Exhibit (d)(2)
ASSET MANAGER'S AGREEMENT
The Balanced Fund (the "Fund") is a portfolio represented by one class
of shares of Advance Capital I, Inc. (the "Company"), a registered open-end
investment company under the Investment Company Act of 1940 (the "Act"), and
subject to the rules and regulations promulgated thereunder.
Advance Capital Management, Inc. (the "Manager") acts as the investment
manager of the Fund pursuant to the terms of an Investment Advisory Agreement
(the "Management Agreement") with the Company. The Manager is responsible
for the day-to-day investment advice, management and supervision of the Fund
and the coordination of the Fund's assets in portfolio securities. Pursuant
to the terms of the Management Agreement, the Manager may appoint another
entity to act as sub-advisor to furnish to the Company on behalf of the
Manager certain services specified in and subject to the provisions of the
Agreement, if such appointment is approved by the Directors of the Company
and by the shareholders of the Fund.
1. Appointment as an Asset Manager. The Manager, being duly authorized,
hereby appoints and employs X. Xxxx Price Associates, Inc. ("Asset Manager")
as a discretionary asset manager, on the terms and conditions set forth
herein, of those assets of the Fund which the Manager determines to assign
to the Asset Manager (those assets being referred to as the "Portfolio
Account(s)"). The Manager may, from time to time, with the consent of the
Asset Manager (and such consent shall not be unreasonably withheld), make
additions to the Portfolio Account(s) and may, from time to time, make
withdrawals from the Portfolio Account(s).
2. Acceptance of Appointment: Standard of Performance. The Asset Manager
accepts the appointment as a discretionary asset manager and agrees to use
its best professional judgment to make timely investment decisions for the
Fund with respect to the investments of the Portfolio Account in accordance
with the provisions of this Agreement.
3. Asset Management Services of Asset Manager. The Asset Manager is hereby
employed and authorized to select portfolio securities for investment by the
Fund, to purchase and sell securities of the Portfolio Account(s), and upon
making any purchase or sale decision, to place orders for the execution of
such portfolio transactions in accordance with paragraphs 5 and 6 hereof.
In providing portfolio management services to the Portfolio Account(s), the
Asset Manager shall be subject to such investment restrictions as are set
forth in the Act and the Rules and Regulations promulgated thereunder, the
supervision and control of the Directors, such specific instructions as
the Directors may adopt and communicate to the Asset Manager, the investment
objectives, policies and restrictions of the Fund furnished pursuant to
paragraph 4, and instructions from the Manager. The Asset Manager shall
maintain on behalf of the Fund those records which may be mutually agreed
upon by both parties. At the Manager's reasonable request, Asset Manager
will consult with the Fund or with the Manager with respect to any decisions
made by it with respect to the investments of the Portfolio Account(s).
4. Investment Objectives, Policies, and Restrictions. The Manager shall
provide the Asset Manager with a statement of the investment objectives and
policies of the Fund and any specific investment restrictions applicable
thereto, including cash flow requirements, as established by the Fund. The
Fund retains the right, on written notice to the Asset Manager from the
Fund or the Manager, to modify any such objectives, policies or restrictions
in any manner at any time provided any such amendment is consistent with the
Articles of Incorporation and By-Laws of the Fund and with the Act and the
Rules and Regulations promulgated thereunder.
5. Transaction Procedures. All transactions will be consummated by payment
to or delivery by the Fund's custodian (presently, Huntington Banks of
Michigan) (the "Custodian"), or such depositories or agents as may be
designated by the Custodian, as custodian for the Fund, of all cash and/or
securities due to or from the Portfolio Account(s), and the Asset Manager,
shall not have possession or custody thereof or any responsibility or
liability with respect thereto. The Asset Manager shall advise the
Custodian and confirm in writing to the Fund all investment orders for the
Portfolio Account(s) placed by it with brokers and dealers at the time and
in the manner as set forth in those procedures mutually agreed upon by both
parties. The Fund shall issue to the Custodian such instructions as may be
appropriate in connection with the settlement of any transaction initiated
by the Asset Manager. The Fund shall be responsible for all custodial
arrangements and the payment of all custodial charges and fees, and, upon
giving proper instructions to the Custodian, the Asset Manager shall have
no responsibility or liability with respect to custodial arrangements or
the acts, omissions or other conduct of the Custodian.
6. Allocation of Brokerage. The Asset Manager shall have authority and
discretion to select brokers and dealers to execute portfolio transactions
initiated by the Asset Manager, and for the selection of the markets on or
in which the transaction will be executed.
A. In doing so, the Asset Manager's primary responsibility shall be to obtain
the best net price and execution for the Fund. However, this responsibility
shall not be deemed to obligate the Asset Manager to solicit competitive bids
for each transaction, and the Asset Manager shall have no obligation to seek
the lowest available commission cost to the Fund, so long as the Asset Manager
determines that the broker or dealer is able to obtain the best net price and
execution for the particular transaction and that the commission cost is
reasonable in relation to the total quality and reliability of the brokerage
and research services made available by the broker to the Asset Manager
viewed in terms of either that particular transaction or of the Asset
Manager's overall responsibilities with respect to its clients, including the
Fund, as to which the Asset Manager exercises investment discretion,
notwithstanding that the Fund may not be the direct or exclusive beneficiary
of any such services or that another broker may be willing to charge the
Fund a lower commission on the particular transaction.
