Exhibit (d)(15)
SMALL CAP GROWTH FUND
OF
ULTRA SERIES FUND
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
MEMBERS CAPITAL ADVISORS, INC.
AND
PARADIGM ASSET MANAGEMENT CO., LLC
THIS INVESTMENT SUB-ADVISORY AGREEMENT ("AGREEMENT"), effective as of the
1st day of May, 2007, by and between MEMBERS CAPITAL ADVISORS, INC., an Iowa
corporation (the "ADVISER"), and PARADIGM ASSET MANAGEMENT CO., LLC, a Delaware
limited liability partnership (the "SUB-ADVISER").
Adviser and Sub-Adviser agree as follows:
1. Adviser hereby engages the services of Sub-Adviser in connection with
Adviser's management of a portion of the assets (which could be up to 100%) of
the SMALL CAP GROWTH FUND (the "PORTFOLIO") of ULTRA SERIES FUND (the "FUND").
Adviser intends to use a manager of managers approach to the management of the
Portfolio, as well as other portfolios in the Fund. Therefore, the number of
sub-advisers and the percentage of assets of the Portfolio managed by each
sub-adviser will be determined by the Fund's Board of Trustees and MEMBERS
Capital Advisors from time to time. The portion of the assets assigned to the
Sub-Adviser will be referred to as the Sub-Portfolio. Pursuant to this Agreement
and subject to the oversight and supervision by Adviser and the officers and the
Board of Trustees of the Fund, Sub-Adviser shall manage the investment and
reinvestment of the assets of the Sub-Portfolio as requested by MEMBERS Capital
Advisors.
2. Sub-Adviser hereby accepts employment by Adviser in the foregoing capacity
and agrees, at its own expense, to render the services set forth herein and to
provide the office space, furnishings, equipment and personnel required by it to
perform such services on the terms and for the compensation provided in this
Agreement.
3. In particular, Sub-Adviser shall furnish continuously an investment program
for the Sub-Portfolio and shall determine from time to time in its discretion
the securities and other investments to be purchased or sold or exchanged and
what portions of the Sub-Portfolio shall be held in various securities, cash or
other investments. In this connection, Sub-Adviser shall provide Adviser and the
officers and Trustees of the Fund with such reports and documentation as the
latter shall reasonably request regarding Sub-Adviser's management of the
Sub-Portfolio's assets.
4. Sub-Adviser shall carry out its responsibilities under this Agreement in
compliance with: (a) the Portfolio's investment objective, policies and
restrictions as set forth in the Fund's current registration statement, (b) such
policies or directives as the Fund's Trustees may from time to time establish or
issue, and (c) applicable law and related regulations. Adviser shall promptly
notify Sub-Adviser of changes to (a) or (b) above and shall notify Sub-Adviser
of changes to (c) above promptly after it becomes aware of such changes.
5. The Sub-Adviser and Adviser acknowledge that the Sub-Adviser is not the
compliance agent for the Fund or for the Adviser, and does not have access to
all of the Fund's or the Portfolio's books and records necessary to perform
certain compliance testing. To the extent that the Sub-Adviser has agreed to
perform the services specified in this Agreement in accordance with the Fund's
registration statement, the Fund's Declaration of Trust, the Portfolio's
prospectus and any policies adopted by the Fund's Board of Trustees applicable
to the Portfolio, and in accordance with applicable law, the Sub-Adviser shall
perform such services based upon its books and records with respect to the
Portfolio, which comprise a portion the Portfolio's books and records, and upon
information and written instructions received from the Fund or the Adviser, and
shall not be held responsible under this Agreement so long as it performs such
services in accordance with this Agreement, the policies of the Fund's Board of
Trustees and applicable law based upon such books and records and such
information and instructions provided by the Fund or the Adviser. The Adviser
shall promptly provide the Sub-Adviser with copies of the Fund's registration
statement, the Fund's Declaration of Trust, the Portfolio's currently effective
prospectus and any written policies or procedures adopted by the Fund's Board of
Trustees applicable to the Portfolio and any amendments or revisions thereto.
6. The Sub-Adviser shall have full and complete discretion to establish
brokerage accounts with one or more brokers, dealers or other financial
intermediaries as Sub-Adviser may select, including those which from time to
time may furnish to Sub-Adviser or its affiliates statistical and investment
research information and other services. Sub-Adviser will place orders with or
through such brokers, dealers or other financial intermediaries in accordance
with Paradigm Asset Management's Statement of Policy on Brokerage Practices and
the policy with respect to brokerage set forth in the Fund's Registration
Statement or as the Board of Trustees or the Adviser may direct from time to
time, in conformity with federal securities laws
On occasions when Sub-Adviser deems the purchase or sale of a security to
be in the best interest of the Sub-Portfolio as well as other clients of the
Sub-Adviser, the Sub-Adviser to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be purchased or sold to attempt to obtain a more favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transactions, will be made by the Sub-Adviser in the manner the Sub-Adviser
considers to be the most equitable and consistent with its fiduciary obligations
to the Portfolio and to its other clients.
