Exhibit (d)(4)
INVESTMENT SUB-ADVISORY AGREEMENT
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AGREEMENT made as of the 20 day of August, 2004 by and among Deutsche
Asset Management, Inc., a Delaware corporation (the `Investment Adviser'), and
Northern Trust Investments, N.A., a national banking association (the
`Subadviser').
WHEREAS, the Xxxxxxx Advisor Funds III (the `Trust') is an open-end,
management investment company, registered under the Investment Company Act of
1940, as amended (the `1940 Act'), and Lifecycle Long Range Fund (the `Fund') is
a series of the Trust;
WHEREAS, the Investment Adviser and the Subadviser are investment
advisers registered under the Investment Advisers Act of 1940 (the `Advisers
Act');
WHEREAS, the Trust, on behalf of the Fund, has entered into an
Investment Advisory Agreement, dated August 20, 2004, with the Investment
Adviser (the `Advisory Agreement') pursuant to which the Investment Adviser has
agreed to provide certain management services to the Fund;
WHEREAS, pursuant to the provisions of the Advisory Agreement, the
Investment Adviser may delegate any or all of its Fund management
responsibilities under that agreement to one or more subadvisers;
WHEREAS, the Investment Adviser has selected the Subadviser to act as a
sub-investment adviser of the Fund and to provide certain other services, as
more fully set forth below, and the Subadviser is willing to act as such
sub-investment adviser and to perform such services under the terms and
conditions hereinafter set forth;
NOW, THEREFORE, the Investment Adviser, the Trust and the Subadviser
agree as follows:
1. Investment Advisory and Management Services. Subject to and in
accordance with the provisions hereof, the Investment Adviser hereby appoints
the Subadviser to serve as sub-investment adviser to perform the various
investment advisory and other services for the Fund set forth herein and,
subject to the restrictions set forth herein, hereby delegates to the Subadviser
the authority vested in the Investment Adviser pursuant to the Advisory
Agreement to the extent necessary to enable the Subadviser to perform its
obligations under this Agreement, and the Subadviser hereby accepts such
appointment.
Subject to the supervision and control of the Investment Adviser and
the Board of Trustees, the Subadviser will regularly provide the Fund with
investment advice and investment management services concerning the investments
of the Fund. The Subadviser will determine what securities shall be purchased,
held, sold or reinvested by the Fund and what portion of the Fund's assets shall
be held uninvested in cash and cash equivalents, subject at all times to: (i)
the provisions of the Trust's Declaration of Trust and By-laws, (ii) the
requirements of the 1940 Act, and the rules and regulations thereunder, (iii)
the investment objectives, policies and restrictions applicable to the Fund
(including, without limitation, the provisions of the Internal Revenue Code of
1986, as amended (the `Code') applicable to regulated investment companies),
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as each of the same shall be from time to time in effect or set forth in the
Fund's Prospectus and Statement of Additional Information, and (iv) any other
investment guidelines, policies or limitations the Board of Trustees or the
Investment Adviser may from time to time establish and deliver in writing to the
Subadviser.
To carry out such determinations the Subadviser will exercise full
discretion, subject to the preceding paragraph, and act for the Fund in the same
manner and with the same force and effect as the Trust might or could do with
respect to purchases, sales or other transactions, as well as with respect to
all other things necessary or incidental to the furtherance or conduct of such
purchases, sales or other transactions.
The Subadviser will also make its officers and employees available to
meet with the officers of the Investment Adviser and the Trust's officers and
Trustees on due notice to review the investments and investment program of the
Fund in the light of current and prospective economic and market conditions. In
addition, the Subadviser shall, on the Subadviser's own initiative, and as
reasonably requested by the Investment Adviser, for itself and on behalf of the
Fund, furnish to the Investment Adviser from time to time whatever information
the Investment Adviser reasonably believes appropriate for this purpose. From
time to time as the Board of Trustees of the Trust or the Investment Adviser may
reasonably request, the Subadviser will furnish to the Investment Adviser and
Trust's officers and to each of its Trustees, at the Subadviser's expense,
reports on portfolio transactions and reports on issuers of securities held by
the Fund, all in such detail as the Trust or the Investment Adviser may
reasonably request. In addition, the Subadviser shall provide advice and
assistance to the Investment Adviser as to the determination of the value of
securities held or to be acquired by the Fund for valuation purposes in
accordance with the process described in the Fund's current Prospectus or
Statement of Additional Information.
