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Exhibit 23(d)(1)
XXXXX VARIABLE ACCOUNT FUND, INC.
INVESTMENT ADVISORY AGREEMENT
JANUARY 1, 2001
Xxxxx Selected Advisers, L.P.
0000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Dear Sirs:
We herewith confirm our agreement with you as follows:
1. Acting as an Investment Company, Xxxxx Selected Advisers, L.P., to Serve as
Investment Adviser. We desire to employ the capital of Xxxxx Variable
Account Fund, Inc. (the "Company") by investing and reinvesting the same in
securities of the type and in accordance with the limitations specified in
the registration statement under the Securities Act of 1933 and the
Investment Company Act of 1940 (the "1940 Act"), of which we enclose a
copy, and in such manner and to such extent as may from time to time be
approved by our Board of Directors. We desire to employ you to supervise
and assist in the management of this business for us. You shall, for all
purposes herein, be deemed an independent contractor, and shall, unless
otherwise expressly provided for or authorized, have no authority to act
for or to represent us.
2. Employees, Officers, Directors. In this connection it is understood that
you will from time to time employ or associate with yourselves such person
or persons as you may believe to be particularly fitted to assist you in
the execution of this Agreement, it being understood that the compensation
of such person or persons shall be paid by you and that no obligation may
be incurred on our behalf in any such respect. This does not apply to such
individuals as we may in due course elect as officers of our corporation,
except that no officer, director, stockholder or employee of your firm
shall receive compensation from us for acting as director, officer or
employee of our corporation, and you agree to pay the compensation of all
such persons. We understand that, during the continuance of this agreement,
officers of your firm will, if elected, serve as directors of our
corporation and as its principal officers.
3. Exclusive Authority, Information. You are to have complete and exclusive
authority to develop and handle for us any business of the type
above-mentioned which you may consider advantageous for us, subject to the
direction and control of our officers and directors. You will furnish us
with such statistical information with respect to the securities which we
may hold or contemplate purchasing, as we may request. We wish to be kept
in touch with important developments affecting our Company and shall expect
you on your own initiative to furnish us from time to time with such
information as you may believe appropriate for this purpose, whether
concerning the individual companies whose securities are included in our
portfolio or the industries in which they are engaged. We shall also expect
you of your own motion to advise us whenever, in your opinion, conditions
are such as to make it desirable that a specific security be eliminated
from our portfolio.
4. Exercise of Best Judgment, Limitation on Liability. We shall expect of you
your best judgment in rendering these services to us, and we agree as an
inducement to your undertaking the same that you shall not be liable
hereunder for any mistake of judgment or in any other event whatsoever,
except for lack of good faith, provided that nothing herein shall be deemed
to protect or purport to protect you
against any liability to us or to our security holders to which you would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of your duties hereunder, or by reason of
your reckless disregard of your obligations and duties hereunder.
5. Fee for Services. In consideration of such services, we shall pay you a
monthly fee as of the last day of each month in each year based upon the
average daily value of net assets during a month for which the monthly fee
is calculated, as follows:
a monthly rate of 1/12 of 0.75% of the value of average daily net
assets during the month;
provided, however, that such fee for any period which shall not be a full
monthly period shall be prorated according to the proportion which such
period bears to the full month, and no payment of any fee shall be made
before the commencement of the public offering of any common stock. For
this purpose, the value of our net assets shall be computed in the same
manner as the value of such net assets are computed in connection with the
determination of the net asset value of our shares.
6. Clerical Services, Responsibility for Expenses. Except as otherwise
provided below in this paragraph, you will attend to, or arrange for the
performance, at your expense, of such clerical and accounting work related
to the investment and reinvestment of our capital for us as we may specify.
We shall, however, bear all costs and expenses of or attendant upon: (i)
preparation of our federal, state and local tax returns; (ii) preparation
of documents we must file with the Securities and Exchange Commission;
(iii) determination of the status and payment of dividends; (iv)
reconciling and reviewing output of our custodian bank, determining the
adequacy of various accruals, approving our expenses, authorizing our bank
to receive and disburse money and securities and verifications related
thereto, and interfacing with our auditors; (v) verification of our
security ledger and preparation and maintenance of other corporate books
and records; (vi) brokerage commissions and other transaction expenses;
(vii) stockholders' and Directors' meetings; (viii) corporate reports and
proxy materials, including their preparation, printing and distribution;
(ix) fees of Directors not affiliated with you or any other firm acting as
an investment adviser to us; (x) taxes and interest expenses; (xi) reports
to government authorities including all expenses and costs relating to such
reports and to state securities law compliance; (xii) custodian and
transfer agent fees; (xiii) association membership dues; (xiv) premiums on
all insurance and bonds maintained for us or on our behalf; (xv) retention
of the transfer agent and registrar for our shares and the disbursing agent
for our stockholders, including costs and expenses attendant upon
shareholder servicing, purchase, repurchase and redemption of our shares;
(xvi) our counsel; and (xvii) our independent auditors. We may arrange for
you to provide some or all of the services relating to items (i) to (xvii)
above, and any other services not directly relating to investment and
reinvestment of our capital, upon such terms and conditions, including
compensation, as we may agree, and subject to the approval and review of
our Board of Directors.
