EXHIBIT (d)(10)
INVESTMENT SUBADVISORY AGREEMENT
INVESTMENT SUBADVISORY AGREEMENT, dated as of August 1, 2001 by and
between Diversified Investment Advisors, Inc., a Delaware corporation
("Diversified") and INVESCO, Inc., a Delaware corporation ("Subadvisor").
WITNESSETH:
WHEREAS, Diversified has been organized to operate as an investment
advisor registered under the Investment Advisers Act of 1940 and has been
retained to provide investment advisory services to the Special Equity
Portfolio ("Portfolio"), a series of Diversified Investors Portfolios, a
diversified open-end management investment company registered under the
Investment Company Act of 1940 ("1940 Act");
WHEREAS, Diversified desires to retain the Subadvisor to furnish it with
portfolio investment advisory services in connection with Diversified's
investment advisory activities on behalf of the Portfolio, and the Subadvisor
is willing to furnish such services to Diversified;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of the Subadvisor. In accordance with and subject to the
Investment Advisory Agreement between the Portfolio and Diversified, attached
hereto as Schedule A (the "Advisory Agreement"), Diversified hereby appoints
the Subadvisor to perform the portfolio investment advisory services described
herein for the investment and reinvestment of such amount of the Portfolio's
assets as is determined from time to time by the Portfolio's Board of Trustees
("Assets"), subject to the control and direction of Diversified and the
Diversified Investors Portfolios' Board of Trustees, for the period and on the
terms hereinafter set forth.
The Subadvisor shall provide Diversified with such investment advice and
supervision as the latter may from time to time consider necessary for the
proper supervision of the Portfolio's assets. The Subadvisor shall furnish
continuously an investment program and shall determine from time to time what
securities shall be purchased, sold or exchanged and what portion of the assets
of the Portfolio shall be held uninvested, subject always to the provisions of
the 1940 Act and to the Portfolio's then-current Registration Statement on
Form N-1A.
In particular, the Subadvisor shall, without limiting the foregoing: (i)
continuously review, supervise and implement the investment program of the
Portfolio; (ii) monitor regularly the relevant securities for the Portfolio to
determine if adjustments are warranted and, if so, to make such adjustments;
(iii) determine, in the Subadvisors's discretion, the securities to be
purchased or sold or exchanged in order to keep the Portfolio in balance with
its designated investment strategy; (iv) determine, in the Subadvisor's
discretion, whether to exercise warrants or other rights with respect to the
Portfolio's securities; (v) determine, in the Subadvisor's discretion, whether
the merit of an investment has been substantially impaired by extraordinary
events or financial conditions, thereby warranting the removal of such
securities from the Portfolio; (vi) as promptly as practicable after the end of
each calendar month, furnish a report showing: (a) all transactions during such
month, (b) all assets of the Portfolio on the last day of such month, rates of
return, and (c) such other information relating to the Portfolio as Diversified
may reasonably request; (vii) meet at least four times per year with
Diversified and with such other persons as my be designated on reasonable
notice and at reasonable locations, at the request of Diversified, to discuss
general economic conditions, performance, investment strategy, and other
matters relating to the Portfolio; (viii) provide the Portfolio with records
concerning the Subadvisor's activities which the Portfolio is required by law
to maintain; and (ix) render regular reports to the Portfolio's officers and
Directors concerning the Subadvisor's discharge of the foregoing
responsibilities.
The Subadvisor shall exercise the Portfolio's voting rights, rights to
consent to corporate actions and any other rights pertaining to the Portfolio's
securities in accordance with its policy, a copy of which shall be provided to
Diversified.
Should the Board of Trustees at any time establish an investment policy
with respect to the Portfolio and notify the Subadvisor thereof in writing, the
Subadvisor shall be bound by such determination for the period, if any,
specified in such notice or until similarly notified that such policy has been
revoked.
The Subadvisor shall take, on behalf of the Portfolio, all actions which
it deems necessary to implement the investment policies determined as provided
above, and in particular to place all orders for the purchase or sale of
Portfolio securities for the Portfolio's account with brokers or dealers
selected by it, and to that end the Subadvisor is authorized as the agent of
the Portfolio to give instructions to the custodian of the Portfolio as to
deliveries of securities and payments of cash for the account of the Portfolio.
