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EXHIBIT (5)(c)
SUB-ADVISORY AGREEMENT - MFR
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made this _______ day of ____________ 1995 by and between
LEXINGTON MANAGEMENT CORPORATION, a Delaware corporation ("LMC"), and MFR
ADVISORS, INC., a New York corporation ("MFR"), with respect to the following
recital of fact:
RECITAL
WHEREAS, Security Income Fund - Global Income Series (the "Fund") is registered
as an open-end, diversified management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations
promulgated thereunder; and
WHEREAS, Security Management Company ("SMC") is a registered investment advisor
is the investment advisor to the Fund; and
WHEREAS, LMC is registered as an investment advisor under the Investment
Advisers Act of 1940, as amended, and engages in the business of acting as an
investment advisor; and
WHEREAS, LMC is the sub-advisor to the Fund pursuant to a Sub-Advisory
Agreement dated _____________ between LMC and SMC; and
WHEREAS, MFR is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and engages in the business of acting as an
investment advisor; and
WHEREAS, LMC desires to appoint MFR as its sub-advisor to provide certain
investment advisory services to the Fund; and
WHEREAS, MFR proposes to render investment management services to LMC in
connection with LMC's responsibilities to the Fund on the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Duties. MFR shall:
(a) Provide LMC with such economic research and securities analysis as
LMC may from time to time consider necessary.
(b) Obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy
generally or the Fund.
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2. Control by Board of Directors. Any investment program undertaken by MFR
pursuant to this Agreement, as well as any other activities undertaken by MFR
on behalf of the Fund pursuant thereto, shall at all times be subject to any
directives of the Board of Directors of the Fund.
3. Compliance With Applicable Requirements. In carrying out its obligations
under this Agreement, MFR shall at all times conform to:
(a) all applicable provisions of the 1940 Act; and
(b) the provisions of the Registration Statement of the fund under the
Securities Act of 1933 and the 1940 Act; and
(c) the provisions of the Fund's Agreement and Articles of
Incorporation; and
(d) the provisions of the By-Laws of the Fund; and
(e) all applicable statutes and regulations necessary to qualify the
Fund as a Regulated Investment Company under Sub-Chapter M of the
Internal Revenue Code (or any successor or similar provision), and
shall notify LMC immediately upon having a reasonable basis for
believing that the Fund has ceased to so qualify or that it might
not so qualify in the future; and
(f) any other applicable provisions of state and federal law.
4. Expenses. The expenses connected with the Fund shall be borne by MFR as
follows:
(a) MFR shall pay the salaries and payroll expenses of persons serving
as officers or Directors of the Fund who are also employees of MFR
or any of its affiliates.
5. Delegation of Responsibilities. MFR shall provide such services to LMC
for the Fund subject to the oversight and supervision of LMC, SMC and the
Fund's Board of Directors.
6. Other Services. Upon request of LMC and with the approval of the Fund's
Board of Directors MFR may perform services on behalf of the Fund which
are not required by this Agreement. Such services will be performed on
behalf of the Fund and MFR's cost in rendering such services may be
billed monthly to LMC, subject to examination by LMC's independent
accountants. Payment or assumption by MFR of any Fund expense that MFR
is not required to pay or assume under this Agreement shall not relieve
LMC or MFR of any of their obligations to the Fund or obligate MFR to pay
or assume any similar Fund expense on any subsequent occasions.
7. Compensation. For the services to be rendered and the facilities
furnished hereunder, LMC shall pay MFR monthly compensation of the sum of
the amount determined by applying the following annual rate of the Fund's
average daily net assets net of reimbursement, .15% of the Fund's annual
average daily net assets. Compensation under this Agreement shall be
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paid monthly. If this Agreement becomes effective subsequent to the
first day of the month or shall terminate before the last day of the
month, compensation for that part of the month this Agreement is in
effect shall be prorated in a manner consistent with the calculation for
the preceding month and shall be made as promptly as possible after the
end of each month.
8. Term. This Agreement shall become effective at the close of business on
the date hereof and shall remain in force and effect, subject to Section
11 hereof for one year from the date hereof.
9. Renewal. Following the expiration of its initial term, this Agreement
shall continue in force and effect from year to year, provided that such
continuance is specifically approved at least annually.
(a) (i) by the Fund's Board of Directors or (ii) by the vote of a
majority of the Fund's outstanding voting securities (as defined
in Section 2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the Directors who are not
parties of this Agreement or interested persons of a party to the
Agreement (other than as a Director of the Fund), by votes cast in
person at a meeting specifically called for such purposes.
10. Termination. This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Fund's Board of Directors or by
vote of a majority of the Fund's outstanding voting securities or by MFR
on sixty (60) days' written notice to the other party. This Agreement
shall automatically terminate in the event of its assignment, the term
"assignment" for the purposes having the meaning defined in Section
2(a)(42) of the Investment Company Act of 1940.
11. Liability of MFR. In the absence of willful misfeasance, bad faith,
gross negligence on the part of MFR or its officers, directors or
employees, or reckless disregard by MFR of its duties under this
Agreement, MFR shall not be liable to LMC, the Fund or to any shareholder
of the Fund 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, provided MFR has acted in
good faith.
12. Notices. Any notices under this Agreement shall be in writing, addressed
and delivered or mailed postage paid to the other party at such address
as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of LMC
shall be Park 00 Xxxx, Xxxxx Xxx, Xxxxxx Xxxxx, Xxx Xxxxxx 00000, and
that of MFR for this purpose shall be One World Financial Center, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
LEXINGTON MANAGEMENT CORPORATION
By
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Attest: Executive Vice President
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MFR ADVISORS, INC.
By
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Attest: President
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