EXHIBIT 5A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of ___________ 1997 by and between the Xxxxxxxx ______
Fund, a series of The Diversified Investors Funds Group (herein called
the "Fund"), and Diversified Investment Advisors, Inc. a Delaware corporation
(herein called "Diversified").
WHEREAS, the Fund is registered as a diversified, open-end, management
investment company under the Investment Company Act of 1940 (the "1940 Act");
and
WHEREAS, Diversified has been organized to operate as an investment
advisor registered under the Investment Advisers Act of 1940; and
WHEREAS, the Fund desires to retain Diversified to render investment
advisory services, and Diversified is willing to so render such services on the
terms hereinafter set forth;
NOW, THEREFORE, this Agreement
WITNESSETH:
In consideration of the promises and mutual covenants herein contained, it
is agreed between the parties hereto as follows:
1. The Fund hereby appoints Diversified to act as investment advisor to
the Fund for the period and on the terms set forth in this Agreement.
Diversified accepts such appointment and agrees to render the services herein
set forth for the compensation herein provided.
2. (a) Diversified shall, at its expense, (i) employ sub-advisors or
associate with itself such entities as it believes appropriate to assist it in
performing its obligations under this Agreement and (ii) provide all services,
equipment and facilities necessary to perform its obligations under this
Agreement.
(b) The Fund shall be responsible for all of its expenses and
liabilities, including, but not limited to: compensation and out-of-pocket
expenses of Trustees not affiliated with any subadvisor or Diversified;
governmental fees; interest charges; taxes; membership dues; fees and expenses
of independent auditors, of legal counsel and of any transfer agent,
administrator, distributor, shareholder servicing agents, registrar or dividend
disbursing agent of the Fund; expenses of distributing and redeeming shares and
servicing shareholder accounts; expenses of preparing, printing and mailing
prospectuses, shareholder reports, notices, proxy statements and reports to
governmental officers and commissions and to shareholders of the Fund; expenses
connected with the execution, recording and settlement of Fund security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of shares of the Fund; expenses of shareholder meetings; expenses of
litigation and other extraordinary or non-recurring events and expenses
relating to the issuance, registration and qualification of shares of the Fund.
3. (a) Subject to the general supervision of The Diversified Investors
Funds Group's Board of Trustees, Diversified shall formulate and provide an
appropriate investment program on a continuous basis in connection with the
management of the Fund, including research, analysis, advice, statistical and
economic data and information and judgments of both a macroeconomic and
microeconomic character.
Diversified will determine the securities to be purchased, sold, lent,
exchanged or otherwise disposed of or acquired by the Fund in accordance with
predetermined guidelines as set forth from time to time in the Fund's
then-current prospectus and Statement of Additional Information ("SAI") and
will place orders pursuant to its determinations either directly with the
issuer or with any broker or dealer who deals in such securities. In placing
orders with brokers and dealers, Diversified will use its reasonable best
efforts to obtain the best net price and the most favorable execution of its
orders, after taking into account all factors 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. Consistent with this obligation, Diversified may, to the
extent permitted by law, purchase and sell Fund securities to and from brokers
and dealers who provide brokerage and research services (within the meaning of
Section 28(e) of the Securities Exchange Act of 1934) to or for the benefit of
the Fund and/or other accounts over which Diversified or any of its affiliates
exercises investment discretion.
Subject to the review of The Diversified Investors Funds Group's Board of
Trustees from time to time with respect to the extent and continuation of the
policy, Diversified is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for effecting a securities
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
Diversified 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 either that particular transaction or the
overall responsibilities of Diversified with respect to the accounts as to
which it exercises investment discretion.
In placing orders with brokers and/or dealers, Diversified intends to seek
best price and execution for purchases and sales and may effect transactions
through itself and its affiliates on a securities exchange provided that the
commissions paid by the Fund are "reasonable and fair" compared to commissions
received by other broker-dealers having comparable execution capability in
connection with comparable transactions involving similar securities and
provided that the transactions in connection with which such commissions are
paid are effected pursuant to procedures established by The Diversified
Investors Funds Group's Board of Trustees. All transactions are effected
pursuant to written authorizations from the Fund conforming to the requirements
of Section 11 (a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T)
thereunder. Pursuant to such authorizations, an affiliated broker-dealer may
transmit, clear and settle transactions for the Fund that are executed on a
securities exchange provided that it arranges for unaffiliated brokers to
execute such transactions.
Diversified shall determine from time to time the manner in which voting
rights, rights to consent to corporate action and any other rights pertaining
to the Fund's securities shall be exercised, provided, however, that should the
Board of Trustees at any time make any definite determination as to investment
policy and notify Diversified thereof in writing, Diversified shall be bound by
such determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. Diversified will
determine what portion of securities owned by the Fund shall be invested in
securities described by the policies of the Fund and what portion, if any,
should be held uninvested. Diversified will determine whether and to what
extent to employ various investment techniques available to the Fund. In
effecting transactions with respect to securities or other property for the
account of the Fund, Diversified may deal with itself and its affiliates, with
the Trustees of The Diversified Investors Funds Group or with other entities to
the extent such actions are permitted by the 0000 Xxx.
(b) Diversified also shall provide to the Fund administrative assistance
in connection with the operation of the Fund, which shall include compliance
with all reasonable requests of the Fund for information, including information
required in connection with the Fund's filings with the Securities and Exchange
Commission and state securities commissions.
(c) As manager of the assets of the Fund, Diversified shall make
investments for the account of the Fund in accordance with Diversified's best
judgment and within the Fund's investment objectives, guidelines, and
restrictions, the 1940 Act and the provisions of the Internal Revenue Code of
1986 relating to regulated investment companies subject to policy decisions
adopted by the Board of Trustees.