Subject to the primary objective of obtaining the best available prices and
execution, the Subadvisor may place orders for the purchase and sale of
portfolio securities with such broker/dealers who provide research and
brokerage services to the Portfolio within the meaning of Section 28(e) of the
Securities Exchange Act of 1934, to the Subadvisor, or to any other fund or
account for which the Subadvisor provides investment advisory services and may
place such
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orders with broker/dealers who sell shares of the Portfolio or who sell shares
of any other fund for which the Subadvisor provides Investment advisory
services. Broker/dealers who sell shares of the funds of which INVESCO, Inc. is
investment advisor shall only receive orders for the purchase or sale of
portfolio securities to the extent that the placing of such orders is in
compliance with the Rules of the Securities and Exchange Commission and the
National Association of Securities Dealers, Inc.
Notwithstanding the provisions of the previous paragraph and subject to
such policies and procedures as may be adopted by the Board of Trustees and
officers of the Portfolio, the Subadvisor may pay a member of an exchange,
broker or dealer an amount of commission for effecting a securities transaction
in excess of the amount of commission another member of an exchange, broker or
dealer would have charged for effecting that transaction, in such instances
where the Subadvisor has determined in good faith that such amount of commission
was reasonable in relation to the value of the brokerage and research services
provided by such member, broker or dealer, viewed in terms of either that
particular transaction or the Subadvisor's overall responsibilities with
respect to the Portfolio and to other funds and clients for which the
Subadvisor exercises investment discretion.
2. Allocation of Charges and Expenses. The Subadvisor shall furnish at
its own expense all necessary services, facilities and personnel in connection
with its responsibilities under Section 1 above. It is understood that the
Portfolio will pay all of its own expenses and liabilities including, without
limitation, compensation and out-of-pocket expenses of Trustees not affiliated
with the 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 Portfolio; 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 Portfolio; expenses connected with the execution, recording
and settlement of Portfolio security transactions; insurance premiums; fees and
expenses of the custodian for all services to the Portfolio, including
safekeeping of funds and securities and maintaining required books and
accounts; expenses of calculating the net asset value of shares of the
Portfolio; 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 Portfolio.
3. Compensation of the Subadvisor. For the services to be rendered,
Diversified shall pay to the Subadvisor an investment advisory fee computed in
accordance with the terms of Schedule B herewith attached. If the Subadvisor
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serves for less than the whole of any period specified, its compensation shall
be prorated.
4. Covenants and Representations of the Subadvisor and of Diversified.
The Subadvisor agrees that it will not deal with itself, or with the Trustees
of the Portfolio or with Diversified, or the Portfolio's principal underwriter
or distributor as principals in making purchases or sales of securities or
other property for the account of the Portfolio, except as permitted by the
1940 Act, and will comply with all other provisions of the Declaration of Trust
and any current Registration Statement on Form N-1A of the Portfolio relative
to the Subadvisor, Advisor and its Trustees and officers.
Diversified represents and warrants (i) that it has full power and
authority to enter into this Agreement, (ii) that this Agreement has been duly
authorized and when executed and delivered will be binding upon the Portfolio,
(iii) that Diversified is a "qualified eligible client," as defined in Rule 4.7
promulgated by the Commodity Futures Trading Commission ("CFTC") under the
Commodity Exchange Act, as amended, and as set forth in Schedule D.
