EXHIBIT (d)(38)
INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 28th day of August, 2003 between SEI Investments
Management Corporation (the "Adviser") and Enhanced Investment Technologies, LLC
(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 acts as investment adviser to the series of the Trust set forth on
Schedule A attached hereto (the "Fund"), as such Schedule may be amended by
mutual agreement of the parties hereto; 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 Fund, 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 all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Fund's investment objectives, policies and
restrictions as stated in the Fund'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, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Fund, 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 (the "Code"), 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 Assets to be purchased or sold by the
Fund as provided in subparagraph (a) 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 Fund's Prospectus or as the Board of Trustees or
the Adviser may direct from time to time, in conformity with all federal
securities laws. In executing Fund transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to seek on behalf of the
Fund
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, including 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 provided (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934 (the
"Exchange Act")). Consistent with any guidelines established by the Board
of Trustees of the Trust and Section 28(e) of the Exchange Act, the
Sub-Adviser is authorized to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Fund 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 in terms of the overall responsibilities of
the Sub-Adviser to its discretionary clients, including the Fund. In
addition, the Sub-Adviser is authorized to allocate purchase and sale
orders for securities to brokers or dealers (including brokers and dealers
that are affiliated with the Adviser, Sub-Adviser or the Trust's principal
underwriter) and 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 Fund's Assets be purchased from or sold
to the Adviser, Sub-Adviser, the Trust's principal underwriter, or any
affiliated person of either the Trust, Adviser, the Sub-Adviser or the
principal underwriter, acting as principal in the transaction, except to
the extent permitted by the Securities and Exchange Commission ("SEC") and
the 1940 Act.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
The Sub-Adviser shall provide to the Adviser or the Board of Trustees such
periodic and special reports, balance sheets or financial information, and
such other information with regard to its affairs as the Adviser or Board
of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under 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 Fund required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the 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 Fund are property of the Fund
and the Sub-Adviser will surrender promptly to the Fund any of such records
upon the Fund's request; provided, however, that the Sub-Adviser may
2
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 Fund's custodian on each business day
with information relating to all transactions concerning the Fund's Assets
and shall provide the Adviser with such information upon request of the
Adviser. The Assets shall be maintained in the custody of the custodian
identified pursuant to the Agreement. Any additional Assets added to the
Fund shall be delivered directly to such custodian. Sub-Adviser will have
no authority, responsibility or obligation with respect to the custody,
receipt or delivery of securities or other assets of the Fund including the
Assets.
(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.
(h) (i) Except under the circumstances set forth in subsection (ii), the
Sub-Adviser shall not be responsible for reviewing proxy
solicitation materials or voting and handling proxies in relation to
the securities held as Assets in the Fund. If the Sub-Adviser
receives a misdirected proxy, it shall promptly forward such
misdirected proxy to the Adviser.
(ii) The Sub-Adviser hereby agrees that upon 60 days' written notice from
the Adviser, the Sub-Adviser shall assume responsibility for
reviewing proxy solicitation materials and voting proxies in
relation to the securities held as Assets in the Fund. As of the
time as the Sub-Adviser shall assume such responsibilities with
respect to proxies under this sub-section (ii), the Adviser shall
instruct the custodian and other parties providing services to the
Fund to promptly forward misdirected proxies to the Sub-Adviser.
(i) In performance of its duties and obligations under this Agreement, the
Sub-Adviser shall not consult with any other sub-adviser to the Fund or a
sub-adviser to a portfolio that is under common control with the Fund
concerning the Assets, except as permitted by the policies and procedures
of the Fund. The Sub-Adviser shall not provide investment advice to any
assets of the Fund other than the Assets.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's control
affiliates, partners, officers or employees.
3
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Fund pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, the Code, and all other applicable federal and state laws and
regulations, as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies of each of the following documents and will deliver to it all future
amendments and supplements, if any, on or before the date they become
effective:
(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");
(c) Prospectus of the Fund;
(d) Notice of the Trust's custodian designated to hold the Assets;
(e) Copies of the Trust's liquidity procedures, cross-trade procedures,
repurchase agreement procedures, Rule 10f-3, 17a-7 and 17e-1 procedures and
other procedures that govern the Sub-Adviser's management of the Assets
under this Agreement;
(f) A Qualified Institutional Buyer Certification completed by the Fund;
(g) A list of persons authorized to act on behalf of the Trust;
(h) A list of "affiliates" of the Fund, as such term is used in the 1940 Act,
including all broker-dealers affiliated with the Fund;
(i) If applicable, applicable Commodities Futures Trading Commission
exemptions, notifications and/or related documentation; and
(j) A list of established futures accounts.