(d) Diversified shall furnish to the Board of Trustees periodic reports on
the investment performance of the Fund and on the performance of its
obligations under this Agreement and shall supply such additional reports and
information as the Fund's officers or Board of Trustees shall reasonably
request.
(e) On occasions when Diversified deems the purchase or sale of a Security
to be in the best interest of the Fund as well as other customers, Diversified,
to the extent permitted by applicable law, may aggregate the securities to be
so sold or purchased in order to obtain the best execution or lower brokerage
commissions, if any. Diversified may also on occasion purchase or sell a
particular security for one or more customers in different amounts. On either
occasion, and to the extent permitted by applicable law and regulations,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by Diversified in the manner it
considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other customers.
(f) Diversified shall also provide the Fund with the following services as
may be required:
(i) providing office space, equipment and clerical personnel
necessary for maintaining the organization of the Fund and for
performing administrative and management functions;
(ii) supervising the overall administration of the Fund, including
negotiation of contracts and fees with and the monitoring of
performance and xxxxxxxx of the Fund's transfer agent,
custodian and other independent contractors or agents;
(iii) preparing and, if applicable, filing all documents required for
compliance by the Fund with applicable laws and regulations,
including registration statements, registration fee filings,
semi-annual and annual reports to investors, proxy statements
and tax returns;
(iv) preparation of agendas and supporting documents for and minutes
of meeting of Trustees, committees of Trustees and investors;
and
(v) maintaining books and records of the Fund.
4. Diversified shall give the Fund the benefit of Diversified's best
judgment and efforts in rendering services under this Agreement. As an
inducement to Diversified's undertaking to render these services, the Fund
agrees that Diversified shall not be liable under this Agreement for any
mistake in judgment or in any other event whatsoever provided that nothing in
this Agreement shall be deemed to protect or purport to protect Diversified
against any liability to the Fund or its investors to which Diversified would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Advisor's duties under this Agreement or
by reason of the Advisor's reckless disregard of its obligations and duties
hereunder.
5. In consideration of the services to be rendered by Diversified under
this Agreement, the Fund shall pay Diversified a fee accrued daily and paid
monthly at an annual rate equal to ___% of the Fund's average daily net assets.
If the fees payable to Diversified pursuant to this paragraph 5 begin to accrue
before the end of any month or if this Agreement terminates before the end of
any month, the fees for the period from that date to the end of that month or
from the beginning of that month to the date of termination, as the case may
be, shall be prorated according to the proportion which the period bears to the
full month in which the effectiveness or termination occurs. For purposes of
calculating the monthly fees, the value of the net assets of the Fund shall be
computed in the manner specified in its Regulation Statement on Form N-1A for
the computation of net asset value. For purposes of this Agreement, a "business
day" is any day the New York Stock Exchange is open for trading.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Diversified hereby agrees that all records which it maintains for the Fund are
property of the Fund and further agrees to surrender promptly to the Fund any
such records upon the Fund's request. Diversified further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act any such records
required to be maintained by Rule 31a-1 under the 1940 Act.
6. This Agreement shall be effective as to the Fund as of the date the
Fund commences investment operations after this Agreement shall have been
approved by The Diversified Investors Funds Group's Board of Trustees and the
investors in the Fund in the manner contemplated by Section 15 of the 1940 Act
and, unless sooner terminated as provided herein, shall continue until the
second anniversary of the date hereof. Thereafter, if not terminated, this
Agreement shall continue in effect as to the Fund for successive periods of 12
months each, provided such continuance is specifically approved at least
annually by the vote of a majority of those members of The Diversified
Investors Funds Group's Board of Trustees who are not parties to this Agreement
or interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval; and either (a) by the vote of a
majority of the full Board of Trustees or (b) by vote of a majority of the
outstanding voting securities of the Fund; provided, however, that this
Agreement may be terminated by the Fund at any time, without the payment of any
penalty, by The Diversified Investors Funds Group's Board of Trustees or by
vote of a majority of the outstanding voting securities on 60 days' written
notice to Diversified, or by Diversified as to the Fund at any time, without
payment of any penalty, on 90 days' written notice to the Fund. This Agreement
will immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities",
"interested person" and "assignment" shall have the same meanings as such terms
have in the 1940 Act and the rule and regulatory constructions thereunder.)
7. Except to the extent necessary to perform Diversified's obligations
under this Agreement, nothing herein shall be deemed to limit or restrict the
right of Diversified, or any affiliate of Diversified, or any employee of
Diversified, to engage in any other business or devote time and attention to
the management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other trust,
corporation, firm, individual or association.
8. The investment management services of Diversified to the Fund under
this Agreement are not to be deemed exclusive as to Diversified and Diversified
will be free to render similar services to others.
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge, or termination is
sought and no material amendment of this Agreement shall be effective until
approved by vote of the holders of a majority of the outstanding voting
securities of the Fund.
This Agreement embodies the entire agreement and understanding between the
parties hereto and supersedes all prior agreements and understandings relating
to the subject matter hereof. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. Should any
part of this Agreement be held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement shall not be affected
thereby. This Agreement shall be binding and shall inure to the benefit of the
parties hereto and their respective successors, to the extent permitted by law.
9. This Agreement shall be construed in accordance with the laws of the
State of New York provided that nothing herein shall be construed in a manner
inconsistent with the requirements of 1940 Act.
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 above
written.
Attest: Xxxxxxxx Select Equity Fund, a series of
Diversified Investors Funds Group
___________________ By:___________________________________
Attest: Diversified Investment Advisors, Inc.
____________________ By:______________________________________
Xxxxxx X. Xxxxx
Vice President and General Counsel
