Exhibit (d)(3)
SUB-ADVISORY AGREEMENT
BETWEEN
SAGE ADVISORS, INC.
AND
CONNING ASSET MANAGEMENT COMPANY
This Agreement is made as of June 25, 2001 between Sage Advisors, Inc. (the
"Manager") and Conning Asset Management Company, a Missouri corporation (the
"Sub-Adviser").
WHEREAS, Sage Life Investment Trust (the "Investment Company") is an open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act") consisting of series, each having its own
investment objective and policies; and
WHEREAS, the Manager is a Delaware corporation and is in the business of
providing, among other things, investment services, including investment
management services to the Investment Company pursuant to a Management Agreement
by and between the Investment Company and the Manager effective June 15, 2000
(the "Management Agreement"); and
WHEREAS, the Sub-Adviser is in the business of providing, among other things,
investment advisory services; and
WHEREAS, as permitted by the Management Agreement, the Manager desires to retain
the Sub-Adviser to render sub-investment advisory services to the Investment
Company with respect to the series set forth on Schedule A, as amended from time
to time (each a "Fund" and together the "Funds"), and the Sub-Adviser is willing
to render such services and pay all expenses incurred in connection with
rendering such services;
NOW THEREFORE, in consideration of the mutual agreements contained herein, the
Manager and the Sub-Adviser agree as follows:
1. APPOINTMENT OF SUB-ADVISER
(a) Initial Funds: the Manager hereby appoints the Sub-Adviser to act as
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investment Sub-Adviser to the Funds for the period and on the terms set forth in
this Agreement. The Sub-Adviser accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.
(b) Additional Funds: In the event that the Investment Company establishes
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one or more Funds, other than the initial Funds ("Additional Funds"), with
respect to which the Manager desires to retain the Sub-Adviser to render
sub-investment advisory services hereunder, the Manager shall so notify the
Sub-Adviser in writing, indicating the advisory fee to be payable with respect
to the additional Fund. If the Sub-Adviser is willing to render such services,
it shall so notify the Manager in writing, whereupon such Fund shall become a
Fund under this Agreement. In such event, a writing signed by both the Manager
and the Sub-Adviser shall
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evidence an amendment to Schedule A as a part hereof indicating that such
additional Fund has become a Fund hereunder and reflecting the agreed-upon fee
schedule for such Fund.
2. REPRESENTATIONS AND WARRANTIES. As of the effective date of this Agreement,
the Sub-Adviser is and shall remain registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), unless
exempt from registration thereunder.
3. SUB-ADVISORY DUTIES. Subject to the supervision of the Board of Trustees of
the Investment Company (the "Board") and of the Manager, the Sub-Adviser shall
provide the Investment Company with such investment research, advice and
supervision as the Investment Company may from time to time consider necessary
for the proper management of the assets of each Fund, shall furnish continuously
an investment program for each Fund, shall determine from time to time which
securities or other investments shall be purchased, sold or exchanged and what
portions of each Fund shall be held in the various securities or other
investments or cash, and shall take such steps as are necessary to implement an
overall investment plan for each Fund, including providing or obtaining such
services as may be necessary in managing, acquiring or disposing of securities,
cash or other investments.
The Manager has furnished or will furnish the Sub-Adviser with copies of
the Investment Company's registration statement, Declaration of Trust, and
Bylaws as currently in effect and agrees during the continuance of this
Agreement to furnish the Sub-Adviser with copies of any amendments or
supplements thereto before or at the time the amendments or supplements become
effective. The Sub-Adviser will be entitled to rely on all documents furnished
by the Manager.
The Sub-Adviser represents that in performing sub-investment advisory
services for each Fund, the Sub-Adviser shall make every effort to ensure that:
(1) each Fund shall comply with Section 817(h) of the Internal Revenue Code of
1986, as amended (the "Code") and the regulations issued thereunder,
specifically Regulation Section 1.817-5, relating to the diversification
requirements for variable annuity, endowment, and life insurance contracts, and
any amendments or other modifications to such Section or regulations; (2) each
Fund continuously qualifies as a regulated investment company under Subchapter M
of the Code or any successor provision; and (3) any and all applicable state
insurance law restrictions on investments that operate to limit or restrict the
investments that a Fund may otherwise make are complied with as well as any
changes thereto. Except as instructed by the Board, the Sub-Adviser shall also
make decisions for the Investment Company as to the manner in which voting
rights, rights to consent to corporate action, and any other rights pertaining
to the Investment Company's securities shall be exercised. If the Board at any
time makes any determination as to investment policy and notifies the
Sub-Adviser of such determination, the Sub-Adviser shall be bound by such
determination for the period, if any, specified in the notice or until similarly
notified that such determination has been revoked.
