Exhibit d(5)
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of the 30 day of April, 2003 by and between Deutsche
Asset Management VIT Funds, a Massachusetts trust (the "Trust"), and DEUTSCHE
ASSET MANAGEMENT, INC., a Delaware corporation (the "Advisor").
WHEREAS, the Trust is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), consisting of several series of shares, each having its own
investment policies;
WHEREAS, the Advisor is registered as an investment advisor under the Investment
Advisers Act of 1940, as amended, and engages in the business of acting as an
investment advisor; and
WHEREAS, the Trust and the Advisor desire to enter into an agreement to provide
investment advisory services for the series listed in Exhibit A to this
Agreement on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of Investment Advisor. The Trust hereby appoints the
Advisor to act as the investment advisor of each series listed in Exhibit A to
this Agreement (each such series, together with all other series subsequently
established by the Trust and made subject to this Agreement in accordance with
section 11, being herein referred to as "a Series", and collectively as "the
Series"). The Advisor shall manage a Series' affairs and shall supervise all
aspects of a Series' operations (except as otherwise set forth herein),
including the investment and reinvestment of the cash, securities or other
properties comprising a Series' assets, subject at all times to the policies and
control of the Board of Trustees. The Advisor shall give a Series the benefit of
its best judgment, efforts and facilities in rendering its services as Advisor.
2. Delivery of Documents. The Trust has furnished the Advisor with
copies properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, filed with the State of
Massachusetts on January 19, 1996, and all amendments thereto (such
Declaration of Trust, as presently in effect and as it shall from time
to time be amended, is herein called the "Declaration of Trust");
(b) Resolutions of the Trust's Board of Trustees and shareholders
authorizing the appointment of the Advisor and approving this Agreement;
(c) Each Series' Registration Statement on Form N-1A under the
Investment Company Act of 1940, as amended (the "1940 Act") (File No.
811-07507) as filed with the Securities and Exchange Commission ("SEC")
relating to the shares of the Trust and its series, and all amendments
thereto; and
(d) Each Series' most recent prospectus (such prospectus, as
presently in effect, and all amendments and supplements thereto are
herein called "Prospectus").
The Trust will furnish the Advisor from time to time with copies, properly
certified or authenticated, of all amendments or supplements to the foregoing,
if any, and all documents, notices and reports filed with the SEC.
The Advisor will provide the Trust with copies of its Form ADV, including all
amendments thereto, as filed with the SEC.
3. Duties of Investment Advisor. In carrying out its obligations
under Section 1 hereof, the Advisor shall:
(a) supervise and manage all aspects of a Series' operations, except
for distribution services;
(b) formulate and implement continuing programs for the purchases
and sales of securities, consistent with the investment objective and
policies of a Series;
(c) provide the Trust with, or obtain for it, adequate office space
and all necessary office equipment and services, including telephone
service, utilities, stationery, supplies and similar items for the
Trust's principal office;
(d) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or a
Series, and whether concerning the individual issuers whose securities
are included in a Series portfolio or the activities in which they
engage, or with respect to securities which the Advisor considers
desirable for inclusion in a Series' portfolio;
(e) determine which issuers and securities shall be represented in a
Series' portfolio and regularly report thereon to the Trust's Board of
Trustees; and
(f) take all actions necessary to carry in effect a Series' purchase
and sale programs.
4. Portfolio Transactions. The Advisor is authorized to select the
brokers or dealers that will execute the purchases and sales of portfolio
securities for a Series and is directed to use its reasonable best efforts to
obtain the best net results as described from time to time in a Series'
prospectus and statement of additional information. The Advisor will promptly
communicate to the Trust's administrator and to the officers and Trustees of the
Trust such information relating to portfolio transactions as they may reasonably
request.
It is understood that the Advisor will not be deemed to have acted unlawfully,
or to have breached a fiduciary duty to the Trust or be in breach of any
obligation owing to the Trust under this Agreement, or otherwise, solely by
reason of its having directed a securities
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transaction on behalf of a Series to a broker-dealer in compliance with the
provisions of Section 28(e) of the Securities Exchange Act of 1934 or as
otherwise permitted from time to time by a Series' prospectus and statement of
additional information.
