Exhibit 99.D(2)
EXHIBIT 23(d)(2)(31)
SUB-ADVISORY AGREEMENT ON BEHALF OF JANUS BALANCED
SUB-ADVISORY AGREEMENT
BETWEEN
AEGON/TRANSAMERICA FUND ADVISERS, INC.
AND
JANUS CAPITAL MANAGEMENT LLC
SUB-ADVISORY AGREEMENT, made as of the 1st day of May 2002 between
AEGON/Transamerica Fund Advisers, Inc. ("Investment Adviser"), a corporation
organized and existing under the laws of the State of Florida, and Janus Capital
Management LLC ("Sub-Adviser"), a Delaware limited liability company.
WHEREAS, the Investment Adviser acts as an investment adviser to
AEGON/Transamerica Series Fund, Inc. ("Fund"), a Maryland corporation which is
engaged in business as an open-end investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"), pursuant to an
Investment Advisory Agreement dated January 1, 1997, as amended ("Advisory
Agreement"), with the Fund;
WHEREAS, the Fund is authorized to issue shares of Janus Balanced (the
"Portfolio"), a separate series of the Fund;
WHEREAS, the Sub-Adviser is engaged principally in the business of
rendering investment advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended ("Advisers Act");
and
WHEREAS, the Investment Adviser desires to retain the Sub-Adviser as
sub-adviser to furnish certain investment advisory services to the Investment
Adviser with respect to the Portfolio and the Sub-Adviser is willing to furnish
such services.
NOW, THEREFORE, in consideration of the premises and mutual promises
herein set forth, the parties hereto agree as follows:
1. APPOINTMENT.
Investment Adviser hereby appoints the Sub-Adviser as its investment
sub-adviser with respect to the Portfolio for the period and on the terms set
forth in this Agreement. The Sub-Adviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. DUTIES OF THE SUB-ADVISER.
A. Investment Sub-Advisory Services. Subject to the
supervision of the Fund's Board of Directors ("Board") and the Investment
Adviser, the Sub-Adviser shall act as the investment sub-adviser and shall
supervise and direct the investments of the Portfolio in accordance with the
Portfolio's investment objective, policies, and restrictions as provided in the
Fund's Prospectus and Statement of Additional Information, as currently in
effect and as amended or supplemented from time to time (hereinafter referred to
as the "Prospectus"), and such other limitations as directed by the appropriate
officers of the Investment Adviser or the Fund by notice in writing to the
Sub-Adviser. The Sub-Adviser shall obtain and evaluate such information relating
to the economy, industries, businesses, securities markets, and securities as it
may deem necessary or useful in the discharge of its obligations hereunder and
shall formulate and implement a continuing program for the management of the
assets and resources of the Portfolio in a manner consistent with the
Portfolio's investment objective, policies, and restrictions. In furtherance of
this duty, the Sub-Adviser, on behalf of the Portfolio, is authorized, in its
discretion and without prior consultation with the Board or the Investment
Adviser, to:
(1) buy, sell, exchange, convert, lend, and otherwise trade in any
stocks, bonds and other securities or assets; and
(2) place orders and negotiate the commissions (if any) for the
execution of transactions in securities or other assets with or
through such brokers, dealers, underwriters or issuers as the
Sub-Adviser may select.
B. Additional Duties of Sub-Adviser. In addition to the above,
Sub-Adviser shall:
(1) furnish continuous investment information, advice and
recommendations to the Fund as to the acquisition,
holding or disposition of any or all of the securities or other
assets which the Portfolio may own or contemplate acquiring from
time to time;
(2) cause its officers to attend meetings of the Fund and furnish oral or
written reports, as the Fund may reasonably require, in order to keep the Fund's
officers and Board fully informed as to the condition of the investment
securities of the Portfolio, the investment recommendations of the Sub-Adviser,
and the investment considerations which have given rise to those
recommendations;
(3) furnish such statistical and analytical information and reports as may
reasonably be required by the Fund from time to time;
(4) have no responsibility to monitor certain limitations or restrictions,
including without limitation, the 90% - source test, for which the Sub-Adviser
determines it has not been provided sufficient information in accordance with
Section 2 of this Agreement or otherwise. All such monitoring shall be the
responsibility of the Investment Adviser. In addition, the Sub-Adviser shall not
be responsible for Fund accounting, nor shall it be required to generate
information derived from Fund accounting.
