Exhibit 99.D
EXHIBIT 23(d)(2)(uu)
SUB-ADVISORY AGREEMENT ON BEHALF OF IDEX XXXXXXX GROWTH
SUB-ADVISORY AGREEMENT
BETWEEN
BANC OF AMERICA CAPITAL MANAGEMENT, LLC
AND XXXXXXX CAPITAL MANAGEMENT, LLC
This Agreement is entered into as of November 1, 2002 between Banc of
America Capital Management, LLC (referred to herein as "BACAP"), and Xxxxxxx
Capital Management, LLC (referred to herein as "MCM").
WHEREAS, BACAP entered into a Sub-Advisory Agreement (referred to herein
as the "Advisory Agreement"), dated as of November 1, 2002 with
AEGON/Transamerica Fund Advisers, Inc. (referred to herein as "ATFA") with
respect to providing advisory services to IDEX Mutual Funds, a Massachusetts
business trust (herein referred to as "IDEX"), on behalf of IDEX Xxxxxxx Growth
(the "Fund").
WHEREAS, the Advisory Agreement provides that BACAP may engage MCM to
furnish investment information and advice to assist BACAP in carrying out its
responsibilities under the Advisory Agreement as investment sub-adviser to the
Fund.
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided by
MCM to BACAP and the terms and conditions under which such services will be
rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. SERVICES OF MCM. MCM shall act as investment counsel to BACAP with
respect to the Fund. In this capacity, MCM shall have the following
responsibilities:
(a) provide a continuous investment program for the Fund including
advice as to the acquisition, holding or disposition of any or all
of the securities or other assets which the Fund may own or
contemplate acquiring from time to time;
(b) to cause its representatives to attend meetings of ATFA or IDEX (by
telephone or otherwise) when reasonably necessary and to furnish
oral or written reports, as BACAP may reasonably require, in order
to keep BACAP, ATFA and their respective officers and the Trustees
of IDEX and appropriate officers of IDEX fully informed as to the
condition of the investment portfolio of the Fund, the investment
recommendations of MCM, and the investment considerations which have
given rise to those recommendations;
(c) to furnish such statistical and analytical information and reports
as may reasonably be required by BACAP from time to time;
(d) to supervise the purchase and sale of securities as sub-adviser as
described below;
(e) Investment Sub-Advisory Services. MCM shall act as the investment
sub-adviser and shall supervise and direct the investments of the
Fund in accordance with the Fund's investment objective, policies,
and restrictions as provided in the Prospectus and Statement of
Additional Information, as currently in effect and as amended or
supplemented from time to time (hereinafter referred to as the
"Prospectus"), and such other limitations as directed by the
appropriate officers of BACAP, ATFA or IDEX by notice in writing to
MCM; provided that MCM shall be entitled to rely on and comply with
the Prospectus most recently furnished to MCM by BACAP (as received
from ATFA). MCM shall obtain and evaluate such information relating
to the economy, industries, businesses, securities markets, and
securities as it may deem necessary or useful in the discharge of
its obligations hereunder and shall formulate and implement
a continuing program for the management of the assets and resources
of the Fund in a manner consistent with the Fund's investment
objective, policies, and restrictions. In furtherance of this duty,
MCM, on behalf of the Fund, is authorized, in its discretion and
without prior consultation with IDEX, BACAP or ATFA, to:
(1) Buy, sell, exchange, convert, lend, and otherwise trade in any
stocks, bonds and other securities or assets; and
(2) Place orders and negotiate the commissions (if any) for the
execution of transactions in securities or other assets with or
through such brokers, dealers, underwriters or issuers as MCM may
select.
