INVESTMENT SUB-ADVISORY AGREEMENT
(GLOBAL BOND PORTFOLIO)
THIS AGREEMENT, made as of the 1st day of May, 1998, by and between
Advantus Capital Management, Inc., a Minnesota corporation, registered as an
Investment Adviser under the Investment Advisers Act of 1940 (the "Adviser") and
Xxxxxx Xxxx Investment Management Inc., a Delaware corporation, registered as an
Investment Adviser under the Investment Advisers Act of 1940 (the
"Sub-Adviser").
WHEREAS, the Adviser is the Investment Adviser to Advantus Series Fund,
Inc., (the "Fund"), an open-end diversified management investment company
organized as a series fund, registered under the Investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish it with
portfolio selection and related research and statistical services in connection
with the Adviser's investment advisory activities on behalf of the Fund's Global
Bond Portfolio (hereinafter "Portfolio"), and the Sub-Adviser desires to furnish
such services to the Adviser;
NOW, THEREFORE, in consideration of the premises and the terms and
conditions hereinafter set forth, it is agreed as follows:
1. APPOINTMENT OF SUB-ADVISER
In accordance with and subject to the Investment Advisory Agreement between
the Fund and the Adviser dated May 1, 1998, the Adviser hereby appoints the
Sub-Adviser to perform portfolio selection services described herein for
investment and reinvestment of the Portfolio, subject to the control and
direction of the Fund's Board of Directors, for the period and on the terms
hereinafter set forth. The Sub-Adviser accepts such appointment and agrees to
furnish the services hereinafter set forth for the compensation herein provided.
The Sub-Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, except as expressly provided or authorized, have no
authority to act for or represent the Fund or the Adviser in any way or
otherwise be deemed an agent of the Fund or the Adviser.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY THE SUB-ADVISER
(a) The Sub-Adviser shall provide the following services and assume the
following obligations with respect to the Portfolio of the Fund:
(1) The investment of the assets of the Portfolio shall at all times
be subject to the applicable provisions of the Articles of
Incorporation, the Bylaws, the Registration Statement, the
current Prospectus and the Statement of Additional Information of
the Fund and shall conform to the investment objectives, policies
and restrictions of the Portfolio as set forth in such documents
and as interpreted from time to time by the Board of Directors of
the Fund and by the Adviser, including diversification of the
holdings of the Portfolio as a
segregated asset account in accordance with Section 817 of the
Internal Revenue Code, as amended (the "Code"), and Regulation
Section 1.817-5 thereunder, provided that Advantus and Minnesota
Mutual shall be responsible for ensuring that the Fund as a whole
is "adequately diversified" if and to the extent required by
Section 817(h) of the Code and Regulation 1.817-5 thereunder.
Within the framework of the investment objectives, policies and
restrictions of the Portfolio, and subject to the supervision of
the Adviser, the Sub-Adviser shall formulate and implement an
overall continuing program for managing the investment of the
assets of the Global Bond Portfolio, and shall amend and update
such program from time to time as financial and other economic
conditions warrant. Advantus agrees to promptly inform the
Sub-Adviser if such objective, policies or restrictions change
and to deliver to the Sub-Adviser updated documents, if prepared.
(2) In carrying out its obligations to manage the investments and
reinvestments of the assets of the Portfolio, the Sub-Adviser
shall: (1) obtain and evaluate pertinent economic, statistical,
financial and other information affecting the economy generally
and individual companies, governments or industries the
securities of which are included in the Portfolio or are under
consideration for inclusion therein; (2) formulate and implement
a continuous investment program for the Portfolio consistent with
the investment objective and related investment policies for such
Portfolio as set forth in the Fund's registration statement, as
amended; (3) make all determinations with respect to managing the
investment of the international component (as described in the
Prospectus) of the assets of the Global Bond Portfolio; (4)
determine allocation of assets of the Global Bond Portfolio among
domestic and international components; (5) manage currency and
foreign exchange position with respect to all components of the
assets and (6) take such steps as are necessary to implement the
aforementioned investment program by purchase and sale of
securities including the placing, or directing the placement
through an affiliate of the Sub-Adviser, of orders for such
purchases and sales.
(3) In connection with the purchase and sale of securities of the
Portfolio, the Sub-Adviser shall arrange for the transmission to
the Adviser and the Custodian for the Fund on a daily basis such
confirmation, trade tickets and other documents as may be
necessary to enable them to perform their administrative
responsibilities with respect to the Portfolio. With respect to
portfolio securities to be purchased or sold through the
Depository Trust Company, the Sub-Adviser shall arrange for the
automatic transmission of the I.D. confirmation of the trade to
the Custodian of the Portfolio. The Sub-Adviser shall render such
reports to the Adviser and/or to the Fund's Board of Directors
concerning the investment activity and portfolio composition of
the Portfolio in such form and at such intervals as the Adviser
or the Board may from time to time require.
