EXHIBIT (8)(g)
INVESTMENT SUBADVISORY AGREEMENT
INVESTMENT SUBADVISORY AGREEMENT, dated as of July 31, 2001 by and between
Diversified Investment Advisors, Inc., a Delaware corporation ("Diversified")
and Credit Suisse Asset Management, LLC, a Delaware limited liability company
("Subadvisor").
WITNESSETH:
WHEREAS, Diversified has been organized to operate as an investment
advisor registered under the U.S. Investment Advisers Act of 1940, as amended
("Advisers Act"), and has been retained to provide investment advisory services
to the Growth & Income Portfolio ("Portfolio"), a series of Diversified
Investors Portfolios, a diversified open-end management investment company
registered under the U.S. Investment Company Act of 1940, as amended ("1940
Act");
WHEREAS, Diversified desires to retain the Subadvisor to furnish it with
portfolio investment advisory 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 agreement 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 investment advisory 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
("Assets"), subject to the supervision of Diversified and the Diversified
Investors Portfolios' Board of Trustees, for the period and on the terms
hereinafter set forth.
The Subadvisor shall furnish continuously an investment program and shall
determine from time to time in its discretion 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 Registration Statement on Form N-1A, provided
that a copy thereof shall have been provided to Subadvisor by Diversified.
In particular, the Subadvisor shall, without limiting the foregoing:
(i) continuously review, supervise and implement the investment program for the
Assets; (ii) monitor regularly the securities comprising the Assets to
determine if adjustments are warranted and, if so, to make such adjustments;
(iii) determine, in the Subadvisor's discretion, the securities to be purchased
or sold or exchanged in order to keep the Assets 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 Assets; (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 Assets; (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 on the last day of such
month, (c) rates of return for the Assets, and (d) such other information
relating to the Assets as Diversified may reasonably 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 Assets; (viii) provide the
Portfolio, as reasonably requested by Diversified, with records concerning the
Subadvisor's activities which the Portfolio is required by law to maintain with
respect to the Assets; and (ix) render regular reports to the Portfolio's
officers and Directors concerning the Subadvisor's discharge of the foregoing
responsibilities.
The Subadvisor shall also make recommendations to Diversified as to the
manner in which voting rights, rights to consent to corporate action and any
other rights pertaining to the securities comprising the Assets shall be
exercised, and Subadvisor shall be responsible for effecting such
recommendations.
Should the Board of Trustees of the Portfolio at any time establish an
investment policy with respect to the Assets and notify the Subadvisor thereof
in writing, the Subadvisor shall be bound by such determination for the period,
if any, specified in such notice or until similarly notified that such policy
has been revoked.
The Subadvisor shall take, on behalf of the Assets, all actions which it
deems necessary to implement the investment policies determined as provided
above with respect to the Assets, 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 (including broker/dealers affiliated with the
Subadvisor), 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.
Subject to the primary objective of obtaining the best available prices and
execution, the Subadvisor may place orders for the purchase and sale of
portfolio securities with such broker/dealers who provide research and
brokerage services to the Portfolio within the meaning of Section 28(e) of the
Securities Exchange Act of 1934, to the Subadvisor, or to any other fund or
account for which the Subadvisor provides investment advisory services.
If the Portfolio is subject to Section 11(a) of the U.S. Securities
Exchange Act of 1934, as amended (the "1934 Act"), and Rule 11a2-2(T) thereunder
(or any similar rule which may be adopted in the future), it is agreed that,
unless otherwise instructed by Diversified in writing, broker-dealer associates
of Subadvisor may retain commissions in connection with effecting any securities
transactions for the Portfolio provided that such transactions are affected in
accordance with the 1940 Act and the rules thereunder. To the extent applicable,
Subadvisor will furnish Diversified with all reports required by law, including
the 1940 Act and the rules thereunder.
Notwithstanding the provisions above and subject to such policies and
procedures as may be adopted by the Board of Trustees and officers of the
Portfolio and provided to the Subadvisor, the Subadvisor may pay a member of an
exchange, broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another member of an
exchange, broker or dealer would have charged for effecting that transaction,
in such instances where the Subadvisor has determined in good faith that such
amount of commission was reasonable in relation to the value of the brokerage
and research services provided by such member, broker or dealer, viewed in
terms of either that particular transaction or the Subadvisor's overall
responsibilities with respect to the Portfolio and to other funds and clients
for which the Subadvisor exercises investment discretion.