2. OBLIGATIONS OF BACAP. BACAP shall have the following obligations
under this Agreement:
(a) to keep MCM continuously and fully informed as to the
composition of the Fund's investment portfolio and the nature
of the Fund's assets and liabilities from time to time;
(b) to furnish MCM with copies of each of the following documents
and all future amendments and supplements to such documents,
if any, as soon as practicable after such documents become
available;
(1) The Agreement and Declaration of Trust of IDEX, as filed
with the State of Massachusetts, as in effect on the date
hereof and as amended from time to time ("Articles");
(2) The By-Laws of IDEX as in effect on the date hereof and as
amended from time to time ("By-Laws");
(3) Certified resolutions of the Board of IDEX authorizing the
appointment of BACAP and MCM and approving the form of the
Advisory Agreement and this Agreement;
(4) IDEX Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-1A, as filed
with the Securities and Exchange Commission ("SEC") relating
to the Fund and its shares and all amendments thereto
("Registration Statement");
(5) The Fund's Prospectus (as defined above); and
(6) A certified copy of any publicly available financial
statement or report prepared for the Fund by certified or
independent public accountants, and copies of any financial
statements or reports made by the Fund to its shareholders or
to any government body or securities exchange.
(c) to furnish MCM with any further materials or information which
MCM may reasonably request to enable it to perform its
functions under this Agreement;
(d) to compensate MCM for its services under this Agreement as set
forth in Schedule A. The fee shall accrue daily and be paid
monthly in arrears within 15 days after the end of each month.
In the event that this Agreement shall be effective for only
part of a period, then an appropriate pro-ration of the fee
that would have been payable hereunder shall be made, based on
the number of calendar days in such period and the number of
calendar days during the period in which this Agreement was in
effect.
3. BROKERAGE.
(a) MCM agrees that, in placing orders with broker-dealers for the
purchase or sale of portfolio securities, it shall attempt to obtain quality
execution at favorable security prices (best price and execution); provided
that, on behalf of the Fund, MCM may, in its discretion, agree to pay a
broker-dealer that furnishes brokerage or research services as such services are
defined under Section 28(e) of the Securities Exchange Act of 1934, as amended
("1934 Act"), a higher commission than that which might have been charged by
another broker-dealer for effecting the same
transactions, if MCM determines in good faith that such commission is reasonable
in relation to the brokerage and research services provided by the
broker-dealer, viewed in terms of either that particular transaction or the
overall responsibilities of MCM with respect to the accounts as to which it
exercises investment discretion (as such term is defined under Section 3(a)(35)
of the 1934 Act). In no instance will portfolio securities be purchased from or
sold to MCM, or any affiliated person thereof, except in accordance with the
federal securities laws and the rule and regulations thereunder.
(b) On occasions when MCM deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients of MCM,
MCM, to the extent permitted by applicable laws and regulations, may, but shall
be under no obligation to, aggregate the securities to be purchased or sold to
attempt to obtain a more favorable price or lower brokerage commissions and
efficient execution. In such event, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be made by MCM
in the manner MCM considers to be fair and equitable and consistent with its
fiduciary obligations to the Fund and to its other clients.
(c) Without limiting MCM's discretion in seeking best execution by
placing orders and negotiating commissions with broker-dealers it selects, MCM
agrees that orders with broker-dealers for the purchase or sale of portfolio
securities by the Fund shall be placed in accordance with reasonable standards
set forth in the Advisory Agreement if BACAP timely brings them to MCM's
attention, subject to compliance with applicable laws and procedures adopted by
the Trustees of IDEX. At the direction of ATFA, BACAP may direct MCM to effect a
portion of all transactions in portfolio securities for the Fund through
broker-dealers in a manner that will generate resources to help pay certain
expenses that the Fund is required to pay or for which the Fund is required to
arrange payment or for any other lawful purposes. MCM will treat such a
direction as a decision by ATFA to retain, to the extent of the direction, the
discretion that MCM otherwise would exercise to select broker-dealers and
negotiate commissions for the Fund. There may be occasions when MCM is unable to
obtain best execution because, for example, MCM cannot evaluate the services
provided by the selected broker, the selected broker may not be as efficient in
executing transactions as another broker, or the trade cannot be aggregated with
other trades sent to other brokers.
