Exhibit (d)(50)
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of the 30th day of April, 2003 by and among Deutsche
Investment Management Americas Inc., a Delaware corporation (the `Investment
Adviser'), and Northern Trust Investments, Inc., an Illinois trust company (the
`Subadviser').
WHEREAS, ▇▇▇▇▇▇▇ Variable Series II (the `Trust') is an open-end,
management investment company, registered under the Investment Company Act of
1940, as amended (the `1940 Act'), and SVS Index 500 Portfolio (the `Fund') is a
series of the Trust;
WHEREAS, the Investment Adviser and the Subadviser are investment
advisers registered under the Investment Advisers Act of 1940 (the `Advisers
Act');
WHEREAS, the Trust, on behalf of the Fund, has entered into an
Investment Management Agreement, dated March 21, 2003 with the Investment
Adviser (the `Advisory Agreement') pursuant to which the Investment Adviser has
agreed to provide certain management services to the Fund;
WHEREAS, pursuant to the provisions of the Advisory Agreement, the
Investment Adviser may delegate any or all of its portfolio management
responsibilities under that agreement to one or more subadvisers;
WHEREAS, the Investment Adviser has selected the Subadviser to act as a
sub-investment adviser of the Fund and to provide certain other services, as
more fully set forth below, and the Subadviser is willing to act as such
sub-investment adviser and to perform such services under the terms and
conditions hereinafter set forth;
NOW, THEREFORE, the Investment Adviser, the Trust and the Subadviser
agree as follows:
1. Investment Advisory and Management Services. Subject to and in
accordance with the provisions hereof, the Investment Adviser hereby appoints
the Subadviser to serve as sub-investment adviser to perform the various
investment advisory and other services for the Fund set forth herein and,
subject to the restrictions set forth herein, hereby delegates to the Subadviser
the authority vested in the Investment Adviser pursuant to the Advisory
Agreement to the extent necessary to enable the Subadviser to perform its
obligations under this Agreement, and the Subadviser hereby accepts such
appointment. Subject to the supervision and control of the Investment Adviser
and the Board of Trustees, the Subadviser will regularly provide the Fund with
investment advice and investment management services concerning the investments
of the Fund. The Subadviser will determine what securities shall be purchased,
held, sold or reinvested by the Fund and what portion of the Fund's assets shall
be held uninvested in cash and cash equivalents, subject at all times to: (i)
the provisions of the Trust's Declaration of Trust and By-laws, (ii) the
requirements of the 1940 Act, and the rules and regulations thereunder, (iii)
the investment objectives, policies and restrictions applicable to the Fund
(including, without limitation, the provisions of the Internal Revenue Code of
1986, as amended (the `Code') applicable to regulated investment companies), as
each of the same shall be from time to time in
effect or set forth in the Fund's Prospectus and Statement of Additional
Information, and (iv) any other investment guidelines, policies or limitations
the Board of Trustees or the Investment Adviser may from time to time establish
and deliver in writing to the Subadviser.
To carry out such determinations the Subadviser will exercise full
discretion subject to the preceding paragraph, and act for the Fund in the same
manner and with the same force and effect as the Trust might or could do with
respect to purchases, sales or other transactions, as well as with respect to
all other things necessary or incidental to the furtherance or conduct of such
purchases, sales or other transactions. The Subadviser will also make its
officers and employees available to meet with the officers of the Investment
Adviser and the Trust's officers and Trustees on due notice to review the
investments and investment program of the Fund in the light of current and
prospective economic and market conditions. In addition, the Subadviser shall,
on the Subadviser's own initiative, and as reasonably requested by the
Investment Adviser, for itself and on behalf of the Fund, furnish to the
Investment Adviser from time to time whatever information the Investment Adviser
reasonably believes appropriate for this purpose. From time to time as the Board
of Trustees of the Trust or the Investment Adviser may reasonably request, the
Subadviser will furnish to the Investment Adviser and Trust's officers and to
each of its Trustees, at the Subadviser's expense, reports on portfolio
transactions and reports on issuers of securities held by the Fund, all in such
detail as the Trust or the Investment Adviser may reasonably request. In
addition, the Subadviser shall provide advice and assistance to the Investment
Adviser as to the determination of the value of securities held or to be
acquired by the Fund for valuation purposes in accordance with the process
described in the Fund's current Prospectus or Statement of Additional
Information.
