EXHIBIT 99.d(3)
23 (d) (2) (tt) SUB-ADVISORY AGREEMENT ON BEHALF OF
TA IDEX TRANSAMERICA BALANCED
SUB-ADVISORY AGREEMENT
BETWEEN
AEGON/TRANSAMERICA FUND ADVISERS, INC.
AND
TRANSAMERICA INVESTMENT MANAGEMENT, LLC
SUB-ADVISORY AGREEMENT, made as of the 28th day of May 2004, between
AEGON/Transamerica Fund Advisers, Inc. ("Investment Adviser"), a corporation
organized and existing under the laws of the State of Florida and Transamerica
Investment Management, LLC ("Sub-Adviser"), a limited liability company
organized and existing under the laws of the State of Delaware.
WHEREAS, the Investment Adviser acts as an investment adviser to
Transamerica IDEX Mutual Funds ("Transamerica IDEX"), a Massachusetts business
trust which is engaged in business as an open-end management investment company
registered under the Investment Company Act of 1940, as amended ("1940 Act"),
pursuant to an investment advisory agreement dated June 25, 1998, as amended
(the "Advisory Agreement");
WHEREAS, Transamerica IDEX is authorized to issue shares of TA IDEX
Transamerica Balanced (the "Fund"), a separate series of Transamerica IDEX;
WHEREAS, the Sub-Adviser is engaged principally in the business of
rendering investment advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended ("Advisers Act");
and
WHEREAS, the Investment Adviser desires to retain the Sub-Adviser as
sub-adviser to furnish certain investment advisory services to the Investment
Adviser with respect to the Fund and the Sub-Adviser is willing to furnish such
services.
NOW, THEREFORE, in consideration of the premises and mutual promises
herein set forth, the parties hereto agree as follows:
1. APPOINTMENT.
Investment Adviser hereby appoints the Sub-Adviser as its investment
sub-adviser with respect to the Fund for the period and on the terms set forth
in this Agreement. The Sub-Adviser accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.
2. DUTIES OF THE SUB-ADVISER.
A. Investment Sub-Advisory Services. Subject to the supervision
of the Transamerica IDEX Board of Trustees ("Board") and the Investment Adviser,
the Sub-Adviser shall act as the investment sub-adviser and shall supervise and
direct the investments of the Fund in accordance with the Fund's investment
objective, policies, and restrictions as provided in the Transamerica IDEX
Prospectus and Statement of Additional Information, as currently in effect and
as amended or supplemented from time to time (hereinafter referred to as the
"Prospectus"), and such other limitations as directed by the appropriate
officers of the Investment Adviser or Transamerica IDEX by notice in writing to
the Sub-Adviser. The Sub-Adviser shall obtain and evaluate such information
relating to the economy, industries, businesses, securities markets, and
securities as it may deem necessary or useful in the discharge of its
obligations hereunder and shall formulate and implement a continuing program for
the management of the assets and resources of the Fund in a manner consistent
with the Fund's investment objective, policies, and restrictions. In furtherance
of this duty, the Sub-Adviser, on behalf of the Fund, is authorized, in its
discretion and without prior consultation with the Fund or the Investment
Adviser, to:
(1) buy, sell, exchange, convert, lend, and otherwise trade in any
stocks, bonds and other securities or assets; and
(2) place orders and negotiate the commissions (if any) for the
execution of transactions in securities or other assets with or
through such brokers, dealers, underwriters or issuers as the
Sub-Adviser may select.
B. Additional Duties of Sub-Adviser. In addition to the above,
Sub-Adviser shall:
(1) furnish continuous investment information, advice and
recommendations to Transamerica IDEX as to the acquisition, holding
or disposition of any or all of the securities or other assets which
the Fund may own or contemplate acquiring from time to time;
(2) cause its officers to attend meetings of Transamerica IDEX and
furnish oral or written reports, as Transamerica IDEX may reasonably
require, in order to keep Transamerica IDEX and its officers and
Board fully informed as to the condition of the investment
securities of the Fund, the investment recommendations of the
Sub-Adviser, and the investment considerations
which have given rise to those recommendations; and
(3) furnish such statistical and analytical information and reports as
may reasonably be required by Transamerica IDEX from time to time.
C. Further Duties of Sub-Adviser. In all matters relating to the
performance of this Agreement, the Sub-Adviser shall act in conformity with the
Transamerica IDEX Restatement of Declaration of Trust and By-Laws, as each may
be amended or supplemented, and currently effective Registration Statement (as
defined below) and with the written instructions and directions of the Board and
the Investment Adviser, and shall comply with the requirements of the 1940 Act,
the Advisers Act, the rules thereunder, and all other applicable federal and
state laws and regulations.