7. Unless the Adviser gives the Sub-Adviser written instructions to the
contrary, the Sub-Adviser shall use its good faith judgment in a manner which it
reasonably believes best serves the interests of the Portfolio's shareholders to
vote or abstain from voting all proxies solicited by or with respect to the
issuers of securities in which assets of the Portfolio may be invested.
The Sub-Adviser shall not file class action claims or derivative
shareholder claims on behalf of the Sub-Advised Funds. However, the Sub-Adviser
will provide transaction information to the Client or custodian upon reasonable
request.
8. Sub-Adviser's services under this Agreement are not exclusive. Sub-Adviser
may provide the same or similar services to other clients. Sub-Adviser shall for
all purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Adviser, the Fund or the Portfolio or otherwise be deemed agents
of the Adviser, the Fund or the Portfolio.
9. For the services rendered, the facilities furnished and the expenses assumed
by Sub-Adviser, Adviser shall pay Sub-Adviser at the end of each month, a fee
based on the average daily net assets of the Sub-Portfolio t the annual rate of
0.70%. Sub-Adviser's fee shall be accrued daily at 1/365th of the applicable
annual rate set forth above. For the purposes of accruing compensation, the net
assets of the Sub-Portfolio shall be determined in the manner and on the dates
set forth in the current prospectus of the Fund, and, on days on which the net
assets are not so determined, the net asset value computation to be used shall
be as determined on the next day on which the net assets shall have been
determined. In the event of termination of this Agreement, all compensation due
through the date of termination will be calculated on a pro-rated basis through
the date of termination and paid within thirty business days of the date of
termination. During any period when the determination of net asset value is
suspended, the net asset value of the Sub-Portfolio as the last business day
prior to such suspension shall for this purpose be deemed to be the net asset
value at the close of each succeeding business day until it is again determined.
10. The Sub-Adviser shall maintain all books and records with respect to the
Sub-Advised Fund's portfolio transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the Investment
Company Act of 1940, as amended (the "1940 Act") and shall render to the Manager
such periodic and special reports as the Manager may reasonably request.
Sub-Adviser agrees that all books and records which it maintains for the
Sub-Portfolio or the Fund pursuant to this section are the property of the Fund
and further agrees to surrender promptly to the Adviser or the Fund any such
books, records or information upon the Adviser's or the Fund's request. All such
books and records shall be made available, within five business days of a
written request, to the Fund's accountants or auditors during regular business
hours at Sub-Adviser's offices. Adviser and the Fund or either of their
authorized representative shall have the right to copy any records in the
possession of Sub-Adviser which pertain to the
Portfolio or the Fund. Such books, records, information or reports shall be made
available to properly authorized government representatives consistent with
state and federal law and/or regulations. In the event of the termination of
this Agreement, all such books, records or other information shall be returned
to Adviser or the Fund, however, the Sub-Adviser may retain a copy of such
documents.
11. The Adviser and Sub-Adviser shall cooperate with each other in providing
information, reports and other materials to regulatory and administrative bodies
having proper jurisdiction over the Portfolio, the Adviser and the Sub-Adviser
in connection with the services provided pursuant to this Agreement; provided,
however, that this agreement to cooperate does not apply to the provision of
information, reports and other materials which either the Adviser or the
Sub-Adviser reasonably believes the regulatory or administrative body does not
have the authority to request or is the privileged or confidential information
of the Adviser or Sub-Adviser.
12. Each party to this agreement agrees that it will not disclose or use any
records or information of the other party (the "non-disclosing party") obtained
pursuant to this Agreement in any manner whatsoever except as authorized in this
Agreement and that it will keep confidential any non-public information obtained
pursuant to this Agreement and disclose such information only if non-disclosing
party (or the Fund, in cases where the non-disclosing party is the Adviser) has
authorized such disclosure, or if such disclosure is required by federal or
state regulatory authorities.
13. In the absence of willful misfeasance, bad faith or gross negligence on the
part of Sub-Adviser or its officers, Trustees or employees, or reckless
disregard by Sub-Adviser of its duties under this Agreement, Sub-Adviser shall
not be liable to Adviser, the Portfolio, the Fund or to any shareholder of the
Portfolio for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security, except to the extent specified in Section 36(b)
of the 1940 Act concerning loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services.