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(4) The Sub-Adviser shall, in the name of the Fund, place or direct
the placement of orders for the execution of portfolio
transactions in accordance with the policies with respect
thereto, as set forth in the Fund's Registration Statement, as
amended from time to time, and under the 1933 Act and the 1940
Act. In connection with the placement of orders for the
execution of the Fund's portfolio transactions, the Sub-Adviser
shall create and maintain all necessary brokerage records of the
Fund in accordance with all applicable law, rules and
regulations, including but not limited to, records required by
Section 31(a) of the 1940 Act. All records shall be the property
of the Fund and shall be available for inspection and use by the
Securities and Exchange Commission, the Fund or any person
retained by the Fund. Where applicable, such records shall be
maintained by the Sub-Adviser for the period and in the place
required by Rule 31a-2 under the 1940 Act.
(5) In placing orders or directing the placement of orders for the
execution of portfolio transactions, the Sub-Adviser shall select
brokers and dealers for the execution of the Portfolio's
transactions. In selecting brokers or dealers to execute such
orders, the Sub-Adviser is expressly authorized to consider the
fact that a broker or dealer has furnished statistical, research
or other information or services which enhance the Sub-Adviser's
investment research and portfolio management capability
generally. It is further understood in accordance with Section
28(e) of the Securities Exchange Act of 1934, as amended, that
the Sub-Adviser may negotiate with and assign to a broker a
commission which may exceed the commission which another broker
would have charged for effecting the transaction if the
Sub-Adviser determines in good faith that the amount of
commission charged was reasonable in relation to the value of
brokerage and/or research services (as defined in Section 28(e))
provided by such broker, viewed in terms either of the Portfolio
or the Sub-Adviser's overall responsibilities to the
Sub-Adviser's discretionary accounts.
(b) The Sub-Adviser shall use the same skill and care in providing
services to the Fund as it uses in providing services to fiduciary accounts for
which it has investment responsibility. The Sub-Adviser will conform with all
applicable rules and regulations of the Securities and Exchange Commission.
3. EXPENSES
During the terms of this Agreement, the Sub-Adviser will pay all expenses
incurred by it in connection with its activities under this Agreement.
4. COMPENSATION
In payment for the investment sub-advisory services to be rendered by the
Sub-Adviser in respect of the Portfolio hereunder, the Adviser shall pay to the
Sub-Adviser as full compensation for all services hereunder a fee computed at an
annual rate which shall be a percentage of the average daily value of the net
assets of the Portfolio. The fee shall be accrued daily and shall be
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based on the net asset values of all of the issued and outstanding shares of the
Portfolio as determined as of the close of each business day pursuant to the
Articles of Incorporation, Bylaws and currently effective Prospectus and
Statement of Additional Information of the Fund. The fee shall be payable in
arrears on the last day of each calendar month.
The amount of such annual fee, as applied to the average daily value of the
net assets of the Portfolio shall be as described in the schedule below:
ASSETS FEE
Total Global Bond Portfolio Assets .30%
5. RENEWAL AND TERMINATION
This Agreement shall continue in effect for a period more than two years
from the date of this Agreement, only so long as such continuance is
specifically approved at least annually by a vote of the holders of the majority
of the outstanding voting securities of the Portfolio, or by a vote of the
majority of the Fund's Board of Directors. And further provided that such
continuance is also approved annually by a vote of the majority of the Fund's
Board of Directors who are not parties to this Agreement or interested persons
of parties hereto, cast in person at a meeting called for the purpose of voting
on such approval. This Agreement may be terminated at any time without payment
of penalty: (i) by the Fund's Board of Directors or by a vote of a majority of
the outstanding voting securities of the class of capital stock of the Portfolio
on sixty days' prior written notice, or (ii) by either party hereto upon sixty
days' prior written notice to the other. This Agreement will terminate
automatically upon any termination of the Investment Advisory Agreement between
the Fund and the Adviser or in the event of its assignment. The terms
"interested person," "assignment" and "vote of a majority of the outstanding
voting securities" shall have the meanings set forth in the 1940 Act.
6. GENERAL PROVISIONS
(a) The Sub-Adviser may rely on information reasonably believed by it to
be accurate and reliable. Except as may otherwise be provided by the 1940 Act,
neither the Sub-Adviser nor its officers, directors, employees or agents shall
be subject to any liability for any error of judgment or mistake of law or for
any loss arising out of any investment or other act or omission in the
performance by the Sub-Adviser of its duties under this Agreement or for any
loss or damage resulting from the imposition by any government or exchange
control restrictions which might affect the liquidity of the Portfolio's assets,
or from acts or omissions of custodians or securities depositories, or from any
war or political act of any foreign government to which such assets might be
exposed, provided that nothing herein shall be deemed to protect, or purport to
protect, the Sub-Adviser against any liability to the Fund or to its
shareholders to which the Sub-Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder, or by reason of the Sub-Adviser's reckless disregard of its
obligations and duties hereunder.