(d) MCM is authorized to place orders on behalf of the Fund
through MCM or any affiliate thereof if MCM or its affiliate is registered as a
broker or dealer with the SEC or as a FCM with the Commodities Futures Trading
Commission ("CFTC"), to any of its affiliates that are brokers or dealers or
FCBs or such other entities which provide similar services in foreign countries,
or to such brokers or dealers that also provide research or statistical research
and material, or other services to the Funds or MCM. Such allocation shall be in
such amounts and proportions as MCM shall determine consistent with the above
standards, and, upon, request, MCM will report on said allocation to BACAP and
Board of Trustees of IDEX, indicating the brokers, dealers or FCBs to which such
allocations have been made and the basis therefor.
(e) In particular, MCM may use Banc of America Securities, LLC
("BAS"), or any other broker or dealer affiliated with MCM ("affiliated
broker"), to execute trades for the Fund, provided that MCM seeks best execution
in using the affiliated broker. An affiliated broker will not act as principal
for its own account, but may execute transactions as agent for the Fund on an
exchange floor, and receive and retain all commissions, fees, and benefits
without complying further with Section 11(a) of the Securities Exchange Act. An
affiliated broker also may execute agency cross trades, in which it
simultaneously acts as broker for the Fund and for another customer on the other
side of the trade. Agency cross trades may enable MCM to purchase or sell a
block of securities for the Fund at a set price, and to avoid unfavorable price
movements caused by trading a large order on the market. MCM will comply with
all legal requirements concerning the use of an affiliated broker, including
Rules 10f-3 and 17e-1 under the Investment Company Act and Rule 206(3)-2 under
the Investment Advisers Act. BACAP and ATFA are aware that MCM's affiliation
with an affiliated broker could give MCM an indirect interest in commissions
received by the affiliated broker, and that agency cross trades could create
potentially conflicting divisions of loyalties and responsibilities because the
affiliated broker acts for both sides of the trade. BACAP or ATFA may at any
time revoke its consent to the execution of agency cross trades for the Fund by
giving written notice to MCM or the affiliated broker.
4. PURCHASES BY AFFILIATES. Although MCM will not purchase
securities issued by the Fund, MCM's officers, directors, and employees may
purchase from the Fund shares issued by the Fund at the current price available
to the public, or at such price with reductions in sales charge as may be
permitted in the Fund's current prospectus in
accordance with Section 22(d) of the Investment Company Act of 1940, as amended
(the "1940 Act").
5. SERVICES TO OTHER CLIENTS. Nothing contained in this Agreement
shall limit or restrict (i) the freedom of MCM, or any affiliated person
thereof, to render investment management and corporate administrative services
to other investment companies, to act as investment manager or investment
counselor to other persons, firms, or corporations, or to engage in any other
business activities, or (ii) the right of any director, officer, or employee of
MCM, to engage in any other business or to devote his or her time and attention
in part to the management or other aspects of any other business, whether of a
similar nature or a dissimilar nature.
6. SUB-ADVISER'S USE OF THE SERVICES OF OTHERS. MCM may employ,
retain, or otherwise avail itself of the services or
facilities of subcontractors, or other persons or
organizations for the purpose of obtaining such statistical
and other factual information, such advice regarding economic
factors and trends, such advice as to transactions in specific
securities, or such other information, advice, or assistance
as MCM may deem necessary, appropriate, or convenient for
discharge of its obligations hereunder or otherwise helpful to
the Fund, as appropriate, or in the discharge of MCM overall
responsibilities with respect to the other accounts that it
serves as investment manager or counselor.