The Subadviser shall maintain all accounts, books and records as
required of an investment adviser of a registered investment company pursuant to
the 1940 Act and the rules and regulations thereunder relating to its
responsibilities provided hereunder with respect to the Fund, and shall preserve
such records for the periods and in a manner prescribed by under the 1940 Act
and the rules and regulations thereunder. The Subadviser shall maintain and
enforce adequate security procedures with respect to all materials, records,
documents and data relating to any of its responsibilities pursuant to this
Agreement including all means for the effecting of securities transactions. The
Subadviser agrees that all such records are the property of the Trust, and will
be surrendered to the Trust promptly upon request. The Subadviser shall permit
the Investment Adviser, the Fund's officers and its independent public
accountants to inspect and audit such records pertaining to the Fund at
reasonable times during normal business hours upon due notice.
In the performance of its duties hereunder, the Subadviser is and shall
be an independent contractor and, except as expressly provided for herein or
otherwise expressly provided or authorized in writing by the Investment Adviser,
shall have no authority to act for or represent any Fund or the Trust in any way
or otherwise be deemed to be an agent of any Fund, the Trust or of the
Investment Adviser. If any occasion should arise in which the Subadviser gives
any advice to its clients concerning the shares of the Fund, the Subadviser will
act solely as
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investment counsel for such clients and not in any way on behalf of the Fund.
The Subadviser's services to the Fund pursuant to this Agreement are not to be
deemed to be exclusive, and it is understood that the Subadviser may render
investment advice, management and other services to others.
Subject to and in accordance with the provisions hereof and any
direction of the Board of Trustees, the Subadviser shall vote, pursuant to
procedures set forth and described to the Trustees, all proxies solicited by or
with respect to issuers of securities in which the assets of the Fund may be
invested from time to time.
2. (a) Expenses. The Subadviser will bear its own costs of performing
its obligations under this Agreement, including, but not limited to, the
following: all necessary investment and management facilities, including
salaries of personnel required for it to execute its duties faithfully, and
administrative facilities, including bookkeeping, clerical personnel and
equipment necessary for the efficient conduct of the investment affairs of the
Fund.
The Subadviser will not be responsible for expenses of the Investment
Adviser or the Fund, including, but not limited to, the following: the Fund's
legal, auditing and accounting expenses; expenses of maintenance of the Fund's
books and records other than those required to be maintained by the Subadviser,
including computation of the Fund's daily net asset value per share and
dividends; interest, taxes, governmental fees and membership dues incurred by
the Fund; fees of the Fund's custodians, transfer agents, registrars or other
agents; expenses of preparing the Fund's share certificates; expenses relating
to the redemption or repurchase of the Fund's shares; expenses of registering
and qualifying Fund shares for sale under applicable federal and state laws;
expenses of preparing, setting in print, printing and distributing prospectuses,
reports, notices and dividends to Fund investors (except that the Subadviser
will be responsible for costs associated with reprints of or supplements to such
documents necessitated solely by actions of the Subadviser, including, without
limitation, a change of control of the Subadviser or any change in the portfolio
manager or managers assigned by the Subadviser to manage the Fund); cost of Fund
stationery; costs of Trustee, shareholder and other meetings of the Trust or
Fund (except that the Subadviser will be responsible for costs associated with
any shareholder meeting, proxy solicitation or proxy statement or information
statement, in each case, to the extent necessitated by actions or events
involving the Subadviser, including, without limitation, a change of control of
the Subadviser); traveling expenses of officers, Trustees and employees of the
Trust or Fund; fees of the Trust's Trustees and salaries of any officers or
employees of the Trust or Fund; and the Fund's pro rata portion of premiums on
any fidelity bond and other insurance covering the Trust or Fund and their
officers and Trustees.
(b) Compensation of Subadviser. (i) Until such time as the Subadviser
is paid pursuant to Section 2(b)(ii) of this Agreement, and during the period
when this Agreement is in effect, as compensation for all investment advisory
and management services to be rendered hereunder, the Investment Adviser will
pay the Subadviser an annual subadvisory fee, paid monthly in arrears, as set
forth on Schedule A to this Agreement. With respect to such subadvisory fee, the
Fund shall be the `Investment Type,' as set forth on Schedule A.