Subadvisor may, but is not obligated to, aggregate purchase or sale orders
for the Portfolio Assets with those of other client accounts.
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 and liabilities including, without
limitation, compensation and out-of-pocket 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.
2
3. Compensation of the Subadvisor. For the services to be rendered
hereunder, 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 Portfolio's 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, and will comply
with all other provisions of the Declaration of Trust and any current
Registration Statement on Form N-1A of the Portfolio, provided that copies of
the Declaration of Trust and Registration Statement have been provided to
Subadvisor.
5. Representations by Diversified. Diversified represents that it has
the authority under the Advisory Agreement and the 1940 Act to manage the assets
of Portfolio, with authority to appoint Subadvisor as a sub-adviser of the
Portfolio. Diversified further represents that the terms hereof do not violate
any obligation by which Diversified and/or the Portfolio are bound, whether
arising by contract, operation of law or otherwise, and that this Agreement will
be binding upon Diversified and the Portfolio in accordance with its terms.
Notwithstanding any other provision of this Agreement, (i) prior to this
Agreement being approved by a vote of a majority of the Portfolio's outstanding
voting securities in accordance with the 1940 Act, in no event shall
compensation paid to the Subadvisor hereunder exceed the amount permitted by
Rule 15a-4(b)(1) under the 1940 Act, and (ii) if this Agreement is not approved
by a vote of a majority of the Portfolio's outstanding voting securities in
accordance with the 1940 Act no later than 150 days after July 30, 2001, this
Agreement shall immediately terminate.
Prior to commencement of Subadvisor's services under this Agreement,
Diversified will provide Adviser with copies of the following documents, each
as amended or supplemented through the date of this Agreement: (i) the
Declaration of Trust of Portfolio and (ii) the prospectus, statement of
additional information, and Registration Statement on Form N-1A for the
Portfolio. Diversified represents that it will promptly provide to Subadvisor
copies or other written notice of any future amendments to such documents, it
being understood that any changes to such documents which affect the rights and
responsibilities of Subadvisor under this Agreement will become effective with
respect to Subadvisor upon actual receipt by Subadvisor of written notice
thereof.
Diversified acknowledges receipt of Part II of Subadvisor's Form ADV at
least forty-eight (48) hours prior to execution of this Agreement.
6. Limits on Duties. The Subadvisor shall be responsible only for
managing the Assets in good faith and in accordance with the investment
objectives, fundamental policies and restrictions, and shall have no
responsibility whatsoever for, and shall incur no liability on account of (i)
diversification, selection or establishment of such investment objectives,
fundamental policies and restrictions (ii) advice on, or management of, any
other assets for Diversified or the Portfolio, (iii) filing of any tax or
information returns or forms, withholding or paying any taxes, or seeking any
exemption or refund, (iv) registration of the Portfolio with any government or
agency, or (v) administration of the plans and trusts investing through the
Portfolio, or (vi) overall Portfolio compliance with the requirements of the
1940 Act, which requirements are outside of the Subadvisor's control, and
Subchapter M of the Internal Revenue Code of 1986, as amended. Diversified
agrees that requirements imposed by the 1940 Act, Subchapter M, or any other
applicable laws, that are outside Subadvisor's control include compliance with
any percentage limitations applicable to the Portfolio's assets that would
require knowledge of the Portfolio's holdings other than the Assets subject to
this Agreement. Subadvisor shall be indemnified and held harmless by Diversified
for any loss in carrying out the terms and provisions of this Agreement,
including reasonable attorney's fees, indemnification to the Portfolio, or any
shareholder thereof, and brokers and commission merchants, fines, taxes,
penalties and interest. Subadvisor, however, shall be liable for any liability,
damages, or expenses of Diversified
3
arising out of the willful malfeasance, bad faith, gross negligence, or
violation of applicable law or reckless disregard of the duties owed pursuant
to this Agreement by 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 advice of Diversified and/or
Diversified's counsel and upon any document which Subadvisor reasonably believes
to be genuine and to have been signed by the proper person or persons.