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 B which is
attached hereto and made part of this Agreement. The fee will be
4
calculated based on the average daily value of the Assets under the
Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. 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 of the Sub-Adviser's
obligations under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Paragraph 5 shall be reduced to the extent that 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 of the Adviser's obligations
under this Agreement; provided, however, that the Adviser's obligation
under this Paragraph 5 shall be reduced to the extent that 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.
6. EXPENSES. Adviser and the Fund shall pay their respective organizational,
operational and business expenses not specifically assumed or agreed to be
paid by Sub-Adviser pursuant to this Agreement. Sub-Adviser shall pay its
own organizational, operational, and business expenses but shall not be
obligated to pay any expenses of Adviser or Fund including without
limitation: (a) interest and taxes; (b) brokerage commissions and other
costs in connection with the purchase or sale of securities or other
investment instruments for the Assets; and (c) custodian fees and expenses.
7. REPRESENTATIONS AND WARRANTIES.
(a) The Adviser represents and warrants the following:
(i) Adviser has been duly incorporated and is validly existing and in
good standing as a corporation under the laws of the state of
Delaware;
(ii) Adviser has all requisite corporate power and authority under the
laws of Delaware and federal securities laws to execute, deliver and
to perform this Agreement;
(iii) all necessary corporate proceedings of Adviser have been duly taken
to authorize the execution, delivery and performance of this
Agreement by Adviser;
(iv) Adviser is a registered investment adviser under the Investment
Advisers Act of 1940 and is in compliance with all other
registrations required;
5
(v) Adviser has the authority under the Advisory Agreement to execute,
deliver and perform this Agreement; and
(vi) Adviser has received a copy of Part II of Sub-Adviser's Form ADV no
less than 48 hours prior to entering into this Agreement.
(b) Sub-Adviser represents and warrants the following:
(i) Sub-Adviser has been duly incorporated and is validly existing and
in good standing as a corporation under the laws of the state of
Delaware;
(ii) Sub-Adviser has all requisite corporate power and authority under
the laws of Delaware and federal securities laws to execute, deliver
and to perform this Agreement;
(iii) all necessary corporate proceedings of Sub-Adviser have been duly
taken to authorize the execution, delivery and performance of this
Agreement by Sub-Adviser; and
(iv) Sub-Adviser is a registered investment adviser under the Investment
Advisers Act of 1940 and is in compliance with all other
registrations required.
8. CONFIDENTIALITY. Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as confidential (i) any
"non-public personal information" about any "consumer" or "customer" of
another party (as such terms are defined in the Securities and Exchange
Commission's Regulation S-P); (ii) all information, books, records, and
data supplied by one party to another party in connection with the
negotiation or carrying out of this Agreement; and (iii) any other
information reasonably identified as confidential in writing by the party
providing the information (collectively referred to as "Confidential
Information"). Each party agrees not to disclose, disseminate or utilize
another party's Confidential Information except: (i) as permitted by this
Agreement; (ii) upon the written consent of such party; (iii) when the
Confidential Information comes into the public domain through no fault of
the party receiving the information; or (iv) as otherwise required or
permitted under applicable law.
9. PROPRIETARY RIGHTS. Sub-Adviser or its affiliates are the sole owners of
the name and xxxx "INTECH." All goodwill associated with the name and xxxx
"INTECH" shall inure to the benefit of Sub-Adviser or its affiliates.
Adviser acknowledges that, in order for it to understand Sub-Adviser's
investment management strategy (the "Large Cap Core Enhanced" strategy),
Adviser has been exposed to certain proprietary and Confidential
Information regarding these strategies, which information constitutes trade
secrets belonging to the Sub-Adviser. Adviser shall not, and shall not
permit the Fund to use the name or xxxx "INTECH" or make representations
regarding Sub-Adviser or its affiliates without prior written consent of
Sub-Adviser, such consent not to be unreasonably
6
withheld. Notwithstanding the foregoing, the Sub-Adviser's approval is not
required when used as required to be disclosed in the Prospectus of the
Fund.
Upon termination of this Agreement for any reason, Adviser shall
immediately cease, and Adviser shall cause the Fund to immediately cease
any and all further use of any INTECH xxxx(s), although the Adviser may
continue to further use such name or xxxx(s) as permitted by other then
current sub-advisory agreements in which the Adviser and Sub-Adviser have
executed.
Adviser further agrees not to employ deliberately an investment strategy
the primary purpose of which is to replicate the portfolio of investment
securities comprising the Assets, including, but not limited to, purchasing
shares of the same stocks as those that comprise the Assets, in a similar
number and in similar weightings.