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For purposes of determining the applicable fees under this Section
2(b)(i), the assets under management being referred to in the column `Fee Tier
Structure by Assets under Management' of Schedule A shall refer to the average
daily net assets of the Fund.
For purposes of this Section 2(b)(i), the value of net assets of the
Fund shall be computed as required by the 1940 Act and in accordance with any
procedures approved by the Board of Trustees for the computation of the value of
the net assets of the Fund in connection with the determination of net asset
value of its shares. On any day that the net asset value determination is
suspended as specified in the Fund's Prospectus, the net asset value for
purposes of calculating the advisory fee shall be calculated as of the date last
determined. The Investment Adviser represents to the Subadviser that, so long as
the subadvisory fee is determined in accordance with this Section 2(b), the same
computation of net asset value shall be used in connection with determining the
investment advisory fee of the Investment Adviser, and the Investment Adviser
shall promptly notify the Subadviser in writing if the two computations of net
asset value ever differ from each other.
(ii) (A) Notwithstanding anything to the contrary thereto in
Section 2(b)(i), at such time as the Adviser determines, as compensation for all
investment advisory and management services to be rendered hereunder during the
period of time beginning as of the day and year first written above and ending
twenty-four (24) months thereafter (such period being the `Initial Period of the
Agreement'), the Adviser shall pay the Subadviser the annual subadvisory fee set
forth on Schedule A to this Agreement. The subadvisory fee will be paid monthly
in arrears. With respect to such fees, the Fund shall have the same `Investment
Type' as utilized in Section 2(b)(i) above.
For purposes of determining the applicable fees under this Section
2(b)(ii)(A), the assets under management being referred to in the column `Fee
Tier Structure by Assets under Management' of Schedule A shall refer to assets
under management being calculated by aggregating the assets of the same
Investment Type as the Fund for which the Subadviser provides investment
management services to the `DB Group' or the `Preferred Clients,' each as
defined below, pursuant to a subadvisory agreement substantially similar to this
Agreement across all vehicles, structures, funds, etc. (including, without
limitation, mutual funds, commingled funds and separately managed accounts)
within the same Investment Type as the Fund.
(B) Following the Initial Period of the Agreement, the investment
management fees paid by the Adviser to the Subadviser hereunder shall be, in the
aggregate, (i) no greater than those which the Subadviser charges to any of its
other clients for `Substantially Similar Mandates' with `Substantially Similar
Levels of Assets under Management,' each as defined below, and (ii) competitive
with the aggregate investment management fees customarily charged by leading
investment advisers that compete in the particular investment management market
for Substantially Similar Mandates with Substantially Similar Levels of Asset
Under Management. Such fees shall be adjusted, beginning as of the first day
following the Initial Period of the Agreement and thereafter as of each January
1, so as to comply with the immediately preceding sentence.
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`Substantially Similar Mandate' means a mandate to provide to another
client of a person or entity (other than an affiliate of such person or entity)
investment management services that are substantially similar (including, for
purposes of this definition, on the basis of index, particular category of
client, type of investment vehicle, type and level of service, degree of
customization and domicile) to, and with substantially similar service levels
and performance objectives as, the investment advisory and management services
provided hereunder.
The investment advisory and management services provided hereunder to
the Fund shall have a `Substantially Similar Level of Assets Under Management'
as a mandate for another client of a person or entity (other than an affiliate
of such person or entity) if either (a) the then aggregate Fair Market Value of
assets of the Fund is substantially similar to or greater than the then
aggregate Fair Market Value of assets under such mandate of such other client or
(b) the then aggregate Fair Market Value of assets under all mandates for the
Subadviser to provide passive equity, passive fixed income and enhanced equity
investment management services for all Preferred Clients, is substantially
similar to or greater than the then aggregate Fair Market Value of assets for
all mandates for passive equity, passive fixed income and enhanced equity
investment management services provided to such other client (other than the
Preferred Clients) of such person or entity and such client's affiliates. `Fair
Market Value' as used herein means the fair market value based on industry
standards reasonably acceptable to the parties hereunder.