C. Further Duties of Sub-Adviser. In all matters relating to
the performance of this Agreement, the Sub-Adviser shall, upon prior
notification in writing, act in conformity with the Fund's Articles of
Incorporation and By-Laws, as each may be amended or supplemented, and the
Fund's currently effective Registration Statement (as defined below) and with
the written instructions and directions of the Board and the Investment Adviser,
and shall comply with the requirements of the 1940 Act, the Advisers Act, the
rules thereunder, and all other applicable federal and state laws and
regulations.
3. COMPENSATION.
For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Agreement, the Sub-Adviser shall receive monthly, (i) an
investment management fee as specified in Schedule A of this Agreement. If this
Agreement becomes effective or terminates before the end of any month, the
investment management fee for the period from the effective date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be pro-rated according to the pro-ration which such
period bears to the full month in which such effectiveness or termination
occurs.
4. DUTIES OF THE INVESTMENT ADVISER.
A. The Investment Adviser shall continue to have
responsibility for all services to be provided to the Portfolio pursuant to the
Advisory Agreement and shall oversee and review the Sub-Adviser's performance of
its duties under this Agreement.
B. The Investment Adviser has furnished the Sub-Adviser with
copies of each of the following documents and will furnish to the Sub-Adviser at
its principal office all future amendments and supplements to such documents, if
any, as soon as practicable after such documents become available:
(1) The Articles of Incorporation of the Fund, as filed with
the State of Maryland, as in effect on the date hereof
and as amended from time to time ("Articles"):
(2) The By-Laws of the Fund as in effect on the date hereof
and as amended from time to time ("By-Laws");
(3) Certified resolutions of the Board of the Fund
authorizing the appointment of the Investment Adviser and
the Sub-Adviser and approving the form of the Advisory
Agreement and this Agreement;
(4) The Fund's Registration Statement under the 1940 Act and
the Securities Act of 1933, as amended, on Form N-1A, as
filed with the Securities and Exchange Commission ("SEC")
relating to the Portfolio and its shares and all
amendments thereto ("Registration Statement");
(5) The Fund's Prospectus (as defined above);
(6) A certified copy of any publicly available financial
statement or report prepared for the Fund by certified or
independent public accountants, and copies of any
financial statements or reports made by the Portfolio to
its shareholders or to any governmental body or
securities exchange;
(7) Notice of the Fund's custodian designated to hold assets
in the Fund;
(8) A list of the countries approved by the Trustees in
accordance with Rule 17f-5 in which Fund assets may be
maintained and a list of those countries available
immediately;
(9) Reports as to the composition of assets in the Fund, cash
requirements and cash available for investment in the
Fund;
(10) Copies of Investment Adviser's liquidity procedures,
cross-trade procedures, repurchase agreement procedures,
10f-3, 17a-7 and 17e-1 procedures and other procedures
that may affect the duties of Sub-Adviser;
(11) A list of "affiliates" of the Fund, as such term is used
in the 1940 Act, including all broker-dealers affiliated
with the Fund;
(12) Applicable Commodities Futures Trading Commission
exemptions, notifications and/or related documentation;
(13) A list of established futures accounts; and
(14) An Internal Revenue Service Form W-9 completed by the
Fund.
The Investment Adviser shall furnish the Sub-Adviser with any further
documents, materials or information that the Sub-Adviser may reasonably request
to enable it to perform its duties pursuant to this Agreement.
C. During the term of this Agreement, the Investment Adviser
shall furnish to 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 Portfolio or the public, which
refer to the Sub-Adviser or investment companies or other advisory accounts
advised or sponsored by the Sub-Adviser in any way, prior to the use thereof,
and the Investment Adviser shall not use any such materials if the Sub-Adviser
reasonably objects in writing fifteen business days (or such other time as may
be mutually agreed) after receipt thereof.
