INVESTMENT SUB-ADVISORY AGREEMENT
THIS AGREEMENT, made as of the 7th day of March, 2000, 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
State Street Research & Management Company, 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 Small Company Value 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, 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 and communicated in writing to the Sub-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 each Portfolio 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 have the sole and exclusive
responsibility for the making and execution of all
investment decisions for the Portfolio. 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 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; 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 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 reasonably 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 other 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.
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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 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
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On the first $500 million 0.65%
On the next $500 million 0.60%
On all assets in excess of $1 billion 0.50%
*The term "assets" for purposes of each of the breakpoints set forth
above shall include all [cad 180]small company value' assets sub-advised by the
Sub-Adviser for the Adviser or its affiliates, in addition to the assets of
the Portfolio. The aggregation of the assets for purposes of the breakpoints,
shall be calculated quarterly based upon the aggregate assets on March 31st,
June 30th, September 30th and December 31st of each calendar year (or portion
thereof) that this agreement is effective.
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.
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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.
(b) The Adviser and the Fund's Board of Directors understand that the value
of investments made for the Portfolio 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.
(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
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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 Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, XX
00000-0000 Attention: General Counsel.
IN WITNESS WHEREOF, the parties have duly executed this Agreement.
ADVANTUS CAPITAL MANAGEMENT, INC.
By:
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Its:
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STATE STREET RESEARCH & MANAGEMENT COMPANY
By:
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Its:
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