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(b) The Adviser and the Fund's Board of Directors understand that the
value of investments made for the Account may go up as well as down, is not
guaranteed and that investment decisions will not always be profitable. The
Adviser has not made and is not making any guarantees, including any guarantee
as to any specific level of performance of the Portfolio. The Adviser and the
Fund's Board of Directors acknowledge that this Portfolio is designed for the
described investment objective and is not intended as a complete investment
program. They also understand that investment decisions made on behalf of the
Portfolio by Sub-Adviser are subject to various market and business risks.
(c) This Agreement shall not become effective unless and until it is
approved by the Board of Directors of the Fund, including a majority of the
members who are not "interested persons" to parties to this Agreement, by a vote
cast in person at a meeting called for the purpose of voting such approval, and
by a majority of the outstanding voting securities of the class of capital stock
of the Portfolio.
(d) The Adviser understands that the Sub-Adviser now acts, will continue
to act, or may act in the future, as investment adviser to fiduciary and other
managed accounts, including other investment companies, and the Adviser has no
objection to the Sub-Adviser so acting, provided that the Sub-Adviser duly
performs all obligations under this Agreement. The Adviser also understands
that the Sub-Adviser may give advice and take action with respect to any of its
other clients or for its own account which may differ from the timing or nature
of action taken by the Sub-Adviser with respect to the Fund. Nothing in this
Agreement shall impose upon the Sub-Adviser any obligation to purchase or sell
or to recommend for purchase or sale, with respect to the Fund, any security
which the Sub-Adviser or its shareholders, directors, officers, employees or
affiliates may purchase or sell for its or their own account(s) or for the
account of any other client.
(e) Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the right of the
Sub-Adviser, or the right of any of its officers, directors or employees who may
also be an officer, director or employee of the Fund, or persons otherwise
affiliated with the Fund (within the meaning of the 0000 Xxx) to engage in any
other business or to 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.
(f) Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes hereof. This
Agreement shall be construed and enforced in accordance with and governed by the
laws of the State of Minnesota. The captions in this Agreement are included for
convenience only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(g) Any notice under this Agreement shall be in writing, addressed and
delivered or mailed postage pre-paid to the appropriate party at the following
address: The Adviser and the Fund at 000 Xxxxxx Xxxxxx Xxxxx, Xx. Xxxx,
Xxxxxxxxx 00000-0000, and the Sub-Adviser at Xxxxxx Xxxx Investment Management,
Inc., 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xx.
Xxx Xxxxxxxxxx.
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(h) Sub-Adviser agrees to notify Adviser of any change in Sub-Adviser's
officers and directors within a reasonable time after such change.
IN WITNESS WHEREOF, the parties have duly executed this Agreement.
ADVANTUS CAPITAL MANAGEMENT, INC.
By:
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Its:
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Date:
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XXXXXX XXXX INVESTMENT MANAGEMENT INC.
By:
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Its:
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Date:
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SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
AMENDED JANUARY 14, 1998
As compensation for the services to be rendered and the charges and
expenses to be assumed and paid by the Adviser, each Portfolio shall pay the
Adviser an annual fee based on the average daily net asset value of the
respective Portfolio in accordance with Section 3 of the Investment Advisory
Agreement and the following schedule:
PORTFOLIO FEE RATE
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Growth Portfolio 0.50%
Bond Portfolio 0.50%
Money Market Portfolio 0.50%
Asset Allocation Portfolio 0.50%
Mortgage Securities Portfolio 0.50%
Index 500 Portfolio 0.40%
Capital Appreciation Portfolio 0.75%
International Stock Portfolio 1.00% on the first $10 million in assets
0.90% on the next $15 million in assets
0.80% on the next $25 million in assets
0.75% on the next $50 million in assets
0.65% on the next $100 million in assets
Small Company Portfolio 0.75%
Maturing Government Bond-1998 Portfolio 0.05% from inception to April 30, 1998
0.25% from May 1, 1998 and thereafter
Maturing Government Bond-2002 Portfolio 0.05% from inception to April 30, 1998
0.25% from May 1, 1998 and thereafter
Maturing Government Bond-2006 Portfolio 0.25%
Maturing Government Bond-2010 Portfolio 0.25%
Value Stock Portfolio 0.50%
Small Company Value Portfolio 0.75%
International Bond Portfolio 0.60%
Index 400 Mid-Cap Portfolio 0.40%
Micro-Cap Value Portfolio 1.25%
Macro-Cap Value Portfolio 0.70%
Micro-Cap Growth Portfolio 1.10%
Global Bond Portfolio 0.60%
Real Estate Securities Portfolio 0.75%
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