7. LIMITATION OF LIABILITY OF THE SUB-ADVISER. Neither MCM, nor
any of its officers, directors, or employees, or any other
person performing executive, administrative, trading, or other
functions for MCM, the Fund (at the direction or request of
MCM), ATFA, or BACAP in connection with MCM's discharge of its
obligations undertaken or reasonably assumed with respect to
this Agreement, shall be liable for any error of judgment or
mistake of law or for any loss suffered by ATFA, BACAP or the
Fund, or for any error of facts or mistake of law contained in
any report or date provided by MCM, except for any error,
mistake or loss resulting from willful misfeasance, bad faith
or gross negligence in the performance of its duties on behalf
of the Fund or from reckless disregard by MCM, or any such
person of the duties of MCM pursuant to this Agreement.
No statement in this Agreement or any other document constitutes a
representation by MCM regarding the rate of growth or return of the Fund.
Neither MCM nor any of its officers, directors, or employees make any
representations or warranties, express or implied, that any level of performance
or investment results will be achieved by the Fund or that the Fund will perform
comparably with any standard or index, including other MCM client accounts.
8. REPRESENTATIONS.
The parties hereto represent, warrant, and agree as follows:
(a) BACAP and MCM each: (i) is registered as an investment
adviser under the Advisers Act and any applicable state laws and will continue
to be so registered for so long as this Agreement remains in effect; (ii) is not
prohibited by the 1940 Act or the Advisers Act from performing the services
contemplated by this Agreement; (iii) has met, and will continue to meet for so
long as this Agreement remains in effect, any applicable federal or state
requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency, necessary to be met in order to perform the services
contemplated by this Agreement; (iv) has the authority to enter into and perform
the services contemplated by this Agreement; and (v) will immediately notify the
other party of the occurrence of any event that would disqualify such other
party from serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise.
(b) BACAP and MCM each has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and, if it has
not already done so, will provide the Investment Adviser and the Fund with a
copy of such code of ethics, together with evidence of its adoption.
(c) MCM has provided BACAP and ATFA with a copy of its Form
ADV as most recently filed with the SEC and will annually furnish a copy of Part
2 of Form ADV to BACAP and ATFA.
9. TERM OF AGREEMENT.
This Agreement shall become effective upon the date first above
written, provided that this Agreement shall not take effect unless it has first
been approved (i) by a vote of a majority of those Trustees 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 (ii) by vote of a
majority of the Fund's outstanding voting securities. Unless sooner terminated
as provided herein, this Agreement shall continue in effect for an initial term
ending April 30, 2004. Thereafter, this Agreement shall continue in effect from
year to year, with respect to the Fund, subject to the termination provisions
and all other terms and conditions hereof, so long as such continuation shall be
specifically approved at least annually (a) by either the Board, or by vote of a
majority of the outstanding voting securities of the Fund; and (b) in either
event, by the vote, cast in person at a meeting called for the purpose of voting
on such approval, of a majority of the Trustees of IDEX who are not parties to
this Agreement or interested persons of any such party. MCM shall furnish to
BACAP and/or IDEX, promptly upon its request such information as may reasonably
be necessary to evaluate the terms of this Agreement or any extension, renewal,
or amendment hereof.
10. TERMINATION OF AGREEMENT.
Notwithstanding the foregoing, this Agreement may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Fund, or per the terms of
the exemptive order-Release No. 00000-xxxxx Xxxxxxx 6(c) of the Act from Section
15(a) and Rule 18f-2 under the Act, on at least 60 days' prior written notice to
MCM. This Agreement may also be terminated by BACAP: (i) on at least 60 days'
prior written notice to MCM, without the payment of any penalty; or (ii) if MCM
becomes unable to discharge its duties and obligations under this Agreement. MCM
may terminate this Agreement at any time, or preclude its renewal without the
payment of any penalty, on at least 60 days' prior notice to BACAP and ATFA.
This Agreement shall terminate automatically in the event of its assignment or
upon termination of the Advisory Agreement. Upon any termination, fees shall be
payable to MCM through the effective date on a pro-rated basis in accordance
with section 2(d).
11. AMENDMENT OF AGREEMENT.
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 or a majority of the Fund outstanding voting securities and a
vote of a majority of those Trustees of IDEX 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, unless otherwise permitted
in accordance with the 1940 Act.
