INVESTMENT SUB-ADVISORY AGREEMENT
THIS AGREEMENT, made this 1st day of March, 1995, by and between ADVANTUS
CAPITAL MANAGEMENT, INC., a Minnesota corporation registered as an Investment
Adviser under the Investment Advisers Act of 1940 (the "Adviser") and XXXXXXXXX
INVESTMENT COUNSEL, INC., a Florida corporation registered as an Investment
Adviser under the Investment Advisers Act of 1940 (the "Sub-Adviser").
WHEREAS, the Adviser is the Investment Adviser to Advantus International
Balanced Fund, Inc. (the "Fund"), an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish it with
portfolio selection and related research and statistical services in connection
with the Adviser's investment advisory activities on behalf of the Fund, and the
Sub-Adviser desires to furnish such services to the Adviser;
NOW, THEREFORE, in consideration of the premises and the terms and
conditions hereinafter set forth, it is agreed as follows:
1. APPOINTMENT OF SUB-ADVISER
In accordance with and subject to the Investment Advisory Agreement (the
"Advisory Agreement") between the Fund and the Adviser dated March 1, 1995, the
Adviser hereby appoints the Sub-Adviser to perform portfolio selection services
described herein for investment and reinvestment of the Fund's assets, subject
to the control and direction of the Fund's Board of Directors, for the period
and on the terms hereinafter set forth. The Sub-Adviser accepts such
appointment and agrees to furnish the services hereinafter set forth for the
compensation herein provided. The Sub-Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, except as expressly provided
or authorized, have no authority to act for or
represent the Fund or the Adviser in any way or otherwise be deemed an agent of
the Fund or the Adviser.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY THE SUB-ADVISER
(a) The Sub-Adviser shall provide the following services and assume the
following obligations with respect to the Fund's portfolio:
(1) The investment of the assets of the Fund shall at all times be
subject to the applicable provisions of the Articles of
Incorporation, the Bylaws, the Registration Statement, the current
Prospectus and the Statement of Additional Information of the Fund
and shall conform to the investment objectives, policies and
restrictions of the Fund as set forth in such documents and as
interpreted from time to time by the Board of Directors of the Fund
and by the Adviser. Within the framework of the investment
objectives, policies and restrictions of the Fund, and subject to
the supervision of the Adviser, the Sub-Adviser shall have the sole
and exclusive responsibility for the making and execution of all
investment decisions for the Fund.
(2) In carrying out its obligations to manage the investments and
reinvestments of the assets of the Fund, the Sub-Adviser shall:
(1) obtain and evaluate pertinent economic, statistical, financial
and other information affecting the economy generally and
individual companies or industries the securities of which are
included in the Fund's portfolio or are under consideration for
inclusion therein; (2) formulate and implement a continuous
investment program for the Fund consistent with the investment
objective and related investment policies for the Fund as set forth
in the Fund's registration statement, as amended; and (3) take such
steps as are necessary to implement the aforementioned investment
program by purchase and sale of securities including the placing,
or directing the placement through an affiliate of the Sub-Adviser,
of orders for such purchases and sales.
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(3) In connection with the purchase and sale of securities of the
Fund's portfolio, the Sub-Adviser shall arrange for the
transmission to the Adviser and the Custodian for the Fund on a
daily basis such confirmation, trade tickets and other documents as
may be necessary to enable them to perform their administrative
responsibilities with respect to the Fund's portfolio. With
respect to portfolio securities to be purchased or sold through the
Depository Trust Company, the Sub-Adviser shall arrange for the
automatic transmission of the I.D. confirmation of the trade to the
Custodian of the Fund, Norwest Bank Minnesota, N.A. The Sub-
Adviser shall render such reports to the Adviser and/or to the
Fund's Board of Directors concerning the investment activity and
portfolio composition of the Fund in such form and at such
intervals as the Adviser or the Board may from time to time
require.