`Preferred Client' means (a) any person or entity that is a member of
the `DB Group,' i.e., Deutsche Bank AG and its affiliates, or a client of any
member of the DB Group, for which the Subadviser begins to provide passive
equity, passive fixed income or enhanced equity investment management services
after January 31, 2003 and (b) any person who receives passive equity, passive
fixed income or enhanced equity investment management services from the
Subadviser pursuant to a subadvisory agreement substantially similar to this
Agreement and to which a member of the DB Group is a party; provided that
`Preferred Client' shall not include a client of the DB Group (except a person
or entity to the extent a party to, or otherwise covered by, a subadvisory
agreement of the type described in clause (b)) whose annualized revenues are
included in the purchase price paid by the Subadviser to Deutsche Bank AG in
accordance with the Amended and Restated Sale and Purchase Agreement dated as of
January 31, 2003.
(iii) The Fund shall have no responsibility to pay any investment
management fee to the Subadviser pursuant to this Agreement, and the
Subadviser's fee shall be payable solely by the Investment Adviser from its fee
as investment adviser. For any period less than a full fiscal month during which
the payment of the annual fee to the Subadviser pursuant to this Section 2(b) is
in effect, the fee shall be prorated according to the proportion which such
period bears to a full fiscal month.
3. Obligations of the Investment Adviser.
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(a) The Investment Adviser shall provide (or cause the Trust's
custodian to provide) timely information to the Subadviser regarding such
matters as the composition of assets in the Fund, cash requirements and cash
available for investment in the Fund, and all other information as may be
reasonably necessary for the Subadviser to perform its responsibilities
hereunder.
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(b) The Investment Adviser has furnished the Subadviser copies of the
Fund's Prospectus and Statement of Additional Information, provisions of the
Trust's Declaration of Trust and bylaws that are relevant to the services
contemplated by this Agreement, and all investment guidelines, policies or
limitations the Board of Trustees or the Investment Adviser has from time to
time established that are applicable to the Fund, and agrees during the
continuance of this Agreement to furnish the Subadviser copies of any revisions
or supplements thereto at, or, if practicable, before the time the revisions or
supplements become effective.
4. Brokerage Transactions. Subject to the provisions of this Section 4
and absent instructions from the Investment Adviser or the Trust, the Subadviser
will have full discretionary authority to place orders for the purchase and sale
of securities for the account of the Fund with such brokers or dealers as it may
select. In the selection of such brokers or dealers and the placing of such
orders, the Subadviser is directed at all times to seek for the Fund the most
favorable best execution and net price available. In assessing the best
execution and net price available for any transaction, the Subadviser shall
consider all factors it deems relevant, including, without limitation, the
breadth of the market in and the price of the security, the financial condition
and execution capability of the broker or dealer, the quality of research
provided and the reasonableness of the commission, if any, with respect to the
specific transaction and on a continuing basis.
It is also understood, however, that it is desirable for the Fund that
the Subadviser have access to supplemental investment and market research and
security and economic analyses provided by certain brokers who may execute
brokerage transactions at higher commissions to the Fund than another broker may
have charged. Therefore, the Subadviser is authorized to place orders for the
purchase and sale of securities for the Fund with such brokers upon a good faith
determination that the commission paid is reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, subject
to applicable laws and regulations and review and direction by the Investment
Adviser and the Trust's Board of Trustees from time to time with respect to the
extent and continuation of this practice. The Subadviser shall provide such
information as the Investment Adviser or the Trustees shall from time to time
request concerning the commissions paid by the Fund and research and other
services provided to the Subadviser by brokers executing transactions on behalf
of the Fund.
On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interests of the Fund as well as other clients of the
Subadviser, the Subadviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of
securities so sold or purchased, as well as the expenses incurred in the
transaction, will be made by the Subadviser in the manner the Subadviser
considers to be the most equitable and consistent with its fiduciary obligations
to the Fund and to such other clients.
The Subadviser may buy securities for the Fund at the same time it is
selling such securities for another client account and may sell securities for
the Fund at the time it is buying such securities for another client account. In
such cases, subject to applicable legal and regulatory requirements, and in
compliance with such procedures of the Trust as may be in effect
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from time to time, the Subadviser may effectuate cross transactions between the
Fund and such other account if it deems this to be advantageous to both of the
accounts involved.
