EXHIBIT 99.B5
INVESTMENT ADVISORY AGREEMENT
BETWEEN
TRIFLEX FUND, INC. AND
SECURITIES MANAGEMENT AND RESEARCH, INC.
THIS AGREEMENT made and entered into this 30th day of November, 1989, by
and between TRIFLEX FUND, INC. a MARYLAND Corporation (hereinafter referred
to as the "Fund"), and SECURITIES MANAGEMENT AND RESEARCH, INC., a Florida
Corporation (hereinafter referred to as the "Adviser").
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. Adviser shall act as investment adviser for the Fund and shall, in
such capacity, supervise the investment and reinvestment of the cash,
securities and other properties comprising the assets of the Fund, subject at
all times to the policies and approval of the Board of Directors of the Fund.
2. In carrying out its obligations under paragraph 1. hereof, Adviser
shall:
(a) 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
portfolio of the Fund, and whether concerning the individual companies
whose securities are included in the Fund's portfolio, or the
industries in which they engage, or with respect to securities which
the Adviser considers desirable for inclusion in the Fund's portfolio.
(b) Determine what industries and companies shall be represented in
the Fund's portfolio and regularly report them to the Board of
Directors of the Fund.
(c) Formulate and implement programs for the purchases and sales of
the securities of such companies and regularly report thereon to the
Board of Directors of the Fund; and
(d) Take, on behalf of the Fund, all actions which appear to the
Adviser necessary to carry into effect such purchase and sale programs
and supervisory functions, including the placing of orders for the
purchase and sale of portfolio securities.
The Adviser, as agent for the Fund, shall keep the Fund's books of
account. In compliance with the requirements of the rules and regulations of
the Securities and Exchange Commission under the Investment Company Act of
1940, as amended, the Adviser hereby agrees that all records which it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's request.
The Adviser further agrees to preserve for the periods prescribed by such
rules and regulations any such records as are required to be maintained.
3. Except for those investment-related expenses hereafter expressly
reserved to the Fund, the Adviser will furnish all investment-related
management, executive, administrative and operational services reasonably
necessary to the Fund, either by furnishing the same directly to the Fund or
by reimbursing the Fund for any such investment-related expense not so
excepted but paid by the Fund. The investment-related services and materials
to be furnished and paid for by Adviser include without limitation:
(a) The services of all persons necessary to perform the executive,
administrative, clerical and bookkeeping functions for the Fund's
investment operations; and
(b) Suitable office space, necessary office equipment and utilities
required in connection with the Fund's investment operations.
4. The investment-related expenses reserved to the Fund are as follows:
(a) Commissions and other expenses incidental to portfolio transactions;
(b) The charges of the custodian for the Fund's assets (including the
sums, if any, charged to the Fund by such custodian for keeping books
and similar services with respect to the custodianship of such
assets);
(c) Taxes;
(d) Related fees and expenses of the Fund's auditors, the Fund's
legal counsel and counsel for the not "interested" directors; and
(e) The fees to the Adviser set forth below in paragraph 5.
5. As its sole compensation for the services, expenses, facilities and
materials supplied to the Fund hereunder, the Fund shall pay to the Adviser
an investment advisory fee for investment advice furnished pursuant to
paragraphs 1. & 2. hereof.
The advisory fee shall be computed by applying to the average daily net
asset value of the Fund for each month one-twelfth (1/12th) of the annual
rate as follows:
On the Portion of the Fund's Advisory Fee
Average Daily Net Assets Annual Rate
---------------------------- ------------
Not exceeding $100,000,000 .750 of 1%
Exceeding $100,000,000 but
not exceeding $200,000,000 .625 of 1%
Exceeding $200,000,000 but
not exceeding $300,000,000 .500 of 1%
Exceeding $300,000,000 .400 of 1%
The "average daily net asset value" of the Fund for a particular
period shall be determined by adding net asset values as regularly computed
by the Fund at the close of business each business day during such period
and dividing the resulting total by the number of business days during such
period.
The investment advisory fee for each month shall be payable as soon as
practicable after the last business day of such month.
6. Advisor is affiliated with American National Insurance Company, a
Texas insurance corporation ("American National"). Adviser has entered into a
contract dated January 1, 1987 with American National pursuant to which
contract American National will furnish certain personnel, investment
information and resources, services, equipment, materials and facilities to
Adviser, some of which will or may be used by Adviser in meeting its
obligations to the Fund hereunder.
7. Any investment program undertaken by the Adviser pursuant to this
Agreement, as well as any other activities undertaken by the Adviser on
behalf of the Fund pursuant thereto, shall at all times be subject to the
Articles of Incorporation and the current prospectus of the Fund, as well as
any directives of the Board of Directors of the Fund, the Executive Committee
of said Board, any other committee or committees of the Fund acting pursuant
to authority of the Board, or any officer of the Fund acting pursuant to
authority of the Board, or any officers of the Fund acting pursuant to like
authority.
8. In carrying out its obligations under this Agreement, Adviser shall at
all times conform to:
(a) All applicable provisions of the Investment Company Act of 1940,
as amended, and any rules and regulations adopted thereunder;
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(b) The provisions of the Articles of Incorporation of the Fund as
amended from time to time;
(c) The provisions of the By-Laws of the Fund as amended from time to
time;
(d) The provisions of the registration statements of the Fund under
the Securities Act of 1933 and the Investment Company Act of 1940, as
amended from time to time; and
(e) Any other applicable provisions of state or federal laws.
In connection with purchases or sales of portfolio securities for the
account of the Fund neither the Adviser nor any officer or director of the
Adviser shall act as a principal or receive any commission other than its
compensation provided for in paragraph 5. hereof.
9. The Adviser shall not be liable for any error of judgement or mistake
of law or for any loss suffered by the Fund in connection with the matters to
which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Adviser in the
performance of its duties or from reckless disregard by the Adviser of its
obligations and duties under this Agreement.
10. This Agreement shall become effective on the date set forth above and
shall continue in effect until August 15, 1990. Thereafter, this Agreement
will continue in effect for additional one year periods only so long as such
continuance is specifically approved at least annually by the Board of
Directors or by vote of a majority of the outstanding voting securities of
the Fund, and in either case by the specific approval of a majority of the
directors who are not parties to such contract or agreement, or "interested"
persons of any such parties, cast in person at a meeting called for the
purpose of voting on such approval, the term "interested" persons for this
purpose having the meaning defined in Section 2 (a)(19) of the Investment
Company Act of 1940, as amended.
11. This Agreement may be terminated at any time, without the payment of
any penalty, by vote of the Board of Directors of the Fund or by vote of the
holders of a majority of the outstanding voting securities of the Fund, or by
the Adviser, on sixty (60) days' written notice to the other party.
12. This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" for this purpose having the meaning defined
in Section 2 (a)(4) of the Investment Company Act of 1940.
13. Any notice 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 the Fund and that
of the Adviser for this purpose shall be Xxx Xxxxx Xxxxx, Xxxxxxxxx, Xxxxx
00000.
14. No amendment to this Agreement shall be effective until approved by
vote of the holders of a majority of the outstanding shares of the Fund.
15. This Investment Advisory Agreement is separate and distinct from, and
neither affects nor is affected by, the Underwriting Agreement to be entered
into between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate on the day and year first above written.
TRIFLEX FUND, INC.
By: XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx, President
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SECURITIES MANAGEMENT AND RESEARCH, INC.
By: XXX X. XXXX, XX.
Xxx X. Xxxx, Xx.
Senior Vice President
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