INVESTMENT SUB-ADVISORY AGREEMENT
THIS AGREEMENT, made as of the 1st day of May, 2000, 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
State Street Research & Management Company, a Delaware 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 Venture 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
between the Fund and the Adviser, the Adviser hereby appoints the Sub-Adviser to
perform portfolio selection services described herein for investment and
reinvestment of the Fund, 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:
(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, and communicated in
writing to the Sub-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. The Adviser agrees to
promptly inform the Sub-Adviser if such objectives,
policies or restrictions change and to deliver to the
Sub-Adviser updated documents, if prepared.
(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 or are under consideration for inclusion therein; (2)
formulate and implement a continuous investment program
for the Fund consistent with the investment objectives 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.
(3) In connection with the purchase and sale of securities of
the Fund, 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. 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. 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 reasonably 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
-2-
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 execution of the
Fund's 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 other 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 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.
-3-
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 $500 million 0.65%
On the next $500 million 0.60%
On all assets in excess of $1 billion 0.50%
*The term "assets" for purposes of each of the breakpoints set forth
above shall include all "small company value" assets sub-advised by the
Sub-Adviser for the Adviser or its affiliates, in addition to the assets of the
Fund. The aggregation of the assets for purposes of the breakpoints, shall be
calculated quarterly based upon the aggregate assets on March 31st, June 30th,
September 30th and December 31st of each calendar year (or portion thereof) that
this agreement is effective.
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 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 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,
-4-
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 the described
investment objective 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.
(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" of parties to this Agreement, by
a vote cast in person at a meeting called for the purpose of voting on 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 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.
-5-
(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 Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, XX
00000-0000 Attention: General Counsel.
IN WITNESS WHEREOF, the parties have duly executed this Agreement.
ADVANTUS CAPITAL MANAGEMENT, INC.
By:
-----------------------------------------
Its:
----------------------------------------
STATE STREET RESEARCH & MANAGEMENT COMPANY
By:
-----------------------------------------
Its:
----------------------------------------
-6-