12. MISCELLANEOUS.
(a). Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York without giving effect to the
conflicts of laws principles thereof, and the 1940 Act. To the extent that the
applicable laws of the State of New York conflict with the applicable provisions
of the 1940 Act, the latter shall control.
(b). Captions. The captions contained 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.
(c). Entire Agreement. This Agreement represents the entire
agreement and understanding of the parties hereto and shall supersede any prior
agreements between the parties relating to the subject matter hereof, and all
such prior agreements shall be deemed terminated upon the effectiveness of this
Agreement.
(d). Interpretation. Nothing herein contained shall be deemed
to require IDEX to take any action contrary to its Articles or By-Laws, or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Board of its responsibility for
and control of the conduct of the affairs of IDEX.
(e). Definitions. Any question of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the 1940 Act shall be resolved by reference to such term
or provision of the 1940 Act and to interpretation thereof, if any, by the
United States courts or, in the absence of any controlling decision of any such
court, by rules, regulations, or orders of the SEC validly issued pursuant to
the 1940 Act. As used in this Agreement, the terms "majority of the outstanding
voting securities," "affiliated person," "interested person," "assignment,"
"broker," "investment adviser," "net assets," "sale," "sell," and "security"
shall have the same meaning as such terms have in the 1940 Act, subject to such
exemption as may be granted by the SEC by any rule, regulation, or order. Where
the effect of a requirement of the federal securities laws reflected in any
provision of this Agreement is made less restrictive by a rule, regulation, or
order of the SEC, whether of special or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation, or order,
unless BACAP and MCM agree to the contrary.
(f). MCM/Xxxxxxx Name: IDEX Mutual Funds may use any name
including or derived from the name "MCM" or "Xxxxxxx" in connection with a fund
only for so long as this Agreement, or any extension, renewal or amendment
hereof remains in effect, including any similar agreement with any organization
which shall succeed to MCM's or Xxxxxxx'x business as investment adviser or
distributor. Upon termination of this Agreement ATFA and IDEX Mutual Funds will
cause the fund to cease to use such a name or any other name indicating that it
is advised by or otherwise connected with MCM or Xxxxxxx or any organization
which shall have so succeeded to MCM's or Xxxxxxx'x business.
13. COMPLIANCE WITH LAWS.
(a) In all matters relating to the performance of this Agreement,
MCM will act in conformity with the IDEX Declaration of Trust,
Bylaws, and current prospectus and with the instructions and
direction of BACAP, ATFA and the Fund's Trustees.
(b) MCM shall conform with (1) the 1940 Act and all rules and
regulations thereunder, and releases and interpretations
thereto (including any no-action letters and exemptive orders
which have been granted by the SEC to the Fund, ATFA, BACAP
and/or MCM and (2) with all other applicable federal and state
laws and regulations pertaining to management of investment
companies.
(c) ATFA shall perform quarterly and annual tax compliance tests
to ensure that the Fund is in compliance with Subchapter M of
the Internal Revenue Code ("IRC"). In connection with such
compliance tests, ATFA shall prepare and provide reports to
BACAP and MCM within 10 business days of a calendar quarter
end relating to the diversification of the Fund under
Subchapter M. MCM shall review such reports for purposes of
determining compliance with such diversification requirements.
If it is determined that the Fund is not in compliance with
the requirements noted above, MCM, in consultation with BACAP,
will take prompt action to bring the Fund back into compliance
within the time permitted under the IRC.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ATTEST: BANC OF AMERICA CAPITAL MANAGEMENT, LLC
By: By:
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Name: Name:
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Title: Title:
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ATTEST: XXXXXXX CAPITAL MANAGEMENT, LLC
By: By:
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Name: Name:
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Title: Title:
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SCHEDULE A
IDEX Xxxxxxx Growth 0.40% of the Fund's average daily net assets