10. DURATION AND TERMINATION. This Agreement shall become effective upon
approval by the Trust's Board of Trustees and its execution by the parties
hereto. Pursuant to the exemptive relief obtained in the SEC Order dated
April 29, 1996, Investment Company Act Release No. 21921, approval of the
Agreement by a majority of the outstanding voting securities of the Fund is
not required, and the Sub-Adviser acknowledges that it and any other
sub-adviser so selected and approved shall be without the protection (if
any) 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 Fund (a) by the Fund
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 the Fund, (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 Sub-Adviser, or (c) by the Sub-Adviser at any time,
without the payment of any penalty, on 90 days' written notice to the
Adviser. This Agreement shall terminate automatically and immediately in
the event of its assignment, or in the event of a termination of the
Advisory Agreement with the Trust. As used in this Paragraph 10, 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 SEC under the 1940 Act.
11. 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.
12. 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.
7
13. 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 Xxxx
Xxxx, XX 00000
Attention: Legal Department
To the Sub-Adviser at: Enhanced Investment Technologies, LLC
Harbour Financial Center
0000 X.X.X. Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
14. NON-HIRE/NON-SOLICITATION. The Sub-Adviser hereby agrees that so long as
the Sub-Adviser provides services to the Adviser or the Trust and for a
period of one year following the date on which the Sub-Adviser ceases to
provide services to the Adviser and the Trust, the Sub-Adviser shall not
for any reason, directly or indirectly, on the Sub-Adviser's own behalf or
on behalf of others, hire any person employed by the Adviser, whether or
not such person is a full-time employee or whether or not any person's
employment is pursuant to a written agreement or is at-will. The
Sub-Adviser further agrees that, to the extent that the Sub-Adviser
breaches the covenant described in this paragraph, the Adviser shall be
entitled to pursue all appropriate remedies in law or equity.
15. NO REPRESENTATION OR WARRANTY AS TO PERFORMANCE. The Sub-Adviser makes no
representation or warranty, express or implied, that any level of
performance or investment results will be achieved by the Assets, or that
the Assets will perform comparably with any standard or index, including
results achieved for other clients of the Sub-Adviser, whether public or
private.
16. 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.
In the event the terms of this Agreement are applicable to more than one
portfolio of the Trust (for purposes of this Paragraph 16, each a "Fund"),
the Adviser is entering into this Agreement with the Sub-Adviser on behalf
of the respective Funds severally and not jointly, with the express
intention that the provisions contained in each numbered paragraph hereof
shall be understood as applying separately with respect to each Fund as if
contained in separate agreements between the Adviser and Sub-Adviser for
each such
8
Fund. In the event that this Agreement is made applicable to any additional
Funds by way of a Schedule executed subsequent to the date first indicated
above, provisions of such Schedule shall be deemed to be incorporated into
this Agreement as it relates to such Fund so that, for example, the
execution date for purposes of Paragraph 10 of this Agreement with respect
to such Fund shall be the execution date of the relevant Schedule.
17. MISCELLANEOUS.
(a) A copy of the Declaration of Trust is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given that the
obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Fund or the Trust.
(b) 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 SEC, 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 ENHANCED INVESTMENT TECHNOLOGIES, LLC
By: By:
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxx
-------------------------------------- --------------------------------------
Name: Name:
Xxxxxxx X. Xxxxx Xxxxx X. Xxxxxx
-------------------------------------- --------------------------------------
Title: Title:
Vice President Senior Vice President
-------------------------------------- --------------------------------------
9
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
ENHANCED INVESTMENT TECHNOLOGIES, LLC
AS OF AUGUST 28, 2003
SEI INSTITUTIONAL INVESTMENTS TRUST
Large Cap Disciplined Equity Fund
10
SCHEDULE B
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
ENHANCED INVESTMENT TECHNOLOGIES, LLC
AS OF AUGUST 28, 2003
Pursuant to Paragraph 4, the Adviser shall pay the Sub-Adviser compensation at
an annual rate as follows:
SEI INSTITUTIONAL INVESTMENTS TRUST
Large Cap Disciplined Equity Fund
Agreed and Accepted:
SEI INVESTMENTS MANAGEMENT CORPORATION ENHANCED INVESTMENT TECHNOLOGIES, LLC
By: By:
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxx
-------------------------------------- --------------------------------------
Name:
Name:
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx --------------------------------------
--------------------------------------
Title: Title:
Vice President Senior Vice President
-------------------------------------- --------------------------------------
11