14. Representations and Warranties.
a. Adviser represents and warrants that:
(1) Adviser is registered with the U.S. Securities and Exchange
Commission under the Advisers Act. The Adviser shall remain so registered
throughout the term of this Agreement and shall notify Sub-Adviser immediately
if Adviser ceases to be so registered as an investment adviser;
(2) The Adviser is a corporation duly organized and validly existing
under the laws of the State of Delaware with the power to own and possess its
assets and carry on its business as it is now being conducted;
(3) The execution, delivery and performance by the Adviser of this
Agreement are within the Adviser's powers and have been duly authorized by all
necessary action on the part of its directors, and no action by or in respect
of, or filing with, any governmental body, agency or official is required on the
part of the Adviser for the execution, delivery and performance of this
Agreement by the parties hereto, and the execution, delivery and performance of
this Agreement by the parties hereto does not contravene or constitute a default
under: (a) any provision of applicable law, rule or regulation; (b) the
Advisers' Articles of Incorporation or Bylaws; or (c) any agreement, judgment,
injunction, order, decree or other instruments binding upon the Adviser;
(4) This Agreement is a valid and binding Agreement of the Adviser;
(5) The Adviser has provided the Sub-Adviser with a copy of its Form
ADV as most recently filed with the Securities and Exchange Commission ("SEC")
and the Adviser further represents that it will, within a reasonable time after
filing any amendment to its Form ADV with the SEC furnish a copy of such
amendments to the Sub-Adviser. The information contained in the Adviser's Form
ADV is accurate and complete in all material respects and does not omit to state
any material fact necessary in order to make the statements made, in light of
the circumstances under which they are made, not misleading; and
(6) The Adviser acknowledges that it received a copy of the
Sub-Adviser's current Form ADV, at least 48 hours prior to the execution of this
Agreement and has delivered a copy of the same to the Fund.
b. Sub-Adviser represents and warrants that:
(1) Sub-Adviser is registered with the U.S. Securities and Exchange
Commission under the Advisers Act. The Sub-Adviser shall remain so registered
throughout the term of this Agreement and shall notify Adviser immediately if
Sub-Adviser ceases to be so registered as an investment adviser;
(2) The Sub-Adviser is a limited liability partnership duly organized
and validly existing under the laws of the Commonwealth of Massachusetts with
the power to own and possess its assets and carry on its business as it is now
being conducted;
(3) The execution, delivery and performance by the Sub-Adviser of this
Agreement are within the Sub-Adviser's powers and have been duly authorized by
all necessary action on the part of its directors, and no action by or in
respect of, or filing with, any governmental body, agency or official is
required on the part of the Sub-Adviser for the execution, delivery and
performance of this Agreement by the parties hereto, and the execution, delivery
and performance of this Agreement by the parties hereto does not contravene or
constitute a default under: (a) any provision of applicable law, rule or
regulation; (b) the Sub-
Advisers Articles of Incorporation or Bylaws; or (c) any agreement, judgment,
injunction, order, decree or other instruments binding upon the Sub-Adviser;
(4) This Agreement is a valid and binding Agreement of the
Sub-Adviser;
(5) The Sub-Adviser has provided the Adviser with a copy of its Form
ADV as most recently filed with the SEC and the Sub-Adviser further represents
that it will, within a reasonable time after filing any amendment to its Form
ADV with the SEC furnish a copy of such amendments to the Adviser. The
information contained in the Sub-Adviser's Form ADV is accurate and complete in
all material respects and does not omit to state any material fact necessary in
order to make the statements made, in light of the circumstances under which
they are made, not misleading; and
(6) The Sub-Adviser acknowledges that it received a copy of the
Adviser's current Form ADV, at least 48 hours prior to the execution of this
Agreement and has delivered a copy of the same to the Fund.
15. The Adviser will not use, and will not permit the Fund to use, the
Sub-Adviser's name (or that of any affiliate) or any derivative thereof or logo
associated therewith in Fund literature without prior review and approval by the
Sub-Adviser.
16. This Agreement shall not become effective unless and until it is approved by
the Board of Trustees of the Fund, including a majority of Trustees who are not
parties to this Agreement or interested persons of any such party to this
Agreement. This Agreement shall come into full force and effect on the date
which it is so approved. This Agreement shall continue in effect for two years
and shall thereafter continue in effect from year to year so long as such
continuance is specifically approved at least annually by (i) the Board of
Trustees of the Fund, or by the vote of a majority of the outstanding votes
attributable to shares of the class of stock representing an interest in the
Portfolio; and (ii) a majority of those Trustees who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
17. This Agreement may be terminated at any time without the payment of any
penalty, by the Fund's Board of Trustees, or by vote of a majority of the
outstanding votes attributable to shares of the class of stock representing an
interest in the Portfolio on sixty (60) days written notice to the Adviser and
Sub-Adviser, or by the Adviser, or by the Sub-Adviser, on sixty (60) days
written notice to the other. This Agreement shall automatically terminate in the
event of its assignment or in the event of the termination of the investment
Advisery agreement between the Adviser and the Fund regarding the Adviser's
management of the Portfolio.
18. This Agreement may be amended by either party only if such amendment is
specifically approved by a majority of those Trustees who are not parties to
this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval.
19. The terms "assignment", "affiliated person" and "interested person", when
used in this Agreement, shall have the respective meanings specified in the 1940
Act. The term "majority of the outstanding votes attributable to shares of the
class" means the lesser of (a) 67% or more of the shares of such class present
at a meeting if more than 50% of such shares are present or represented by proxy
or (b) more than 50% of the votes attributable to the shares of such class.
20. This Agreement shall be construed in accordance with laws of the State of
Delaware, and applicable provisions of the Advisers Act.
21. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
MEMBERS CAPITAL ADVISORS, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, President
PARADIGM ASSET MANAGEMENT CO., LLC
By: /s/ Xxxxxxx Xxx
------------------------------------
Title: Xxxxxxx Xxx, Managing Director