The Subadviser shall maintain all accounts, books and records as
required of an investment adviser of a registered investment company pursuant to
the 1940 Act and the rules and regulations thereunder relating to its
responsibilities provided hereunder with respect to the Fund, and shall preserve
such records for the periods and in a manner prescribed by under the 1940 Act
and the rules and regulations thereunder. The Subadviser shall maintain and
enforce adequate security procedures with respect to all materials, records,
documents and data relating to any of its responsibilities pursuant to this
Agreement including all means for the effecting of securities transactions. The
Subadviser agrees that all such records are the property of the Trust, and will
be surrendered to the Trust promptly upon request. The Subadviser shall permit
the Investment Adviser, the Fund's officers and its independent public
accountants to inspect and audit such records pertaining to the Fund at
reasonable times during normal business hours upon due notice.
In the performance of its duties hereunder, the Subadviser is and shall
be an independent contractor and, except as expressly provided for herein or
otherwise expressly provided or authorized in writing by the Investment Adviser,
shall have no authority to act for or represent any Fund or the Trust in any way
or otherwise be deemed to be an agent of any Fund, the Trust or of the
Investment Adviser. If any occasion should arise in which the Subadviser gives
any advice to its clients concerning the shares of the Fund, the Subadviser will
act solely as investment counsel for such clients and not in any way on behalf
of the Fund. The Subadviser's services to the Fund pursuant to this Agreement
are not to be deemed to be exclusive, and it is understood that the Subadviser
may render investment advice, management and other services to others.
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Subject to and in accordance with the provisions hereof and any
direction of the Board of Trustees, the Subadviser shall vote, pursuant to
procedures set forth and described to the Trustees, all proxies solicited by or
with respect to issuers of securities in which the assets of the Fund may be
invested from time to time.
2. (a) Expenses. The Subadviser will bear its own costs of performing its
obligations under this Agreement, including, but not limited to, the following:
all necessary investment and management facilities, including salaries of
personnel required for it to execute its duties faithfully, and administrative
facilities, including bookkeeping, clerical personnel and equipment necessary
for the efficient conduct of the investment affairs of the Fund.
The Subadviser will not be responsible for expenses of the Investment
Adviser or the Fund, including, but not limited to, the following: the Fund's
legal, auditing and accounting expenses; expenses of maintenance of the Fund's
books and records other than those required to be maintained by the Subadviser,
including computation of the Fund's daily net asset value per share and
dividends; interest, taxes, governmental fees and membership dues incurred by
the Fund; fees of the Fund's custodians, transfer agents, registrars or other
agents; expenses of preparing the Fund's share certificates; expenses relating
to the redemption or repurchase of the Fund's shares; expenses of registering
and qualifying Fund shares for sale under applicable federal and state laws;
expenses of preparing, setting in print, printing and distributing prospectuses,
reports, notices and dividends to Fund investors (except that the Subadviser
will be responsible for costs associated with reprints of or supplements to such
documents necessitated solely by actions of the Subadviser, including, without
limitation, a change of control of the Subadviser or any change in the portfolio
manager or managers assigned by the Subadviser to manage the Fund); cost of Fund
stationery; costs of Trustee, shareholder and other meetings of the Trust or
Fund (except that the Subadviser will be responsible for costs associated with
any shareholder meeting, proxy solicitation or proxy statement or information
statement, in each case, to the extent necessitated by actions or events
involving the Subadviser, including, without limitation, a change of control of
the Subadviser); traveling expenses of officers, Trustees and employees of the
Trust or Fund; fees of the Trust's Trustees and salaries of any officers or
employees of the Trust or Fund; and the Fund's pro rata portion of premiums on
any fidelity bond and other insurance covering the Trust or Fund and their
officers and Trustees.
