INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this __ day of September, 1998, by and among SEI Investments
Management Corporation, (the "Adviser") and Mellon Equity Associates, LLP (the
"Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser will act as investment adviser to the Small Cap Fund (the
"Portfolio"), which is a separate series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. Duties of the Sub-Adviser. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage the investment
operations of the Portfolio and the composition of the Portfolio, including
the purchase, retention and disposition of securities and other assets, in
accordance with the Portfolio's investment objectives, policies and
restrictions as stated in the Portfolio's prospectus and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall provide supervision of the Portfolio's investments
and determine from time to time what investments and securities will be
purchased, retained or sold by the Portfolio, and what portion of the
assets will be invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the Trust's Declaration of Trust
(as defined herein) and the Prospectus and with the instructions and
directions of the Adviser and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, and all other applicable federal and state
laws and regulations, as each is amended from time to time.
(c) The Sub-Adviser shall determine the securities to be purchased or sold by
the Portfolio and will place orders with or through such persons, brokers
or dealers to carry out the policy with respect to brokerage set forth in
the Portfolio's Registration Statement and Prospectus or as
the Board of Trustees or the Adviser may direct from time to time, in
conformity with federal securities laws. In executing Portfolio
transactions and selecting brokers or dealers, the Sub-Adviser will use its
best efforts to seek on behalf of the Portfolio the best overall terms
available. In assessing the best overall terms available for any
transaction, the Sub-Adviser shall consider all factors that it deems
relevant, which may include the breadth of the market in the security, the
price of the security, the financial condition and 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. In evaluating
the best overall terms available, and in selecting the broker-dealer to
execute a particular transaction the Sub-Adviser may also consider the
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) provided to the Portfolio
and/or other accounts over which the Sub-Adviser or an affiliate of the
Sub-Adviser may exercise investment discretion. The Sub-Adviser is
authorized, subject to the prior approval of the Trust's Board of Trustees,
to pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for any of the
Portfolio which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if, but only if,
the Sub-Adviser determines in 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 that particular
transaction or terms of the overall responsibilities of the Sub-Adviser to
the Portfolio. In addition, the Sub-Adviser is authorized to allocate
purchase and sale orders for portfolio securities to brokers or dealers
(including brokers and dealers that are affiliated with the Sub-Adviser or
the Trust's principal underwriter) to take into account the sale of shares
of the Trust if the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with
other qualified firms. In no instance, however, will the Portfolio's
securities be purchased from or sold to the Sub-Adviser, the Trust's
principal underwriter, or any affiliated person of either the Trust, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and Exchange
Commission and the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to the
Portfolio's portfolio transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Adviser or Board of Trustees such periodic and
special reports as the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the Portfolio's books and records required to be
maintained by the Sub-Adviser of this Agreement and shall timely furnish to
the Adviser all information relating to the Sub-Adviser's services under
this Agreement needed by the Adviser to keep the other books and records of
the Portfolio required by Rule 31a-1 under the 1940 Act. The Sub-Adviser
shall also furnish to the Adviser any other information that is required to
be filled by the Adviser or the Trust with the Securities and Exchange
Commission ("SEC") or sent to shareholders under the 1940 Act (including
the rules adopted thereunder) or any exemptive or other relief that the
Adviser or the Trust obtains from the SEC. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are property of the
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Portfolio and the Sub-Adviser will surrender promptly to the Portfolio any
of such records upon the Portfolio's request; provided, however, that the
Sub-Adviser may retain a copy of such records. In addition, for the
duration of this Agreement, the Sub-Adviser shall preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by it pursuant to this Agreement, and shall
transfer said records to any successor Sub-Adviser upon the termination of
this Agreement (or, if there is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the
Portfolio's assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to others, as long as such services do not
impair the services rendered to the Adviser or the Trust.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. Duties of the Adviser. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that nothing herein shall
be construed to relieve the Sub-Adviser of responsibility for compliance
with the Portfolio's investment objectives, policies, and restrictions, as
provided in Section 1 hereunder. The Adviser hereby covenants to promptly
provide the Sub-Adviser with copies of any amendment or supplement to the
Portfolio's Registration Statement as well as all applicable trading
guidelines and procedures established for the Portfolio.
3. Delivery of Documents. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
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(c) Prospectus(es) of the Portfolio.
(d) The Adviser hereby covenants to promptly furnish the Sub-Adviser with
copies of any amendments or supplements to such documents.