3. COMPENSATION.
For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Agreement, the Sub-Adviser shall receive monthly an investment
management fee as specified in Schedule A of this Agreement. If this Agreement
becomes effective or terminates before the end of any month, the investment
management fee for the period from the effective date to the end of such month
or from the beginning of such month to the date of termination, as the case may
be, shall be pro-rated according to the pro-ration which such period bears to
the full month in which such effectiveness or termination occurs.
With respect to the Sub-Adviser's obligation to reimburse the Fund for the
Sub-Adviser's pro rata share of the expenses in excess of the Fund's expense
limitation, the total amount to be reimbursed or waived by the Sub-Adviser shall
not be greater than the amount of sub-advisory fees the Sub-Adviser would have
received under the fee schedule. Furthermore, to the extent ATFA recaptures or
is reimbursed any portion of its advisory fee in future periods, then ATFA shall
pay Sub-Adviser a portion of such recaptured or reimbursed fee in the proportion
that the sub-advisory fee otherwise due Sub-Adviser bears to the management fee
otherwise due ATFA.
4. DUTIES OF THE INVESTMENT ADVISER.
A. The Investment Adviser shall continue to have responsibility
for all services to be provided to the Fund pursuant to the Advisory Agreement
and shall oversee and review the Sub-Adviser's performance of its duties under
this Agreement. Notwithstanding the Advisory Agreement, the Sub-Adviser has the
authority to buy, sell, exchange, convert, lend, and otherwise trade in any
stocks, bonds and other securities or assets on behalf of the Fund.
B. The Investment Adviser has furnished the Sub-Adviser with
copies of each of the following documents and will furnish to the Sub-Adviser at
its principal office all future amendments and supplements to such documents, if
any, as soon as practicable after such documents become available:
(1) The Transamerica IDEX Restatement of Declaration of Trust, as
filed with the State of Massachusetts, as in effect on the date
hereof and as amended from time to time ("Trust");
(2) The By-Laws of Transamerica IDEX as in effect on the date hereof
and as amended from time to time ("By-Laws");
(3) Certified resolutions of the Board of Transamerica IDEX
authorizing the appointment of the Investment Adviser and the
Sub-Adviser and approving the form of the Advisory Agreement and
this Agreement;
(4) The Transamerica IDEX Registration Statement under the 1940 Act
and the Securities Act of 1933, as amended, on Form N-1A, as filed
with the Securities and Exchange Commission ("SEC") relating to the
Fund and its shares and all amendments thereto ("Registration
Statement");
(5) The Transamerica IDEX Prospectus (as defined above);
(6) A certified copy of any publicly available financial statement
or report prepared for Transamerica IDEX by certified or independent
public accountants, and copies of any financial statements or
reports made by the Fund to its shareholders or to any governmental
body or securities exchange; and
The Investment Adviser shall furnish the Sub-Adviser with any further
documents, materials or information that the Sub-Adviser may reasonably request
to enable it to perform its duties pursuant to this Agreement.
C. During the term of this Agreement, the Investment Adviser
shall furnish to the Sub-Adviser at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature, or other material
prepared for distribution to shareholders of the
Fund or the public, which refer to the Fund, the Sub-Adviser or investment
companies or other advisory accounts advised or sponsored by the Sub-Adviser or
investment companies or other advisory accounts advised or sponsored by the
Sub-Adviser in any way, prior to the use thereof, and the Investment Adviser
shall not use any such materials if the Sub-Adviser reasonably objects in
writing fifteen business days (or such other time as may be mutually agreed)
after receipt thereof.
5. BROKERAGE.
A. The Sub-Adviser agrees that, in placing orders with
broker-dealers for the purchase or sale of portfolio securities, it shall
attempt to obtain quality execution at favorable security prices (best price and
execution); provided that, on behalf of the Fund, the Sub-Adviser may, in its
discretion, agree to pay a broker-dealer that furnishes brokerage or research
services as such services are defined under Section 28(e) of the Securities
Exchange Act of 1934, as amended ("1934 Act"), a higher commission than that
which might have been charged by another broker-dealer for effecting the same
transactions, if the Sub-Adviser determines in good faith that such commission
is reasonable in relation to the brokerage and research services provided by the
broker-dealer, viewed in terms of either that particular transaction or the
overall responsibilities of the Sub-Adviser with respect to the accounts as to
which it exercises investment discretion (as such term is defined under Section
3(a)(35) of the 1934 Act). In no instance will portfolio securities be purchased
from or sold to the Sub-Adviser, or any affiliated person thereof, except in
accordance with the federal securities laws and the rule and regulations
thereunder.