(b) Compensation of Subadviser. (i) Until such time as the Subadviser
is paid pursuant to Section 2(b)(ii) of this Agreement, and during the period
when this Agreement is in effect, as compensation for all investment advisory
and management services to be rendered hereunder, the Investment Adviser will
pay the Subadviser an annual subadvisory fee, paid monthly in arrears, as set
forth on Schedule A to this Agreement. With respect to such subadvisory fee, the
Fund shall be the following `Investment Type,' as set forth on Schedule A.
For purposes of determining the applicable fees under this Section
2(b)(i), the assets under management being referred to in the column `Fee Tier
Structure by Assets under Management' of Schedule A shall refer to the average
daily net assets of the Fund.
For purposes of this Section 2(b)(i), the value of net assets of the
Fund shall be computed as required by the 1940 Act and in accordance with any
procedures approved by the Board of Trustees for the computation of the value of
the net assets of the Fund in connection with the
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determination of net asset value of its shares. On any day that the net asset
value determination is suspended as specified in the Fund's Prospectus, the net
asset value for purposes of calculating the advisory fee shall be calculated as
of the date last determined. The Investment Adviser represents to the Subadviser
that, so long as the subadvisory fee is determined in accordance with this.
Section 2(b), the same computation of net asset value shall be used in
connection with determining the investment advisory fee of the Investment
Adviser, and the Investment Adviser shall promptly notify the Subadviser in
writing if the two computations of net asset value ever differ from each other.
(ii) (A) Notwithstanding anything to the contrary thereto in Section
2(b)(i), at such time as the Adviser determines, as compensation for all
investment advisory and management services to be rendered hereunder during the
period of time beginning as of the day and year first written above and ending
twenty-four (24) months thereafter (such period being the `Initial Period of the
Agreement'), the Adviser shall pay the Subadviser the annual subadvisory fee set
forth on Schedule A to this Agreement. The subadvisory fee will be paid monthly
in arrears. With respect to such fees, the Fund shall have the same `Investment
Type' as utilized in Section 2(b)(i) above.
For purposes of determining the applicable fees under this Section
2(b)(ii)(A), the assets under management being referred to in the column `Fee
Tier Structure by Assets under Management' of Schedule A shall refer to assets
under management being calculated by aggregating the assets of the same
Investment Type as the Fund for which the Subadviser provides investment
management services to the `DB Group' or the `Preferred Clients,' each as
defined below, pursuant to a subadvisory agreement substantially similar to this
Agreement across all vehicles, structures, funds, etc. (including, without
limitation, mutual funds, commingled funds and separately managed accounts)
within the same Investment Type as the Fund.
(B) Following the Initial Period of the Agreement, the investment
management fees paid by the Adviser to the Subadviser hereunder shall be, in the
aggregate, (i) no greater than those which the Subadviser charges to any of its
other clients for `Substantially Similar Mandates' with `Substantially Similar
Levels of Assets under Management,' each as defined below, and (ii) competitive
with the aggregate investment management fees customarily charged by leading
investment advisers that compete in the particular investment management market
for Substantially Similar Mandates with Substantially Similar Levels of Asset
Under Management. Such fees shall be adjusted, beginning as of the first day
following the Initial Period of the Agreement and thereafter as of each January
1, so as to comply with the immediately preceding sentence.
`Substantially Similar Mandate' means a mandate to provide to another
client of a person or entity (other than an affiliate of such person or entity)
investment management services that are substantially similar (including, for
purposes of this definition, on the basis of index, particular category of
client, type of investment vehicle, type and level of service, degree of
customization and domicile) to, and with substantially similar service levels
and performance objectives as, the investment advisory and management services
provided hereunder.
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The investment advisory and management services provided hereunder to
the Fund shall have a `Substantially Similar Level of Assets Under Management'
as a mandate for another client of a person or entity (other than an affiliate
of such person or entity) if either (a) the then aggregate Fair Market Value of
assets of the Fund is substantially similar to or greater than the then
aggregate Fair Market Value of assets under such mandate of such other client or
(b) the then aggregate Fair Market Value of assets under all mandates for the
Subadviser to provide passive equity, passive fixed income and enhanced equity
investment management services for all Preferred Clients, is substantially
similar to or greater than the then aggregate Fair Market Value of assets for
all mandates for passive equity, passive fixed income and enhanced equity
investment management services provided to such other client (other than the
Preferred Clients) of such person or entity and such client's affiliates. `Fair
Market Value' as used herein means the fair market value based on industry
standards reasonably acceptable to the parties hereunder.