4. Compensation to the Sub-Adviser. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the Sub-
Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in Schedule A which is
attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of investments under
management and will be paid to the Sub-Adviser monthly. The Sub-Adviser
may, in its discretion and from time to time, waive a portion of its fee.
5. Limitation of Liability of the Sub-Adviser. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with performance of its obligations under this Agreement, except
a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act), or a loss resulting from willful misfeasance, bad faith
or negligence on the Sub-Adviser's part in the performance of its duties or
from reckless disregard of its obligations and duties under this Agreement,
except as may otherwise be provided under provisions of applicable state
law which cannot be waived or modified hereby.
6. Reports. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Portfolio, the Trust or the public that
refer to the Sub-Adviser or its clients in any way prior to use thereof and
not to use material if the Sub-Adviser reasonably objects in writing within
five business days (or such other period as may be mutually agreed) after
receipt thereof. The Sub-Adviser's right to object to such materials is
limited to the portions of such materials that expressly relate to the Sub-
Adviser, its services and its clients. The Adviser agrees to use its
reasonable best efforts to ensure that materials prepared by its employees
or agents or its affiliates that refer to the Sub-Adviser or its clients in
any way are consistent with those materials previously approved by the
Sub-Adviser as referenced in the first sentence of this paragraph. Sales
literature may be furnished to the Sub-Adviser by first class or overnight
mail, facsimile transmission equipment or hand delivery.
7. Indemnification. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with the performance by the Sub-Adviser of
its duties under this Agreement; provided, however, that the Sub-Adviser
shall not be required to indemnify or otherwise hold the Adviser harmless
under this
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Section 7 where the claim against, or the loss, liability or damage
experienced by the Adviser, is caused by or is otherwise directly related
to the Adviser's own willful misfeasance, bad faith or negligence, or to
the reckless disregard of its duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related expenses) howsoever arising
from or in connection with the performance by the Adviser of its duties
under this Agreement; provided, however, that the Adviser shall not be
required to indemnify or otherwise hold the Sub-Adviser harmless under this
Section 7 where the claim against, or the loss, liability or damage
experienced by the Sub-Adviser, is caused by or is otherwise directly
related to the Sub-Adviser's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
8. Duration and Termination. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio; provided, however, that
at any time the Adviser shall have obtained exemptive relief from the SEC
permitting it to engage a Sub-Adviser without first obtaining approval of
the Agreement from a majority of the outstanding voting securities of the
Portfolio involved, the Agreement shall become effective upon its approval
by the Trust's Board of Trustees. Any Sub-Adviser so selected and approved
shall be without the protection accorded by shareholder approval of an
investment adviser's receipt of compensation under Section 36(b) of the
1940 Act.
This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated with respect to the Portfolio (a) by the
Portfolio at any time, without the payment of any penalty, by the vote of a
majority of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of such Portfolio, (b) by the Adviser at any
time, without the payment of any penalty, on not more than 60 days' nor
less than 30 days' written notice to the other party, or (c) by the
Sub-Adviser at any time, without the payment of any penalty, on 90 days'
written notice to the other party. This Agreement shall terminate
automatically and immediately in the event of its assignment, or in the
event of a termination of the Adviser's agreement with the Trust. As used
in this Section 8, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the Commission under the 1940 Act.
9. Governing Law. This Agreement shall be governed by the internal laws of
the Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
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10. Severability. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
11. Notice. Any notice, advice or report to be given pursuant to this
Agreement shall be deemed sufficient if delivered or mailed by registered,
certified or overnight mail, postage prepaid addressed by the party giving
notice to the other party at the last address furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
Xxx Xxxxxxx Xxxxxx Xxxxx
Xxxx, XX 00000
Attention: Legal Department
To the Sub-Adviser at: Mellon Equity Associates, LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xx 00000
Attention: President
12. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
Where the effect of a requirement of the 1940 Act reflected in any provision of
this Agreement is altered by a rule, regulation or order of the Commission,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
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 written
above.
SEI INVESTMENTS MANAGEMENT CORPORATION MELLON EQUITY ASSOCIATES, LLP
By: /s/ Xxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------- --------------------------------
Name: Xxxx X. Xxxxxxxxx Name: Xxxxxxx X. Xxxxxx
------------------------------ ------------------------------
Title: Vice President Title: President
------------------------------- -----------------------------
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SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
MELLON EQUITY ASSOCIATES, LLP
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate of up to:
Small Cap Fund .45%
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