FORM OF INVESTMENT MANAGEMENT SERVICES AGREEMENT
AMENDED AND RESTATED
This Agreement dated as of April __, 2006, is by and between RiverSource
Investments, LLC (the "Investment Manager"), a Minnesota limited liability
company and RiverSource Dimensions Series, Inc. (the "Registrant") on behalf of
its underlying series listed in Schedule A (the term "Fund" or "Funds" is used
to refer to either the Registrant or its underlying series, as context
requires).
PART ONE: INVESTMENT MANAGEMENT AND OTHER SERVICES
(1) The Fund hereby retains the Investment Manager, and the Investment Manager
hereby agrees, for the period of this Agreement and under the terms and
conditions hereinafter set forth, to furnish the Fund continuously with
investment advice; to determine, consistent with the Fund's investment
objectives and policies, which securities in the Investment Manager's
discretion shall be purchased, held or sold, and to execute or cause the
execution of purchase or sell orders; to prepare and make available to the
Fund all necessary research and statistical data in connection therewith;
to furnish all other services of whatever nature required in connection
with the management of the Fund as provided under this Agreement; and to
pay such expenses as may be provided for in Part Three; subject always to
the direction and control of the Board of Directors (the "Board") and the
authorized officers of the Fund. The Investment Manager agrees to maintain
an adequate organization of competent persons to provide the services and
to perform the functions herein mentioned and to maintain adequate
oversight over any service providers including subadvisers hired to
provide services and to perform the functions herein mentioned. The
Investment Manager agrees to meet with any persons at such times as the
Board deems appropriate for the purpose of reviewing the Investment
Manager's performance under this Agreement. The Fund agrees that the
Investment Manager may subcontract for certain of the services described
under this Agreement with the understanding that there shall be no
diminution in the quality or level of services and also with the
understanding, that the Investment Manager shall obtain such approval from
the Fund's Board and/or its shareholders as is required by law, rules and
regulations promulgated thereunder, terms of the Agreement, resolutions of
the Board and commitments of the Investment Manager.
(2) The Investment Manager agrees that the investment advice and investment
decisions will be in accordance with general investment policies of the
Fund as disclosed to the Investment Manager from time to time by the Fund
and as set forth in the prospectus and registration statement filed with
the United States Securities and Exchange Commission (the "SEC").
(3) The Investment Manager agrees to provide such support as required or
requested by the Board in conjunction with voting proxies solicited by or
with respect to the issuers of securities in which the Fund's assets may
be invested from time to time, it being understood that the Board has sole
voting power with respect to all such proxies.
(4) The Investment Manager agrees that it will maintain all required records,
memoranda, instructions or authorizations relating to the management of
the assets for the Fund including the acquisition or disposition of
securities, proxy voting and safekeeping of assets.
(5) The Fund agrees that it will furnish to the Investment Manager any
information that the latter may reasonably request with respect to the
services performed or to be performed by the Investment Manager under this
Agreement.
(6) In selecting broker-dealers for execution, the Investment Manager will
seek to obtain best execution for securities transactions on behalf of the
Fund, except where otherwise directed by the Board. In selecting
broker-dealers to execute transactions, the Investment Manager will
consider not only available prices (including commissions or xxxx-up), but
also other relevant factors such as, without limitation, the
characteristics of the security being traded, the size and difficulty of
the transaction, the execution, clearance and settlement capabilities as
well as the reputation, reliability, and financial soundness of the
broker-dealer selected, the broker-dealer's risk in positioning a block of
securities, the broker-dealer's execution service rendered on a continuing
basis and in other transactions, the broker-dealer's expertise in
particular markets, and the broker-dealer's ability to provide research
services. To the extent permitted by law, and consistent with its
obligation to seek best execution, the Investment Manager may execute
transactions or pay a broker-dealer a commission or markup in excess of
that which another broker-dealer might have charged for executing a
transaction provided that the Investment Manager determines, in good
faith, that the execution is appropriate or the commission or markup is
reasonable in relation to the value of the brokerage and/or research
services provided, viewed in terms of either that particular transaction
or the Investment Manager's overall responsibilities with respect to the
Fund and other clients for which it acts as investment adviser. The
Investment Manager shall not consider the sale or promotion of shares of
the Fund, or other affiliated products, as a factor in the selection of
broker-dealers through which transactions are executed.
(7) Except for bad faith, intentional misconduct or negligence in regard to
the performance of its duties under this Agreement, neither the Investment
Manager, nor any of its respective directors, officers, partners,
principals, employees, or agents shall be liable for any acts or omissions
or for any loss suffered by the Fund or its shareholders or creditors.