Subject to the policies established by the Board in compliance with applicable
law, the Advisor may direct DB Securities, Inc. ("DB Securities") or any of its
affiliates to execute portfolio transactions for a Series on an agency basis.
The commissions paid to DB Securities or any of its affiliates must be, as
required by Rule 17e-1 under the 1940 Act, "reasonable and fair compared to the
commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions involving similar
securities...during a comparable period of time." If the purchase or sale of
securities consistent with the investment policies of a Series or one or more
other accounts of the Advisor is considered at or about the same time,
transactions in such securities will be allocated among the accounts in a manner
deemed equitable by the Advisor. DB Securities or any of its affiliates and the
Advisor may combine such transactions, in accordance with applicable laws and
regulations, in order to obtain the best net price and most favorable execution.
The Trust on behalf of a Series will not deal with the Advisor or DB Securities
or any of its affiliates in any transaction in which the Advisor or DB
Securities or any of its affiliates acts as a principal with respect to any part
of a Series' order, except in compliance with rules of the SEC. If DB Securities
or any of its affiliates is participating in an underwriting or selling group, a
Series may not buy portfolio securities from the group except in accordance with
policies established by the Board in compliance with rules of the SEC.
5. Control by Board of Trustees. Any management or supervisory
activities undertaken by the Advisor pursuant to this Agreement, as well as any
other activities undertaken by the Advisor on behalf of a Series pursuant
thereto, shall at all times be subject to any applicable directives of the
Board.
6. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules and
regulations adopted thereunder;
(b) the provisions of the Registration Statement of the Trust on
behalf of a Series under the 1933 Act and the 1940 Act;
(c) the provisions of the Declaration of Trust; and
(d) any other applicable provisions of state and federal law.
7. Expenses. The expenses connected with the Trust on behalf of a
Series shall be allocable between the Trust and the Advisor as follows:
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(a) The Advisor shall furnish, at its expense and without cost to
the Trust, the services of one or more officers of the Advisor, to the
extent that such officers may be required by the Trust on behalf of a
Series for the proper conduct of its affairs.
(b) The Trust assumes and shall pay or cause to be paid all other
expenses of the Trust on behalf of a Series, including, without
limitation: payments to the Trust's distributor under the Trust's plan
of distribution; the charges and expenses of any registrar, any
custodian or depository appointed by the Trust for the safekeeping of a
Series' cash, portfolio securities and other property, and any transfer,
dividend or accounting agent or agents appointed by the Trust; brokers'
commissions chargeable to the Trust on behalf of a Series in connection
with portfolio securities transactions to which the Trust is a party;
all taxes, including securities issuance and transfer taxes, and fees
payable by the Trust to Federal, State or other governmental agencies;
the costs and expenses of engraving or printing of certificates
representing shares of the Trust; all costs and expenses in connection
with the registration and maintenance of registration of the Trust and
its shares with the SEC and various states and other jurisdictions
(including filing fees, legal fees and disbursements of counsel); the
costs and expenses of printing, including typesetting, and distributing
prospectuses and statements of additional information of the Trust and
supplements thereto to the Trust's shareholders; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and
mailing of proxy statements and reports to shareholders; fees and travel
expenses of Trustees or Trustee members of any advisory board or
committee; all expenses incident to the payment of any dividend,
distribution, withdrawal or redemption, whether in shares of in cash;
charges and expenses of any outside service used for pricing of the
Trust's shares; charges and expenses of legal counsel, including counsel
to the Trustees and of the Trust who are not interested persons (as
defined in the 0000 Xxx) or the Trust and of independent certified
public accountants, in connection with any matter relating to the Trust;
membership dues of industry associations; interest payable on Trust
borrowings; postage; insurance premiums on property or personnel
(including officers and Trustees) of the Trust which inure to its
benefit; extraordinary expenses (including but not limited to, legal
claims and liabilities and litigation costs and any indemnification
related thereto); and all other charges and costs of the Series' or
Trust's operation unless otherwise explicitly provided herein.
