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EXHIBIT d(12)
INVESTMENT SUBADVISORY AGREEMENT
INVESTMENT SUBADVISORY AGREEMENT, dated as of April 20, 2001 by and
between Diversified Investment Advisors, Inc., a Delaware corporation
("Diversified") and Dresdner RCM Global Investors LLC ("Subadvisor").
WITNESSETH:
WHEREAS, Diversified has been organized to operate as an investment
advisor registered under the Investment Advisers Act of 1940 and has been
retained to provide investment advisory services to the Mid-Cap Growth
Portfolio, a series of Diversified Investors' Portfolios ("Portfolio"), a
diversified open-end management investment company registered under the
Investment Company Act of 1940 ("1940 Act"); and
WHEREAS, Diversified desires to retain the Subadvisor to furnish it
with portfolio management services in connection with Diversified's investment
advisory activities on behalf of the Portfolio, and the Subadvisor is willing to
furnish such services to Diversified;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of the Subadvisor. In accordance with and subject to the Investment
Advisory Agreement between the Portfolio and Diversified, attached hereto as
Schedule A (the "Advisory Agreement"), Diversified hereby appoints the
Subadvisor to perform the portfolio management services described herein for the
investment and reinvestment of such amount of the Portfolio's assets as is
determined from time to time by the Portfolio's Board of Trustees, subject to
the control and direction of Diversified and the Portfolio's Board of Trustees,
for the period and on the terms hereinafter set forth.
The Subadvisor shall provide Diversified with such investment advice
and supervision as the latter may from time to time consider necessary for the
proper supervision of the Portfolio's assets. The Subadvisor shall furnish
continuously an investment program and shall determine from time to time what
securities shall be purchased, sold or exchanged and what portion of the assets
of the Portfolio shall be held uninvested, subject always to the provisions of
the 1940 Act and to the Portfolio's then-current Prospectus and Statement of
Additional Information ("SAI"). The Subadvisor will not supervise the investment
of cash. Cash in the Fund will be invested by Diversified who shall be solely
responsible for the investment of such cash.
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In particular, the Subadvisor shall: (i) continuously review, supervise
and administer the investment program of the Portfolio; (ii) monitor regularly
the relevant securities for the Portfolio to determine if adjustments are
warranted and, if so, to make such adjustments on a periodic basis; (iii)
determine, in the Subadvisor's discretion, the securities to be purchased or
sold or exchanged in order to keep the Portfolio in balance with its designated
investment strategy; (iv) determine, in the Subadvisor's discretion, whether to
exercise warrants or other rights with respect to the Portfolio's securities;
(v) determine, in the Subadvisor's discretion, whether the merit of an
investment has been substantially impaired by extraordinary events or financial
conditions, thereby warranting the removal of such securities from the
Portfolio; (vi) as promptly as practicable after the end of each calendar month,
furnish a report showing: (a) all transactions during such month, (b) all assets
of the Portfolio on the last day of such month, rates of return, and (c) such
other information relating to the Portfolio as the Diversified may request;
(vii) meet at least four times per year with Diversified and with such other
persons as may be designated on reasonable notice and at reasonable locations,
at the request of Diversified, to discuss general economic conditions,
performance, investment strategy, and other matters relating to the Portfolio;
(viii) provide the Portfolio with records concerning the Subadvisor's activities
which the Portfolio is required to by law maintain; and (ix) render regular
reports to the Portfolio's officers and Directors concerning the Subadvisor's
discharge of the foregoing responsibilities.
The Subadvisor shall take, on behalf of the Portfolio, all actions
which it deems necessary to implement the investment policies determined as
provided above, and in particular to place all orders for the purchase or sale
of Portfolio securities for the Portfolio's account with brokers or dealers
selected by it, and to that end the Subadvisor is authorized as the agent of the
Portfolio to give instructions to the custodian of the Portfolio as to
deliveries of securities and payments of cash for the account of the Portfolio.
In connection with the selection of such brokers or dealers and the placing of
such orders, the Subadvisor is directed to seek for the Portfolio, in its best
judgment, prompt execution in an effective manner at the most favorable price.
Subject to this requirement of seeking the most favorable price, securities may
be bought from or sold to broker-dealers that charge commissions in excess of
the amount of commission another broker-dealer would have charged as long as the
Subadvisor determines in good faith that such amount of commission is reasonable
in relation to the value of statistical, research and other information or
services provided by such broker-dealer to the Subadvisor or the Portfolio,
subject to any applicable laws, rules and regulations.