Each of the Investment Manager, and its respective directors, officers,
partners, principals, employees and agents, shall be entitled to rely, and
shall be protected from liability in reasonably relying, upon any
information or instructions furnished to it (or any of them as
individuals) by the Fund or its agents which is believed in good faith to
be accurate and reliable. The Fund understands and acknowledges that the
Investment Manager does not warrant any rate of return, market value or
performance of any assets in the Fund. Notwithstanding the foregoing, the
federal securities laws impose liabilities under certain circumstances on
persons who act in good faith and, therefore, nothing herein shall
constitute a waiver of any right which the Fund may have under such laws
or regulations.
PART TWO: COMPENSATION TO THE INVESTMENT MANAGER
(1) The Fund agrees to pay to the Investment Manager, and the Investment
Manager covenants and agrees to accept from the Fund in full payment for
the services furnished, a fee as set forth in Schedule A.
(2) The fee shall be paid on a monthly basis and, in the event of the
termination of this Agreement, in whole or in part with respect to any
Fund, the fee accrued shall be prorated on the basis of the number of days
that this Agreement is in effect during the month with respect to which
such payment is made.
(3) The fee provided for hereunder shall be paid in cash by the Fund to the
Investment Manager within five business days after the last day of each
month.
PART THREE: ALLOCATION OF EXPENSES
(1) The Fund agrees to pay:
(a) Fees payable to the Investment Manager for its services under the
terms of this Agreement.
(b) Taxes.
(c) Brokerage commissions and charges in connection with the purchase
and sale of assets.
(d) Custodian fees and charges.
(e) Premium on the bond required by Rule 17g-1 under the Investment
Company Act of 1940.
(f) Fees and expenses of attorneys (i) it employs in matters not
involving the assertion of a claim by a third party against the
Fund, its Board members and officers, (ii) it employs in conjunction
with a claim asserted by the Board against the Investment Manager,
except that the Investment Manager shall reimburse the Fund for such
fees and expenses if it is ultimately determined by a court of
competent jurisdiction, or the Investment Manager agrees, that it is
liable in whole or in part to the Fund, (iii) it employs to assert a
claim against a third party, and (iv) it or the Investment Manager
employs, with the approval of the Board, to assist in the evaluation
of certain investments or other matters related to the management of
the Fund.
(g) Fees paid for the qualification and registration for public sale of
the securities of the Fund under the laws of the United States and
of the several states in which such securities shall be offered for
sale.
(h) Fees of consultants employed by the Fund.
(i) Board member, officer and employee expenses which shall include
fees, salaries, memberships, dues, travel, seminars, pension, profit
sharing, and all other benefits paid to or provided for Board
members, officers and employees, directors and officers liability
insurance, errors and omissions liability insurance, worker's
compensation insurance and other expenses applicable to the Board
members, officers and employees, except the Fund will not pay any
fees or expenses of any person who is an officer or employee of the
Investment Manager or its affiliates.
(j) Filing fees and charges incurred by the Fund in connection with
filing any amendment to its organizational documents, or incurred in
filing any other document with the state where the Fund is organized
or its political subdivisions.
(k) Organizational expenses of the Fund.
(l) Expenses incurred in connection with lending portfolio securities of
the Fund.
(m) Expenses properly payable by the Fund, approved by the Board.
(n) Other expenses payable by the Fund pursuant to separate agreement of
the Fund and any of its service providers.
(2) Unless the Fund is obligated to pay an expense pursuant to Part Three,
Section I, above, the Investment Manager agrees to pay all expenses
associated with the services it provides under the terms of this
Agreement.
PART FOUR: MISCELLANEOUS
(1) The Investment Manager shall be deemed to be an independent contractor
and, except as expressly provided or authorized in this Agreement, shall
have no authority to act for or represent the Fund.
(2) A "full business day" shall be as defined in the By-laws of the Fund.
(3) The Fund acknowledges that the Investment Manager and its affiliates may
perform investment advisory services for other clients, so long as the
Investment Manager's services to the Fund under this Agreement are not
impaired thereby. The Investment Manager and its affiliates may give
advice or take action in the performance of duties to other clients that
may differ from advice given, or the timing and nature of action taken,
with respect to the Fund, and that the Investment Manager and its
affiliates may trade and have positions in securities of issuers where the
Fund may own equivalent or
related securities, and where action may or may not be taken or
recommended for the Fund. Nothing in this Agreement shall be deemed to
impose upon the Investment Manager or any of its affiliates any obligation
to purchase or sell, or recommend for purchase or sale for the Fund, any
security or any other property that the Investment Manager or any of its
affiliates may purchase, sell or hold for its own account or the account
of any other client. Notwithstanding any of the foregoing, the Investment
Manager shall allocate investment opportunities among its clients,
including the Fund, in an equitable manner, consistent with its fiduciary
obligations. By reason of their various activities, the Investment Manager
and its affiliates may from time to time acquire information about various
corporations and their securities. The Fund recognizes that the Investment
Manager and its affiliates may not always be free to divulge such
information, or to act upon it.