Notwithstanding the foregoing, the Subadviser agrees that the
Investment Adviser shall have the right by written notice to identify securities
that may not be purchased on behalf of the Fund and/or brokers and dealers
through or with which portfolio transactions on behalf of the Fund may not be
effected, including, without limitation, brokers or dealers affiliated with the
Investment Adviser. The Subadviser shall refrain from purchasing such securities
for the Fund or directing any portfolio transaction to any such broker or dealer
on behalf of the Fund, unless and until the written approval of the Investment
Adviser or the Board of Trustees, as the case may be, is so obtained. In
addition, the Subadviser agrees that it shall not direct portfolio transactions
for the Fund with or through the Subadviser or any broker or dealer that is an
`affiliated person' of the Subadviser (as defined in the 1940 Act or interpreted
under applicable rules and regulations of the Securities and Exchange
Commission) without the prior written approval of the Board of Trustees and the
Investment Adviser and then only as permitted under the 1940 Act.
In connection with purchases or sales of portfolio securities for the
account of the Fund, neither the Subadviser nor any of its affiliated persons,
will act as a principal in connection with the purchase or sale of investment
securities by the Fund, except as permitted by applicable law and with the
express written consent of the Board of Trustees and the Investment Adviser.
The Subadviser will advise the Fund's custodian on a prompt basis of
each purchase and sale of a portfolio security, specifying the name of the
issuer, the description and amount or number of shares of the security purchased
or sold, the market price, commission and gross or net price, trade date,
settlement date and identity of the effecting broker or dealer, and such other
information as may be reasonably required.
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5. Standard of Care and Liability of Subadviser. The Subadviser will
not be liable for any loss sustained by reason of the adoption of any investment
policy or the purchase, sale, or retention of any security on the recommendation
of the Subadviser, whether or not such recommendation shall have been based upon
its own investigation and research or upon investigation and research made by
any other individual, firm or corporation, if such recommendation shall have
been made and such other individual, firm, or corporation shall have been
selected with due care and in good faith; but nothing herein contained will be
construed to protect the Subadviser against any liability to the Investment
Adviser, the Fund or its shareholders by reason of: (a) the Subadviser's causing
the Fund to be in violation of any applicable federal or state law, rule or
regulation or any investment policy or restriction set forth in the Fund's
Prospectus or Statement of Additional Information or any written guidelines,
policies or instruction provided in writing by the Trust's Board of Trustees or
the Investment Adviser, (b) the Subadviser's causing the Fund to fail to satisfy
the diversification or source of income requirements of Subchapter M of the Code
or (c) the Subadviser's willful misfeasance, bad faith or gross negligence
generally in the performance of its duties hereunder or its reckless disregard
of its obligations and duties under this Agreement.
6. Term and Termination. This Agreement shall remain in force until two
(2) years from the day and year first written above, and from year to year
thereafter, but only so long as such continuance, and the continuance of the
Investment Adviser as investment adviser of the Fund, is specifically approved
at least annually by the vote of a majority of the Trustees who are not
interested persons of the Subadviser or the Investment Adviser of the Fund, cast
in person at a meeting called for the purpose of voting on such approval and by
a vote of the Board of Trustees or of a majority of the outstanding voting
securities of the Fund. The aforesaid requirement that continuance of this
Agreement be `specifically approved at least annually' shall be construed in a
manner consistent with the 1940 Act and the rules and regulations thereunder.
This Agreement may, upon 60 days' written notice to the Subadviser, be
terminated at any time without the payment of any penalty, (a) by the Fund, by
the Board of Trustees or by vote of a majority of the outstanding voting
securities of the Fund, or (b) by the Investment Adviser. This Agreement may,
upon 120 days' written notice to the Trust and the Investment Adviser, be
terminated at any time, without payment of any penalty, by the Subadviser. This
Agreement shall automatically terminate in the event of its assignment or in the
event of the termination of the Advisory Agreement. The Investment Adviser
agrees that it shall promptly notify the Subadviser in writing upon the
termination of the Advisory Agreement. In addition, the Investment Adviser shall
have the right to terminate this Agreement upon immediate written notice if the
Subadviser becomes statutorily disqualified from performing its duties under
this Agreement or otherwise is legally prohibited from operating as an
investment adviser. Upon the effective date of termination of this Agreement,
the Subadviser shall deliver all books and records of the Trust and the Fund to
such entity as the Trust may designate as a successor subadviser, or to the
Investment Adviser. The provisions of Sections 5, 13, 14, 15, 16, 18 and 19
shall survive termination of this Agreement. In addition, the obligation to pay
to the Subadviser any compensation earned by the Subadviser under this Agreement
but not paid as of the termination of this Agreement shall survive termination
of this Agreement.