`Preferred Client' means (a) any person or entity that is a member of
the `DB Group,' i.e., Deutsche Bank AG and its affiliates, or a client of any
member of the DB Group, for which the Subadviser begins to provide passive
equity, passive fixed income or enhanced equity investment management services
after January 31, 2003 and (b) any person who receives passive equity, passive
fixed income or enhanced equity investment management services from the
Subadviser pursuant to a subadvisory agreement substantially similar to this
Agreement and to which a member of the DB Group is a party; provided that
`Preferred Client' shall not include a client of the DB Group (except a person
or entity to the extent a party to, or otherwise covered by, a subadvisory
agreement of the type described in clause (b)) whose annualized revenues are
included in the purchase price paid by the Subadviser to Deutsche Bank AG in
accordance with the Amended and Restated Sale and Purchase Agreement dated as of
January 31, 2003.
(iii) The Fund shall have no responsibility to pay any investment
management fee to the Subadviser pursuant to this Agreement, and the
Subadviser's fee shall be payable solely by the Investment Adviser from its fee
as investment adviser. For any period less than a full fiscal month during which
the payment of the annual fee to the Subadviser pursuant to this Section 2(b) is
in effect, the fee shall be prorated according to the proportion which such
period bears to a full fiscal month.
3. Obligations of the Investment Adviser.
(a) The Investment Adviser shall provide (or cause the Fund's custodian
to provide) timely information to the Subadviser regarding such matters as the
composition of assets in the Fund, cash requirements and cash available for
investment in the Fund, and all other information as may be reasonably necessary
for the Subadviser to perform its responsibilities hereunder.
(b) The Investment Adviser has furnished the Subadviser copies of the
Fund's Prospectus and Statement of Additional Information, provisions of the
Trust's Declaration of Trust and bylaws that are relevant to the services
contemplated by this Agreement, and all investment guidelines, policies or
limitations the Board of Trustees or the Investment Adviser has from time to
time established that are applicable to the Fund, and agrees during the
continuance of this Agreement to furnish the Subadviser copies of any revisions
or supplements thereto at, or, if practicable, before the time the revisions or
supplements become effective.
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4. Brokerage Transactions. Subject to the provisions of this Section 4 and
absent instructions from the Investment Adviser or the Trust, the Subadviser
will have full discretionary authority to place orders for the purchase and sale
of securities for the account of the Fund with such brokers or dealers as it may
select. In the selection of such brokers or dealers and the placing of such
orders, the Subadviser is directed at all F-5.times to seek for the Fund the
most favorable best execution and net price available. In assessing the best
execution and net price available for any transaction, the Subadviser shall
consider all factors its deems relevant, including without limitation, the
breadth of the market in and the price of the security, the financial condition
and execution capability of the broker or dealer, the quality of research
provided and the reasonableness of the commission, if any, with respect to the
specific transaction and on a continuing basis.
It is also understood, however, that it is desirable for the Fund that
the Subadviser have access to supplemental investment and market research and
security and economic analyses provided by certain brokers who may execute
brokerage transactions at higher commissions to the Fund than another broker may
have charged. Therefore, the Subadviser is authorized to place orders for the
purchase and sale of securities for the Fund with such brokers upon a good faith
determination that the commission paid is reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, subject
to applicable laws and regulations and review and direction by the Investment
Adviser and the Trust's Board of Trustees from time to time with respect to the
extent and continuation of this practice. The Subadviser shall provide such
information as the Investment Adviser or the Trustees shall from time to time
request concerning the commissions paid by the Fund and research and other
services provided to the Subadviser by brokers executing transactions on behalf
of the Fund.
On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interests of the Fund as well as other clients of the
Subadviser, the Subadviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of
securities so sold or purchased, as well as the expenses incurred in the
transaction, will be made by the Subadviser in the manner the Subadviser
considers to be the most equitable and consistent with its fiduciary obligations
to the Fund and to such other clients.