5. Limits on Duties. The Subadvisor shall be responsible only for
managing the Assets in good faith and in accordance with the investment
objectives, fundamental policies and restrictions, and shall have no
responsibility whatsoever for, and shall incur no liability on account of (i)
diversification, selection or establishment of such investment objectives,
fundamental policies and restrictions (ii) advice on, or management of, any
other assets for Diversified or the Portfolio, (iii) filing of any tax or
information returns or forms, withholding or paying any taxes, or seeking any
exemption or refund, (iv) registration of the Portfolio with any government or
agency, or (v) administration of the plans and trust investing through the
Portfolio, or (vi) overall Portfolio compliance with the requirements of the
1940 Act, which requirements are outside of the Subadvisor's control, and
Subchapter M of the Internal Revenue Code of 1986, as amended. Diversified
agrees that requirements imposed by the 1940 Act, Subchapter M, or any other
applicable laws, that are outside Subadvisor's control include compliance with
any percentage limitations applicable to the Portfolio's assets that would
require knowledge of the Portfolio's holdings other than the Assets subject to
this Agreement. Subadvisor shall be indemnified and held harmless by
Diversified for any loss in carrying out the terms and provisions of this
Agreement, including reasonable attorney's fees, Indemnification to the
Portfolio, or any shareholder thereof and, brokers and commission merchants,
fines, taxes, penalties and interest. Subadvisor, however, shall be liable for
any liability, damages, or expenses of Diversified arising out of the willful
malfeasance, bad faith, gross negligence, or violation of applicable law or
reckless disregard of the duties owed pursuant to this Agreement by any of its
employees in providing management under this Agreement; and, in such cases, the
indemnification by Diversified, referred to above, shall be inapplicable.
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The Subadvisor may apply to Diversified at any time for instructions and
may consult counsel for Diversified or its own counsel with respect to any
matter arising in connection with the duties of the Subadvisor. Also, the
Subadvisor shall be protected in acting upon advice of Diversified and/or
Diversified's counsel and upon any document which Subadvisor reasonably believes
to be genuine and to have been signed by the proper person or persons.
6. Exclusivity. Subadvisor represents to Diversified that during the term
of this Agreement, Subadvisor will not manage through any (1) open-end
investment company or insurance company separate account registered under the
1940 Act; (2) collective trust fund; or (3) insurance company separate account
excepted from regulation under section 3(c)(11) of the 1940 Act, any special
equity fund defined as a similarly sized investment vehicle as described above
where multiple sub-advisors are employed, in the same manner to the strategy,
defined as Structure Small Cap Core, employed by Subadvisor for Diversified
under this Agreement if such investment vehicles are designed exclusively for
retirement plans described in Schedule C attached hereto.
7. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written and shall
govern the relations between the parties hereto thereafter, and, unless
terminated earlier as provided below, shall remain in force for two years, on
which date it will terminate unless its continuance thereafter is specifically
approved at least annually (a) by the vote of a majority of the Trustees of the
Portfolio who are not "interested persons" with respect to this Agreement or of
the Subadvisor or Diversified at an in person meeting specifically called for
the purpose of voting on such approval, and (b) by the Board of Trustees of the
Portfolio or by vote of a majority of the outstanding voting securities of the
Portfolio. However, if the shareholders of the Portfolio fail to approve the
Agreement as provided herein, the Subadvisor may continue to serve hereunder in
the manner and to the extent permitted by the Investment Company Act of 1940 and
Rules thereunder.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees, or by the vote of a majority of the outstanding voting
securities of the Portfolio, or by Diversified. The Subadvisor may terminate the
Agreement only upon giving 90 days' advance written notice to Diversified. This
Agreement shall automatically terminate in the event of its assignment.
This Agreement may be amended only if such amendment is approved by the
vote of a majority of the outstanding voting securities of the Portfolio and by
vote of a majority of the Board of Trustees of the Portfolio 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.
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The The terms "specifically approved at least annually", "vote of a
majority of the outstanding voting securities", "assignment", "affiliated
person", and "interested persons", when used in this Agreement, shall have the
respective meanings specified in, and shall be construed in a manner consistent
with, the 1940 Act, subject, however, to such exemptions as may be granted by
the Securities and Exchange Commission under said Act.
8. Certain Records. Any records to be maintained and preserved pursuant
to the provisions of Rule 31a-1 and Rule 31a-2 adopted under the 1940 Act which
are prepared or maintained by the Subadvisor on behalf of the Portfolio are the
property of the Portfolio and will be surrendered promptly to the Portfolio on
request.
9. Survival of Compensation Rates. All rights to compensation under this
Agreement shall survive the termination of this Agreement.
10. Entire Agreement. This Agreement states the entire agreement of the
parties with respect to investment advisory services to be provided to the
Portfolio by the Subadvisor and may not be amended except in a writing signed by
the parties hereto and approved in accordance with Section 7 hereof.
11. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
12. Change of Management and Pending Litigation. Subadvisor represents to
Diversified that it will disclose to Diversified promptly after it has knowledge
of any change or variation in its management structure or personnel or any
significant change or variation in its management style or investment philosophy
that is material to this Agreement. In addition, Subadvisor represents to
Diversified that it will disclose to Diversified the existence of any pending
legal action being brought against it that would affect this Agreement.
Diversified represents to Subadvisor that any information received by
Diversified pursuant to this section will be kept strictly confidential and
will not be disclosed to any third party.
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13. Use of Name. Subadvisor hereby agrees that Diversified may use the
Subadvisor's name in its marketing or advertising materials. Diversified agrees
to allow the Subadvisor to examine and approve any such materials prior to use.
14. Consent to Exemption. Diversified hereby consents to the Portfolio
being an exempt account pursuant to CFTC Rule 4.7.
15. CFTC Notice. Pursuant to an Exemption from the Commodity Futures
Trading Commission in connection with accounts of qualified eligible clients,
this brochure or account document is not required to be, and has not been filed
with the Commission. The Commodity Futures Trading Commission does not pass
upon the merits of participating in a trading program or upon the adequacy or
accuracy of commodity trading advisor disclosure. Consequently, the Commodity
Futures Trading Commission has not reviewed or approved this trading program or
this brochure or account document.
IN WITNESS WHEREOF, the parties thereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
Diversified Investment Advisors, Inc.
By: /s/ XXXX X. XXXXXX
------------------------------------
INVESCO, Inc.
By: /s/ XXXXXXX X. XXXX
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SCHEDULE A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of January 3, 1994 by and between the Special Equity
Portfolio, a series of Diversified Investors Portfolios (herein called the
"Portfolio"), and Diversified Investment Advisors, Inc. a Delaware corporation
(herein called "Diversified").
WHEREAS, the Portfolio 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 Portfolio 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 Portfolio hereby appoints Diversified to act as investment
advisor to the Portfolio 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 Portfolio shall be responsible for all of its expenses and
liabilities, including, but not limited to: compensation and out-of-pocked
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
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of the Portfolio; 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 Portfolio; expenses
connected with the execution, recording and settlement of Portfolio security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Portfolio, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of shares of the Portfolio; 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
Portfolio.
3. (a) Subject to the general supervision of the Board of Trustees of
the Portfolio, Diversified shall formulate and provide an appropriate investment
program on a continuous basis in connection with the management of the
Portfolio, 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 Portfolio in accordance
with predetermined guidelines as set forth from time to time in the Portfolio'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 Portfolio 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 Portfolio and/or other accounts over which Diversified or any of
its affiliates exercises investment discretion.
Subject to the review of the Portfolio'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
Portfolio which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if Diversified
determines in
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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 Portfolio 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
Board of the Trustees of the Portfolio. All transactions are effected pursuant
to written authorizations from the Portfolio 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 Portfolio 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 Portfolio'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 Portfolio
shall be invested in securities described by the policies of the Portfolio 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 Portfolio. In effecting transactions with respect to securities or other
property for the account of the Portfolio, Diversified may deal with itself and
its affiliates, with the Trustees of the Portfolio or with other entities to
the extent such actions are permitted by the 0000 Xxx.
(b) Diversified also shall provide to the Portfolio administrative
assistance in connection with the operation of the Portfolio, which shall
include compliance with all reasonable requests of the Portfolio for
information, including information required in connection with the Portfolio's
filings with the Securities and Exchange Commission and state securities
commissions.
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(c) As manager of the assets of the Portfolio, Diversified shall make
investments for the account of the Portfolio in accordance with Diversified's
best judgment and within the Portfolio'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 Portfolio and on the performance of its
obligations under this Agreement and shall supply such additional reports and
information as the Portfolio'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 Portfolio 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 Portfolio and to such other customers.
