dividend Disbursing Agent; (i) the
Trust's pro rata portion of dues, fees and charges of any trade association of
which the Trust is a member; (j) the expenses of printing, preparing,
distributing and mailing proxies, stock certificates and all reports required by
the Securities and Exchange Commission and State securities administrations,
including the Funds' prospectuses, Statements, and notices to shareholders; (k)
filing fees for the registration or qualification of the Funds and their shares
under federal or state securities laws; (l) the fees and expenses involved in
registering and maintaining registration of the Funds' shares with the
Securities and Exchange Commission and State securities administrations; (m) the
expenses of holding shareholder meetings; (n) the compensation, including fees,
of any of the Trust's unaffiliated directors, officers or employees; (o) all
expenses of computing the Funds' net asset value per share, including any
equipment or services obtained solely for the purpose of pricing shares or
valuing the Funds' investment portfolios; (p) expenses of personnel performing
shareholder servicing functions; and (q) litigation and other extraordinary or
non-recurring expenses and other expenses properly payable by the Trust or the
Funds.
8. Service to Other Companies or Accounts
--------------------------------------
The Trust understands that the Manager and its affiliates may act as
investment manager to fiduciary and other managed accounts and to one or more
other investment companies, and the Trust has no objection to their so acting,
provided that whenever the Trust and one or more other clients advised by the
Manager and its affiliates have available funds for investment, investments
suitable and appropriate for each will be allocated in a manner believed by the
Manager to be equitable to each client. The Trust recognizes that in some cases
this procedure may adversely affect whether a particular security is available
to the Trust, the size of the position obtainable for the Trust or the price at
which that position may be obtained or disposed. In addition, the Trust
understands that the persons
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employed by the Manager to assist in the performance of the Manager's duties
under this Agreement will not devote their full time to such service and nothing
contained in this Agreement shall be deemed to limit or restrict the right of
the Manager or any affiliate of the Manager to engage in and devote time and
attention to other businesses or to render services of any kind or nature.
9. Term of Agreement
-----------------
This Agreement shall become effective on the date hereof, shall continue
in effect for two years and thereafter shall continue for successive annual
periods, provided such continuance is specifically approved at least annually by
(i) the Trust's Trustees or (ii) a vote of a "majority" (as defined in the 0000
Xxx) of each Fund's outstanding voting securities (as defined in the 1940 Act),
provided that in either event the continuance is also approved by a majority of
the Trustees who are not "interested persons" (as defined in the 0000 Xxx) of
any party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable with respect
to each Fund, without penalty, on 60 days' written notice, by the Trust's
Trustees or by vote of holders of a majority of each Fund's outstanding voting
securities, or upon 60 days' written notice, by the Manager. This Agreement
will also terminate automatically in the event of its assignment (as defined in
the 1940 Act).
10. Governing Law
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This Agreement shall be governed by and construed in accordance with the
laws of the State of New York giving effect to the conflict of law rules
thereof.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning the enclosed
copy of this Agreement.
Very truly yours,
DEUTSCHE ASSET MANAGEMENT VIT FUNDS
By: /s/ Xxxxxxx Xxxx
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President
AGREED TO AND ACCEPTED:
DEUTSCHE ASSET MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Vice President
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APPENDIX A
Compensation (as a Percentage
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Name of Fund of Average Daily Net Assets)
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Small Cap Index Fund 0.35%
EAFE(R) Equity Index Fund 0.45%
Equity 500 Index Fund 0.20%
U.S. Bond Index Fund 0.15%
Small Cap Fund 0.75%
International Equity Fund 0.98%
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