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As part of carrying out its obligations to manage the investment and
reinvestment of the assets of each Fund consistent with the requirements under
the 1940 Act, the Sub-Adviser shall:
(a) Perform research and obtain and analyze pertinent economic,
statistical, and financial data relevant to the investment
policies of each Fund as set forth in the Investment Company's
registration statement;
(b) Consult with the Manager and the Board and furnish to the Board
recommendations with respect to an overall investment strategy
for each Fund for approval, modification, or rejection by the
Board;
(c) Seek out and implement specific investment opportunities,
consistent with any investment strategies approved by the Manager
and Board;
(d) Take such steps as are necessary to implement any overall
investment strategies approved by the Manager and the Board for
each Fund, including making and carrying out day-to-day decisions
to acquire or dispose of permissible investments, managing
investments and any other property of the Fund, and providing or
obtaining such services as may be necessary in managing,
acquiring or disposing of investments;
(e) Regularly report to the Manager and the Board with respect to the
implementation of any approved overall investment strategy and
any other activities in connection with management of the assets
of each Fund including furnishing, within 60 days after the end
of each calendar quarter, a statement of investment performance
for the period since the last report and a schedule of
investments and other assets of each Fund as of the end of the
quarter;
(f) Maintain all required accounts, records, memoranda, instructions
or authorizations relating to the acquisition or disposition of
investments for each Fund and the Investment Company and provide
copies of such documents to the Manager upon request;
(g) Furnish any personnel, office space, equipment and other
facilities necessary for the operation of each Fund as
contemplated in this Agreement;
(h) Provide upon request accounting or other data concerning the
Investment Company's investment activities to the Investment
Company or its custodian or administrator, to assist the
Investment Company in preparing and filing all periodic financial
reports or other documents required to be
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filed with the Securities and Exchange Commission and any other
regulatory entity; and
(i) Provide information upon request from a custodian and/or
administrator to assist in calculating, each business day, the
net asset value of the shares of each Fund in accordance with
applicable law.
4. EXECUTION AND ALLOCATION OF PORTFOLIO BROKERAGE. The Sub-Adviser shall
take, on behalf of each Fund, all actions which it deems necessary to implement
the investment policies of such Fund, and in particular, to place all orders for
the purchase or sale of portfolio investments for the account of each Fund with
brokers, dealers, futures commission merchants or banks selected by the Sub-
Adviser. The Sub-Adviser also is authorized as the agent of the Investment
Company to give instructions to any other party serving as custodian of the
Investment Company as to deliveries of securities and payments of cash for the
account of each Fund. In selecting brokers or dealers and placing purchase and
sale orders with respect to assets of the Funds, the Sub-Adviser is directed at
all times to seek to obtain best execution and price within the policy
guidelines determined by the Board and set forth in the current registration
statement. Subject to this requirement and the provisions of the 1940 Act, the
Advisers Act, the Securities Exchange Act of 1934, as amended, and other
applicable provisions of law, the Sub-Adviser may select brokers or dealers that
are affiliated with the Sub-Adviser or the Investment Company.
In addition to seeking the best execution and price, the Sub-Adviser may
also take into consideration brokerage, research and statistical information,
wire, quotation and other services provided by brokers and dealers to the
Sub-Adviser. The Sub-Adviser is also authorized to effect individual securities
transactions at commission rates in excess of the minimum commission rates
available, if the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage, research and
other services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Sub-Adviser's overall responsibilities with
respect to each Fund. The policies with respect to brokerage allocation,
determined from time to time by the Board are those disclosed in the currently
effective registration statement. The execution of such transactions shall not
be deemed to represent an unlawful act or breach of any duty created by this
Agreement or otherwise. The Sub-Adviser will periodically evaluate the
statistical data, research and other investment services provided to it by
brokers and dealers. Such services may be used by the Sub-Adviser in connection
with the performance of its obligations under this Agreement or in connection
with other advisory or investment operations including using such information in
managing its own accounts.