The Subadviser may buy securities for the Fund at the same time it is
selling such securities for another client account and may sell securities for
the Fund at the time it is buying such securities for another client account. In
such cases, subject to applicable legal and regulatory requirements, and in
compliance with such procedures of the Trust as may be in effect from time to
time, the Subadviser may effectuate cross transactions between the Fund and such
other account if it deems this to be advantageous to both of the accounts
involved.
Notwithstanding the foregoing, the Subadviser agrees that the
Investment Adviser shall have the right by written notice to identify securities
that may not be purchased on behalf of the Fund and/or brokers and dealers
through or with which portfolio transactions on behalf of the Fund may not be
effected, including, without limitation, brokers or dealers affiliated with the
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Investment Adviser. The Subadviser shall refrain from purchasing such securities
for the Fund or directing any portfolio transaction to any such broker or dealer
on behalf of the Fund, unless and until the written approval of the Investment
Adviser or the Board of Trustees, as the case may be, is so obtained. In
addition, the Subadviser agrees that it shall not direct portfolio transactions
for the Fund with or through the Subadviser or any broker or dealer that is an
`affiliated person' of the F-6.Subadviser (as defined in the 1940 Act or
interpreted under applicable rules and regulations of the Securities and
Exchange Commission) without the prior written approval of the Board of Trustees
and the Investment Adviser and then only as permitted under the 1940 Act.
In connection with purchases or sales of portfolio securities for the
account of the Fund, neither the Subadviser nor any of its affiliated persons,
will act as a principal in connection with the purchase or sale of investment
securities by the Fund, except as permitted by applicable law and with the
express written consent of the Board of Trustees and the Investment Adviser.
The Subadviser will advise the Fund's custodian on a prompt basis of
each purchase and sale of a portfolio security, specifying the name of the
issuer, the description and amount or number of shares of the security purchased
or sold, the market price, commission and gross or net price, trade date,
settlement date and identity of the effecting broker or dealer, and such other
information as may be reasonably required.
5. Standard of Care and Liability of Subadviser. The Subadviser will not be
liable for any loss sustained by reason of the adoption of any investment policy
or the purchase, sale, or retention of any security on the recommendation of the
Subadviser, whether or not such recommendation shall have been based upon its
own investigation and research or upon investigation and research made by any
other individual, firm or corporation, if such recommendation shall have been
made and such other individual, firm, or corporation shall have been selected
with due care and in good faith; but nothing herein contained will be construed
to protect the Subadviser against any liability to the Investment Adviser, the
Fund or its shareholders by reason of: (a) the Subadviser's causing the Fund to
be in violation of any applicable federal or state law, rule or regulation or
any investment policy or restriction set forth in the Fund's Prospectus or
Statement of Additional Information or any written guidelines, policies or
instruction provided in writing by the Trust's Board of Trustees or the
Investment Adviser, (b) the Subadviser's causing the Fund to fail to satisfy the
diversification or source of income requirements of Subchapter M of the Code or
(c) the Subadviser's willful misfeasance, bad faith or gross negligence
generally in the performance of its duties hereunder or its reckless disregard
of its obligations and duties under this Agreement.
6. Term and Termination. This Agreement shall remain in force until September
30, 2004, and from year to year thereafter, but only so long as such
continuance, and the continuance of the Investment Adviser as investment adviser
of the Fund, is specifically approved at least annually by the vote of a
majority of the Trustees who are not interested persons of the Subadviser or the
Investment Adviser of the Fund, cast in person at a meeting called for the
purpose of voting on such approval and by a vote of the Board of Trustees or of
a majority of the outstanding voting securities of the Fund. The aforesaid
requirement that continuance of this Agreement be `specifically approved at
least annually' shall be construed in a manner consistent with the 1940
7
Act and the rules and regulations thereunder. This Agreement may, upon 60 days'
written notice to the Subadviser, be terminated at any time without the payment
of any penalty, (a) by the Fund, by the Board of Trustees or by vote of a
majority of the outstanding voting securities of the Fund, or (b) by the
Investment Adviser. This Agreement may, upon 120 days written notice to the
Trust and the Investment Adviser, be terminated at any time, without payment of
any penalty, by the Subadviser. This Agreement shall automatically terminate in
the event of its assignment or in the event of the termination of the Advisory
Agreement. The Investment Adviser agrees that it shall promptly notify the
Subadviser in writing upon the termination of the Advisory Agreement In
addition, the Investment Adviser shall have the right to terminate this
Agreement upon immediate written notice if the Subadviser becomes statutorily
disqualified from performing its duties under this Agreement or otherwise is
legally prohibited from operating as an investment adviser. Upon the effective
date of termination of this Agreement, the Subadviser shall deliver all books
and records of the Trust and the Fund to such entity as the Trust may designate
as a successor subadviser, or to the Investment Adviser. The provisions of
Sections 5, 13, 14, 15, 16, 18 and 19 shall survive termination of this
Agreement. In addition, the obligation to pay to the Subadviser any compensation
earned by the Subadviser under this Agreement but not paid as of the termination
of this Agreement shall survive termination of this Agreement.
