Exhibit (d)(ii)
FORM OF INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of the ____ day of __________, 2003 by and between
Equity 500 Index Portfolio, a New York trust (the "Trust" or "Portfolio"), and
DEUTSCHE ASSET MANAGEMENT, INC., a Delaware corporation (the "Advisor").
WHEREAS, the Trust is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), consisting of several series of shares, each having its own
investment policies;
WHEREAS, the Advisor is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment advisor; and
WHEREAS, the Trust and the Advisor desire to enter into an agreement to provide
investment advisory services to the Portfolio on the terms and conditions
hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of Investment Advisor. The Trust hereby appoints the
Advisor to act as the investment advisor of the Portfolio. The Advisor shall
manage a Portfolio' affairs and shall supervise all aspects of a Portfolio'
operations (except as otherwise set forth herein), including the investment and
reinvestment of the cash, securities or other properties comprising a
Portfolio' assets, subject at all times to the policies and control of the Board
of Trustees. The Advisor shall give a Portfolio the benefit of its best
judgment, efforts and facilities in rendering its services as Advisor.
2. Delivery of Documents. The Trust has furnished the Advisor with
copies properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, filed with the State of New York
on December 11, 1991, and all amendments thereto (such Declaration of
Trust, as presently in effect and as it shall from time to time be
amended, is herein called the "Declaration of Trust");
(b) Resolutions of the Trust's Board of Trustees and shareholders
authorizing the appointment of the Advisor and approving this
Agreement;
(c) Each Portfolio' Registration Statement on Form N-1A under the
Investment Company Act of 1940, as amended (the "1940 Act") (File No.
811-006698) as filed with the Securities and Exchange Commission
("SEC") relating to the shares of the Trust and its Portfolio, and all
amendments thereto; and
(d) Each Portfolio' most recent prospectus (such prospectus, as
presently in effect, and all amendments and supplements thereto are
herein called "Prospectus").
The Trust will furnish the Advisor from time to time with copies, properly
certified or authenticated, of all amendments or supplements to the foregoing,
if any, and all documents, notices and reports filed with the SEC.
The Advisor will provide the Trust with copies of its Form ADV, including all
amendments thereto, as filed with the SEC.
3. Duties of Investment Advisor. In carrying out its obligations under
Section 1 hereof, the Advisor shall:
(a) supervise and manage all aspects of a Portfolio' operations, except
for distribution services;
(b) formulate and implement continuing programs for the purchases and
sales of securities, consistent with the investment objective and
policies of a Portfolio;
(c) provide the Trust with, or obtain for it, adequate office space and
all necessary office equipment and services, including telephone
service, utilities, stationery, supplies and similar items for the
Trust's principal office;
(d) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or a
Portfolio, and whether concerning the individual issuers whose
securities are included in a portfolio or the activities in which they
engage, or with respect to securities which the Advisor considers
desirable for inclusion in a portfolio;
(e) determine which issuers and securities shall be represented in a
portfolio and regularly report thereon to the Trust's Board of
Trustees; and
(f) take all actions necessary to carry in effect a Portfolio' purchase
and sale programs.
4. Portfolio Transactions. The Advisor is authorized to select the
brokers or dealers that will execute the purchases and sales of portfolio
securities for a Portfolio and is directed to use its reasonable best efforts to
obtain the best net results as described from time to time in a Portfolio'
prospectus and statement of additional information. The Advisor will promptly
communicate to the Trust's administrator and to the officers and Trustees of the
Trust such information relating to portfolio transactions as they may reasonably
request.
It is understood that the Advisor will not be deemed to have acted unlawfully,
or to have breached a fiduciary duty to the Trust or be in breach of any
obligation owing to the Trust under this Agreement, or otherwise, solely by
reason of its having directed a securities
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transaction on behalf of a Portfolio to a broker-dealer in compliance with the
provisions of Section 28(e) of the Securities Exchange Act of 1934 or as
otherwise permitted from time to time by a Portfolio' prospectus and statement
of additional information.
Subject to the policies established by the Board in compliance with applicable
law, the Advisor may direct DB Securities, Inc. ("DB Securities") or any of its
affiliates to execute portfolio transactions for a Portfolio on an agency
basis. The commissions paid to DB Securities or any of its affiliates must be,
as required by Rule 17e-1 under the 1940 Act, "reasonable and fair compared to
the commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions involving similar
securities...during a comparable period of time." If the purchase or sale of
securities consistent with the investment policies of a Portfolio or one or
more other accounts of the Advisor is considered at or about the same time,
transactions in such securities will be allocated among the accounts in a
manner deemed equitable by the Advisor. DB Securities or any of its affiliates
and the Advisor may combine such transactions, in accordance with applicable
laws and regulations, in order to obtain the best net price and most favorable
execution.
The Trust on behalf of a Portfolio will not deal with the Advisor or DB
Securities or any of its affiliates in any transaction in which the Advisor or
DB Securities or any of its affiliates acts as a principal with respect to any
part of a Portfolio' order, except in compliance with rules of the SEC. If DB
Securities or any of its affiliates is participating in an underwriting or
selling group, a Portfolio may not buy portfolio securities from the group
except in accordance with policies established by the Board in compliance with
rules of the SEC.
