Exhibit d(2)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of May 1, 2000 by and between The Diversified Investors
Funds Group, an open-end, non-diversified management investment company under
the Investment Company Act of 1940 (the "1940 Act") (herein called the "Trust"),
and Diversified Investment Advisors, Inc. a Delaware corporation (herein called
"Diversified").
WHEREAS, the Trust is comprised of distinct series each of which is a
separate mutual fund issuing its own shares;
WHEREAS, the following series of the Trust are covered by this Agreement:
Institutional Short Horizon Strategic Allocation Fund, Institutional
Short/Intermediate Horizon Strategic Allocation Fund, Institutional Intermediate
Horizon Strategic Allocation Fund, Institutional Intermediate/Long Horizon
Strategic Allocation Fund and Institutional Long Horizon Strategic Allocation
Fund (herein called "Fund(s)");
WHEREAS, each Fund of the Trust will purchase shares of existing mutual
funds managed by Diversified (herein called "Underlying Diversified Funds");
WHEREAS, Diversified is an investment advisor registered under the
Investment Advisers Act of 1940; and
WHEREAS, the Trust desires to retain Diversified to render investment
advisory services to each of the Funds, and Diversified is willing to so render
such services on the terms hereinafter set forth;
NOW, THEREFORE, this Agreement
WITNESSETH:
In consideration of the promises and mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. The Trust hereby appoints Diversified to act as investment advisor
to each Fund of the Trust for the period and on the terms set forth in this
Agreement. Diversified accepts such appointment and agrees to render the
services herein set forth for the compensation herein provided.
(a) Subject to the general supervision of the Board of Trustees of the
Trust, Diversified shall provide each Fund with discretionary investment
services. Specifically,
Diversified is responsible for supervising and directing the investments of each
Fund in accordance with each Fund's investment objectives, program, and
restrictions as provided in the Funds' then current Prospectus and the Statement
of Additional Information. Diversified is also responsible for effecting all
security transactions on behalf of each Fund. The Funds will invest their assets
in the shares of the Underlying Diversified Funds, and such investment will be
made without the payment of any commission or other sales charges.
As manager of the assets of the Funds, Diversified shall make
investments for the account of the Fund in accordance with Diversified's best
judgment and within the Funds' investment objectives, guidelines, and
restrictions, the 1940 Act and the provisions of the Internal Revenue Code of
1986 relating to regulated investment companies subject to policy decisions
adopted by the Board of Trustees.
(b) Diversified shall furnish to the Board of Trustees periodic reports
on the investment performance of the Funds and on the performance of its
obligations under this Agreement and shall supply such additional reports and
information as the Funds' officers or Board of Trustees shall reasonably
request.
(c) Diversified shall at its expense provide each Fund with all
services, equipment and facilities as may be required to perform its obligations
under this Agreement including, but not limited to:
(i) providing each Fund with certain corporate administrative
services, including: maintaining trust records, and
registering and qualifying each Fund's shares under federal
and state laws; monitoring the financial, accounting, and
administrative functions of each Fund; maintaining liaison
with the agents employed by each Fund such as the custodian;
assisting each Fund in the coordination of such agents'
activities; and permitting Diversified's employees to serve
as officers, directors, and committee members of each Fund
without cost to the Fund;
(ii) providing office space, equipment and clerical personnel
necessary for maintaining the organization of the Funds and
for performing administrative and management functions;
(iii) supervising the overall administration of the Funds,
including negotiation of contracts and fees with and the
monitoring of performance and xxxxxxxx of the Funds' transfer
agent, custodian and other independent contractors or agents;
(iv) preparing and, if applicable, filing all documents required
for compliance by the Funds with applicable laws and
regulations, including registration statements, registration
fee filings, semi-
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annual and annual reports to investors, proxy statements and
tax returns;
(v) preparation of agendas and supporting documents for and
minutes of meeting of Trustees, committees of Trustees and
investors; and
(vi) maintaining books and records of the Funds.
In addition, Diversified shall pay all operating expenses of the Fund
(including, without limitation, fees and expenses of independent trustees, audit
fees and legal fees) and take all other necessary actions to assure that the fee
payable to Diversified pursuant to Section 2. below shall be the only direct
expense payable by the Funds.
