Exhibit (d)(3)
ASSET MANAGER'S AGREEMENT
The Equity Universe Fund (the "Fund") is a portfolio represented by
one class of shares of Advance Capital I, Inc. (the "Company"), a
registered open-end investment company under the Investment Company Act
of 1940 (the "Act"), and subject to the rules and regulations promulgated
thereunder.
Advance Capital Management, Inc. (the "Manager") acts as the
investment manager of the Fund pursuant to the terms of an Investment
Advisory Agreement (the "Management Agreement") with the Company. The
Manager is responsible for the day-to-day investment advice, management
and supervision of the Fund and the coordination of the Fund's assets in
portfolio securities. Pursuant to the terms of the Management Agreement,
the Manager may appoint another entity to act as sub-advisor to furnish to
the Company on behalf of the Manager certain services specified in and
subject to the provisions of the Agreement, if such appointment is approved
by the Directors of the Company and by the shareholders of the Fund.
1. Appointment as an Asset Manager. The Manager, being duly authorized,
hereby appoints and employs X. Xxxx Price Associates, Inc. ("Asset Manager")
as a discretionary asset manager, on the terms and conditions set forth
herein, of those assets of the Fund which the Manager determines to assign
to the Asset Manager (those assets being referred to as the "Portfolio
Account(s)"). The Manager may, from time to time, with the consent of the
Asset Manager (and such consent shall not be unreasonably withheld), make
additions to the Portfolio Account(s) and may, from time to time, make
withdrawals from the Portfolio Account(s).
2. Acceptance of Appointment: Standard of Performance. The Asset
Manager accepts the appointment as a discretionary asset manager and agrees
to use its best professional judgment to make timely investment decisions for
the Fund with respect to the investments of the Portfolio Account in
accordance with the provisions of this Agreement.
3. Asset Management Services of Asset Manager. The Asset Manager is
hereby employed and authorized to select portfolio securities for investment
by the Fund, to purchase and sell securities of the Portfolio Account(s),
and upon making any purchase or sale decision, to place orders for the
execution of such portfolio transactions in accordance with paragraphs 5
and 6 hereof. In providing portfolio management services to the Portfolio
Account(s), the Asset Manager shall be subject to such investment
restrictions as are set forth in the Act and the Rules and Regulations
promulgated thereunder, the supervision and control of the Directors,
such specific instructions as the Directors may adopt and communicate to
the Asset Manager, the investment objectives, policies and restrictions
of the Fund furnished pursuant to paragraph 4, and instructions from the
Manager. The Asset Manager shall maintain on behalf of the Fund those
records which may be mutually agreed upon by both parties. At the Manager's
reasonable request, Asset Manager will consult with the Fund or with the
Manager with respect to any decisions made by it with respect to the
investments of the Portfolio Account(s).
4. Investment Objectives, Policies, and Restrictions. The Manager shall
provide the Asset Manager with a statement of the investment objectives and
policies of the Fund and any specific investment restrictions applicable
thereto, including cash flow requirements, as established by the Fund. The
Fund retains the right, on written notice to the Asset Manager from the Fund
or the Manager, to modify any such objectives, policies or restrictions in
any manner at any time provided any such amendment is consistent with the
Articles of Incorporation and By-Laws of the Fund and with the Act and the
Rules and Regulations promulgated thereunder.
5. Transaction Procedures. All transactions will be consummated by
payment to or delivery by the Fund's custodian (presently, Huntington Banks
of Michigan) (the "Custodian"), or such depositories or agents as may be
designated by the Custodian, as custodian for the Fund, of all cash and/or
securities due to or from the Portfolio Account(s), and the Asset Manager,
shall not have possession or custody thereof or any responsibility or
liability with respect thereto. The Asset Manager shall advise the
Custodian and confirm in writing to the Fund all investment orders for the
Portfolio Account(s) placed by it with brokers and dealers at the time and
in the manner as set forth in those procedures mutually agreed upon by both
parties. The Fund shall issue to the Custodian such instructions as may be
appropriate in connection with the settlement of any transaction initiated
by the Asset Manager. The Fund shall be responsible for all custodial
arrangements and the payment of all custodial charges and fees, and, upon
giving proper instructions to the Custodian, the Asset Manager shall have
no responsibility or liability with respect to custodial arrangements or
the acts, omissions or other conduct of the Custodian.
6. Allocation of Brokerage. The Asset Manager shall have authority and
discretion to select brokers and dealers to execute portfolio transactions
initiated by the Asset Manager, and for the selection of the markets on or
in which the transaction will be executed.
A. In doing so, the Asset Manager's primary responsibility shall be to
obtain the best net price and execution for the Fund. However, this
responsibility shall not be deemed to obligate the Asset Manager to solicit
competitive bids for each transaction, and the Asset Manager shall have no
obligation to seek the lowest available commission cost to the Fund, so long
as the Asset Manager determines that the broker or dealer is able to obtain
the best net price and execution for the particular transaction and that the
commission cost is reasonable in relation to the total quality and reliability
of the brokerage and research services made available by the broker to the
Asset Manager viewed in terms of either that particular transaction or of the
Asset Manager's overall responsibilities with respect to its clients,
including the Fund, as to which the Asset Manager exercises investment
discretion, notwithstanding that the Fund may not be the direct or exclusive
beneficiary of any such services or that another broker may be willing to
charge the Fund a lower commission on the particular transaction.
B. The Manager shall have the right to request that specified
transactions giving rise to brokerage commissions, in an amount to be
agreed upon by the Manager and the Asset Manager, shall be executed by
brokers and dealers that provide brokerage or research services to the
Fund or the Manager, or as to which an on-going relationship will be of
value to the Fund in the management of its assets, which services and
relationship may, but need not, be of direct benefit to the Portfolio
Account(s), so long as (i) the Manager determines that the broker or
dealer is able to obtain the best net price and execution on a particular
transaction and (ii) the Manager determines that the commission cost is
reasonable in relation to the total quality and reliability of the brokerage
and research services made available to the Fund or to the Manager for the
benefit of its clients for which it exercises investment discretion,
notwithstanding that the Portfolio Account(s) may not be the direct or
exclusive beneficiary of any such service or that another broker may be
willing to charge the Fund a lower commission on the particular transaction.
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C. The Asset-Manager agrees that it will not execute any portfolio
transactions with a broker or dealer which is an "affiliated person"
(as defined in the Act) of the Fund or of the Manager or of any asset manager
for the Fund without the prior written approval of the Fund. The Manager
agrees that it will provide the Asset Manager with a list of brokers and
dealers which are "affiliated persons" of the Fund, the Manager or the Fund's
asset managers.
D. As used in this paragraph 6, "brokerage and research services" shall
have the meaning set forth in Section 28(e)(3) of the Securities Exchange Act
of 1934 and such interpretations as shall be published by the Securities and
Exchange Commission from time to time.
7. Proxies. The Fund will vote all proxies solicited by or with respect
to the issuers of securities in which assets of the Portfolio Account(s) may
be invested from time to time. At the request of the Fund, and upon agreement
of the Asset Manager, the Asset Manager shall vote all proxies on securities
held in the Portfolio Account(s) on behalf of the Fund, provided the
Custodian forwards all proxy materials to the Asset Manager upon receipt.
Asset Manager will not be liable in the event the proxy materials are not
received by the Asset Manager in a timely manner.
8. Reports to the Asset Manager. The Manager shall provide the Asset
Manager with such periodic reports concerning the status of the Portfolio
Account(s) as the Asset Manager may reasonably request.
9. Fees for Servicing. The compensation of the Asset Manager for its
services under this Agreement shall be calculated and paid by the Manager in
accordance with the attached Schedule A. Pursuant to the provisions of the
Management Agreement between the Fund and the Manager, the Manager is solely
responsible for the payment of fees to the Asset Manager, and the Asset
Manager agrees to seek payment of its fees solely from the Manager.
10. Other Investment Activities of the Asset Manager. The Manager
acknowledges that the Asset Manager or one or more of its affiliates may have
investment responsibilities or render investment advice to or perform other
investment advisory services for other individuals or entities ("Affiliated
Accounts"). Subject to the provisions of paragraph 2 hereof, the Manager
agrees that the Asset Manager or its affiliates may give advice or exercise
investment responsibility and take such other action with respect to other
Affiliated Accounts which may differ from the advice given or the timing or
nature of action taken with respect to the Portfolio Account( s), provided
that the Asset Manager acts in good faith and provided further, that it is
the Asset Manager's policy to allocate, within its reasonable discretion,
investment opportunities to the Portfolio Account(s) over a period of time
on a fair and equitable basis relative to the Affiliated Accounts, taking
into account the investment objectives and policies of the Fund and any
specific investment restrictions applicable thereto. The Manager
acknowledges that one or more of the Affiliated Accounts may at any time
hold, acquire, increase, decrease, dispose or otherwise deal with positions
in investments in which the Portfolio Account(s) may have an interest from
time to time, whether in transactions which involve the Portfolio Account(s)
or otherwise. The Asset Manager shall have no obligation to acquire for the
Portfolio Account(s) a position in any investment which any Affiliated
Account may acquire, and the Fund shall have no first refusal, co-investment
or other rights in respect of any such investment, either for the Portfolio
Account(s) or otherwise.
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11. Certificate of Authority. The Fund, the Manager and the Asset
Manager shall furnish to each other from time to time certified copies of the
resolutions of their Board of Directors or executive committees, as the case
may be, evidencing the authority of officers and employees who are authorized
to act on behalf of the Fund, the Portfolio Account(s), the Manager and/or
the Asset Manager.
12. Limitation of Liability. The Asset Manager shall not be liable for
any action taken, omitted or suffered to be taken by it in its reasonable
judgment, in good faith and believed by it to be authorized or within the
discretion or rights or power conferred upon it by this Agreement, or in
accordance with (or in the absence of) specific directions or instructions
from the Fund, provided, however, that such acts or omissions shall not have
resulted from the Asset Manager's willful misfeasance, bad faith or gross
negligence, a violation of the standard of care established by paragraph 2
hereof and applicable to the Asset Manager in its actions under this
Agreement or breach of its duty or of its obligations hereunder.
13. Confidentiality. Subject to the duty of the Asset Manager, the
Manager and the Fund to comply with applicable law, including any demand of
any regulatory or taxing authority having jurisdiction, the parties hereto
shall treat as confidential all information pertaining to the Portfolio
Accounts and the actions of the Asset Manager and the Fund in respect
thereof.
14. Assignment. No assignment, as that term is defined in Section
2(a)(4) of the Act, of this Agreement shall be made by the Asset Manager, and
this Agreement shall terminate automatically in the event of such assignment.
The Asset Manager shall notify the Fund in writing sufficiently in advance of
any proposed change of control, as defined in Section 2(a)(9) of the Act, as
will enable the Fund to consider whether an assignment as defined in Section
2(a)(4) of the Act will occur, and to take the steps necessary to enter into
a new contract with the Asset Manager.
15. Representation, Warranties, and Agreements of the Fund. The Fund
represents, warrants, and agrees that:
A. The Asset Manager has been duly appointed by the Directors and
shareholders of the Fund to provide investment advice to the Portfolio
Account(s) as contemplated hereby.
B. The Fund will deliver to the Asset Manager a true and complete copy
of its then current prospectus as amended or supplemented from time to time
and such other documents or instruments governing the investment of the
Portfolio Account(s) and such other information as is necessary for the
Asset Manager to carry out its obligations under this Agreement.
C. The Fund is currently in compliance and shall at all times comply
with the requirements imposed upon the Fund by applicable laws and
regulations.
16. Representations, Warranties, and Agreements of the Asset Manager.
The Asset Manager represents, warrants, and agrees that:
A. The Asset Manager is registered as an "Investment Adviser" under the
Investment Advisers Act of 1940 ("Advisers Act");
B. The Asset Manager will maintain, keep current and preserve on behalf
of the Fund, in the manner required or permitted by the Act, those records
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which may be mutually agreed upon by both parties from time to time. The
Asset Manager agrees that such records are the property of the Fund and
will be surrendered to the Fund promptly upon request.
C. The Asset Manager will adopt a written code of ethics complying with
the requirements of Rule 17j-1 under the Act, will provide the Fund with a
copy of the code of ethics and evidence of its adoption, will report to the
Fund as are required by Rule l7j-l under the Act.
17. Amendment. This Agreement may be amended at any time, but only by
written agreement between the Asset Manager and the Manager, which amendment
is subject to the approval of the Directors and the shareholders of the Fund
in the manner required by the Act.
18. Effective Date; Term. This Agreement shall become effective on
December 20, 1993, and shall continue in effect for a term of two years from
that date. Thereafter, the Agreement shall continue in effect only so long
as its continuance has been specifically approved at least annually by the
Directors, or the shareholders of the Fund in the manner required by the
Act. The aforesaid requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed in a manner
consistent with the Act and the Rules and Regulations thereunder.
19. Termination. This Agreement may be terminated by either party
hereto, without the payment of any penalty, immediately upon written notice
to the other in the event of a breach of any provision hereof by the party
so notified, or otherwise upon sixty (60) days' written notice to the other.
This agreement may be terminated by the Directors or by vote of a majority
of the outstanding shares of the Fund, on sixty (60) days' written notice
to the Asset Manager. Any such termination shall not affect the status,
obligations, or liabilities of any party hereto to the other.
20. Severability. 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 but shall continue in full
force and effect.
21. Applicable Law. The provisions of this Agreement shall be
construed in a manner consistent with the requirements of the Act and the
Rules and Regulations thereunder. To the extent that state law is not
preempted by the provisions of any law of the United States heretofore
or hereafter enacted, as the same may be amended from time to time, this
Agreement shall be administered, construed, and enforced according to the
laws of the State of Maryland.
ADVANCE CAPITAL MANAGEMENT, INC.
By: /S/ XXXXXX X. XXXXXXXX
Xxxxxx X. Xxxxxxxx, Vice President
December 21, 1993
X. XXXX PRICE ASSOCIATES, INC.
By: /S/ XXXXXXX X. WOLDLY
Xxxxxxx X. Woldly, Vice President
December 21, 1993
By: /S/ XXXXXXXX X. XXXXXX
Xxxxxxxx X. Xxxxxx, Vice President
December 21, 1993
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SCHEDULE A
For services provided to the Portfolio Account(s), Advance Capital
Management, Inc. will pay a quarterly fee for each calendar quarter at the
annual rate provided below of the average assets in the Portfolio Account(s)
during the quarter. Average assets shall be determined using the average
daily assets in the Portfolio Account(s) during the calendar quarter. The
fee shall be prorated for any calendar quarter during which the contract is
in effect for only a portion of the quarter. Below is the agreed upon fee:
First $100 Million 20/100 of 1%
Next $100 Million 15/100 of 1%
Above $200 Million Negotiable