B. The Manager shall have the right to request that specified transactions
giving rise to brokerage commissions, in an amount to be agreed upon by the
Manager and the Asset Manager, shall be executed by brokers and dealers that
provide brokerage or research services to the Fund or the Manager, or as to
which an on-going relationship will be of value to the Fund in the management
of its assets, which services and relationship may, but need not, be of
direct benefit to the Portfolio Account(s), so long as (i) the Manager
determines that the broker or dealer is able to obtain the best net price
and execution on a particular transaction and (ii) the Manager determines
that the commission cost is reasonable in relation to the total quality and
reliability of the brokerage and research services made available to the
Fund or to the Manager for the benefit of its clients for which it exercises
investment discretion, notwithstanding that the Portfolio Account(s) may not
be the direct or exclusive beneficiary of any such service or that another
broker may be willing to charge the Fund a lower commission on the particular
transaction.
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C. The Asset-Manager agrees that it will not execute any portfolio
transactions with a broker or dealer which is an "affiliated person" (as
defined in the Act) of the Fund or of the Manager or of any asset manager
for the Fund without the prior written approval of the Fund. The Manager
agrees that it will provide the Asset Manager with a list of brokers and
dealers which are "affiliated persons" of the Fund, the Manager or the Fund's
asset managers.
D. As used in this paragraph 6, "brokerage and research services" shall have
the meaning set forth in Section 28(e)(3) of the Securities Exchange Act of
1934 and such interpretations as shall be published by the Securities and
Exchange Commission from time to time.
7. Proxies. The Fund will vote all proxies solicited by or with respect
to the issuers of securities in which assets of the Portfolio Account(s) may
be invested from time to time. At the request of the Fund, and upon agreement
of the Asset Manager, the Asset Manager shall vote all proxies on securities
held in the Portfolio Account(s) on behalf of the Fund, provided the Custodian
forwards all proxy materials to the Asset Manager upon receipt. Asset Manager
will not be liable in the event the proxy materials are not received by the
Asset Manager in a timely manner.
8. Reports to the Asset Manager. The Manager shall provide the Asset Manager
with such periodic reports concerning the status of the Portfolio Account(s)
as the Asset Manager may reasonably request.
9. Fees for Servicing. The compensation of the Asset Manager for its
services under this Agreement shall be calculated and paid by the Manager in
accordance with the attached Schedule A. Pursuant to the provisions of the
Management Agreement between the Fund and the Manager, the Manager is solely
responsible for the payment of fees to the Asset Manager, and the Asset
Manager agrees to seek payment of its fees solely from the Manager.
10. Other Investment Activities of the Asset Manager. The Manager a
cknowledges that the Asset Manager or one or more of its affiliates may
have investment responsibilities or render investment advice to or perform
other investment advisory services for other individuals or entities
("Affiliated Accounts"). Subject to the provisions of paragraph 2 hereof,
the Manager agrees that the Asset Manager or its affiliates may give advice
or exercise investment responsibility and take such other action with respect
to other Affiliated Accounts which may differ from the advice given or the
timing or nature of action taken with respect to the Portfolio Account( s),
provided that the Asset Manager acts in good faith and provided further,
that it is the Asset Manager's policy to allocate, within its reasonable
discretion, investment opportunities to the Portfolio Account(s) over a
period of time on a fair and equitable basis relative to the Affiliated
Accounts, taking into account the investment objectives and policies of the
Fund and any specific investment restrictions applicable thereto. The
Manager acknowledges that one or more of the Affiliated Accounts may at any
time hold, acquire, increase, decrease, dispose or otherwise deal with
positions in investments in which the Portfolio Account(s) may have an
interest from time to time, whether in transactions which involve the
Portfolio Account(s) or otherwise. The Asset Manager shall have no
obligation to acquire for the Portfolio Account(s) a position in any
investment which any Affiliated Account may acquire, and the Fund shall have
no first refusal, co-investment or other rights in respect of any such
investment, either for the Portfolio Account(s) or otherwise.
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11. Certificate of Authority. The Fund, the Manager and the Asset Manager
shall furnish to each other from time to time certified copies of the
resolutions of their Board of Directors or executive committees, as the
case may be, evidencing the authority of officers and employees who are
authorized to act on behalf of the Fund, the Portfolio Account(s), the
Manager and/or the Asset Manager.
12. Limitation of Liability. The Asset Manager shall not be liable for
any action taken, omitted or suffered to be taken by it in its reasonable
judgment, in good faith and believed by it to be authorized or within the
discretion or rights or power conferred upon it by this Agreement, or in
accordance with (or in the absence of) specific directions or instructions
from the Fund, provided, however, that such acts or omissions shall not
have resulted from the Asset Manager's willful misfeasance, bad faith or
gross negligence, a violation of the standard of care established by
paragraph 2 hereof and applicable to the Asset Manager in its actions
under this Agreement or breach of its duty or of its obligations hereunder.
