INVESTMENT SUB-ADVISORY AGREEMENT
THIS AGREEMENT, made as of this 1st day of May, 1997, 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
XXXXXXXXX INVESTMENT COUNSEL, INC., a Florida 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
International Stock 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
The Adviser hereby appoints the Sub-Adviser to perform portfolio
selection services described herein for investment and reinvestment of the
Fund's International Stock 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 Fund's International Stock Portfolio:
(1) The investment of the assets of the International Stock 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 International Stock
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. Within the framework of the investment objectives,
policies and restrictions of the International Stock Portfolio,
and subject to the supervision of the Adviser, the Sub-Adviser
shall have the sole and exclusive responsibility for the making
and execution of all investment decisions for the International
Stock Portfolio.
(2) In carrying out its obligations to manage the investments and
reinvestments of the assets of the International Stock Portfolio,
the Sub-Adviser shall: (1) obtain and evaluate pertinent
economic, statistical, financial and other
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information affecting the economy generally and individual
companies or industries the securities of which are included in
the International Stock Portfolio or are under consideration for
inclusion therein; (2) formulate and implement a continuous
investment program for the International Stock Portfolio
consistent with the investment objective and related investment
policies for such Portfolio as set forth in the Fund's
registration statement, as amended; and (3) 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
Fund's International Stock 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 Fund's
International Stock 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, Norwest Bank Minnesota, N.A. 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 Fund's International
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Stock Portfolio in such form and at such intervals as the Adviser
or the Board may from time to time require.
(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 International Stock
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
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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 International Stock 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 International Stock Portfolio. The
fee shall be accrued daily and shall be based on the net asset values of all of
the issued and outstanding shares of the International Stock Portfolio as
determined as of the close of each business day pursuant to the Articles of
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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 International Stock Portfolio shall be as described in the
schedule below:
Assets Fee
------ ---
On the first $10 million in assets .75%
On the next $15 million in assets .65%
On the next $25 million in assets .55%
On the next $50 million in assets .50%
On the next $100 million in assets and thereafter .40%
Notwithstanding the schedule described above, there shall be a minimum
annual fee paid by the Adviser to the Sub-Adviser which shall be $75,000.
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 Fund's International Stock
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 Fund's International
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Stock 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 International Stock
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.
(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
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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
investors seeking international diversification 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, and that investing in securities of companies in emerging
countries involves special risks which are not typically associated with
investing in U.S. companies. Risks include but are not limited to, foreign
currency fluctuations, investment and repatriation restrictions, and political
and social instability. Although the Sub-Adviser intends to invest in companies
located in countries which the Sub-Adviser considers to have relatively stable
and friendly governments, the Fund's Board of Directors accepts the possibility
that countries in which the Sub-Adviser invests may expropriate or nationalize
properties of foreigners, may impose confiscatory taxation or exchange controls,
including suspending currency transfers from a given country, or may be subject
to political or diplomatic developments that could affect investments in those
countries.
(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 Fund's International Stock 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
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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
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address: The Adviser and the Fund at 000 Xxxxx Xxxxxx Xxxxxx, Xx. Xxxx,
Xxxxxxxxx 00000-0000, and the Sub-Adviser at 000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx
0000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000.
(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 on the
date first above written.
ADVANTUS CAPITAL MANAGEMENT, INC.
By:
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Its:
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XXXXXXXXX INVESTMENT COUNSEL, INC.
By:
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Its:
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