8. Delegation of Advisory Services. With respect to any or all
Series listed in Schedule A to this Agreement, and subject to the prior approval
of a majority of the members of the Trust's Board of Trustees, including a
majority of the Trustees who are not "interested persons," as defined in the
1940 Act, and, where required, by the shareholders of the Series, the Advisor
may, through a sub-advisory agreement or other arrangement, (1) delegate to a
sub-advisor any or all of its duties enumerated in section 1 hereof and (2)
delegate to any other company that the Advisor controls, is controlled by, or is
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, any or
all of the Advisor's duties enumerated in section 1 hereof, and may adjust the
duties of such entity,
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the portion of portfolio assets of the Series that such entity shall manage and
the fees to be paid to such entity; provided, that with respect to the
delegations, the Advisor shall continue to supervise the services provided by
any such sub-advisor or any such company or employees and any such delegation
shall not relieve the Advisor of any of its obligations hereunder (including
without limitation the management of the Series' assets in accordance with this
Agreement).
9. Compensation. For the services to be rendered and the expenses
assumed by the Advisor, the Trust shall pay the Advisor monthly compensation in
accordance with Exhibit A.
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily and the amounts of the daily accruals shall be paid
monthly. If this Agreement becomes effective subsequent to the first day of a
month, compensation for that par of the month this Agreement is in effect shall
be prorated in a manner consistent with the calculation of the fees as set forth
above.
In the event of termination of this Agreement, the advisory fee shall be
computed on the basis of the period ending on the last business day on which
this Agreement is in effect subject to a pro rata adjustment based on the number
of days elapsed in the current month as a percentage of the total number of days
in such month.
In addition to the foregoing, the Advisor may from time to time agree not to
impose all or a portion of its fee otherwise payable hereunder (in advance of
the time such fee or a portion thereof would otherwise accrue) and/or undertake
to pay or reimburse the Trust on behalf of the Series for all or a portion of
its expenses not otherwise required to be borne on reimbursed by the Advisor.
Any such fee reduction or undertaking may be discontinued or modified by the
Advisor at any time.
All rights of compensation under this Agreement for services performed as of the
termination date shall survive the termination of this Agreement.
10. Non-Exclusivity. The services of the Advisor to the Trust on
behalf of each Series are not to be deemed to be exclusive, and the Advisor
shall be free to render investment advisory or other services to others
(including other investment companies) and to engage in other activities, so
long as its services under this Agreement are not impaired thereby. It is
understood and agreed that officers or directors of the Advisor may serve as
officers or Trustees of the Trust, and that officers or Trustees of the Trust
may serve as officers or directors of the Advisor to the extent permitted by
law; and that the officers and directors of the Advisor are not prohibited from
engaging in any other business activity or from rendering services to any other
person, or from serving as partners, officers, trustees or directors of any
other firm, trust or corporation, including other investment companies.
11. Additional Series and Classes. In the event that the Trust
establishes one or more series of Shares or one more classes of Shares after the
effectiveness of this Agreement, such series of shares or classes of shares, as
the case may be, shall become
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Series and classes under this Agreement upon approval of this Agreement by the
Board with respect to the series of Shares or class of Shares and the execution
of an amended Appendix A reflecting the applicable names and terms.
12. Duration and Termination. This Agreement, unless sooner
terminated as provided herein, shall remain in effect with respect to the Trust
on behalf of a Series until two years from the date first set forth above, and
thereafter, for periods of one year so long as such continuance thereafter is
specifically approved at least annually (a) by the vote of a majority of those
Trustees of the Trust 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 (b) by the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of a Series, subject to the right
of the Trust and the Advisor to terminate this contract as provided in this
Section 1; provided, however, that if the shareholders of a Series fail to
approve the Agreement as provided herein, the Advisor may continue to serve
hereunder in the manner and to the extent permitted by the 1940 Act as modified
or interpreted by any applicable order or orders of the SEC or any rules or
regulations adopted by, or interpretative releases of, the SEC thereunder. The
foregoing requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
1940 Act as modified or interpreted by any applicable order or orders of the SEC
or any rules or regulations adopted by, or interpretative releases of, the SEC
thereunder.