2. Allocation of Charges and Expenses. The Subadvisor shall furnish at its own
expense all necessary services, facilities and personnel in connection with its
responsibilities under Section 1 above. It is understood that the Portfolio will
pay all of its own expenses including, without limitation, compensation and
out-of-pocket
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expenses of Trustees not affiliated with the Subadvisor or Diversified;
governmental fees; interest charges; taxes; membership dues; fees and expenses
of independent auditors, of legal counsel and of any transfer agent,
administrator, distributor, shareholder servicing agents, registrar or dividend
disbursing agent of the Portfolio; expenses of distributing and redeeming shares
and servicing shareholder accounts; expenses of preparing, printing and mailing
prospectuses, shareholder reports, notices, proxy statements and reports to
governmental officers and commissions and to shareholders of the Portfolio;
expenses connected with the execution, recording and settlement of Portfolio
security transactions; insurance premiums; fees and expenses of the custodian
for all services to the Portfolio, including safekeeping of funds and securities
and maintaining required books and accounts; expenses of calculating the net
asset value of shares of the Portfolio; expenses of shareholder meetings;
expenses of litigation and other extraordinary or non-recurring events and
expenses relating to the issuance, registration and qualification of shares of
the Portfolio.
3. Compensation of the Subadvisor. For the services to be rendered, Diversified
shall pay to the Subadvisor an investment advisory fee computed in accordance
with the terms of Schedule B herewith attached. If the Subadvisor serves for
less than the whole of any period specified, its compensation shall be prorated.
4. Covenants and Representations of the Subadvisor. The Subadvisor agrees that
it will not deal with itself, or with the Trustees of the Portfolio or with
Diversified, or the principal underwriter or distributor as principals in making
purchases or sales of securities or other property for the account of the
Portfolio, except as permitted by the 1940 Act, will not take a long or short
position in the shares of the Portfolio except as permitted by the Portfolio's
Articles, and will comply with all other applicable provisions of the
Portfolio's Articles and By-Laws and any current Prospectus of the Portfolio.
5. Covenants and Representations of Diversified. Diversified represents and
warrants to Subadvisor that (i) this Agreement has been approved by the
Portfolio's Board of Trustees, including a majority of the Trustees who are not
interested persons of the Portfolio, and that (ii) this Agreement will be
approved by the Shareholder(s) as of the date the Subadvisor begins to manage
the Portfolio.
6. Limits on Duties. The Subadvisor shall be responsible only for managing the
assets in good faith and in accordance with the investment guidelines, and shall
have no responsibility whatsoever for, and shall incur no liability on account
of (i) diversification or selection of such investment guidelines, (ii) advice
on, or management of, any other assets for Diversified, (iii) filing of any tax
or information returns or forms, withholding or paying any taxes, or seeking any
exemption or refund, (iv) registration with any government or agency, or (v)
administration of the plans and trusts investing through the Portfolio, and
shall be indemnified by Diversified for any loss in carrying out the terms and
provisions of this Agreement, including reasonable
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attorney's fees, indemnification to brokers and commission merchants, fines,
taxes, penalties and interest. Subadvisor, however, shall be liable for any
liability, damages, or expenses of Diversified arising out of the negligence,
malfeasance or violation of applicable law by it or any of its employees in
providing management under this Agreement; and, in such cases, the
indemnification by Diversified, referred to above shall be inapplicable.
The Subadvisor may apply to Diversified at any time for instructions
and may consult counsel for Diversified or its own counsel with respect to any
matter arising in connection with the duties of the Subadvisor. Also, the
Subadvisor shall be protected in acting upon any document which it reasonably
believes to be genuine and to have been signed by the proper person or persons.
7. Duration, Termination and Amendments of this Agreement. This Agreement shall
become effective as of the day and year first above written and shall govern the
relations between the parties hereto thereafter, and, unless terminated earlier
as provided below, shall remain in force for two years, on which date it will
terminate unless its continuance thereafter is specifically approved at least
annually (a) by the vote of a majority of the Trustees of the Portfolio who are
not "interested persons" to this Agreement or of the Subadvisor or Diversified
at a meeting specifically called for the purpose of voting on such approval, and
(b) by the Board of Trustees of the Portfolio or by vote of a majority of the
outstanding voting securities of the Portfolio. However, if the shareholders of
the Portfolio fail to approve the Agreement as provided herein, the Subadvisor
may continue to serve hereunder in the manner and to the extent permitted by the
1940 Act and Rules thereunder.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the vote of a majority of the outstanding voting
securities of the Portfolio, or by Diversified. The Subadvisor may terminate the
Agreement only upon giving 90 days' advance written notice to Diversified. This
Agreement shall automatically terminate in the event of its assignment.
This Agreement may be amended only if such amendment is approved by the
vote of a majority of the outstanding voting securities of the Portfolio and by
vote of a majority of the Board of Trustees of the Portfolio 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.