7. Exclusivity. Subadvisor represents to Diversified that during the
term of this Agreement, Subadvisor will not manage through (1) an open-end
investment company or insurance company separate account registered under the
1940 Act; (2) a collective trust fund; or (3) an insurance company separate
account excepted from regulation under section 3(c)(11) of the 1940 Act, any
growth and income fund, in a substantially similar manner to the strategy
employed by Subadvisor for Diversified with the same client service
requirements as under this Agreement, if such investment vehicle is designed
exclusively for retirement plans described on Schedule C attached hereto.
Notwithstanding the preceding paragraph above, Subadvisor is not and will
not be precluded from providing such management services on behalf of any
entity (1) that is currently or in the future advised, underwritten, sponsored
or otherwise organized by any entity that is an affiliated person of Subadvisor
within the meaning of section 2(a)(3) of the 1940 Act; (2) which itself or
through any of its affiliates, has any pre-existing relationship with
Subadvisor or any of its affiliates, (3) if the Asset value falls more than 5%
through redemptions, (4) upon consent from Diversified, which consent shall not
be unreasonably withheld, or (5) resulting from a merger or acquisition
involving the Subadvisor.
8. Services to Other Clients. It is understood that Subadvisor and its
affiliates perform investment advisory and other services for various clients.
Diversified agrees that Subadvisor and its affiliates may give advice and take
action in the performance of their duties with respect to any of their other
clients which may differ from advice given, or the timing or nature of actions
taken, with respect to the Assets. Diversified also acknowledges that
Subadvisor and its affiliates are fiduciaries to other entities, some of which
have the same or similar investment objectives (and will hold the same or
similar investments) as the Portfolio, and that Subadvisor will carry out its
duties hereunder together with its duties under such relationships. Nothing in
this Agreement shall be deemed to confer upon Subadvisor any obligation to
purchase or sell or to recommend for purchase or sale for the Portfolio any
investment which Subadvisor, its affiliates, officers or employees may purchase
or sell for its or their own account or for the account of any other client, if
in the sole and absolute discretion of Subadvisor it is for any reason
impractical or undesirable to take such action or make such recommendation for
the Portfolio.
9. 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" with respect to this Agreement
or of the Subadvisor or Diversified at an in person 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 Investment Company
Act of 1940 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.
4
Except for those instances in which the 1940 Act allows amendment without
shareholder approval, 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.
10. 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 with respect to the Assets are the
property of the Portfolio and will be surrendered promptly to the Portfolio on
request, provided that Subadvisor may retain copies of any records required to
be retained under the record keeping requirements of any applicable law.
11. Survival of Compensation Rates. All rights to compensation under this
Agreement shall survive the termination of this Agreement.
12. Entire Agreement. This Agreement states the entire agreement of the
parties with respect to investment advisory services to be provided to the
Portfolio by the Subadvisor and may not be amended except in a writing signed
by the parties hereto and approved in accordance with Section 9 hereof.
13. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without giving effect to the
choice of law or conflict of law provisions thereof.
14. Change of Management and Pending Litigation. Subadvisor represents to
Diversified that it will disclose to Diversified promptly after it has
knowledge of any significant change or variation in its management structure or
key personnel or any significant change or variation in its management style or
investment philosophy that is material to this Agreement. In addition,
Subadvisor represents to Diversified that it will similarly disclose to
Diversified, promptly after it has knowledge, the existence of any pending
legal action being brought against it whether in the form of a lawsuit or a
non-routine investigation by any federal or state governmental agency that
directly relate to the Assets.
Diversified represents to Subadvisor that any information received by
Diversified pursuant to this section will be kept strictly confidential and
will not be disclosed to any third party.
15. 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.
5
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 Investments Advisors, Inc.
By: /s/ XXXX X. XXXXXX
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President & Senior
Counsel
Credit Suisse Asset Management, LLC
By: /s/ XXX XXXXXX
------------------------------------
Name: Xxx Xxxxxx
Title: General Counsel
6
SCHEDULE A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of January 3, 1994 by and between the Growth & Income
Portfolio, a series of Diversified Investors Portfolios (herein called the
"Portfolio"), and Diversified Investment Advisors, Inc, a Delaware corporation
(herein called "Diversified").