D. Investment Adviser shall be responsible for providing such
assistance in setting up and maintaining brokerage accounts and other accounts
as Sub-Adviser reasonably requests to allow for the purchase or sale of various
forms of securities pursuant to this Agreement.
5. BROKERAGE.
A. The Sub-Adviser agrees that, in placing orders with
broker-dealers for the purchase or sale of portfolio securities, it shall
attempt to obtain quality execution at favorable security prices (best price and
execution); provided that, on behalf of the Fund, the Sub-Adviser may, in its
discretion, agree to pay a broker-dealer that furnishes brokerage or research
services as such services are defined under Section 28(e) of the Securities
Exchange Act of 1934, as amended ("1934 Act"), a higher commission than that
which might have been charged by another broker-dealer for effecting the same
transactions, if the Sub-Adviser determines in good faith that such commission
is reasonable in relation to the brokerage, research services or other goods
provided by the broker-dealer, viewed in terms of either that particular
transaction or the overall responsibilities of the Sub-Adviser with respect to
the accounts as to which it exercises investment discretion (as such term is
defined under Section 3(a)(35) of the 1934 Act). In no instance will portfolio
securities be purchased from or sold to the Sub-Adviser, or any affiliated
person thereof, except in accordance with the federal securities laws and the
rules and regulations thereunder.
B. 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 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 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 its other clients.
C. In addition to the foregoing, the Sub-Adviser agrees that
orders with broker-dealers for the purchase or sale of portfolio securities by
the Portfolio shall be placed in accordance with the standards set forth in the
Advisory Agreement.
6. OWNERSHIP OF RECORDS.
The Sub-Adviser shall maintain all books and records required to be
maintained by the Sub-Adviser pursuant to the 1940 Act and the rules and
regulations promulgated thereunder with respect to transactions on behalf of the
Fund. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-Adviser hereby agrees: (i) that all records that it maintains for the Fund
are the property of the Fund, (ii) to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records that it maintains for the Fund and
that are required to be maintained by Rule 31a-1 under the 1940 Act and (iii)
agrees to surrender promptly to the Fund any records that it maintains for the
Fund upon request by the Fund; provided, however, the Sub-Adviser may retain
copies of such records.
7. REPORTS.
The Sub-Adviser shall furnish to the Board or the Investment Adviser,
or both, as appropriate, such information, reports, evaluations, analyses and
opinions as the Sub-Adviser and the Board or the Investment Adviser, as
appropriate, may mutually agree upon from time to time.
8. SERVICES TO OTHERS CLIENTS.
Nothing contained in this Agreement shall limit or restrict (i) the
freedom of the Sub-Adviser, or any affiliated person thereof, to render
investment management and corporate administrative services to other investment
companies, to act as investment manager or investment counselor to other
persons, firms, or corporations, or to engage in any other business activities,
or (ii) the right of any director, officer, or employee of the Sub-Adviser, 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 other business, whether of a similar nature or a dissimilar
nature.
9. SUB-ADVISER'S USE OF THE SERVICES OF OTHERS.
The Sub-Adviser may (at its cost except as contemplated by Paragraph 5
of this Agreement) employ, retain, or otherwise avail itself of the services or
facilities of other persons or organizations for the purpose of obtaining such
statistical and other factual information, such advice regarding economic
factors and trends, such advice as to occasional transactions in specific
securities, or such other information, advice, or assistance as the Sub-Adviser
may deem necessary, appropriate, or convenient for the discharge of its
obligations hereunder or otherwise helpful to the Sub-Adviser, as appropriate,
or in the discharge of Sub-Adviser's overall responsibilities with respect to
the other accounts that it serves as investment manager or counselor, provided
that the Sub-Adviser shall at all times retain responsibility for making
investment recommendations with respect to the Portfolio.