The terms "specifically approved at least annually", "vote of a
majority of the outstanding voting securities", "assignment", "affiliated
person", and "interested persons", when used in this Agreement, shall have the
respective meanings specified in, and shall be construed in a manner consistent
with, the 1940 Act, subject, however, to such exemptions as may be granted by
the Securities and Exchange Commission under said Act.
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8. Proxy Voting. The Subadvisor shall vote proxies solicited by or with respect
to the issuers of securities in which Portfolio assets are invested as of the
record date for voting such proxies (the "Proxies"). If any shares of any mutual
fund managed by the Subadvisor are held by the Portfolio, the authority to vote
shares of such fund is specifically withheld. In addition, the Subadvisor agrees
to provide to the Portfolio's Board of Trustees upon request a written report
with respect to the voting of Proxies pursuant to the authority granted hereby
and such additional reports concerning the voting of Proxies as shall be
reasonably requested by the Board of Trustees. The Board of Trustees understands
and agrees that, notwithstanding such reporting, the Subadvisor neither solicits
nor shall it accept direction with respect to the voting of Proxies.
9. Aggregation of Orders. Provided the investment objectives of the Portfolio
are adhered to, it is agreed that the Subadvisor may aggregate sales and
purchase orders of securities held in the Portfolio with similar orders being
made simultaneously for other portfolios managed by the Subadvisor if, in the
Subadvisor's reasonable judgment, such aggregation shall result in an overall
economic benefit to the Portfolio, taking into consideration the advantageous
selling or purchase price and brokerage commission. In accounting for such
aggregated order, price and commission shall be averaged on a per bond or share
basis daily.
10. Allocating Investment Opportunities. It is understood and agreed that (a)
the Subadvisor performs investment adviser services for various clients and that
the Subadvisor may take action with respect to any of its other clients which
may differ from action, or from the timing or nature of action, taken with
respect to the Portfolio, so long as it is the Subadvisor's policy, to the
extent practicable, to allocate investment opportunities to the Portfolio over a
period of time on a fair and equitable basis relative to other portfolios, and
(b) the Subadvisor shall have no obligation to purchase or sell for the
Portfolio any security which the Subadvisor or its principals, affiliates or
employees, may purchase or sell for its or their own accounts or the account of
any other portfolio, if in the opinion of the Subadvisor such transaction or
investment appears unsuitable, impractical or undesirable for the Portfolio.
11 Certain Records. Any records to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 adopted under the 1940 Act which are
prepared or maintained by the Subadvisor on behalf of the Portfolio are the
property of the Portfolio and will be surrendered promptly to the Portfolio on
request.
12. Survival of Compensation Rates. All rights of compensation under this
Agreement shall survive the termination of this Agreement.
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13. Entire Agreement. This Agreement states the entire agreement of the parties
with respect to management of the Portfolio and may not be amended except in a
writing signed by the parties.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
15. Change of Management and Pending Litigation. Subadvisor represents to
Diversified that it will disclose to Diversified as soon as it has knowledge of
any significant change or variation in its management structure or personnel or
any significant change or variation in its management style or investment
philosophy. In addition, Subadvisor represents to Diversified that it will
similarly disclose to Diversified, as soon as it has knowledge, the existence of
any pending or threatened, significant legal action being brought against it
whether in the form of a lawsuit or an investigation by any federal or state
governmental agency.
Diversified represents to Subadvisor that any information received by
Diversified pursuant to this section will be kept strictly confidential.
16. Use of Name. Subadvisor hereby agrees that Diversified may use the
Subadvisor's name in its marketing or advertising materials. Diversified agrees
to allow the Subadvisor to examine and approve any such materials prior to use.
IN WITNESS WHEREOF, the parties thereto have caused this Agreement to
be executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
Diversified Investment Advisors, Inc.
By:_______________________________________
Xxxx X. Xxxxxx
Vice President and Senior Counsel
Dresdner RCM Global Investors LLC
By:________________________________________
DRESDNER2.ISA
2001
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SCHEDULE B
The Subadvisor shall be compensated for its services under this Agreement on the
basis of the below-described annual fee schedule. The fee schedule shall only be
amended by agreement between the parties.
Fee Schedule
.82% of the aggregate net assets of the Portfolio applied to the first
$25 million dollars
.46% of the aggregate net assets of the Portfolio applied to the next
$25 million dollars
.35% of the aggregate net assets of the Portfolio applied to the next
$50 million dollars
.23% of the aggregate net assets of the Portfolio applied to everything
in excess of $100 million dollars
Aggregate net assets are equal to the total market value of the Portfolio. Fees
will be calculated by multiplying the arithmetic average of the beginning and
ending monthly net assets in the Portfolio by the fee schedule and dividing by
twelve. The fee will be paid quarterly.
DRESDNER2-ISA
2001