All of our expenses shall be paid by us except for those you specifically
agree to assume under this Agreement.
7. Portfolio Transactions.
(a Best Execution. You are authorized to place purchase and sale orders
for our portfolio transactions with brokers and/or dealers which in
your best judgment, are able to achieve "best execution" of such
orders. "Best execution" shall mean prompt and reliable execution at
the most favorable security price obtainable, taking into account
research and other services available and the reasonableness of
commission charges. Purchases and sales of securities not listed or
traded on a securities exchange shall ordinarily be executed with
primary market makers, acting as principal, except where, in your
judgment, better prices and execution may otherwise be obtained.
(b) Brokerage and Research. You are authorized to allocate brokerage and
principal business to hereinafter referred to as "brokers") who have
provided brokerage and research services, as such services are defined
in Section 28(e) of the Securities Exchange Act of 1934 (the "1934
Act") for us and/or other accounts, if any, for which you exercise
investment discretion (as defined in
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Section 3(a)(35) of the 0000 Xxx) and to cause us to pay a commission
for effecting a securities transaction in excess of the amount another
broker would have charged for effecting that transaction if you
determine in good faith that such amount of commission is reasonable
in relation to the value of the brokerage and research services
provided by such broker, viewed in terms of either that particular
transaction or your overall responsibilities with respect to us and
the other accounts, if any, as to which you exercise investment
discretion. In reaching such determination, you will not be required
to place or attempt to place a specific dollar value on the research
or execution services of a broker or on the portion of any commission
reflecting either of said services.
(c) Sales of Shares. Portfolio transactions may be allocated to any broker
or dealer taking into account the sale by such broker or dealer of our
shares. Any such allocation shall be made in accordance with the
provisions of this agreement relating to obtaining "best execution."
8. Non-Exclusive Services, Use of Name. You may act as investment adviser for
any other person, firm or corporation. We recognize that you have given us
the right to use the name "Xxxxx" in our corporate title. If for any reason
you no longer act as our investment adviser, we shall remove the name
"Xxxxx" from our corporate title upon demand made by you.
9. Effective Date, Term, Termination. This Agreement shall become effective
for an initial period of not more than two years from its effective date,
and shall continue in full force and effect continuously thereafter, if its
continuance is approved at least annually as required by the 1940 Act. The
effective date of this Agreement shall be the date this Agreement has been
approved as required by the 1940 Act. As of such effective date, this
Agreement shall supersede all prior investment advisory agreements between
the parties. This Agreement may be terminated at any time, without the
payment of any penalty, by our Board of Directors or by vote of a majority
of our outstanding voting securities (as defined in the 1940 Act) on 60
days' written notice to you, or by you on 60 days' written notice to us,
and it shall be automatically terminated in the event of its assignment (as
defined in said Act).
10. Series Offered by the Company. As of the date of this Agreement, the
Company has three series of shares (the Xxxxx Value Portfolio, Xxxxx
Financial Portfolio, and Xxxxx Real Estate Portfolio) and this Agreement
shall apply to those series. In the event that the Company shall create
future series, this Agreement shall apply to and be effective as to each
such series, provided (i) that as to any additional series there may be a
different fee payable to you, and (ii) this Agreement, as amended to
reflect any change in fees, is approved as required by the 1940 Act. The
effective date of this Agreement as to each such series shall be the date
that it is so approved or any later date as shall be agreed to by you and
the Company.
If the foregoing is in accordance with your understanding, will you so kindly
indicate by signing and returning to us the enclosed copy hereof.
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Very truly yours,
XXXXX VARIABLE ACCOUNT FUND, INC.
By: ________________________________
Its: _______________________________
Accepted as of the day and year first above written.
XXXXX SELECTED ADVISERS, L.P.
By: XXXXX INVESTMENTS, LLC, General Partner
By: ______________________________________
Its: _____________________________________