(4) Neither this Agreement nor any transaction pursuant hereto shall be
invalidated or in any way affected by the fact that Board members,
officers, agents and/or shareholders of the Fund are or may be interested
in the Investment Manager or any successor or assignee thereof, as
directors, officers, stockholders or otherwise; that directors, officers,
stockholders or agents of the Investment Manager are or may be interested
in the Fund as Board members, officers, shareholders, or otherwise; or
that the Investment Manager or any successor or assignee, is or may be
interested in the Fund as shareholder or otherwise, provided, however,
that neither the Investment Manager, nor any officer, Board member or
employee thereof or of the Fund, shall sell to or buy from the Fund any
property or security other than shares issued by the Fund, except in
accordance with applicable regulations or orders of the SEC.
(5) Any notice under this Agreement shall be given in writing, addressed, and
delivered, or mailed postpaid, to the party to this Agreement entitled to
receive such, at such party's principal place of business in Minneapolis,
Minnesota, or to such other address as either party may designate in
writing mailed to the other.
(6) The Investment Manager agrees that no officer, director or employee of the
Investment Manager will deal for or on behalf of the Fund with himself as
principal or agent, or with any corporation or partnership in which he may
have a financial interest, except that this shall not prohibit:
(a) Officers, directors or employees of the Investment Manager from
having a financial interest in the Fund or in the Investment
Manager.
(b) The purchase of securities for the Fund, or the sale of securities
owned by the Fund, through a security broker or dealer, one or more
of whose partners, officers, directors or employees is an officer,
director or employee of the Investment Manager, provided such
transactions are handled in the capacity of broker only and provided
commissions charged do not exceed customary brokerage charges for
such services.
(c) Transactions with the Fund by a broker-dealer affiliate of the
Investment Manager as may be allowed by rule or order of the U.S.
Securities and Exchange Commission and if made pursuant to
procedures adopted by the Board.
(7) The Investment Manager agrees that, except as herein otherwise expressly
provided or as may be permitted consistent with the use of a broker-dealer
affiliate of the Investment Manager under applicable provisions of the
federal securities laws, neither it nor any of its officers, directors or
employees shall at any time during the period of this Agreement, make,
accept or receive, directly or indirectly, any fees, profits or emoluments
of any character in connection with the purchase or sale of securities
(except shares issued by the Fund) or other assets by or for the Fund.
(8) All information and advice furnished by the Investment Manager to the Fund
under this Agreement shall be confidential and shall not be disclosed to
third parties, except as required by law, order, judgment, decree, or
pursuant to any rule, regulation or request of or by any government,
court, administrative or regulatory agency or commission, other
governmental or regulatory authority or any self-regulatory organization.
All information furnished by the Fund to the Investment Manager under this
Agreement shall be confidential and shall not be disclosed to any
unaffiliated third party, except as permitted or required by the
foregoing, where it is necessary to effect transactions or provide other
services to the Fund, or where the Fund requests or authorizes the
Investment Manager to do so. The Investment Manager may share information
with its affiliates in accordance with its privacy policies in effect from
time to time.
(9) This Agreement shall be governed by the laws of the State of Minnesota.
PART FIVE: RENEWAL AND TERMINATION
(1) This Agreement shall continue in effect until April__, 2008 or until a new
agreement is approved by a vote of the majority of the outstanding shares
of the Fund and by vote of the Board, including the vote required by (b)
of this paragraph, and if no new agreement is so approved, this Agreement
shall continue from year to year thereafter unless and until terminated by
either party as hereinafter provided, except that such continuance shall
be specifically approved at least annually (a) by the Board or by a vote
of the majority of the outstanding shares of the Fund and (b) by the vote
of a majority of the Board members 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. As used in this
paragraph, the term "interested person" shall have the same meaning as set
forth in the Investment Company Act of 1940, as amended, and the rules
promulgated thereunder (the "1940 Act"). As used in this agreement, the
term "majority of the outstanding shares of the Fund" shall have the same
meaning as set forth in the 1940 Act.
(2) This Agreement may be terminated, with respect to each underlying series
of the Fund, by either the Fund or the Investment Manager at any time by
giving the other
party 60 days' written notice of such intention to terminate, provided
that any termination shall be made without the payment of any penalty, and
provided further that termination may be effected either by the Board or
by a vote of the majority of the outstanding voting shares of the Fund.
(3) This Agreement shall terminate in the event of its assignment, the term
"assignment" for this purpose having the same meaning as set forth in the
1940 Act.
(4) Non-material amendments or modifications to this Agreement as may be
permitted by the 1940 Act will only be made effective upon written
agreement executed by the Investment Manager and the Board.
IN WITNESS THEREOF, the parties hereto have executed the foregoing Agreement as
of the day and year first above written.