WHEREAS, the Portfolio is required as a diversified, open-end, management
investment company under the Investment Company Act of 1940 (the "1940 Act");
and
WHEREAS, Diversified has been organized to operate as an investment advisor
registered under the Investment Advisers Act of 1940; and
WHEREAS, the Portfolio desires to retain Diversified to render investment
advisory services, and Diversified is willing to so render such services on the
terms hereinafter set forth;
NOW, THEREFORE, this Agreement
WITNESSETH:
In consideration of the promises and mutual covenants herein contained, it
is agreed between the parties hereto as follows:
1. The Portfolio hereby appoints Diversified to act as investment
advisor to the Portfolio for the period and on the terms set forth in this
Agreement. Diversified accepts such appointment and agrees to render the
services herein set forth for the compensation herein provided.
2. (a) Diversified shall, at its expense, (i) employ sub-advisors or
associate with itself such entities as it believes appropriate to assist it in
performing its obligations under this Agreement and (ii) provide all services,
equipment and facilities necessary to perform its obligations under this
Agreement.
(b) The Portfolio shall be responsible for all of its expenses and
liabilities, including, but not limited to: compensation and out-of-pocket
expenses of Trustees not affiliated with any 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
-2-
of the Portfolio; expenses 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. (a) Subject to the general supervision of the Board of Trustees of the
Portfolio, Diversified shall formulate and provide an appropriate investment
program on a continuous basis in connection with the management of the
Portfolio, including research, analysis, advice, statistical and economic data
and information and judgments of both a macroeconomic and microeconomic
character.
Diversified will determine the securities to be purchased, sold, lent,
exchanged or otherwise disposed of or acquired by the Portfolio in accordance
with predetermined guidelines as set forth from time to time in the Portfolio's
then-current prospectus and Statement of Additional Information ("SAI") and will
place orders pursuant to its determinations either directly with the issuer or
with any broker or dealer who deals in such securities. In placing orders with
brokers and dealers, Diversified will use its reasonable best efforts to obtain
the best net price and the most favorable execution of its orders, after taking
into account all factors it deems relevant, including the breadth of the market
in the security, the price of the security, the financial condition and the
execution capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing basis.
Consistent with this obligation, Diversified may, to the extent permitted by
law, purchase and sell Portfolio securities to and from brokers and dealers who
provide brokerage and research services (within the meaning of Section 28(e) of
the Securities Exchange Act of 1934) to or for the benefit of the Portfolio
and/or other accounts over which Diversified or any of its affiliates exercises
investment discretion.
Subject to the review of the Portfolio's Board of Trustees from time to
time with respect to the extent and continuation of the policy, Diversified is
authorized to pay to a broker or dealer who provides such brokerage and research
services a commission for effecting a securities transaction for the Portfolio
which is in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if Diversified determines in
-3-
good faith that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the overall responsibilities of
Diversified with respect to the accounts as to which it exercises investment
discretion.
In placing orders with brokers and/or dealers, Diversified intends to seek
best price and execution for purchases and sales and may effect transactions
through itself and its affiliates on a securities exchange provided that the
commissions paid by the Portfolio are "reasonable and fair" compared to
commissions received by other broker-dealers having comparable execution
capability in connection with comparable transactions involving similar
securities and provided that the transactions in connection with which such
commissions are paid are effected pursuant to procedures established by the
Board of the Trustees of the Portfolio. All transactions are effected pursuant
to written authorizations from the Portfolio conforming to the requirements of
Section 11(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T)
thereunder. Pursuant to such authorizations, an affiliated broker-dealer may
transmit, clear and settle transactions for the Portfolio that are executed on
a securities exchange provided that it arranges for unaffiliated brokers to
execute such transactions.
Diversified shall determine from time to time the manner in which voting
rights, rights to consent to corporate action and any other rights pertaining
to the Portfolio's securities shall be exercised, provided, however, that
should the Board of Trustees at any time make any definite determination as to
investment policy and notify Diversified thereof in writing, Diversified shall
be bound by such determination for the period, if any, specified in such notice
or until similarly notified that such determination has been revoked.