7. Interpretation of Terms; Captions In interpreting the provisions of this
Agreement, the definitions contained in Section 2(a) of the 1940 Act and the
rules and regulations thereunder (including specifically the definitions of
`interested person,' `affiliated person,' `assignment,' `control' and `vote of a
majority of the outstanding voting securities'), shall be applied, subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation or order. Captions used herein are for
reference only and shall not limit or otherwise affect the meaning of any
provision of this Agreement.
8. Registration Statement, Prospectus and Statement of Additional Information
Concerning Subadviser; Compliance Procedures and Information. The Subadviser has
reviewed the most recent amendment to the Registration Statement of the Trust,
relating to the Fund as filed with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, and the 1940 Act (File Nos.33-11802;
811-05002) and the current Prospectus and Statement of Additional Information
relating to the Fund, and represents and warrants that with respect to
disclosure about the Subadviser or information relating directly or indirectly
to the Subadviser, such Registration Statement, Prospectus and Statement of
Additional Information contain, on and after the effective date thereof, no
untrue statement of any material fact and do not omit any statement of material
fact which was required to be stated therein or necessary to make the statements
contained therein not misleading.
The Subadviser shall promptly provide such information as is necessary
to enable the Trust to prepare and update the Trust's Registration Statement
(and any supplement thereto) and the Fund's financial statements, and shall
notify the Trust promptly in the event any information contained therein
relating to the Subadviser or the Subadviser's management of the Fund becomes
inaccurate or incomplete under applicable law. The Subadviser understands that
the Trust and the Investment Adviser will rely on such information in the
preparation of the Trust's Registration Statement and the Fund's financial
statements, and hereby covenants that any such
8
information approved by the Subadviser expressly for use in such registration
and/or financial statements shall be true and complete in all material respects.
The Subadviser and Investment Adviser each shall establish compliance
procedures reasonably calculated to ensure compliance at all times with: all
applicable provisions of the 1940 Act and the Advisers Act, and any rules and
regulations adopted thereunder; Subchapter M of the Code; the provisions of the
Registration Statement; the governing documents of the Fund and other written
policies, guidelines and instructions; and any other applicable provisions of
state, federal or foreign law. The Subadviser shall provide to the Investment
Adviser and/or the Trustees such information as it or they may reasonably
request in order to review the adequacy of the Subadviser's compliance
procedures. The Investment Adviser shall provide to the Subadviser such
information as the Subadviser may reasonably request in order to review the
adequacy of the compliance procedures of the Investment Adviser.
The Subadviser and Investment Adviser each shall maintain and enforce a
Code of Ethics which in form and substance is consistent with industry norms
existing from time to time. The Subadviser and Investment Adviser each agree to
report to the other party hereto any material violations of the Code of Ethics
affecting the Fund of which its senior management becomes aware. The Subadviser
shall promptly notify the Investment Adviser and the Trustees upon the adoption
of any material change to its Code of Ethics and provide copies thereof to the
Investment Adviser and the Trustees so that the Trustees, including a majority
of the Trustees who are not interested persons of the Fund, may consider
approval of such change promptly after its adoption by the Subadviser. The
Subadviser shall also provide the Fund with a copy of any amendments to its Code
of Ethics that do not represent a material change to such Code of Ethics. The
Investment Adviser shall provide the Subadviser with a copy of any amendment to
its Code of Ethics if such amendment concerns providing investment advisory
services to the Fund.