5. ACTIVITIES OF THE SUB-ADVISER. The services of the Sub-Adviser are not
deemed to be exclusive, and the Sub-Adviser is free to render services to
others, so long as the Sub-Adviser's services under this Agreement are not
impaired. It is understood that trustees, officers, employees and shareholders
of the Investment Company are or may become interested persons of the Sub-
Adviser, as directors, officers, employees and shareholders or otherwise, and
that directors, officers, employees and shareholders of the Sub-Adviser are or
may become
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similarly interested persons of the Investment Company, and that the Sub-Adviser
may become interested in the Investment Company as a shareholder or otherwise.
It is agreed that the Sub-Adviser may use any supplemental investment
research obtained for the benefit of the Investment Company in providing
investment advice to its other investment advisory accounts. The Sub-Adviser or
its affiliates may use such information in managing their own accounts.
Conversely, such supplemental information obtained by the placement of business
for the Sub-Adviser or other entities advised by the Sub-Adviser will be
considered by and may be useful to the Sub-Adviser in carrying out its
obligations to the Investment Company.
Securities or other investments held by a Fund of the Investment Company
may also be held by separate investment accounts or other mutual funds for which
the Sub-Adviser may act as an investment adviser or by the Sub-Adviser or its
affiliates. Because of different investment objectives or other factors, a
particular security may be bought by the Sub-Adviser or its affiliates for one
or more clients when one or more clients are selling the same security. If
purchases or sales of securities for a Fund or other entities for which the
Sub-Adviser or its affiliates act as investment adviser or for their advisory
clients arise for consideration at or about the same time, the Investment
Company agrees that the Sub-Adviser may make transactions in such securities,
insofar as feasible, for the respective entities and clients in a manner deemed
equitable to all. To the extent that transactions on behalf of more than one
client of the Sub-Adviser during the same period may increase the demand for
securities being purchased or the supply of securities being sold, the
Investment Company recognizes that there may be an adverse effect on price.
It is agreed that, on occasions when the Sub-Adviser deems the purchase or
sale of a security to be in the best interest of a Fund as well as other
accounts or companies, it may, to the extent permitted by applicable laws or
regulations, but will not be obligated to, aggregate the securities to be sold
or purchased for other accounts or companies in order to obtain favorable
execution and lower brokerage commissions or prices. In that event, allocation
of the securities purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Sub-Adviser in accordance with any written
procedures maintained by the Sub-Adviser or, if there are no such written
procedures, in the manner it considers to be most equitable and consistent with
its fiduciary obligations to the Investment Company and to such other accounts
or companies. The Investment Company recognizes that in some cases this
procedure may adversely affect the size of the position obtainable for a Fund.
6. BOOKS AND RECORDS. The Sub-Adviser hereby undertakes and agrees to
maintain, in the form and for the period required by Rule 31 a-2 and Rule 2a-7
under the 1940 Act, all records relating to the Investment Company's investments
that are required to be maintained by the Investment Company pursuant to the
requirements of Rule 31 a-i and Rule 2a-7 of the 1940 Act.
The Sub-Adviser agrees that all books and records which it maintains for
the Investment Company are the property of the Investment Company and further
agrees to surrender promptly to the Investment Company any such books, records
or information upon the Investment
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Company's request. All such books and records shall be made available, within
five business days of a written request, to the Investment Company's accountants
or auditors during regular business hours at the Sub-Adviser's offices. The
Investment Company or its authorized representative shall have the right to copy
any records in the possession of the Sub-Adviser that pertain to the Investment
Company. Such books, records, information or reports shall be made available to
properly authorized government representatives consistent with state and federal
law and/or regulations. In the event of the termination of this Agreement, all
such books, records or other information shall be returned to the Investment
Company free from any claim or assertion of rights by the Sub-Adviser.