Diversified will determine what portion of securities owned by the Portfolio
shall be invested in securities described by the policies of the Portfolio and
what portion, if any, should be held uninvested. Diversified will determine
whether and to what extent to employ various investment techniques available to
the Portfolio. In effecting transactions with respect to securities or other
property for the account of the Portfolio. Diversified may deal with itself and
its affiliates, with the Trustees and the Portfolio or with other entities to
the extent such actions are permitted by the 0000 Xxx.
(b) Diversified also shall provide to the Portfolio administrative
assistance in connection with the operation of the Portfolio, which shall
include compliance with all reasonable requests of the Portfolio for
information, including information required in connection with the Portfolio's
filings with the Securities and Exchange Commission and state securities
commissions.
-4-
(c) As manager of the assets of the Portfolio, Diversified shall make
investments for the account of the Portfolio in accordance with Diversified's
best judgment and within the Portfolio's investment objectives, guidelines, and
restrictions, the 1940 Act and the provisions of the Internal Revenue Code of
1986 relating to regulated investment companies subject to policy decisions
adopted by the Board of Trustees.
(d) Diversified shall furnish to the Board of Trustees periodic
reports on the investment performance of the Portfolio and on the performance of
its obligations under this Agreement and shall supply such additional reports
and information as the Portfolio's officers or Board of Trustees shall
reasonably request.
(e) On occasions when Diversified deems the purchase of sale of a
security to be in the best interest of the Portfolio as well as other customers,
Diversified, to the extent permitted by applicable law, may aggregate the
securities to be so sold or purchased in order to obtain the best execution or
lower brokerage commissions, if any. Diversified may also on occasion purchase
or sell a particular security for one or more customers in different amounts. On
either occasion, and to the extent permitted by applicable law and regulations,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by Diversified in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Portfolio and to such other customers.
(f) Diversified shall also provide the Portfolio with the following
services as may be required:
(i) providing office space, equipment and clerical personnel
necessary for maintaining the organization of the Portfolio
and for performing administrative and management functions;
(ii) supervising the overall administration of the Portfolio,
including negotiation of contracts and fees with and the
monitoring of performance and xxxxxxxx of the Portfolio's
transfer agent, custodian and other independent contractors
or agents;
(iii) preparing and, if applicable, filing all documents required
for compliance by the Portfolio with applicable laws and
regulations, including registration statements,
registration fee filings, semi-annual and annual reports to
investors, proxy statements and tax returns;
-5-
(iv) preparation of agendas and supporting documents for and
minutes of meeting of Trustees, committees of Trustees and
investors; and
(v) maintaining books and records of the Portfolio.
4. Diversified shall give the Portfolio the benefit of Diversified's best
judgment and efforts in rendering services under this Agreement. As an
inducement to Diversified's undertaking to render these services, the Portfolio
agrees that Diversified shall not be liable under this Agreement for any mistake
in judgment or in any order event whatsoever provided that nothing in this
Agreement shall be deemed to protect or purport to protect Diversified against
any liability to the Portfolio or its investors to which Diversified would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Adviser's duties under this Agreement or by
reason of the Adviser's reckless disregard of its obligations and duties
hereunder.
5. In consideration of the services to be rendered by Diversified under
this Agreement, the Portfolio shall pay Diversified a fee accrued daily and paid
monthly at an annual rate equal to .60% of the Portfolio's average daily net
assets. If the fees payable to Diversified pursuant to this paragraph 5 begin to
accrue before the end of any month or if this Ordinary Agreement terminates
before the end of any month, the fees for the period from that date to the end
of that month or from the beginning of that month to the date of termination, as
the case may be, shall be prorated according to the proportion which the period
bears to the full month in which the effectiveness or termination occurs. For
purposes of calculating the monthly fees, the value of the net assets of the
Portfolio shall be computed in the manner specified in its Regulation Statement
on Form N-1A for the computation of net asset value. For purposes of this
Agreement, a "business day" is any day the New York Stock Exchange is open for
trading.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Diversified hereby agrees that all records which it maintains for the Portfolio
are property of the Portfolio and further agrees to surrender promptly to the
Portfolio any such records upon the Portfolio's request. Diversified further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
any such records required to be maintained by Rule 31a-1 under the 1940 Act.