5. Control by Board of Trustees. Any management or supervisory
activities undertaken by the Advisor pursuant to this Agreement, as well as any
other activities undertaken by the Advisor on behalf of a Portfolio pursuant
thereto, shall at all times be subject to any applicable directives of the
Board.
6. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules and
regulations adopted thereunder;
(b) the provisions of the Registration Statement of the Trust on behalf
of a Portfolio under the 1933 Act and the 1940 Act;
(c) the provisions of the Declaration of Trust; and
(d) any other applicable provisions of state and federal law.
7. Expenses. The expenses connected with the Trust on behalf of a
Portfolio shall be allocable between the Trust and the Advisor as follows:
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(a) The Advisor shall furnish, at its expense and without cost to the
Trust, the services of one or more officers of the Advisor, to the
extent that such officers may be required by the Trust on behalf of a
Portfolio for the proper conduct of its affairs.
(b) The Trust assumes and shall pay or cause to be paid all other
expenses of the Trust on behalf of a Portfolio, including, without
limitation: payments to the Trust's distributor under the Trust's plan
of distribution; the charges and expenses of any registrar, any
custodian or depository appointed by the Trust for the safekeeping of a
Portfolio' cash, portfolio securities and other property, and any
transfer, dividend or accounting agent or agents appointed by the
Trust; brokers' commissions chargeable to the Trust on behalf of a
Portfolio in connection with portfolio securities transactions to which
the Trust is a party; all taxes, including securities issuance and
transfer taxes, and fees payable by the Trust to Federal, State or
other governmental agencies; the costs and expenses of engraving or
printing of certificates representing shares of the Trust; all costs
and expenses in connection with the registration and maintenance of
registration of the Trust and its shares with the SEC and various
states and other jurisdictions (including filing fees, legal fees and
disbursements of counsel); the costs and expenses of printing,
including typesetting, and distributing prospectuses and statements of
additional information of the Trust and supplements thereto to the
Trust's shareholders; all expenses of shareholders' and Trustees'
meetings and of preparing, printing and mailing of proxy statements and
reports to shareholders; fees and travel expenses of Trustees or
Trustee members of any advisory board or committee; all expenses
incident to the payment of any dividend, distribution, withdrawal or
redemption, whether in shares of in cash; charges and expenses of any
outside service used for pricing of the Trust's shares; charges and
expenses of legal counsel, including counsel to the Trustees and of the
Trust who are not interested persons (as defined in the 0000 Xxx) or
the Trust and of independent certified public accountants, in
connection with any matter relating to the Trust; membership dues of
industry associations; interest payable on Trust borrowings; postage;
insurance premiums on property or personnel (including officers and
Trustees) of the Trust which inure to its benefit; extraordinary
expenses (including but not limited to, legal claims and liabilities
and litigation costs and any indemnification related thereto); and all
other charges and costs of the Portfolio' or Trust's operation unless
otherwise explicitly provided herein.
8. Delegation of Advisory Services. With respect to any or all
Portfolio listed in Schedule A to this Agreement, and subject to the prior
approval of a majority of the members of the Trust's Board of Trustees,
including a majority of the Trustees who are not "interested persons," as
defined in the 1940 Act, and, where required, by the shareholders of the
Portfolio, the Advisor may, through a sub-advisory agreement or other
arrangement, (1) delegate to a sub-advisor any or all of its duties enumerated
in section 1 hereof and (2) delegate to any other company that the Advisor
controls, is controlled by, or is under common control with, or to specified
employees of any such companies, or to more than one such company, to the extent
permitted by applicable law, any or all of the Advisor's duties enumerated in
section 1 hereof, and may adjust the
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duties of such entity, the portion of portfolio assets of the Portfolio that
such entity shall manage and the fees to be paid to such entity; provided, that
with respect to the delegations, the Advisor shall continue to supervise the
services provided by any such sub-advisor or any such company or employees and
any such delegation shall not relieve the Advisor of any of its obligations
hereunder (including without limitation the management of the Portfolio' assets
in accordance with this Agreement).
9. Compensation. For the services to be rendered and the expenses
assumed by the Advisor, the Trust shall pay the Advisor monthly compensation in
the amount equal to the rate of 0.05% of the Portfolio's average daily net
assets.
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily and the amounts of the daily accruals shall be
paid monthly. If this Agreement becomes effective subsequent to the first day
of a month, compensation for that par of the month this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as
set forth above.
In the event of termination of this Agreement, the advisory fee shall be
computed on the basis of the period ending on the last business day on which
this Agreement is in effect subject to a pro rata adjustment based on the
number of days elapsed in the current month as a percentage of the total number
of days in such month.