(f) Diversified shall also provide the Portfolio with the following
services as may be required:
(i) providing office space, equipment and clerical personnel
necessary for maintaining the organization of the Portfolio and
for performing administrative and management functions;
(ii) supervising the overall administration of the Portfolio,
including negotiation of contracts and fees with and the
monitoring of performance and xxxxxxxx of the Portfolio's
transfer agent, custodian and other independent contractors or
agents;
(iii) preparing and, if applicable, filing all documents required for
compliance by the Portfolio with applicable laws and
regulations, including registration statements, registration fee
filings, semi-annual and annual reports to investors, proxy
statements and tax returns;
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(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 Portfolio.
4. Diversified shall give the Portfolio 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 Portfolio
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 Portfolio 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 Adviser's duties under this Agreement or by
reason of the Adviser's reckless disregard of its obligations and duties
hereunder.
5. In consideration of the services to be rendered by Diversified under
this Agreement, the Portfolio shall pay Diversified a fee accrued daily and paid
monthly at an annual rate equal to .80% of the Portfolio'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
Portfolio 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 Portfolio
are property of the Portfolio and further agrees to surrender promptly to the
Portfolio any such records upon the Portfolio'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 Portfolio as of the date
the Portfolio commences investment operations after this Agreement shall have
been approved by the Board of Trustees of the Portfolio and the investor(s) in
the Portfolio in the manner
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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
Portfolio 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 Board of Trustees of the Portfolio 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 Portfolio; provided, however, that this
Agreement may be terminated by the Portfolio at any time, without the payment of
any penalty, by the Board of Trustees of the Portfolio or by vote of a majority
of the outstanding voting securities of the Portfolio on 60 days' written notice
to Diversified, or by Diversified as to the Portfolio at any time, without
payment of any penalty, on 90 days' written notice to the Portfolio. 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 Portfolio
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 Portfolio.
This Agreement embodies the entire agreement and understanding between the
parties hereto and supersedes all prior agreements and undertakings relating to
the subject matter
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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: Diversified Investors Portfolios
/s/ XXXX X. XXXXXX By: /s/ XXX XXXXXXXXXXX
------------------------------ -------------------------------
Xxx Xxxxxxxxxxx
Chairman and President
Attest: Diversified Investment Advisors, Inc.
/s/ XXXXXXXXX X. XXXX By: /s/ XXXXXX X. XXXX
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Xxxxxx X. Xxxx
Vice President and CFO
SCHEDULE B
The Subadvisor shall be compensated for its services under this Agreement on the
basis of the below-described annual fee schedule. The fee schedule shall only be
amended by agreement between the parties.
FEE SCHEDULE
.0055 OF THE FIRST $100M OF NET ASSETS
.0045 OF THE NEXT $100M OF NET ASSETS
.0030 OF THE NEXT $100M OF NET ASSETS
.0020 OF NET ASSETS IN EXCESS OF $300M
Net assets are equal to the market value of the Portfolio. Fees will be
calculated by multiplying the arithmetic average of the beginning and ending
monthly net assets by the fee schedule and dividing by twelve. The fee will be
paid quarterly.
INVESCO, Inc. agrees that if at anytime during the term of this Subadvisory
Agreement, INVESCO offers another of its clients (other than a client that is
an affiliated person of INVESCO) a lower fee than that set forth in this
Schedule B for the management of a similar product, size and structured Special
Equity Portfolio or Special Equity Fund then Diversified will also be charged
the lower rate.
SCHEDULE C
Target market for 401(a), 403(b) and 457 plans is those plans with assets
between $1 and %250 million.
SCHEDULE D
"Qualified Eligible Client" means:
(A) person, acting for its own account or for the account of a qualified
eligible client, that is:
(1) a futures commission merchant registered pursuant to
Section 4(d) of the United States Commodity Exchange Act, as
amended ("Commodity Act");
(2) a broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended;
(3) a commodity pool operator registered pursuant to Section 4m of
the Commodity Act which has been registered and active as such
for two years or which operates pools which, in the aggregate,
have total assets in excess of U.S. $5,000,000; or
(4) a commodity trading advisor registered pursuant to Section 4m of
the Commodity Act which has been registered and active as such
for two years or which provides commodity interest trading
advice to commodity accounts which, in the aggregate, have total
assets in excess of U.S. $5,000,000 deposited at one or more
futures commission merchants.