B. On occasions when the Sub-Adviser deems the purchase or sale
of a security to be in the best interest of the Fund, as well as other clients
of the Sub-Adviser, the Sub-Adviser, to the extent permitted by applicable laws
and regulations, may, but shall be under no obligation to, aggregate the
securities to be purchased or sold to attempt to obtain a more favorable price
or lower brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Sub-Adviser in the manner the
Sub-Adviser considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to its other clients.
C. In addition to the foregoing, the Sub-Adviser agrees that
orders with broker-dealers for the purchase or sale of portfolio securities by
the Fund shall be placed in accordance with the standards set forth in the
Advisory Agreement.
6. OWNERSHIP OF RECORDS.
The Sub-Adviser shall maintain all books and records required to be
maintained by the Sub-Adviser pursuant to the 1940 Act and the rules and
regulations promulgated thereunder with respect to transactions on behalf of
Transamerica IDEX. In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Sub-Adviser hereby agrees: (i) that all records that it maintains
for the Fund are the property of Transamerica IDEX, (ii) to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any records that it
maintains for the Fund and that are required to be maintained by Rule 31a-1
under the 1940 Act and (iii) agrees to surrender promptly to Transamerica IDEX
any records that it maintains for the Fund upon request by Transamerica IDEX;
provided, however, the Sub-Adviser may retain copies of such records.
7. REPORTS.
The Sub-Adviser shall furnish to the Board or the Investment Adviser, or
both, as appropriate, such information, reports, evaluations, analyses and
opinions as the Sub-Adviser and the Board or the Investment Adviser, as
appropriate, may mutually agree upon from time to time.
8. SERVICES TO OTHER CLIENTS.
Nothing contained in this Agreement shall limit or restrict (i) the
freedom of the Sub-Adviser, or any affiliated person thereof, to render
investment management and corporate administrative services to other investment
companies, to act as investment manager or investment counselor to other
persons, firms, or corporations, or to engage in any other business activities,
or (ii) the right of any director, officer, or employee of the Sub-Adviser, who
may also be a director, officer, or employee of Transamerica IDEX, to engage in
any other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar nature
or a dissimilar nature.
9. SUB-ADVISER'S USE OF THE SERVICES OF OTHERS.
The Sub-Adviser may (at its cost except as contemplated by Section 5 of
this Agreement) employ, retain, or otherwise avail itself of the services or
facilities of other persons or organizations for the purpose of obtaining such
statistical and other factual information, such advice regarding economic
factors and trends, such advice as to occasional transactions in specific
securities, or such other information, advice, or assistance as the Sub-Adviser
may deem necessary, appropriate, or convenient for the discharge of its
obligations hereunder or otherwise helpful to the Sub-Adviser, as appropriate,
or in the discharge of Sub-Adviser's overall responsibilities with respect to
the other
accounts that it serves as investment manager or counselor, provided
that the Sub-Adviser shall at all times retain responsibility for making
investment recommendations with respect to the Fund.
10. REPRESENTATIONS OF SUB-ADVISER.
The Sub-Adviser represents, warrants, and agrees as follows:
A. The Sub-Adviser: (i) is registered as an investment adviser
under the Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement; (iii)
has met, and will continue to meet for so long as this Agreement remains in
effect, any applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency, necessary to
be met in order to perform the services contemplated by this Agreement; (iv) has
the authority to enter into and perform the services contemplated by this
Agreement; and (v) will immediately notify the Investment Adviser of the
occurrence of any event that would disqualify the Sub-Adviser from serving as an
investment adviser of an investment company pursuant to Section 9 (a) of the
1940 Act or otherwise.
B. The Sub-Adviser has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and, if it has not
already done so, will provide the Investment Adviser and Transamerica IDEX with
a copy of such code of ethics, together with evidence of its adoption.
C. The Sub-Adviser has provided the Investment Adviser and
Transamerica IDEX with a copy of its Form ADV as most recently filed with the
SEC and will, promptly after filing any amendment to its Form ADV with the SEC,
furnish a copy of such amendment to the Investment Adviser.