13. Confidentiality. Subject to the duty of the Asset Manager, the Manager
and the Fund to comply with applicable law, including any demand of any
regulatory or taxing authority having jurisdiction, the parties hereto shall
treat as confidential all information pertaining to the Portfolio Accounts
and the actions of the Asset Manager and the Fund in respect thereof.
14. Assignment. No assignment, as that term is defined in Section 2(a)(4)
of the Act, of this Agreement shall be made by the Asset Manager, and this
Agreement shall terminate automatically in the event of such assignment.
The Asset Manager shall notify the Fund in writing sufficiently in advance
of any proposed change of control, as defined in Section 2(a)(9) of the
Act, as will enable the Fund to consider whether an assignment as defined
in Section 2(a)(4) of the Act will occur, and to take the steps necessary
to enter into a new contract with the Asset Manager.
15. Representation, Warranties, and Agreements of the Fund. The Fund
represents, warrants, and agrees that:
A. The Asset Manager has been duly appointed by the Directors and shareholders
of the Fund to provide investment advice to the Portfolio Account(s) as
contemplated hereby.
B. The Fund will deliver to the Asset Manager a true and complete copy of
its then current prospectus as amended or supplemented from time to time
and such other documents or instruments governing the investment of the
Portfolio Account(s) and such other information as is necessary for the
Asset Manager to carry out its obligations under this Agreement.
C. The Fund is currently in compliance and shall at all times comply with
the requirements imposed upon the Fund by applicable laws and regulations.
16. Representations, Warranties, and Agreements of the Asset Manager. The
Asset Manager represents, warrants, and agrees that:
A. The Asset Manager is registered as an "Investment Adviser" under the
Investment Advisers Act of 1940 ("Advisers Act");
B. The Asset Manager will maintain, keep current and preserve on behalf of
the Fund, in the manner required or permitted by the Act, those records
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which may be mutually agreed upon by both parties from time to time. The
Asset Manager agrees that such records are the property of the Fund and
will be surrendered to the Fund promptly upon request.
C. The Asset Manager will adopt a written code of ethics complying with the
requirements of Rule 17j-1 under the Act, will provide the Fund with a copy
of the code of ethics and evidence of its adoption, will report to the Fund
as are required by Rule l7j-l under the Act.
17. Amendment. This Agreement may be amended at any time, but only by
written agreement between the Asset Manager and the Manager, which amendment
is subject to the approval of the Directors and the shareholders of the Fund
in the manner required by the Act.
18. Effective Date; Term. This Agreement shall become effective on December
20, 1993, and shall continue in effect for a term of two years from that
date. Thereafter, the Agreement shall continue in effect only so long as
its continuance has been specifically approved at least annually by the
Directors, or the shareholders of the Fund in the manner required by the
Act. The aforesaid requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed in a manner
consistent with the Act and the Rules and Regulations thereunder.
19. Termination. This Agreement may be terminated by either party hereto,
without the payment of any penalty, immediately upon written notice to the
other in the event of a breach of any provision hereof by the party so
notified, or otherwise upon sixty (60) days' written notice to the other.
This agreement may be terminated by the Directors or by vote of a majority
of the outstanding shares of the Fund, on sixty (60) days' written notice
to the Asset Manager. Any such termination shall not affect the status,
obligations, or liabilities of any party hereto to the other.
20. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule, or otherwise, the remainder of
this Agreement shall not be affected thereby but shall continue in full force
and effect.
21. Applicable Law. The provisions of this Agreement shall be construed in
a manner consistent with the requirements of the Act and the Rules and
Regulations thereunder. To the extent that state law is not preempted by
the provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed, and enforced according to the laws of
the State of Maryland.
ADVANCE CAPITAL MANAGEMENT, INC.
By: /S/ XXXXXX X. XXXXXXXX
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Xxxxxx X. Xxxxxxxx, Vice President
December 15, 1993
X. XXXX PRICE ASSOCIATES, INC.
By: /S/ XXXXXXX X. WOLDLY
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Xxxxxxx X. Woldly, Vice President
December 15, 1993
By: /S/ XXXXXXXX X. XXXXXX
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Xxxxxxxx X. Xxxxxx, Vice President
December 15, 1993
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SCHEDULE A
For services provided to the Portfolio Account(s), Advance Capital
Management, Inc. will pay a quarterly fee for each calendar quarter at
the annual rate provided below of the average assets in the Portfolio
Account(s) during the quarter. Average assets shall be determined using
the average daily assets in the Portfolio Account(s) during the calendar
quarter. The fee shall be prorated for any calendar quarter during which
the contract is in effect for only a portion of the quarter. Below is the
agreed upon fee:
First $100 Million 20/100 of 1%
Next $100 Million 15/100 of 1%
Above $200 Million Negotiable