9. Insurance. The Subadviser and Investment Adviser each shall maintain for the
duration hereof, with an insurer acceptable to the other party hereto, a blanket
bond and professional liability or errors and omissions insurance in an amount
or amounts reasonably acceptable to the other party hereto.
10. Representations of the Investment Adviser. The Investment Adviser
represents, warrants and agrees that:
(i) the Investment Adviser is a corporation duly incorporated under the
laws of Delaware;
(ii) the Investment Adviser is duly registered as an investment adviser
under the Advisers Act;
(iii) the Investment Adviser has been duly appointed by the Trustees
and shareholders of the Fund to provide investment services to the Fund
as contemplated by the Advisory Contract;
(iv) the execution, delivery and performance of this Agreement are
within the Investment Adviser's powers, have been and remain duly
authorized by all necessary action and will
9
not violate or constitute a default under any applicable law or
regulation or of any decree, order, judgment, agreement or instrument
binding on the Investment Adviser;
(v) no consent of any applicable governmental authority or body is
necessary, except for such consents as have been obtained and are in
full force and effect, and all conditions of which have been duly
complied with; and
(vi) this agreement constitutes a legal, valid and binding obligation
enforceable against the Investment Adviser. The Investment Adviser
agrees to notify the Subadviser promptly and in writing in the event
that any of the above ceases to be correct while this Agreement is in
effect.
11. Representations of the Subadviser. The Subadviser represents, warrants and
agrees that:
(i) the Subadviser is a trust company established pursuant to the laws
of Illinois;
(ii) the Subadviser is duly registered as an investment adviser under
the Advisers Act;
(iii) the execution, delivery and performance of this Agreement are
within the Subadviser's powers, have been and remain duly authorized by
all necessary action and will not violate or constitute a default under
any applicable law or regulation or of any decree, order, judgment,
agreement or instrument binding on the Subadviser;
(iv) no consent of any applicable governmental authority or body is
necessary, except for such consents as have been obtained and are in
full force and effect, and all conditions of which have been duly
complied with; and
(v) this agreement constitutes a legal, valid and binding obligation
enforceable against the Subadviser.
The Subadviser agrees to notify the Investment Adviser promptly and in
writing in the event that any of the above ceases to be correct while this
Agreement is in effect.
12. a. Certain Covenants of the Subadviser. The Subadviser will promptly notify
the Trust and Investment Adviser in writing of the occurrence of any event which
could have a material impact on the performance of its obligations pursuant to
this Agreement, including without limitation:
(i) the occurrence of any event which could disqualify the Subadviser
from serving as an investment adviser of a registered investment
company pursuant to the 1940 Act and the rules and regulations
thereunder and the Advisers Act and the rules and regulations
thereunder;
(ii) any change in the Subadviser's overall business activities that
may have a material adverse affect on the Subadviser's ability to
perform under its obligations under this Agreement;
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(iii) any event that would constitute a change in control of the
Subadviser or an assignment by the Subadviser of this Agreement;
(iv) any change in the portfolio manager of the Fund; and
(v) except to the extent prohibited by applicable law or order, the
existence of any pending or threatened audit, investigation, complaint,
examination or other inquiry relating to the Fund conducted by any
state or federal governmental regulatory authority.
b. Certain Covenants of the Investment Adviser. The Investment Adviser
will promptly notify the Subadviser in writing of the occurrence of any event
which could have a material impact on the performance of its obligations to the
Fund, including without limitation:
(i) the occurrence of any event which could disqualify the Investment
Adviser from serving as an investment adviser of a registered
investment company pursuant to the 1940 Act and the rules and
regulations thereunder and the Advisers Act and the rules and
regulations thereunder;
(ii) any change in the overall business activities of the Investment
Adviser that may have a material adverse affect on its ability to
perform investment advisory services to the Fund;
(iii) any event that would constitute a change in control of the
Investment Adviser or an assignment of the Advisory Agreement; and
(iv) except to the extent prohibited by applicable law or order, the
existence of any pending or threatened audit, investigation, complaint,
examination or other inquiry relating to the Fund conducted by any
state or federal governmental regulatory authority.