The Sub-Adviser further agrees that it will not disclose or use any records
or information obtained pursuant to this Agreement in any manner whatsoever
except as authorized in this Agreement and that it will keep confidential any
information obtained pursuant to this Agreement and disclose such information
only if the Investment Company or Manager have authorized such disclosure, or if
such disclosure is required by federal or state regulatory authorities.
7. REPORTS TO SUB-ADVISER. The Manager agrees to furnish the Sub-Adviser at
its principal office all Fund prospectuses, proxy statements, reports to
stockholders, sales literature or other material prepared for distribution to
shareholders of the Investment Company or the public, which refer in any way to
the Sub-Adviser, five (5) days, or as reasonably practicable, prior to use
thereof and not to use such material if the Sub-Adviser should object thereto in
writing within five (5) days after receipt of such material; provided, however,
that the Sub-Adviser hereby approves all uses of its name which merely refer in
accurate terms to its appointment as investment Sub-Adviser hereunder, which
merely identifies the Investment Company, or which are required by the
Commission or a state securities commission. In the event of termination of this
Agreement, the Manager shall, on written request of the Sub-Adviser, forthwith
delete any references to the Sub-Adviser from any materials described in the
preceding sentence. The Manager shall furnish or otherwise make available to the
Sub-Adviser such other information relating to the business affairs of the
Investment Company as the Sub-Adviser at any time, or from time to time,
reasonably requests in order to discharge its obligations hereunder.
8. PROXIES. Unless the Manager or the Investment Company gives written
instructions to the contrary, the Sub-Adviser shall vote or not vote all proxies
solicited by or with respect to the issuers of securities in which assets of any
Fund may be invested. The Sub-Adviser shall use its best good faith judgment to
vote or not vote such proxies in a manner which best serves the interests of the
affected Fund's shareholders.
9. EXPENSES. During the term of this Agreement, the Sub-Adviser shall pay all
of its own expenses incurred by it in connection with its activities under this
Agreement and the Manager or the Funds of the Investment Company shall bear all
expenses that are incurred in the Investment Company's operations not
specifically assumed by the Sub-Adviser.
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10. COMPENSATION OF THE SUB-ADVISER. For the services to be rendered by the
Sub-Adviser as provided in this Agreement, the Manager shall pay to the Sub-
Adviser such compensation as is designated in Schedule A to this Agreement, so
long as the Sub-Adviser has not waived all or a portion of such compensation.
11. DURATION, AMENDMENT AND TERMINATION. This Agreement shall become effective
with respect to each Fund on the date first above written. With respect to any
Additional Funds, provided the provisions of Section 1, Paragraph (b) have been
complied with, this Agreement will become effective on the date on which the
Agreement is approved in accordance with Section 15 of the 1940 Act. This
Agreement, unless sooner terminated as provided herein, shall continue for each
Fund for two (2) years following the effective date of this Agreement with
respect to that Fund, if approved in accordance with Section 15 of the 1940 Act,
and thereafter shall continue automatically for periods of one (1) year so long
as such continuance is specifically approved at least annually (a) by the vote
of a majority of those members of the Board of Trustees of the Investment
Company who are not parties to this Agreement or "interested persons" (as
defined in the 0000 Xxx) of any such party, cast in person at a meeting called
for the purpose of voting such approval, and (b) by the Board of Trustees of the
Investment Company or by vote of a majority of the outstanding voting securities
of the Fund (as defined in the 1940 Act).
This Agreement may be amended as to a Fund by the parties only if such
amendment is specifically approved by (a) the vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act), and (b)
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, each as required by the 1940 Act.
This Agreement may be terminated by the Manager, the Sub-Adviser, or the
Investment Company on behalf of a Fund, at any time on sixty (60) days' written
notice, without the payment of any penalty. Termination by the Investment
Company on behalf of a Fund may be effected by vote of a majority of those
members of the Board of Trustees who are not "interested persons" (as defined in
the 0000 Xxx) of the Manager or the Investment Company, or by the vote of either
the majority of the entire Board of Trustees of the Investment Company, or by
vote of a majority of the outstanding voting securities of a Fund with respect
to which the Agreement is being terminated. This Agreement will automatically
and immediately terminate in the event of its assignment (as defined in the 1940
Act).