10. INDEMNIFICATION.
The Sub-Adviser shall exercise its best judgment in rendering the
services in accordance with the terms of this Agreement. The Sub-Adviser shall
not be liable for any error of judgment or mistake of law or for any act or
omission or any loss suffered by the Portfolio in connection with the matters to
which this Agreement relates, provided that nothing herein shall be deemed to
protect or purport to protect the Sub-Adviser against any liability to the
Portfolio or their shareholders, or the Adviser, to which the Sub-Adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement ("disabling
conduct"). The Adviser will indemnify the Sub-Adviser against, and hold harmless
from, any and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses), including any amount paid in satisfaction
of judgments, in compromise or as fines or penalties, not resulting from
disabling conduct by the Sub-Adviser. The Sub-Adviser shall be entitled to
advances from the Adviser for payment of reasonable expenses incurred in
connection with the matter as to which it is seeking indemnification in the
manner and to the fullest extent permissible under law.
11. REPRESENTATIONS OF INVESTMENT ADVISER AND SUB-ADVISER.
The Investment Adviser and Sub-Adviser represent, warrant, and agree as
follows:
A. The Investment Adviser and Sub-Adviser: (i) are registered as
investment advisers under the Advisers Act and will continue to be so registered
for so long as this Agreement remains in effect; (ii) are not prohibited by the
1940 Act or the Advisers Act from performing the services contemplated by this
Agreement; (iii) have met, and will continue to meet for so long as this
Agreement remains in effect, any applicable federal or state requirements, or
the applicable requirements of any regulatory or industry self-regulatory
agency, necessary to be met in order to perform the services contemplated by
this Agreement; (iv) have the authority to enter into and perform the services
contemplated by this Agreement; and (v) will immediately notify the other party
to this Agreement of the occurrence of any event that would disqualify them from
serving as an investment adviser of an investment company pursuant to Section 9
(a) of the 1940 Act or otherwise.
B. The Investment Adviser and Sub-Adviser have adopted a
written code of ethics complying with the requirements of Rule 17j-1 under the
1940 Act and, if they have not already done so, will provide each other and the
Fund with a copy of such code of ethics, together with evidence of its adoption,
provided, however that Sub-Adviser is not required to comply with Investment
Adviser's code of ethics and Investment Adviser is not required to comply with
Sub-Adviser's code of ethics.
C. The Investment Adviser and Sub-Adviser have provided each
other and the Fund with a copy of each Adviser's Form ADV as most recently filed
with the SEC and will, promptly after filing any amendment to its Form ADV with
the SEC, furnish a copy of such amendment to each other.
12. TERM OF AGREEMENT.
This Agreement shall become effective upon the date first above
written, provided that this Agreement shall not take effect unless it has first
been approved (i) by a vote of a majority of those Directors of the Fund 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, and (ii)
by vote of a majority of the Portfolio's outstanding voting securities. Unless
sooner terminated as provided herein, this Agreement shall continue for an
initial term ending April 30. 2004. Thereafter, this Agreement shall continue in
effect from year to year, with respect to the Portfolio, subject to the
termination provisions and all other terms and conditions hereof, so long as
such continuation shall be specifically approved at least annually (a) by either
the Board, or by vote of a majority of the outstanding voting securities of the
Portfolio; or (b) in either event, by the vote, cast in person at a meeting
called for the purpose of voting on such approval, of a majority of the
Directors of the Fund who are not parties to this Agreement or interested
persons of any such party. The Sub-Adviser shall furnish to the Fund, promptly
upon its request such information as may reasonably be necessary to evaluate the
terms of this Agreement or any extension, renewal, or amendment hereof.
13. TERMINATION OF AGREEMENT.
Notwithstanding the foregoing, this Agreement may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Portfolio, or per the terms
of the exemptive order - Release No. 23379 - under Section 6(c) of the Act from
Section 15(a) and Rule 18f-2 under the Act, on at least 60 days' prior written
notice to the Sub-Adviser. This Agreement may also be terminated by the
Investment Adviser: (i) on at least 60 days' prior written notice to the
Sub-Adviser, without the payment of any penalty; or (ii) if the Sub-Adviser
becomes unable to discharge its duties and obligations under this Agreement. The
Sub-Adviser may terminate this Agreement at any time, or preclude its renewal
without the payment of any penalty, on at least 60 days' prior notice to the
Investment Adviser. This Agreement shall terminate automatically in the event of
its assignment or upon termination of the Advisory Agreement.