(B) A person which both:
(i) owns securities (including pool participations) of issuers not affiliated
with such person and other investments with an aggregate market value of
at least U.S. $2,000,000;
(ii) has had on deposit with a futures commission merchant, for its own
account at any time during the six-month period preceding the date that
person opens an exempt account with the Investment Manager, at least U.S.
$200,000 in exchange-specified initial margin and option premiums for
commodity interest transactions; or
(iii) owns a portfolio comprised of a combination of the funds or property
specified in subparagraphs (i) and (ii) above in which the sum of the
funds or property includable under (i) (expressed as a percentage of the
minimum amount required thereunder) and the amount of futures margin and
option premiums includable under (ii) (expressed as a percentage of the
minimum amount required thereunder) equals at least one hundred percent.
An example of a composite portfolio acceptable under this subparagraph
(iii) would consist of U.S. $1,000,000 in securities and other property
(50 percent of subparagraph (i)) and U.S. $100,000 in exchange-specified
initial margin and option premiums (50 percent of subparagraph (ii));
(2) and is:
(i) an investment company registered under the Investment Company Act
of 1940, as amended ("Investment Company Act"), or a business
development company as defined in Section 2(a)(48) of the
Investment Company Act not formed for the specific purpose of
opening an exempt account with the Investment Manager;
(ii) a bank as defined in Section 3(a)(2) of the Securities Act of
1933, as amended ("Securities Act"), or a savings and loan
association or other institution as defined in Section 3(a)(5)(A)
of the Securities Act acting for its own account or for the
account of a qualified eligible client;
(iii) an insurance company as defined in Section 2(13) of the
Securities Act acting for its own account or for the account of a
qualified eligible client;
(iv) a plan established and maintained by a state, its political
subdivisions, or an agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such
plan has total assets in excess of U.S.$5,000,000;
(v) an employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
provided that the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of ERISA, which is a bank,
savings and loan association, insurance company, or registered
investment adviser, or that the employees benefit plan has total
assets in excess of U.S.$5,000,000; or, if the plan is
self-directed, that investment decisions for, or the decisions
as to the types of investment alternatives under, the plan am
made solely by persons that are qualified eligible clients;
(vi) a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940, as amended;
(vii) an organization described in Section 501(c)(3) of the United
States Internal Revenue Code of 1986 as amended, with total
assets in excess of U.S.$5,000,000;
(viii) a corporation, Massachusetts or similar business trust, or
partnership, other than a pool, which has total assets in excess
of U.S.$5,000,000, and is not formed for the specific purpose of
opening an exempt account with the Investment Manager;
(ix) a natural person whose individual net worth, or joint net worth
with that person's spouse, at the time the person opens an exempt
account, exceeds U.S.$1,000,000;
(x) a natural person who had an individual income in excess of
U.S.$200,000 in each of the two most recent years, or joint
income with that person's spouse, in excess of U.S.$300,000 in
each of those years and has a reasonable expectation of reaching
the
same income level in the current year;
(xi) a trust, Insurance company separate account or bank
collective trust, with total assets in excess of U.S.
$5,000,000, not formed for the specific purpose of
opening an exempt account with the Investment Manager,
whose investment in the exempt account is directed by a
qualified eligible client or participant and in which
all of the unit owners or participants, other
than the Investment Manager, are qualified eligible
participants; or
(xii) except as provided for the governmental entities
referenced in subparagraph (B)(2)(iv) above, if
otherwise authorized by law to engage in such
transactions, a governmental entity, (including the
United States, a state, or a foreign government) or
political subdivision thereof, or a multinational or
supranational entity, or an instrumentality, agency, or
department of any of the foregoing.
(C) A commodity pool operated pursuant to CFTC Rule 4.7
(D) An entity in which all of the unit owners or participants, other
than the Investment Manager, are persons listed in Paragraphs (A),
(B) or (C) above.
(E) Notwithstanding Paragraph (B) above, an entity as to which a notice of
eligibility has been filed pursuant to CFTC Rule 4.5 which is operated
in accordance with such Rule and in which all Unit owners or
participants, other than the Investment Manager, are qualified
eligible participants.