This Agreement may be terminated as to a Series at any time, without the payment
of any penalty by vote of a majority of the Trustees of the Trust or by vote of
a majority of the outstanding voting securities of a Series on not less than 60
days' written notice to the Advisor, or by the Advisor at any time without the
payment of any penalty, on 90 days written notice to the Trust. This Agreement
will automatically and immediately terminate in event of its assignment. Any
notice under this Agreement shall be given in writing, addressed and delivered,
or mailed postpaid, to the other party at any office of such party.
As used in this Section 12, the term "assignment" shall have the meaning as set
forth in the 1940 Act as modified or interpreted by any applicable order or
orders of the SEC or any rules or regulations adopted by, or interpretative
releases of, the SEC.
13. Limitation of Liability of the Advisor; Indemnification.
The Advisor shall not be liable for any error of judgment or mistake of law or
for any loss sufferable by a Series in connection with the matters to which this
Agreement relates, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the Advisor in
the performance of its duties or from reckless disregard by its or its
obligations and duties under this Agreement.
14. Notices. Any notices under this agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice.
Currently such addresses are as follows: if
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to the Trust, Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, if to the Advisor,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
15. Severability. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
16. Entire Agreement. 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 as modified or interpreted by any applicable order
or orders of the SEC or any rules or regulations adopted by, or interpretative
releases of, the SEC, when applicable.
17. Reports. The Trust and the Advisor agree to furnish to each
other, if applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and such other
information with regard to their affairs as each may reasonably request.
18. Certain Records. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act which are prepared or maintained by the Advisor on behalf of
the Trust are the property of the Trust and will be surrendered promptly to the
Trust on request.
19. Questions of Interpretation. Any question of interpretation of
any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such term or provision of the 1940 Act and to interpretations thereof, if
any, by the United States Courts or in the absence of any controlling decision
of any court, by rules, regulations or orders of the SEC issued pursuant to the
1940 Act. In addition, where the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is modified or interpreted by any
applicable order or orders of the SEC or any rules or regulations adopted by, or
interpretative releases or, the SEC thereunder, such provision shall be deemed
to incorporate the effect of such order, rule, regulation or interpretative
release. Otherwise the provisions of this Agreement shall be interpreted in
accordance with the laws of Maryland.
20. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed original, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their respective officers on the day and year first above
written.
[SEAL] DEUTSCHE ASSET
MANAGEMENT VIT FUNDS
Attest: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxx X. Xxxxx Name: Xxxxxx X. Xxxxxx
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Title: Secretary
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[SEAL] DEUTSCHE ASSET
MANAGEMENT, INC.
Attest: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxx X. Xxxxx Name: Xxxxxxx X. Xxxx
----------------------- ----------------------------
Title: Vice President
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EXHIBIT A
TO INVESTMENT ADVISORY AGREEMENT
MADE AS OF APRIL 30, 2003
BETWEEN
DEUTSCHE ASSET MANAGEMENT VIT FUNDS
AND
DEUTSCHE ASSET MANAGEMENT, INC.
1. SERIES 2. INVESTMENT ADVISORY FEE
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Equity 500 Index Fund 0.20%
EAFE Equity Index Fund 0.45%
Small Cap Index Fund 0.35%
Xxxxxxx Real Estate Securities Portfolio [See below]
XXXXXXX REAL ESTATE SECURITIES PORTFOLIO
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0.900% on the first $250 million of the Portfolio's average daily net assets
0.875% on the next $250 million of the Portfolio's average daily net assets
0.850% on the next $500 million of the Portfolio's average daily net assets
0.825% on the next $1.5 billion of the Portfolio's average daily net assets
0.800% on the Portfolio's average daily net assets exceeding $2.5 billion