(d) Diversified shall have no discretion with respect to the exercise
of voting rights; and, whenever an Underlying Diversified Fund shall hold a
meeting of shareholders and request the Fund to vote on a matter, the Fund will
cast all of its votes in the same proportion as the votes of the other
shareholders. Diversified shall give the Funds the benefit of Diversified's best
judgment and efforts in rendering services under this Agreement. As an
inducement to Diversified's undertaking to render these services, the Funds
agree that Diversified shall not be liable under this Agreement for any mistake
in judgment or in any other event whatsoever provided that nothing in this
Agreement shall be deemed to protect or purport to protect Diversified against
any liability to the Funds or its investors to which Diversified would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of its advisory duties under this Agreement or by reason of its
reckless disregard of its obligations and duties hereunder.
2. In consideration of the services to be rendered by Diversified under
this Agreement, each Fund shall pay Diversified a fee accrued daily and paid
monthly at an annual rate equal to 0.20% of each Fund's average daily net
assets. If the fees payable to Diversified pursuant to this paragraph 2 begin to
accrue before the end of any month, or, if this Agreement terminates before the
end of any month, the fees for the period from that date to the end of that
month or from the beginning of that month to the date of termination, as the
case may be, shall be prorated according to the proportion which the period
bears to the full month in which the effectiveness or termination occurs. For
purposes of calculating the monthly fees, the value of the net assets of each
Fund shall be computed in the manner specified in its Regulation Statement on
Form N-1A for the computation of net asset value. For purposes of this
Agreement, a "business day" is any day the New York Stock Exchange is open for
trading. Diversified agrees to bear all expenses of the Funds other than the
0.20% advisory fee.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Diversified hereby agrees that all records which it maintains for the Funds are
property of the Funds and further agrees to surrender promptly to the Funds any
such records upon the Funds' request. Diversified further agrees to preserve for
the periods prescribed by
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Rule 31a-2 under the 1940 Act any such records required to be maintained by Rule
31a-1 under the 1940 Act.
3. This Agreement shall be effective as to the Funds as of the date the
Funds commence investment operations after this Agreement shall have been
approved by the Board of Trustees of the Trust and the investor(s) in the Funds
in the manner contemplated by Section 15 of the 1940 Act and, unless sooner
terminated as provided herein, shall continue until the second anniversary of
the date hereof. Thereafter, if not terminated, this Agreement shall continue in
effect as to each Fund for successive periods of 12 months each, provided such
continuance is specifically approved at least annually by the vote of a majority
of those members of the Board of Trustees who are not parties to this Agreement
or interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval; and either (a) by the vote of a majority
of the full Board of Trustees or (b) by vote of a majority of the outstanding
voting securities of the Funds; provided, however, that this Agreement may be
terminated by any or all of the Funds at any time, without the payment of any
penalty, by the Board of Trustees or by vote of a majority of the outstanding
voting securities of the Funds on 60 days' written notice to Diversified, or by
Diversified as to any or all of the Funds at any time, without payment of any
penalty, on 90 days' written notice to the Funds. This Agreement will
immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities",
"interested person" and "assignment" shall have the same meanings as such terms
have in the 1940 Act and the rule and regulatory constructions thereunder.) This
Agreement may be terminated with respect to any Fund and remain in full force
and effect for those Funds which were not specifically terminated.
4. Except to the extent necessary to perform Diversified's obligations
under this Agreement, nothing herein shall be deemed to limit or restrict the
right of Diversified, or any affiliate of Diversified, or any employee of
Diversified, to engage in any other business or devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other trust,
corporation, firm, individual or association.
5. The investment management services of Diversified to the Funds under
this Agreement are not to be deemed exclusive as to Diversified and Diversified
will be free to render similar services to others.
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge, or termination is
sought and except as otherwise permitted by applicable law, no material
amendment of this Agreement shall be effective until approved by vote of the
holders of a majority of the outstanding voting securities of the Funds.
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This Agreement embodies the entire agreement and understanding between
the parties hereto and supersedes all prior agreements and understandings
relating to the subject matter hereof. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect.
Should any part of this Agreement be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding and shall inure to the benefit
of the parties hereto and their respective successors, to the extent permitted
by law.
6. This Agreement shall be construed in accordance with the laws of the
State of New York provided that nothing herein shall be construed in a manner
inconsistent with the requirements of 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
Attest: The Diversified Investors Funds Group
By:
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Attest: Diversified Investment Advisors, Inc.
By:
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ISAF-IAA
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