(4) The Sub-Adviser shall, in the name of the Fund, place or direct the
placement of orders for the execution of portfolio transactions in
accordance with the policies with respect thereto, as set forth in
the Fund's Registration Statement, as amended from time to time,
and under the 1933 Act and the 1940 Act. In connection with the
placement of orders for the execution of the Fund's portfolio
transactions, the Sub-Adviser shall create and maintain all
necessary brokerage records of the Fund in accordance with all
applicable law, rules and regulations, including but not limited
to, records required by Section 31(a) of the 1940 Act. All records
shall be the property of the Fund and shall be available for
inspection and use by the Securities and Exchange Commission, the
Fund or any person retained by the Fund. Where applicable, such
records shall be maintained by the Sub-Adviser for the period and
in the place required by Rule 31a-2 under the 1940 Act.
(5) In placing orders or directing the placement of orders for the
execution of portfolio transactions, the Sub-Adviser shall select
brokers and dealers for the
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execution of the Fund's portfolio transactions. In selecting
brokers or dealers to execute such orders, the Sub-Adviser is
expressly authorized to consider the fact that a broker or dealer
has furnished statistical, research or other information or
services which enhance the Sub-Adviser's investment research and
portfolio management capability generally. It is further
understood in accordance with Section 28(e) of the Securities
Exchange Act of 1934, as amended, that the Sub-Adviser may
negotiate with and assign to a broker a commission which may exceed
the commission which another broker would have charged for
effecting the transaction if the Sub-Adviser determines in good
faith that the amount of commission charged was reasonable in
relation to the value of brokerage and/or research services (as
defined in Section 28(e)) provided by such broker, viewed in terms
either of the Fund or the Sub-Adviser's overall responsibilities to
the Sub-Adviser's discretionary accounts.
(b) The Sub-Adviser shall use the same skill and care in providing services
to the Fund as it uses in providing services to fiduciary accounts for which it
has investment responsibility. The Sub-Adviser will conform with all applicable
rules and regulations of the Securities and Exchange Commission.
3. EXPENSES
During the terms of this Agreement, the Sub-Adviser will pay all expenses
incurred by it in connection with its activities under this Agreement.
4. COMPENSATION
In payment for the investment sub-advisory services to be rendered by the
Sub-Adviser in respect of the Fund hereunder, the Adviser shall pay to the Sub-
Adviser as full compensation for all services hereunder a fee computed at an
annual rate which shall be a percentage of the average daily value of the net
assets of the Fund. The fee shall be accrued daily and shall be based on the
net asset values of all of the issued and outstanding shares of the Fund as
determined as of the close of each business day pursuant to the Articles of
Incorporation, Bylaws and currently
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effective Prospectus and Statement of Additional Information of the Fund. The
fee shall be payable in arrears on the last day of each calendar month.
The amount of such annual fee, as applied to the average daily value of the
net assets of the Fund, shall be as described in the schedule below:
Assets Fee
------ ---
On the first $25 million in assets .70%
On the next $25 million in assets .55%
On the next $50 million in assets .50%
On all assets in excess of $100 million .40%
5. RENEWAL AND TERMINATION
This Agreement shall continue in effect for a period more than two years
from the date of this Agreement, only so long as such continuance is
specifically approved at least annually by a vote of the holders of the majority
of the outstanding voting securities of the Fund, or by a vote of the majority
of the Fund's Board of Directors. And further provided that such continuance is
also approved annually by a vote of the majority of the Fund's Board of
Directors who are not parties to this Agreement or interested persons of parties
hereto, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement may be terminated at any time without payment of
penalty: (i) by the Fund's Board of Directors or by a vote of a majority of the
outstanding voting securities of the Fund on sixty days' prior written notice,
or (ii) by either party hereto upon sixty days' prior written notice to the
other. This Agreement will terminate automatically upon any termination of the
Investment Advisory Agreement between the Fund and the Adviser or in the event
of its assignment. The terms "interested person," "assignment" and "vote of a
majority of the outstanding voting securities" shall have the meanings set forth
in the 1940 Act.
6. GENERAL PROVISIONS
(a) The Sub-Adviser may rely on information reasonably believed by it to be
accurate and reliable. Except as may otherwise be provided by the 1940 Act,
neither the Sub-Adviser nor
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its officers, directors, employees or agents shall be subject to any liability
for any error of judgment or mistake of law or for any loss arising out of any
investment or other act or omission in the performance by the Sub-Adviser of its
duties under this Agreement or for any loss or damage resulting from the
imposition by any government or exchange control restrictions which might affect
the liquidity of the Fund's assets, or from acts or omissions of custodians or
securities depositories, or from any war or political act of any foreign
government to which such assets might be exposed, provided that nothing herein
shall be deemed to protect, or purport to protect, the Sub-Adviser against any
liability to the Fund or to its shareholders to which the Sub-Adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder, or by reason of the Sub-
Adviser's reckless disregard of its obligations and duties hereunder.