7. Interpretation of Terms; Captions. In interpreting the provisions of
this Agreement, the definitions contained in Section 2(a) of the 1940 Act and
the rules and regulations thereunder
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(including specifically the definitions of `interested person,' `affiliated
person,' `assignment,' `control' and `vote of a majority of the outstanding
voting securities'), shall be applied, subject, however, to such exemptions as
may be granted by the Securities and Exchange Commission by any rule, regulation
or order. Captions used herein are for reference only and shall not limit or
otherwise affect the meaning of any provision of this Agreement.
8. Registration Statement, Prospectus and Statement of Additional
Information Concerning Subadviser; Compliance Procedures and Information. The
Subadviser has reviewed the most recent amendment to the Registration Statement
of the Trust, relating to the Fund as filed with the Securities and Exchange
Commission under the the 1940 Act (File No. 811-07774) and the current
Prospectus and Statement of Additional Information relating to the Fund, and
represents and warrants that with respect to disclosure about the Subadviser or
information relating directly or indirectly to the Subadviser, such Registration
Statement, Prospectus and Statement of Additional Information contain, on and
after the effective date thereof, no untrue statement of any material fact and
do not omit any statement of material fact which was required to be stated
therein or necessary to make the statements contained therein not misleading.
The Subadviser shall promptly provide such information as is necessary
to enable the Trust to prepare and update the Trust's Registration Statement
(and any supplement thereto) and the Fund's financial statements, and shall
notify the Trust promptly in the event any information contained therein
relating to the Subadviser or the Subadviser's management of the Fund becomes
inaccurate or incomplete under applicable law. The Subadviser understands that
the Trust and the Investment Adviser will rely on such information in the
preparation of the Trust's Registration Statement and the Fund's financial
statements, and hereby covenants that any such information approved by the
Subadviser expressly for use in such registration and/or financial statements
shall be true and complete in all material respects.
The Subadviser and Investment Adviser each shall establish compliance
procedures reasonably calculated to ensure compliance at all times with: all
applicable provisions of the 1940 Act and the Advisers Act, and any rules and
regulations adopted thereunder; Subchapter M of the Code; the provisions of the
Registration Statement; the governing documents of the Fund and other written
policies, guidelines and instructions; and any other applicable provisions of
state, federal or foreign law. The Subadviser shall provide to the Investment
Adviser and/or the Trustees such information as it or they may reasonably
request in order to review the adequacy of the Subadviser's compliance
procedures. The Investment Adviser shall provide to the Subadviser such
information as the Subadviser may reasonably request in order to review the
adequacy of the compliance procedures of the Investment Adviser.
The Subadviser and Investment Adviser each shall maintain and enforce a
Code of Ethics which in form and substance is consistent with industry norms
existing from time to time. The Subadviser and Investment Adviser each agree to
report to the other party hereto any material violations of the Code of Ethics
affecting the Fund of which its senior management becomes aware. The Subadviser
shall promptly notify the Investment Adviser and the Trustees upon the adoption
of any material change to its Code of Ethics and provide copies thereof to the
Investment Adviser and the Trustees so that the Trustees, including a majority
of the Trustees who are not interested persons of the Fund, may consider
approval of such change promptly after
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its adoption by the Subadviser. The Subadviser shall also provide the Fund with
a copy of any amendments to its Code of Ethics that do not represent a material
change to such Code of Ethics. The Investment Adviser shall provide the
Subadviser with a copy of any amendment to its Code of Ethics if such amendment
concerns providing investment advisory services to the Fund.
9. Insurance. The Subadviser and Investment Adviser each shall maintain
for the duration hereof, with an insurer acceptable to the other party hereto, a
blanket bond and professional liability or errors and omissions insurance in an
amount or amounts reasonably acceptable to the other party hereto.