12. CHOICE OF LAW. This Agreement shall be construed in accordance with the
laws of the State of Delaware (without regard for conflict of law provisions)
and any applicable federal law.
13. LIMITATION OF LIABILITY.
a) In performing its services under this Agreement, the Sub-Adviser agrees
that it is a fiduciary of the Investment Company and that it will
perform its duties and responsibilities with the care, skill, prudence
and diligence under the
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circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. The Sub-Adviser
shall not be liable for any loss, liability, or damage incurred by the
Investment Company or the Manager as a result of any investment
decision, recommendation, or other action taken or omitted in what the
Sub-Adviser, in good faith, believes to be the proper performance of
its duties under this Agreement, except that the Sub-Adviser shall be
liable and indemnify the Investment Company and/or the Manager to the
extent that such loss, liability, or damage results from (i) a failure
of the Sub-Adviser to satisfy its standard of care set forth above;
(ii) the negligence or bad faith of the Sub-Adviser or the reckless
disregard by the Sub-Adviser of its obligations and duties under this
Agreement; or (iii) a breach of the Sub-Adviser's fiduciary duty to the
Investment Company with respect to receipt of compensation as specified
in Section 36(b) of the 1940 Act. Notwithstanding the foregoing, the
Sub-Adviser shall not be liable for any liability, loss or damage
resulting from any investment made by the Sub-Adviser consistent with
its standard of care set forth above or the reliance by the Sub-Adviser
on information provided by the Manager or the Investment Company.
b) In the event the Manager or the Investment Company seeks
indemnification for a claim alleged by a person who is not a party to
this Agreement (a "third party claim"), the Manager or the Investment
Company, as applicable, shall, as a condition to receiving any
indemnification pursuant to Subparagraph (a), above, give prompt
written notice of such third party claim to the Sub-Adviser. The Sub-
Adviser shall have the right to elect to investigate and/or defend such
third party claim and, if such election is made, the Company shall have
the right, at its own expense, to participate in the defense of such
third party claim through counsel of its own choosing. The Sub-Adviser
shall not settle any such claims unless it obtains by a general release
in favor of the Manager or the Investment Company, as applicable, or
such settlement is consented to by the Manager or the Investment
Company, as applicable. The Sub-Adviser shall not be required to
indemnify the Manager or the Investment Company with respect to any
settlement of a third party claim that the Sub-Adviser has not approved
in writing in advance.
c) It is expressly acknowledged and agreed that the obligations of the
Investment Company shall not be binding upon any of the shareholders,
trustees, officers, employees or agents of the Investment Company,
personally, but shall bind only the trust property of the Investment
Company, as provided in its Declaration of Trust. The execution and
delivery of this Agreement have been authorized by the Trustees of the
Investment Company and such authorization by such Trustees shall not be
deemed to have been made by any of them individually or to impose any
liability on any of them personally.
d) Nothing herein shall affect any rights or obligations of the parties
under the Advisers Act or constitute a restriction or waiver of any
rights under applicable federal or state securities laws.
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IN WITNESS WHEREOF, the due execution hereof as of the date first above written
SAGE ADVISORS, INC.
Attest: By:
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Name: Xxxxxxx X. Xxxxxx Name: Xxxxxxxx X. Xxxxxxx
Title: Assistant Secretary Title: Director and Treasurer
CONNING ASSET MANAGEMENT
COMPANY
Attest: By:
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Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxxx
Title: Administrative Assistant Title: Executive Vice President
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SCHEDULE A
Funds Subject to this Agreement
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Money Market Fund
As consideration for the Sub-Adviser's services to the above Fund, the Sub-
Adviser shall receive from the Fund an annual advisory fee, accrued daily at the
rate of 1/365th of the applicable fee rate and payable quarterly in arrears on
the first business day of each quarter, of the following percentages of the
Fund's average daily net assets during the month:
Money Market Fund
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0.15% of the first $100,000,000
0.10% of the next $200,000,000
0.075% thereafter
For the purpose of accruing compensation, the net assets of the Fund shall be
determined in the manner and on the dates set forth in the Declaration of Trust
or the current registration statement of the Trust and, on days on which the net
assets are not so determined, the net asset value computation to be used shall
be as determined on the immediately preceding day on which the net assets were
determined.