(b) The Adviser and the Fund's Board of Directors understand that the value
of investments made for the Fund may go up as well as down, is not guaranteed
and that investment decisions will not always be profitable. The Adviser has
not made and is not making any guarantees, including any guarantee as to any
specific level of performance of the Fund. The Adviser and the Fund's Board of
Directors acknowledge that this Fund is designed for investors seeking
international diversification and is not intended as a complete investment
program. They also understand that investment decisions made on behalf of the
Fund by Sub-Adviser are subject to various market and business risks, and that
investing in securities of companies in emerging countries involves special
risks which are not typically associated with investing in U.S. companies.
Risks include but are not limited to, foreign currency fluctuations, investment
and repatriation restrictions, and political and social instability. Although
the Sub-Adviser intends to invest in companies located in countries which the
Sub-Adviser considers to have relatively stable and friendly governments, the
Fund's Board of Directors accepts the possibility that countries in which the
Sub-Adviser invests may expropriate or nationalize properties of foreigners, may
impose confiscatory taxation or exchange controls, including suspending
currency transfers from a
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given country, or may be subject to political or diplomatic developments that
could affect investments in those countries.
(c) This Agreement shall not become effective unless and until it is
approved by the Board of Directors of the Fund, including a majority of the
members who are not "interested persons" to parties to this Agreement, by a vote
cast in person at a meeting called for the purpose of voting such approval, and
by a majority of the outstanding voting securities of the Fund.
(d) The Adviser understands that the Sub-Adviser now acts, will continue to
act, or may act in the future, as investment adviser to fiduciary and other
managed accounts, including other investment companies, and the Adviser has no
objection to the Sub-Adviser so acting, provided that the Sub-Adviser duly
performs all obligations under this Agreement. The Adviser also understands
that the Sub-Adviser may give advice and take action with respect to any of its
other clients or for its own account which may differ from the timing or nature
of action taken by the Sub-Adviser with respect to the Fund. Nothing in this
Agreement shall impose upon the Sub-Adviser any obligation to purchase or sell
or to recommend for purchase or sale, with respect to the Fund, any security
which the Sub-Adviser or its shareholders, directors, officers, employees or
affiliates may purchase or sell for its or their own account(s) or for the
account of any other client.
(e) Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the right of the Sub-
Adviser, or the right of any of its officers, directors or employees who may
also be an officer, director or employee of the Fund, or persons otherwise
affiliated with the Fund (within the meaning of the 0000 Xxx) to engage in any
other business or to 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.
(f) Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof. This Agreement
shall be construed and enforced in accordance with and governed by the laws of
the State of Minnesota. The captions in
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this Agreement are included for convenience only and in no way define or delimit
any of the provisions hereof or otherwise affect their construction or effect.
(g) Any notice under this Agreement shall be in writing, addressed and
delivered or mailed postage pre-paid to the appropriate party at the following
address: The Adviser and the Fund at 000 Xxxxxx Xxxxxx Xxxxx, Xx. Xxxx,
Xxxxxxxxx 00000-0000, and the Sub-Adviser at 000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx
0000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000.
(h) Sub-Adviser agrees to notify Adviser of any change in Sub-Adviser's
officers and directors within a reasonable time after such change.
(i) Both the Adviser and the Sub-Adviser acknowledge that all sales
literature for investment companies are subject to strict regulatory oversight.
The Adviser agrees to submit to the Sub-Adviser any and all sales literature
referencing "Templeton", "Xxxxxxxxx Investment Counsel, Inc.", or any affiliate
thereof, for review and approval prior to filing with any appropriate regulatory
agency or prior to the public release of any such sales literature. Nothing
herein shall be construed as an obligation or duty on the part of either party
to produce sales literature for the Fund.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
ADVANTUS CAPITAL MANAGEMENT, INC.
By /s/ Xxxx X. Xxxxxxx
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Its President
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XXXXXXXXX INVESTMENT COUNSEL, INC.
By /s/ Xxxxxx X. Xxxx
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Its President
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