10. Representations of the Investment Adviser. The Investment Adviser
represents, warrants and agrees that:
(i) the Investment Adviser is a corporation duly incorporated
under the laws of Delaware;
(ii) the Investment Adviser is duly registered as an investment
adviser under the Advisers Act;
(iii) the Investment Adviser has been duly appointed by the
Trustees and shareholders of the Fund to provide investment services to the Fund
as contemplated by the Advisory Agreement;
(iv) the execution, delivery and performance of this Agreement
are within the Investment Adviser's powers, have been and remain duly authorized
by all necessary action and will not violate or constitute a default under any
applicable law or regulation or of any decree, order, judgment, agreement or
instrument binding on the Investment Adviser;
(v) no consent of any applicable governmental authority or body
is necessary, except for such consents as have been obtained and are in full
force and effect, and all conditions of which have been duly complied with; and
(vi) this agreement constitutes a legal, valid and binding
obligation enforceable against the Investment Adviser.
The Investment Adviser agrees to notify the Subadviser promptly
and in writing in the event that any of the above ceases to be correct while
this Agreement is in effect.
11. Representations of the Subadviser. The Subadviser represents,
warrants and agrees that:
(i) the Subadviser is a national banking association;
(ii) the Subadviser is duly registered as an investment adviser
under the Advisers Act;
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(iii) the execution, delivery and performance of this Agreement
are within the Subadviser's powers, have been and remain duly authorized by all
necessary action and will not violate or constitute a default under any
applicable law or regulation or of any decree, order, judgment, agreement or
instrument binding on the Subadviser;
(iv) no consent of any applicable governmental authority or body
is necessary, except for such consents as have been obtained and are in full
force and effect, and all conditions of which have been duly complied with; and
(v) this agreement constitutes a legal, valid and binding
obligation enforceable against the Subadviser.
The Subadviser agrees to notify the Investment Adviser
promptly and in writing in the event that any of the above ceases to be correct
while this Agreement is in effect.
12. a. Certain Covenants of the Subadviser. The Subadviser will
promptly notify the Trust and Investment Adviser in writing of the occurrence of
any event which could have a material impact on the performance of its
obligations pursuant to this Agreement, including without limitation:
(i) the occurrence of any event which could disqualify the
Subadviser from serving as an investment adviser of a registered investment
company pursuant to the 1940 Act and the rules and regulations thereunder and
the Advisers Act and the rules and regulations thereunder;
(ii) any change in the Subadviser's overall business activities
that may have a material adverse affect on the Subadviser's ability to perform
under its obligations under this Agreement;
(iii) any event that would constitute a change in control of the
Subadviser or an assignment by the Subadviser of this Agreement;
(iv) any change in the portfolio manager of the Fund; and
(v) except to the extent prohibited by applicable law or order,
the existence of any pending or threatened audit, investigation, complaint,
examination or other inquiry relating to the Fund conducted by any state or
federal governmental regulatory authority.
b. Certain Covenants of the Investment Adviser. The Investment Adviser
will promptly notify the Subadviser in writing of the occurrence of any event
which could have a material impact on the performance of its obligations to the
Fund, including without limitation:
(i) the occurrence of any event which could disqualify the
Investment Adviser from serving as an investment adviser of a registered
investment company pursuant to the 1940 Act and the rules and regulations
thereunder and the Advisers Act and the rules and regulations thereunder;
11
(ii) any change in the overall business activities of the
Investment Adviser that may have a material adverse affect on its ability to
perform investment advisory services to the Fund;
(iii) any event that would constitute a change in control of the
Investment Adviser or an assignment of the Advisory Agreement; and
(iv) except to the extent prohibited by applicable law or order,
the existence of any pending or threatened audit, investigation, complaint,
examination or other inquiry relating to the Fund conducted by any state or
federal governmental regulatory authority.
13. Regulation. Except to the extent prohibited by applicable law or
order, the Subadviser agrees that it will immediately forward, upon receipt, to
the Investment Adviser, for itself and as agent for the Fund, any correspondence
from the Securities and Exchange Commission or other regulatory authority that
relates to the Fund including routine regulatory examinations or inspections.