11. TERM OF AGREEMENT.
This Agreement shall become effective upon the date first above written,
provided that this Agreement shall not take effect unless it has first been
approved (i) by a vote of a majority of those members of the Board who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting of the Board called for the purpose of voting on such
approval, and (ii) by vote of a majority of the Fund's outstanding voting
securities. Unless sooner terminated as provided herein, this Agreement shall
continue in effect for two years from its effective date. Thereafter, this
Agreement shall continue in effect from year to year, with respect to the Fund,
subject to the termination provisions and all other terms and conditions hereof,
so long as such continuation shall be specifically approved at least annually
(a) by either the Board, or by vote of a majority of the outstanding voting
securities of the Fund; and (b) in either event, by the vote, cast in person at
a meeting of the Board called for the purpose of voting on such approval, of a
majority of the members of the Board who are not parties to this Agreement or
interested persons of any such party. The Sub-Adviser shall furnish to
Transamerica IDEX, promptly upon its request such information as may reasonably
be necessary to evaluate the terms of this Agreement or any extension, renewal,
or amendment hereof.
12. NOTICES.
Any notice shall be sufficiently given when sent by certified U.S. mail,
national expenses deliver service, or facsimile to the parties at the address
below:
If to Transamerica IDEX:
Transamerica IDEX Mutual Funds
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Investment Adviser:
AEGON/Transamerica Fund Advisers, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Sub-Adviser:
Transamerica Investment Management, LLC
Attn: Compliance
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Fax: 000-000-0000
13. TERMINATION OF AGREEMENT.
Notwithstanding the foregoing, this Agreement may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Fund, or per the terms of
the exemptive order - Release No. 23379 - under Section 6(c) of the Act from
Section 15(a) and Rule 18f-2 under the Act, on at least 60 days' prior written
notice to the Sub-Adviser. This Agreement may also be terminated by the
Investment Adviser: (i) on at least 60 days' prior written notice to the
Sub-Adviser, without the payment of any penalty; or (ii) if the Sub-Adviser
becomes unable to discharge its duties and obligations under this Agreement. The
Sub-Adviser may terminate this Agreement at any time, or preclude its renewal
without the payment of any penalty, on at least 60 days' prior notice to the
Investment Adviser. This Agreement shall terminate automatically in the event of
its assignment or upon termination of the Advisory Agreement.
14. AMENDMENT OF AGREEMENT.
No provision of this Agreement may be changed, waived, discharged, or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge, or termination is
sought, and no amendment of this Agreement shall be effective until approved by
vote of a majority of the Fund's outstanding voting securities, unless otherwise
permitted in accordance with the 1940 Act.
15. MISCELLANEOUS.
A. Governing Law. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Massachusetts without giving effect to the
conflicts of laws principles thereof, and the 1940 Act. To the extent that the
applicable laws of the Commonwealth of Massachusetts conflict with the
applicable provisions of the 1940 Act, the latter shall control.
B. Captions. The captions contained 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.
C. Entire Agreement. This Agreement represents the entire
agreement and understanding of the parties hereto and shall supersede any prior
agreements between the parties relating to the subject matter hereof, and all
such prior agreements shall be deemed terminated upon the effectiveness of this
Agreement.
D. Interpretation. Nothing herein contained shall be deemed to
require Transamerica IDEX to take any action contrary to its Trust or By-Laws,
or any applicable statutory or regulatory requirement to which it is subject or
by which it is bound, or to relieve or deprive the Board of its responsibility
for and control of the conduct of the affairs of Transamerica IDEX.
E. Definitions. 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 such court,
by rules, regulations, or orders of the SEC validly issued pursuant to the 1940
Act. As used in this Agreement, the terms "majority of the outstanding voting
securities," "affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell," and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the SEC by any rule, regulation, or order. Where the effect
of a requirement of the federal securities laws reflected in any provision of
this Agreement is made less restrictive by a rule, regulation, or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation, or order, unless the
Investment Adviser and the Sub-Adviser agree to the contrary.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
ATTEST: AEGON/TRANSAMERICA FUND ADVISERS, INC.
By: __________________________ By: __________________________
Name: __________________________ Name: __________________________
Title:__________________________ Title:__________________________
ATTEST: TRANSAMERICA INVESTMENT MANAGEMENT, LLC
By: __________________________ By: __________________________
Name: __________________________ Name: __________________________
Title:__________________________ Title:__________________________
SUB-ADVISORY AGREEMENT
SCHEDULE A
FUND SUB-ADVISER COMPENSATION
---- ------------------------
TA IDEX TRANSAMERICA BALANCED 0.35% of the first $250 million of the fund's
average daily net assets; 0.325% of assets
over $250 million to $500 million, 0.30% of
assets over $500 million to $1.5 billion; and
0.25% of assets over 1.5 billion, less 50% of
amount reimbursed pursuant to the expense
limitation.
