Exhibit 99. - d(iii)
[Form of]INVESTMENT ADVISORY AGREEMENT
Agreement, made as of ____________________, 2000, between Flag
Investors Portfolios Trust (formerly Deutsche Portfolios), a trust organized
under New York law (the "Trust") on behalf of the COMMUNICATIONS PORTFOLIO (the
"Portfolio"), and Investment Company Capital Corp., a Maryland corporation
("ICCC" or "Investment Adviser"), registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Advisers Act").
W I T N E S S E T H:
WHEREAS, the Trust is an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), and consists on the date hereof of the sub-trust listed on Schedule
A to this Agreement (each such sub-trust, together with each other sub-trust of
the Trust hereafter established by the Trustees of the Trust and made subject to
this Agreement in accordance with Section 13 hereof, individually a "Portfolio"
and, collectively, the "Portfolios"); and
WHEREAS, the Board of Trustees of the Trust desires to retain
the Investment Adviser to render various investment management services to the
Portfolio, and the Investment Adviser is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. The Trust hereby appoints the Investment Adviser to act as
investment manager to the Portfolio for the period and the terms set forth in
this Agreement, with the understanding that it may appoint an adviser to perform
certain services relating to the management of the investment operations of the
Portfolio as set forth in Section 4. The Investment Adviser accepts such
appointment and agrees to render or provide the services herein set forth, for
the compensation herein provided as set forth in Schedule A.
2. The activities of the Investment Adviser or any adviser
appointed hereunder shall at all times be subject to the supervision of the
Trustees of the Trust.
3. The Investment Adviser shall manage, or appoint an adviser
to manage, the investment operations of the Portfolio and the composition of the
Portfolio's holdings of securities and investments, including cash, the
purchase, retention and disposition thereof and agreements relating thereto, in
accordance with the Portfolio's investment objectives and policies as stated in
the Registration Statement (as defined in paragraph 6(d) of this Agreement). The
Investment Adviser, or in case it appoints an adviser, such adviser, shall
perform such services (the person performing such services being referred to
herein as the "Sub-Adviser") subject to the following understandings:
(a) The Sub-Adviser in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Declaration of Trust and By-Laws of the Trust and the Registration
Statement and with the instructions and directions of the Trustees of
the Trust and will conform to and comply with the requirements of the
1940 Act and all other applicable federal and state laws and
regulations;
(b) the Sub-Adviser shall use the same skill and care in the
management of the Portfolio's investments as it uses in the
administration of other accounts for which it has investment
responsibility as agent;
(c) the Sub-Adviser shall determine the securities or other
investments to be purchased, sold or lent by the Portfolio and as agent
for the Portfolio will effect portfolio transactions pursuant to its
determinations either directly with the issuer or with any broker
and/or dealer in such securities, including a broker affiliated with
the Sub-Adviser; in placing orders with brokers and/or dealers the
Sub-Adviser intends to seek best price and execution for purchases and
sales; the Sub-Adviser shall also determine whether or not a Portfolio
shall enter into repurchase or reverse repurchase agreements;
On occasions when the Sub-Adviser deems the purchase or sale
of a security or other investment to be in the best interest of a
Portfolio as well as other customers of the Sub-Adviser, the
Sub-Adviser may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to
be so sold or purchased on behalf of such Portfolio and such other
customer of the Sub-Adviser in order to obtain best execution,
including lower brokerage commissions, if applicable. In such event,
allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Sub-Adviser
in the manner it considers to be the most equitable and consistent with
its fiduciary obligations to a Portfolio;
(d) the Sub-Adviser shall maintain a set of books and records
with respect to the Portfolio's securities and other investment
transactions as required by the Advisers Act and other applicable laws
and regulations and shall render to the Trustees of the Trust such
periodic and special reports as the Trustees may reasonably request;
and
(e) the services of the Sub-Adviser to the Trust under this
Agreement are not to be deemed exclusive, and the Sub-Adviser shall be
free to render similar services to others.
4. The Investment Adviser is authorized to appoint an
investment adviser to carry out the aforementioned investment operations of the
Portfolio, as Sub-Adviser, on the above terms pursuant to an investment advisory
contract conforming to the requirements of the 1940 Act and subject to approval
of the Board of Trustees and the holders of beneficial interests in the Trust as
required by the 1940 Act. Any such investment advisory contract shall provide
that the Sub-Adviser is not authorized to make any business, operational or
management decisions on behalf of the Trust or the Portfolio other than with
respect to the investment operations and composition of the Portfolio's holdings
of securities and other investments as set forth herein. The compensation of any
such Sub-Adviser will be paid by the Investment Adviser.