Similarly, except to the extent prohibited by applicable law or order, the
Investment Adviser agrees that it will immediately forward, upon receipt, to the
Subadviser any correspondence from the Securities and Exchange Commission or
other regulatory authority that relates to the Fund, including routine
regulatory examinations or inspections. Subject to Section 18 hereof, the
Subadviser shall submit to all regulatory and administrative bodies having
jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may reasonably request or require pursuant to applicable laws and
regulations, and shall cooperate with the Trust and the Investment Adviser in
responding to requests or investigations of such regulatory or administrative
bodies or any internal investigation conducted by the Trust or the Investment
Adviser.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland without giving effect to the
choice of law principles thereof, except to the extent the laws of the State of
Maryland are in conflict with U.S. federal law, in which event U.S. federal law
will control.
15. Entire Agreement; Amendments. This Agreement states the entire
agreement of the parties hereto, and is intended to be the complete and
exclusive statement of the terms hereof. It may not be added to or changed
orally, and may not be modified or rescinded, except by a writing signed by the
parties hereto and in accordance with the 1940 Act or pursuant to applicable
orders or interpretations of the Securities and Exchange Commission.
16. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
17. Use of Name. The Subadviser shall not use the name of the
Investment Adviser, the Trust or the Fund in any advertisement, sales literature
or other communication to the public
12
except in accordance with such policies and procedures as shall be mutually
agreed to in writing by the Subadviser and the Investment Adviser. Similarly,
the Investment Adviser agrees that it shall not use the name of the Subadviser
in any advertisement, sales literature or other communication to the public
except in accordance with such polices and procedures as shall be mutually
agreed to in writing by the Investment Adviser and the Subadviser.
18. Confidentiality. Each party agrees that it shall hold in strict
confidence all data and information obtained from another party hereto (unless
such information is or becomes readily ascertainable from public or published
information or trade sources) and shall ensure that its officers, employees and
authorized representatives do not disclose such information to others without
the prior written consent of the party from whom it was obtained, unless such
disclosure is required by the Securities and Exchange Commission, other
regulatory body with applicable jurisdiction, or the Fund's auditors, or in the
opinion of its counsel, applicable law, and then only with as much prior written
notice to the other party as is practicable under the circumstances.
19. Notices. Any notice under this Agreement shall be delivered, mailed
or faxed to the addresses or fax numbers set forth below, as the case may be, or
such other address or number as any party may specify in writing to the others:
If to the Investment Adviser:
Name: Deutsche Asset Management, Inc.
Address: 0 Xxxxxxxxxxxxx Xxxxx, Xxxxx 00
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Secretary
Tel: 000-000-0000
Fax: 000-000-0000
If to the Subadviser:
Name: Northern Trust Investments, N.A..
Address: 00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Senior Vice President
Tel: (000) 000-0000
Fax: (000) 000-0000
If delivered, such notices shall be deemed given upon receipt by the other party
or parties. If mailed, such notices shall be deemed given seven (7) days after
being mailed. If faxed, notices shall be deemed given on the next business day
after confirmed transmission to the correct fax number.
20. Execution in Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
DEUTSCHE ASSET MANAGEMENT, INC.
By: /s/Xxxx X. Xxx
-----------------------------------
Its: Assistant Secretary
-----------------------------------
Date: 2/4/05
-----------------------------------
NORTHERN TRUST INVESTMENTS, N.A.
By: /s/Xxxxx X. Xxxxxxx
-----------------------------------
Its: Vice President
--------------------------------
Date: 2/22/05
-----------------------------------
14
SCHEDULE A
FEES
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
Portfolio Investment Type Fee Tier Structure by Assets under Management Applicable Fee
--------- --------------- --------------------------------------------- --------------
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
S&P 500 On the first $2 billion 1.5 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
On the next $2 billion 1 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
Over $4 billion 0.5 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
U.S. Bond Index Portfolio US Bond On the first $100 million 4 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
On the next $400 million 2 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
Over $500 million 1 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
EAFE Equity Index EAFE On the first $100 million 9 bps
Portfolio
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
On the next $400 million 6.75 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
Over $500 million 3 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
Small Cap On the first $100 million 8 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
On the next $400 million 4 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
Over $500 million 2 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
Lifecycle Long Range Enhanced Domestic Equity On the first $200 million 20 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
On the next $300 million 15 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
Over $500 million 12 bps
-------------------------- ------------------------- ----------------------------------------------------- -------------------------
15