14. AMENDMENT OF AGREEMENT.
No provision of this Agreement may be changed, waived, discharged, or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge, or termination is
sought, and no amendment of this Agreement shall be effective until approved by
vote of a majority of the Portfolio's outstanding voting securities and a vote
of a majority of those Directors of the Fund 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 amendment, unless otherwise permitted
in accordance with the 1940 Act.
15. MISCELLANEOUS.
A. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Massachusetts without giving effect to
the conflicts of laws principles thereof, and the 1940 Act. To the extent that
the applicable laws of the State of Massachusetts conflict with the applicable
provisions of the 1940 Act, the latter shall control.
B. Captions. The captions contained in this Agreement are
included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect.
C. Entire Agreement. This Agreement represents the entire
agreement and understanding of the parties hereto and shall supersede any prior
agreements between the parties relating to the subject matter hereof, and all
such prior agreements shall be deemed terminated upon the effectiveness of this
Agreement.
D. Interpretation. Nothing herein contained shall be deemed to
require the Fund to take any action contrary to its Declaration of Trust or
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of its
responsibility for and control of the conduct of the affairs of the Fund.
E. Definitions. 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 shall be resolved by reference to such term or
provision of the 1940 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 validly issued pursuant to the 1940
Act. As used in this Agreement, the terms "majority of the outstanding voting
securities," "affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell," and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the SEC by any rule, regulation, or order. Where the effect
of a requirement of the federal securities laws reflected in any provision of
this Agreement is made less restrictive by a rule, regulation, or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation, or order, unless the
Investment Adviser and the Sub-Adviser agree to the contrary.
F. Expenses. Investment Adviser and the Fund shall assume and
pay their respective organizational, operational, and business expenses not
specifically assumed or agreed to be paid by Sub-Adviser pursuant to this
Agreement. Sub-Adviser shall pay its own organizational, operational, and
business expenses but shall not be obligated to pay any expenses of Investment
Adviser or the Fund, including without limitation: (a) interest and taxes; (b)
brokerage commissions and other costs in connection with the purchase or sale of
securities or other investment instruments for the Fund; and (c) custodian fees
and expenses. Any reimbursement of management fees required by any expense
limitation provision and any liability arising out of a violation of Section
36(b) of the 1940 Act shall be the sole responsibility of Investment Adviser.
16. CUSTODIAN.
The Fund assets shall be maintained in the custody of the custodian as
identified by the Investment Manager. Any assets added to the Fund shall be
delivered directly to such custodian. Sub-Adviser shall have no liability for
the acts or omissions of any custodian of the Fund's assets. Sub-Adviser shall
have no responsibility for the segregation requirement of the 1940 Act or other
applicable law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized signatories as of the date and year first
above written.
ATTEST: AEGON/TRANSAMERICA FUND ADVISERS, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxx
--------------------------- ----------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxx X. Xxxxxx
Title: Assistant Vice President Title: Vice President, General
and Assistant Secretary Counsel, Compliance Officer
and Secretary
ATTEST: JANUS CAPITAL MANAGEMENT LLC
By: ______________________ By: ______________________________
Name: _____________________ Name: ______________________________
Title: ____________________ Title: _____________________________
SUB-ADVISORY AGREEMENT
SCHEDULE A
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PORTFOLIO SUB-ADVISER COMPENSATION TERMINATION DATE
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JANUS BALANCED 0.45% of the first $500 million of the April 30, 2004
Portfolio's average daily net assets;
0.425% of the next $500; and 0.40% of
the Portfolio's average daily net assets
over $1 billion, less 50% of the amount
paid or reimbursed by the investment
adviser pursuant to the Portfolio's
expense limitation*
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* Sub-Adviser will share 50% of the amounts reimbursed by the Investment Adviser
for the first 24 months of the Agreement.