Subject to the approval of the Board of Trustees and holders
of beneficial interests of the Trust, to the extent required by the 1940 Act,
the Investment Adviser may delegate to any company that it controls, is
controlled by, or is under common control with (or to more than one such
company), or to specified employees of any such companies, certain of its duties
enumerated herein provided that the Investment Adviser shall continue to
supervise the performance of any such company and shall regularly report thereon
to the Trust's Board of Trustees.
The Investment Adviser may, but shall not be under any duty
to, perform services on behalf of the Portfolio which are not required by this
Agreement upon the request of the Trust's Board of Trustees. Such services will
be performed on behalf of the Portfolio and the Investment Adviser's charge in
rendering such services may be billed monthly to the Trust, subject to
examination by the Trust's independent accountants. Payment or assumption by the
Investment Adviser of any Trust expense that the Investment Adviser is not
required to pay or assume under this Agreement shall not relieve the Investment
Adviser of any of its obligations to the Portfolio nor obligate the Investment
Adviser to pay or assume any similar Portfolio's expenses on any subsequent
occasions.
5. The Investment Adviser shall also provide certain
supervisory and administrative services to the Trust, including:
(a) negotiating, maintaining, evaluating and coordinating
contractual arrangements with third-party service providers, including,
but not limited to, administrators, custodians, transfer agents, fund
accounting agents, independent accountants, attorneys, printers and
insurers;
(b) assisting the various third-party service providers
retained by or for the Trust by, among other things, providing any
information to such service providers as the Trustees of the Trust deem
appropriate, including information concerning Portfolio performance and
administration;
(c) reviewing agendas for and minutes of meetings of Trustees
and committees of Trustees; and preparing such supporting documents for
such meetings as the Trustees may request the Investment Adviser to
prepare;
(d) arranging, if desired by the Trust, for directors,
officers or employees of the Investment Adviser to serve as Trustees,
officers or agents of the Trust if duly elected or appointed to such
positions and subject to their individual consent and to any
limitations imposed by law; and
(e) reviewing all registration statements, amendments thereto
and other documents as may be required for compliance by the Trust and
each Portfolio with all applicable laws and regulations and preparing
such portions thereof as the Trustees of the Trust may request the
Investment Adviser to prepare.
Notwithstanding the foregoing, the Investment Adviser shall
not be deemed to have assumed any duties under this Agreement with respect to,
and shall not be responsible for, functions specifically assumed by any
administrator, fund accounting agent, custodian, private placement agent or
transfer agent of the Trust. As to any of the services contemplated by this
Section 5 to be provided by the Investment Adviser, it may instead retain a
third party to perform those services on its behalf and expense, subject to its
supervision of such third party.
6. The Trust has delivered copies of each of the following
documents to the Investment Adviser and will promptly notify and deliver to it
all future amendments and supplements, if any:
(a) Declaration of Trust of the Trust (such Declaration of
Trust, as presently in effect and as amended from time to time, is
herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as presently in effect
and as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Trustees of the Trust
authorizing the appointment of the Investment Adviser and approving the
form of this Agreement;
(d) The Trust's Notification of Registration on Form N-8A
under the 1940 Act, its Registration Statement on Form N-1A under the
1940 Act (No. 811-8375) and the Registration Statement on Form N-1A of
Deutsche Funds, Inc. (No. 333-27709) under the Securities Act of 1933,
as amended, and the 1940 Act, as filed with the Securities and Exchange
Commission (the "Commission") on May 23, 1997, including all amendments
thereto (together with the Registration Statement of the Trust, the
"Registration Statement").
7. The Sub-Adviser shall keep the books and records required
to be maintained by it pursuant to paragraph 3(e). The Investment Adviser agrees
that all records which it maintains for the Trust are the property of the Trust
and it will promptly surrender any of such records to the Trust upon request.
The Sub-Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 of the Commission under the 1940 Act any such records as are required to
be maintained by the Sub-Adviser with respect to the Portfolios by Rule 31a-2 of
the Commission under the 1940 Act.