6. This Agreement shall be effective as to the Portfolio as of the date
the Portfolio commences investment operations after this Agreement shall have
been approved by the Board of Trustees of the Portfolio and the investor(s) in
the Portfolio in the manner
-6-
contemplated by Section 15 of the 1940 Act and, unless sooner terminated as
provided herein, shall continue until the second anniversary of the date hereof.
Thereafter, if not terminated, this Agreement shall continue in effect as to the
Portfolio for successive periods of 12 months each, provided such continuance is
specifically approved at least annually by the vote of a majority of those
members 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; and either (a) by the vote of
a majority of the full Board of Trustees or (b) by vote of a majority of the
outstanding voting securities of the Portfolio; provided, however, that this
Agreement may be terminated by the Portfolio at any time, without the payment of
any penalty, by the Board of Trustees of the Portfolio or by vote of a majority
of the outstanding voting securities of the Portfolio on 60 days' written notice
to Diversified, or by Diversified as to the Portfolio at any time, without
payment of any penalty, on 90 days' written notice to the Portfolio. This
Agreement will immediately terminate in the event of its assignment. (As used in
this Agreement, the terms "majority of the outstanding voting securities",
"interested person" and "assignment" shall have the same meanings as such terms
have in the 1940 Act and the rule and regulatory constructions thereunder.)
7. Except to the extent necessary to perform Diversified's obligations
under this Agreement, nothing herein shall be deemed to limit or restrict the
right of Diversified, or any affiliate of Diversified, or any employee of
Diversified, to engage in any other business or 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.
8. The investment management services of Diversified to the Portfolio
under this Agreement are not to be deemed exclusive as to Diversified and
Diversified will be free to render similar services to others.
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge, or termination is
sought and no material amendment of this Agreement shall be effective until
approved by vote of the holders of a majority of the outstanding voting
securities of the Portfolio.
This Agreement embodies the entire agreement and understanding between the
parties hereto and supersedes all prior agreements and understandings relating
to the subject matter
-7-
hereof. The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. Should any part of this Agreement be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby. This Agreement shall be binding
and shall inure to the benefit of the parties hereto and their respective
successors, to the extent permitted by law.
9. This Agreement shall be construed in accordance with the laws of the
State of New York provided that nothing herein shall be construed in a manner
inconsistent with the requirements of 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
Attest: Diversified Investors Portfolios
/s/ XXXX X. XXXXXX By: /s/ XXX XXXXXXXXXXX
------------------------------ -------------------------------
Xxx Xxxxxxxxxxx
Chairman and President
Attest: Diversified Investment Advisors, Inc.
/s/ XXXXXXXXX X. XXXX By: /s/ XXXXXX X. XXXX
-------------------------------- -------------------------------
Xxxxxx X. Xxxx
Vice President and CFO
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
.0030 OF THE FIRST $100M OF NET ASSETS
.0020 OF THE NEXT $200M OF NET ASSETS
.0015 OF THE NEXT $200M OF NET ASSETS
.0010 OF NET ASSETS IN EXCESS OF $500M
Net assets are equal to the market value of the Assets. Fees will be
calculated by multiplying the arithmetic average of the beginning and ending
monthly net assets by the fee schedule and dividing by twelve. The fee will be
paid quarterly.
Subadvisor agrees that if at anytime during the term of this Subadvisory
Agreement, Subadvisor offers another of its clients (other than a client that
is an affiliated person of Credit Suisse Group) a lower fee than that set
forth in this Schedule B for the management of a similarly structured Growth &
Income Portfolio or Growth & Income Fund then Diversified will also be charged
the lower rate. Diversified will benefit from the lower rate from the first day
that it is in effect for Subadvisor's other client. It is understood and agreed
by both Subadvisor and Diversified that this paragraph is applicable solely to
Diversified's Growth & Income Portfolio and not to any other fund/assets which
Subadvisor now manages or may manage in the future on Diversified's behalf.
SCHEDULE C
Target market for 401(a), 403(b) and 457 plans is those plans with assets
between $1 and $250 million.