13. Regulation. Except to the extent prohibited by applicable law or order, the
Subadviser agrees that it will immediately forward, upon receipt, to the
Investment Adviser, for itself and as agent for the Fund, any correspondence
from the Securities and Exchange Commission or other regulatory authority that
relates to the Fund including routine regulatory examinations or inspections.
Similarly, except to the extent prohibited by applicable law or order, the
Investment Adviser agrees that it will immediately forward, upon receipt, to the
Subadviser nay correspondence from the Securities and Exchange Commission or
other regulatory authority that relates to the Fund, including routine
regulatory examinations or inspections. Subject to Section 18 hereof, the
Subadviser shall submit to all regulatory and administrative bodies having
jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may reasonably request or require pursuant to applicable laws and
regulations, and shall cooperate with the Trust and the Investment Adviser in
responding to requests or investigations of such regulatory or administrative
bodies or any internal investigation conducted by the Trust or the Investment
Adviser.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland without giving effect to the
choice of law principles thereof,
11
except to the extent the laws of the State of Maryland are in conflict with U.S.
federal law, in which event U.S. federal law will control.
15. Entire Agreement; Amendments. This Agreement states the entire agreement of
the parties hereto, and is intended to be the complete and exclusive statement
of the terms hereof. It may not be added to or changed orally, and may not be
modified or rescinded, except by a writing signed by the parties hereto and in
accordance with the 1940 Act or pursuant to applicable orders or interpretations
of the Securities and Exchange Commission.
16. Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
17. Use of Name. The Subadviser will not use the name of the Investment Adviser,
the Trust or the Fund in any advertisement, sales literature or other
communication to the public except in accordance with such policies and
procedures as shall be mutually agreed to in writing by the Subadviser and the
Investment Adviser. Similarly, the Investment Adviser agrees that it will not
use the name of the Subadviser in any advertisement, sales literature or other
communication to the public except in accordance with such polices and
procedures as shall be mutually agreed to in writing by the Investment Adviser
and the Subadviser.
18. Confidentiality. Each party agrees that it shall hold in strict confidence
all data and information obtained from another party hereto (unless such
information is or becomes readily ascertainable from public or published
information or trade sources) and shall ensure that its officers, employees and
authorized representatives do not disclose such information to others without
the prior written consent of the party from whom it was obtained, unless such
disclosure is required by the Securities and Exchange Commission, other
regulatory body with applicable jurisdiction, or the Fund's auditors, or in the
opinion of its counsel, applicable law, and then only with as much prior written
notice to the other party as is practicable under the circumstances.
19. Notices. Any notice under this Agreement shall be delivered, mailed or faxed
to the addresses or fax numbers set forth below, as the case may be, or such
other address or number as any party may specify in writing to the others:
If to the Investment Adviser:
Name: Deutsche Investment Management Americas Inc.
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Tel: (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
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If to the Subadviser:
Name: Northern Trust Investments, Inc.
Address: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If delivered, such notices shall be deemed given upon receipt by the
other party or parties. If mailed, such notices shall be deemed given seven (7)
days after being mailed. If faxed, notices shall be deemed given on the next
business day after confirmed transmission to the correct fax number.
20. Execution in Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
Deutsche Investment Management Americas Inc
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
------------------------------
Its: General Counsel, Chief Legal Officer &
Secretary
Northern Trust Investments, Inc.
By:
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Its: Senior Vice President
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SCHEDULE A
FEES
Fee Tier Structure by Assets
Investment Type under Management Applicable Fee
--------------- ---------------------------- --------------
1. S&P 500 On the first $2 billion 1.5 bps
On the next $2 billion 1 bps
Over $4 billion 0.5 bps
2. US Bond On the first $100 million 4 bps
On the next $400 million 2 bps
Over $500 million 1 bps
3. EAFE On the first $100 million 9 bps
On the next $400 million 6.75 bps
Over $500 million 3 bps
4. Small Cap On the first $100 million 8 bps
On the next $400 million 4 bps
Over $500 million 2 bps
5. Enhanced Domestic On the first $100 million 20 bps
Equity On the next $400 million 15 bps
Over $500 million 12 bps
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