Exhibit 5(a)
XXXXXXX VARIABLE LIFE INVESTMENT FUND
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
November 14 , 1986
Xxxxxxx, Xxxxxxx & Xxxxx Ltd.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Investment Advisory Agreement
Dear Sirs:
Xxxxxxx Variable Life Investment Fund (the "Fund") has been established as
a Massachusetts business trust to engage in the business of an investment
company. The shares of beneficial interest of the Fund are divided into separate
series ("Portfolios"), each of which is established pursuant to written
instruments executed by the Trustees of the Fund. Portfolios may be terminated,
and additional Portfolios established, from time to time by action of the
Trustees. The Fund has selected you to act as the sole investment adviser for
the Portfolios of the Fund referred to in Paragraph 5 herein and to provide
certain other services, as more fully set forth below, and you are willing to
act as such investment adviser and to perform such services under the terms and
conditions hereinafter set forth. Accordingly, the Fund agrees with you as
follows:
1. Delivery of Fund Documents. The Fund has furnished you with copies
properly certified or authenticated of each of the following:
(a) Declaration of Trust of the Fund, dated March 15, 1985, as amended
from time to time.
(b) By-Laws of the Fund as in effect on the date hereof.
(c) Resolutions of the Trustees of the Fund selecting you as investment
adviser and approving the form of this Agreement.
(d) Written Instruments to Establish and Designate Separate Series of
Shares.
The Fund will furnish you from time to time with copies, properly certified or
authenticated, of all amendments of or supplements to the foregoing, if any.
2. Name of Fund. The Fund may use any name derived from the name "Xxxxxxx,
Xxxxxxx & Xxxxx", if it elects to do so, only for so long as this Agreement, any
other Investment Advisory Agreement between you and the Fund, or any extension,
renewal or amendment hereof or thereof remains in effect, including any similar
agreement with any organization which shall have succeeded to your business as
investment adviser. At such time as such an agreement shall no longer be in
effect, the Fund will (to the extent that it lawfully can) cease to use such a
name or any other name indicating that it is advised by or otherwise connected
with you or any organization which shall have so succeeded to your business.
3. Advisory Services. You will regularly provide each Portfolio of the
Fund with investment research, advice and supervision and will furnish
continuously an investment program for each Portfolio consistent with the
investment objectives and policies of such Portfolios and of the Fund. You will
determine what securities shall be purchased for each Portfolio, what securities
shall be held or sold by each Portfolio, and what portion of each Portfolio's
assets shall be held uninvested, subject always to the provisions of the Fund's
Declaration of Trust and By-Laws and of the Investment Company Act of 1940, as
amended, and to the investment objectives, policies and restrictions of such
Portfolios and of the Fund, as each of the same shall be from time to time in
effect, and subject, further, to such policies and instructions as the Trustees
may from time to time establish. You shall advise and assist the officers of the
Fund in taking such steps as are necessary or appropriate to carry out the
decisions of the Trustees and the appropriate committees of the Trustees
regarding the conduct of the business of the Fund.
4. Allocation of Charges and Expenses. You will pay the compensation and
expenses of all officers and executive employees of the Fund and will make
available, without expense to the Fund, the services of such of your managing
directors, principals and employees as may duly be elected officers or Trustees
of the Fund, subject to their individual consent to serve and to any limitations
imposed by law. You will pay the Fund's office rent and will provide investment
advisory research and statistical facilities and all clerical services relating
to research, statistical and investment work. You will not be required to pay
any expenses of the Fund other than those specifically allocated to you in this
paragraph 4. In particular, but without limiting the generality of the
foregoing, you will not be required to pay: organization expenses
-2-
of the Fund; clerical salaries; fees and expenses incurred by the Fund in
connection with membership in investment company organizations; brokers'
commissions; payment for portfolio pricing services to a pricing agent, if any;
legal, auditing or accounting expenses; taxes or governmental fees; the fees and
expenses of the transfer agent of the Fund; the cost of preparing share
certificates or any other expenses, including clerical expenses of issue,
redemption or repurchase of shares of the Fund; the expenses of and fees for
registering or qualifying securities for sale; the fees and expenses of Trustees
of the Fund who are not affiliated with you; the cost of preparing and
distributing reports and notices to shareholders; public and investor relations
expenses; or the fees or disbursements of custodians of the Fund's assets,
including expenses incurred in the performance of any obligations enumerated by
the Declaration of Trust or By-Laws of the Fund insofar as they govern
agreements with any such custodian. You shall not be required to pay expenses of
any activity which is primarily intended to result in the sale of shares,
including clerical expenses, of offer, sale, underwriting and distribution of
the Fund's shares if and to the extent that such expenses (i) are required to be
borne by a principal underwriter which acts as the distributor of the Fund's
shares pursuant to an underwriting agreement which provides that the underwriter
shall assume some or all of such expenses, or (ii) the Fund shall have adopted a
plan in conformity with Rule 12b-1 under the Investment Company Act of 1940, as
amended, providing that the Fund shall assume some or all of such expenses. You
shall be required to pay such of the foregoing expenses as are not required to
be paid by the principal underwriter pursuant to the underwriting agreement or
are not permitted to be paid by the Fund pursuant to such a plan.
5. Compensation of the Adviser. For all services to be rendered and
payments made as provided in paragraphs 3 and 4 hereof, the Fund will pay you on
the last day of each month a fee equal to 1/12 of the sum of the following fees
computed as a percentage of the average daily net assets for such month of each
of the respective Portfolios: Money Market Portfolio - .37%; Managed Bond
Portfolio - .475%; