Exhibit (d)(4)
SUBADVISORY AGREEMENT
This Sub-advisory Agreement (the "Agreement") is effective as of
January 2, 2008 (the "Effective Date"), between ADVANCE CAPITAL ASSET
MANAGEMENT, INC., a Michigan corporation (the "Adviser"), and SEIZERT
CAPITAL PARTNERS, LLC, a Delaware limited liability company
(the "Sub-Adviser").
WHEREAS, the Adviser has entered into an Investment Management Agreement,
dated as of August 3, 1987, as amended (the "Management Agreement"), with
Advance Capital I, Inc. (the "Company"), a Maryland corporation and a
diversified, open-end management investment company registered under
the Investment Company Act of 1940 (the "1940 Act"), pursuant to which
the Adviser acts as investment manager for the Company's separate series
of shares, one of which is the Advance Capital I Core Equity Fund
(the "Fund"); and
WHEREAS, the Adviser desires to retain the Sub-adviser to provide
investment advisory services to the Fund and to manage the Fund as the
Adviser shall from time to time direct, and the Sub-adviser is willing
to render such investment advisory services;
NOW, THEREFORE, the Parties agree as follows:
1. Subject to the direction of the Adviser and the Board of Directors of
the Company, the Sub-adviser shall provide portfolio management services to
the Fund, including (but not limited to) the purchase, retention and
disposition of portfolio securities in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus and
Statement of Additional Information (such Prospectus and Statement of
Additional Information as currently in effect and as amended or supplemented
from time to time, being herein called the Prospectus), portfolio
reconciliation, cash management, back-office services, periodic reporting
to the Adviser and the Board of Directors of the Company and such other
services as may be reasonably requested by the Adviser. The Sub-adviser's
activities shall be subject to the following understandings:
(a) The Sub-adviser shall determine from time to time what investments and
securities will be purchased, retained, sold or loaned by the Fund, and what
portion of the assets will be invested or held uninvested as cash or invested
in cash equivalents.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-adviser shall act in conformity with the Company's Articles of
Incorporation, Bylaws and Prospectus of the Fund and with the instructions
and directions of the Adviser and of the Board of Directors of the Company,
co-operate with the Adviser's (or its designee's) personnel responsible for
monitoring the Fund's compliance, and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986 and all other
applicable federal and state laws and regulations. In connection therewith,
the Sub-adviser shall, among other things, comply with the Sub-adviser's Code
of Ethics, and the Adviser's soft dollar trading policy, brokerage allocation
policy, and such other policies as the Adviser or the Company may establish,
and it shall prepare and file such reports as are, or may in the future be,
required by the Securities and Exchange Commission.
(c) The Sub-adviser shall place orders with or through such persons,
brokers or dealers (but only with brokers or dealers that are not affiliated
with the Adviser or the Sub-adviser) to carry out the policy with respect to
brokerage as set forth in the Fund's Prospectus or as the Company's Board of
Directors or the Adviser may direct from time to time. In providing the Fund
with investment supervision, it is recognized that the Sub-adviser will give
primary consideration to securing the most favorable price and efficient
execution. Within the framework of this policy, the Sub-adviser may consider
the financial responsibility, research and investment information and other
services provided by brokers or dealers who may effect or be a party to any
such transaction or other transactions to which the Sub-adviser's other
clients may be a party. It is understood that no broker or dealer affiliated
with the Adviser or the Sub-adviser may be used as principal broker for
securities transactions. It is also understood that it is desirable for the
Fund that the Sub-adviser have access to supplemental investment and market
research and security and economic analysis provided by brokers who may
execute brokerage transactions at a higher cost to the Fund than may result
when allocating brokerage to other brokers on the basis of seeking the most
favorable price and efficient execution. Therefore, the Sub-adviser is
authorized to place orders for the purchase and sale of securities for the
Fund with such brokers, subject to review by the Company's Board of Directors
and the Adviser from time to time with respect to the extent and continuation
of this practice. It is understood that the services provided by such brokers
may be useful to the Sub-adviser in connection with the Sub-adviser's services
to other clients.
On occasions when the Sub-adviser deems the purchase or sale of a
security to be in the best interest of the Fund 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 sold or purchased in order to obtain the most 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 transaction, 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 Fund and to such other clients.
(d) The Sub-adviser shall maintain all books and records with respect to the
Fund's portfolio transactions required by subparagraphs (b)(5), (6), (7), (9),
(10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act, and shall
provide to the Company's Board of Directors and to the Adviser such periodic
and special reports as the Directors or the Adviser may reasonably request.
The Sub-adviser shall make reasonably available its employees and officers
for consultation with any of the Directors or officers or employees of the
Fund or the Adviser with respect to any matter discussed herein, including,
without limitation, the valuation of the Fund's securities.
(e) The Sub-adviser shall provide to the Adviser and to the Fund's Custodian
on each business day information relating to all transactions concerning the
Fund's assets that it manages, including (but not limited to) any pricing
discrepancies from daily closing prices reported by the Fund's pricing
services, and shall provide the Adviser with such other information as the
Adviser may request.
(f) The Sub-adviser understands and agrees that the Adviser will, among other
things, (i) continually evaluate the performance of the Sub-adviser to the
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Fund through quantitative and qualitative analysis and consultations with the
Sub-adviser, (ii) periodically make recommendations to the Company's Board of
Directors as to whether this Agreement should be renewed, modified, or
terminated and (iii) periodically report to the Company's Board of Directors
regarding the results of its evaluation and monitoring functions. The
Sub-adviser recognizes that its services may be terminated or modified
pursuant to this process.
(g) The Sub-adviser will support all marketing and sales activities with
respect to the Fund, including (but not limited to) providing press and other
publicity interviews, attending conferences and seminars that the Adviser
deems to be appropriate and meeting with prospective and existing
shareholders, registered investment advisers and other financial
intermediaries. The Adviser will reimburse the Sub-adviser for its
out-of-pocket expenses incurred in connection with such marketing support,
provided that the expenses are approved in advance by the Adviser.
(h) The Adviser shall have the right to approve the specific individuals
employed by the Sub-adviser to perform the investment management services
described above, and the Adviser shall also have the right to direct that
the Sub-adviser terminate the involvement of any one or more of such
individuals with respect to the Fund's investment management activities,
but any such change in personnel of the Sub-adviser shall not be deemed
to be a termination of this Agreement.
(i) The Sub-adviser will not provide portfolio management services to any
other mutual fund using the same investment process or style as the
Sub-adviser uses with respect to the Fund without the prior written
consent of the Adviser, nor will the Sub-adviser organize a mutual fund
with a substantially similar investment objective as the Fund. The
Sub-adviser agrees to provide the Company with the first opportunity to
organize and register any new mutual fund that the Sub-adviser develops.
2. The Sub-adviser may authorize and permit any of its directors,
officers and employees who may be elected as Directors or officers of the
Fund to serve in the capacities in which they are elected. Services to be
furnished by the Sub-adviser under this Agreement may be furnished through
the medium of any of such directors, officers or employees.
3. The Sub-adviser shall keep the Fund's books and records required to
be maintained by the Sub-adviser pursuant to Section 1(d) hereof and shall
timely furnish to the Adviser all information relating to the Sub-adviser's
services hereunder needed by the Adviser to keep the other books and records
of the Fund required by Rule 31a-1 under the 1940 Act. The Sub-adviser
agrees that all records which it maintains for the Fund are the property
of the Fund and the Sub-adviser will surrender promptly to the Fund any of
such records upon the Fund's request, provided, however, that the
Sub-adviser may retain a copy of such records. The Sub-adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940
Act any such records as are required to be maintained by it pursuant to
Section 1(d) hereof.
4. The Sub-adviser agrees to maintain its registration as an investment
adviser under the Investment Advisers Act of 1940 (the "Advisers Act") and to
maintain adequate compliance procedures to ensure its compliance with the 1940
Act, the Advisers Act and any other applicable state and federal laws or
regulations.
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5. The Sub-adviser shall furnish to the Adviser copies of all records
prepared in connection with (i) the performance of this Agreement and (ii)
the maintenance of compliance procedures pursuant to Section 1(b) hereof as
the Adviser may reasonably request.
6. For the services provided and the expenses assumed pursuant to this
Agreement, the Adviser shall pay the Sub-adviser as full compensation
therefor, a fee at the annual rate of 0.40% of the average daily net assets
of the Fund. This fee will be computed daily, and will be paid to the
Sub-adviser monthly, within three (3) business days after receipt by the
Adviser of payment of its monthly management fee from the Company.
7. The Sub-adviser shall not be liable for any error of judgment or
for any loss suffered by the Fund or the Adviser in connection with the
matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the Sub-adviser's
part in the performance of its duties or from its reckless disregard of
its obligations and duties under this Agreement.
8. This Agreement shall continue in effect for a period of more than
two years from the date hereof only so long as such continuance is
specifically approved at least annually in conformity with the requirements
of the 1940 Act; provided, however, that this Agreement may be terminated by
the Fund at any time, without the payment of any penalty, by the Board of
Directors of the Company or by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of the Fund, or by the Adviser or
the Sub-adviser at any time, without the payment of any penalty, on not
more than 60 days' nor less than 30 days' written notice to the other party.
This Agreement shall terminate automatically in the event of its assignment
(as defined in the 0000 Xxx) or upon the termination of the Management
Agreement.
9. Nothing in this Agreement shall limit or restrict the right of any
of the Sub-adviser's directors, officers or employees who may also be a
Director, officer or employee of the Fund to engage in any other business or
to devote his or her time and attention in part to the management or other
aspects of any business, whether of a similar or dissimilar nature, nor limit
or restrict the Sub-adviser's right to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association.
10. During the term of this Agreement, the Adviser agrees to furnish the
Sub-adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature or other material prepared for
distribution to shareholders of the Fund or the public, which refer to the
Sub-adviser in any way, prior to use thereof and not to use material if the
Sub-adviser reasonably objects in writing within three (3) business days
(or such other time as may be mutually agreed) after receipt thereof.
Sales literature may be furnished to the Sub-adviser hereunder by first-class
or overnight mail, facsimile transmission equipment or hand delivery.
11. This Agreement may be amended by mutual consent, but the consent
of the Fund must be obtained in conformity with the requirements of the 1940
Act.
12. Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act or the Advisers Act shall be resolved by
reference to such term or provision of the 1940 Act or the Advisers
Act and to interpretations thereof, if any, by the United States Courts
or in the absence of any controlling decision of any such court, by rules,
regulations or orders of the SEC issued pursuant to said Acts. In
addition, where the effect of a requirement of the 1940 Act or the
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Advisers Act reflected in any provision of the Agreement is revised by
rule, regulation or order of the SEC, such provision shall be deemed to
incorporate the effect of such rule, regulation or order. Subject to the
foregoing, this Agreement shall be governed by and construed in accordance
with the laws (without reference to conflicts of law provisions) of the
State of Illinois.
13. Any notices or other communications required or permitted hereunder
shall be deemed to have been given if sent by first class mail, overnight
delivery or hand delivery to the following addresses:
If to the Adviser, to:
Advance Capital Management, Inc.
Xxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
If to the Sub-adviser, to:
Seizert Capital Partners, LLC
000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be
executed as of the day and year first above written.
ADVANCE CAPITAL MANAGEMENT, INC.
By: ____________________________
Xxxxxx X. Xxxxxxxx, President
SEIZERT CAPITAL PARTNERS, LLC
By: ___________________________
Xxxxxx X. Xxxxxxx, President
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