RIVERSOURCE DIMENSIONS SERIES, INC.
By:
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Xxxxxx X. Xxx
Vice President
RIVERSOURCE INVESTMENTS, LLC
By:
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Xxxxx X. Xxxxx
Senior Vice President
SCHEDULE A
ASSET CHARGE
The asset charge for each calendar day of each year shall be equal to the total
of 1/365th (1/366th in each leap year) of the amount computed in accordance with
the fee schedule in the table, below:
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FUND NET ASSETS ANNUAL RATE AT
(BILLIONS) EACH ASSET LEVEL
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RiverSource Disciplined Small Cap Value Fund First $0.25 0.850%
Next $0.25 0.825%
Next $0.25 0.800%
Next $0.25 0.775%
Next $1.0 0.750%
Over $2.0 0.725%
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RiverSource Disciplined Small and Mid Cap First $1.0 0.700%
Equity Fund Next $1.0 0.675%
Next $1.0 0.650%
Next $3.0 0.625%
Next $1.5 0.600%
Next $2.5 0.575%
Next $5.0 0.550%
Next $9.0 0.525%
Next $26.0 0.500%
Over $50.0 0.475%
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The computation shall be made for each calendar day on the basis of net assets
as of the close of the preceding business day. In the case of the suspension of
the computation of net asset value, the fee for each calendar day during such
suspension shall be computed as of the close of business on the last full
business day on which the net assets were computed. Net assets as of the close
of a full business day shall include all transactions in shares of the Fund
recorded on the books of the Fund for that day.
PERFORMANCE INCENTIVE ADJUSTMENT
In addition to an asset charge, the fee for the Fund shall include a performance
incentive adjustment.
The performance incentive adjustment shall be based on the Fund's performance
compared to an index of similar funds (the "Index"). Current Indexes are shown
below. These Indexes may change as set forth below.
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FUND LIPPER INDEX
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Disciplined Small and Mid Cap Equity Fund Lipper Mid-Cap Core Funds Index
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Disciplined Small Cap Value Lipper Small-Cap Value Funds Index
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The performance incentive adjustment is determined by measuring the percentage
difference over a rolling 12-month period between the performance of one Class A
share of the Fund and the change in performance of the Index. The performance
difference will then be used to determine the adjustment rate.
The adjustment rate, computed to five decimal places, is determined in
accordance with table below, and is applied against average daily net assets for
the applicable rolling 12-month period.
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EQUITY FUNDS
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PERFORMANCE DIFFERENCE ADJUSTMENT RATE
-------------------------------- ----------------------------------------------------------------------
0.00%-0.50% 0
-------------------------------- ----------------------------------------------------------------------
0.50%-1.00% 6 basis points times the performance difference over 0.50% (maximum
of 3 basis points if a 1% performance difference)
-------------------------------- ----------------------------------------------------------------------
1.00%-2.00% 3 basis points, plus 3 basis points times the performance difference
over 1.00% (maximum 6 basis points if a 2% performance difference)
-------------------------------- ----------------------------------------------------------------------
2.00%-4.00% 6 basis points, plus 2 basis points times the performance difference
over 2.00% (maximum 10 basis points if a 4% performance difference)
-------------------------------- ----------------------------------------------------------------------
4.00%-6.00% 10 basis points, plus 1 basis point times the performance difference
over 4.00% (maximum 12 basis points if a 6% performance difference)
-------------------------------- ----------------------------------------------------------------------
6.00% or more 12 basis points
-------------------------------- ----------------------------------------------------------------------
For example, if the performance difference is 2.38%, the adjustment rate is
0.000676 (0.0006 [6 basis points] plus 0.0038 [the 0.38% performance difference
over 2.00%] x 0.0002 [2 basis points] x 100 (0.000076)). Rounded to five decimal
places, the adjustment rate is 0.00068. Where the Fund's Class A performance
exceeds that of the Index, the fee paid to the Investment Manager will increase
by the adjustment rate. Where the performance of the Index exceeds the
performance of the Fund's Class A shares, the fee paid to the Investment Manager
will decrease by the adjustment rate.
The 12-month comparison period rolls over with each succeeding month, so that it
always equals 12 months, ending with the month for which the performance
adjustment is being computed.
CHANGE IN INDEX
If an Index ceases to be published for a period of more than 90 days, changes in
any material respect, otherwise becomes impracticable or, at the discretion of
the Board, is no longer appropriate to use for purposes of a performance
incentive adjustment, for example, if Lipper reclassifies the Fund from one peer
group to another, the Board may take action it deems appropriate and in the best
interests of shareholders, including: (1) discontinuance of the performance
incentive adjustment until such time as it approves a substitute index, or (2)
adoption of a methodology to transition to a substitute index it has approved.