In addition to the foregoing, the Advisor may from time to time agree not to
impose all or a portion of its fee otherwise payable hereunder (in advance of
the time such fee or a portion thereof would otherwise accrue) and/or undertake
to pay or reimburse the Trust on behalf of the Portfolio for all or a portion
of its expenses not otherwise required to be borne on reimbursed by the
Advisor. Any such fee reduction or undertaking may be discontinued or modified
by the Advisor at any time.
All rights of compensation under this Agreement for services performed as of
the termination date shall survive the termination of this Agreement.
10. Non-Exclusivity. The services of the Advisor to the Trust on behalf
of each Portfolio are not to be deemed to be exclusive, and the Advisor shall be
free to render investment advisory or other services to others (including other
investment companies) and to engage in other activities, so long as its services
under this Agreement are not impaired thereby. It is understood and agreed that
officers or directors of the Advisor may serve as officers or Trustees of the
Trust, and that officers or Trustees of the Trust may serve as officers or
directors of the Advisor to the extent permitted by law; and that the officers
and directors of the Advisor are not prohibited from engaging in any other
business activity or from rendering services to any other person, or from
serving as partners, officers, trustees or directors of any other firm, trust or
corporation, including other investment companies.
11. Additional Series and Classes. In the event that the Trust
establishes one or more series of Shares or one more classes of Shares after the
effectiveness of this Agreement, such series of shares or classes of shares, as
the case may be, shall become
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Series and classes under this Agreement upon approval of this Agreement by the
Board with respect to the series of Shares or class of Shares and the execution
of an amended Appendix A reflecting the applicable names and terms.
12. Duration and Termination. This Agreement, unless sooner terminated
as provided herein, shall remain in effect with respect to the Trust on behalf
of a Portfolio until two years from the date first set forth above, and
thereafter, for periods of one year so long as such continuance thereafter is
specifically approved at least annually (a) by the vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of a Portfolio, subject to the
right of the Trust and the Advisor to terminate this contract as provided in
this Section 1; provided, however, that if the shareholders of a Portfolio fail
to approve the Agreement as provided herein, the Advisor may continue to serve
hereunder in the manner and to the extent permitted by the 1940 Act as modified
or interpreted by any applicable order or orders of the SEC or any rules or
regulations adopted by, or interpretative releases of, the SEC thereunder. The
foregoing requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
1940 Act as modified or interpreted by any applicable order or orders of the SEC
or any rules or regulations adopted by, or interpretative releases of, the SEC
thereunder.
This Agreement may be terminated as to a Portfolio at any time, without the
payment of any penalty by vote of a majority of the Trustees of the Trust or by
vote of a majority of the outstanding voting securities of a Portfolio on not
less than 60 days' written notice to the Advisor, or by the Advisor at any time
without the payment of any penalty, on 90 days written notice to the Trust.
This Agreement will automatically and immediately terminate in event of its
assignment. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, to the other party at any office
of such party.
As used in this Section 12, the term "assignment" shall have the meaning as set
forth in the 1940 Act as modified or interpreted by any applicable order or
orders of the SEC or any rules or regulations adopted by, or interpretative
releases of, the SEC.
13. Limitation of Liability of the Advisor; Indemnification.
The Advisor shall not be liable for any error of judgment or mistake of law or
for any loss sufferable by a Portfolio in connection with the matters to which
this Agreement relates, except a loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services or a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of the
Advisor in the performance of its duties or from reckless disregard by its or
its obligations and duties under this Agreement.
14. Notices. Any notices under this agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice.
Currently such addresses are as follows: if
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to the Trust, Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, if to the Advisor,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
15. 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.
16. Entire Agreement. This Agreement states the entire agreement of the
parties hereto, and is intended to be the complete and exclusive statement of
the terms hereof. It may not be added to or changed orally, and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act as modified or interpreted by any applicable order
or orders of the SEC or any rules or regulations adopted by, or interpretative
releases of, the SEC, when applicable.
17. Reports. The Trust and the Advisor agree to furnish to each other,
if applicable, current prospectuses, proxy statements, reports to shareholders,
certified copies of their financial statements, and such other information with
regard to their affairs as each may reasonably request.
18. Certain Records. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act which are prepared or maintained by the Advisor on behalf of
the Trust are the property of the Trust and will be surrendered promptly to the
Trust on request.
19. Questions of Interpretation. 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 interpretations thereof, if any, by the
United States Courts or in the absence of any controlling decision of any court,
by rules, regulations or orders of the SEC issued pursuant to the 1940 Act. In
addition, where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is modified or interpreted by any applicable order
or orders of the SEC or any rules or regulations adopted by, or interpretative
releases or, the SEC thereunder, such provision shall be deemed to incorporate
the effect of such order, rule, regulation or interpretative release. Otherwise
the provisions of this Agreement shall be interpreted in accordance with the
laws of Maryland.
20. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
[SEAL] ------------------------------
Attest: ________________________ By: ________________________
Name: ________________________ Name: ________________________
Title: ________________________
[SEAL] DEUTSCHE ASSET
MANAGEMENT, INC.
Attest: ________________________ By: ________________________
Name: ________________________ Name: ________________________
Title: ________________________
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