8. During the term of this Agreement the Investment Adviser
will pay all expenses, including personnel costs and overhead, incurred by it in
connection with the performance of its obligations under this Agreement other
than the cost of securities and investments purchased for the Portfolio
(including taxes and brokerage commissions, if any) and extraordinary expenses
and shall pay the salaries of Trustees and officers of the Trust who are
affiliated persons (as defined in the 0000 Xxx) of the Investment Adviser. The
Investment Adviser shall not be required to pay expenses of any activity which
is intended primarily to result in sales of shares of the Portfolio.
9. For the services provided and the expenses borne pursuant
to this Agreement, the Portfolio will pay to the Investment Adviser as full
compensation therefor a fee, computed daily and paid monthly in arrears, at an
annual rate equal to the percentage of the average daily net assets of the
Portfolio specified in Schedule A hereto.
10. The Investment Adviser shall not be liable for any error
of judgment or mistake of law or for any loss or expense suffered by the Trust
or the Portfolio in connection with the matters to which this Agreement relates,
except a loss or expense resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
11. This Agreement shall continue in effect until the date two
years after its execution and shall continue in effect from year to year
thereafter with respect to the Portfolio if such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated by the Trust in its
entirety or with respect to the Portfolio, at any time, without the payment of
any penalty, by vote of a majority of all the Trustees of the Trust or by vote
of a majority of the outstanding voting securities (as defined in the 0000 Xxx)
of the Trust or the Portfolio, as the case may be, on 60 days' written notice to
the Investment Adviser, or by the Investment Adviser at any time, without the
payment of any penalty, on 60 days' written notice to the Trust. This Agreement
will automatically and immediately terminate in the event of its assignment (as
defined in the 1940 Act).
12. The Investment Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Trustees of the Trust from time to time,
have no authority to act for or represent the Trust or the Portfolio in any way
or otherwise be deemed an agent of the Trust or the Portfolio.
13. This Agreement may be amended by mutual consent, but the
consent of the Trust must be approved (a) by vote of a majority of those
Trustees of the Trust 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 amendment, and (b) by vote of a majority of the outstanding
voting securities of the Trust or a majority of the outstanding voting
securities of the Portfolio. In the event that the Trustees of the Trust
establish one or more additional sub-trusts with respect to which they wish to
retain the Investment Adviser to act as investment manager, the Trust and the
Investment Adviser may amend Schedule A hereto to add each such sub-trust and
specify the fee payable to the Investment Adviser in respect thereof, in which
event such sub-trust shall become subject to the provisions of this Agreement
and be deemed a "Portfolio" hereunder to the same extent as the existing
Portfolios, except to the extent that such provisions may be modified with
respect to any additional Portfolio in writing by the Trust and the Investment
Adviser at the time of the addition of the Portfolio.
14. Notices of any kind to be given to the Investment Adviser
by the Trust shall be in writing and shall be duly given if mailed or delivered
to the Investment Adviser at Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: President, or at such other address or to such other individual as
shall be specified by the Investment Adviser to the Trust. Notices of any kind
to be given to the Trust by the Investment Adviser shall be in writing and shall
be duly given if mailed or delivered to the Trust at Cardinal Avenue, Grand
Cayman, Cayman Islands, BWI or at such other address or to such other individual
as shall be specified by the Trust to the Investment Adviser.
15. The Trustees of the Trust have authorized the execution of
this Agreement in their capacity as Trustees and not individually and the
Investment Adviser agrees that neither the holders of interests in the Trust nor
the Trustees nor any officer, employee, representative or agent of the Trust
shall be personally liable upon, or shall resort be had to their private
property for the satisfaction of, obligations given, executed or delivered on
behalf of or by the Trust or the Portfolio, that the interest holders of the
Portfolios and the trustees, officers, employees, representatives and agents of
the Trust shall not be personally liable hereunder, and that the Investment
Adviser shall look solely to the property of the Trust for the satisfaction of
any claim hereunder.
16. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
17. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the date
first set forth above.
FLAG INVESTORS PORTFOLIOS TRUST on behalf
of the COMMUNICATIONS PORTFOLIO
By: __________________________________
Title:
INVESTMENT COMPANY CAPITAL CORP.
By: __________________________________
Title:
Schedule A
----------
Fee (annualized
% of average
Portfolio daily net assets)
--------- -----------------
Communications Portfolio 0.85% of first $100 million
0.75% of next $100 million
0.70% of next $100 million
0.65% of next $200 million
0.58% of next $500 million
0.53% of next $500 million
0.50% of portion in excess of $1.5
billion
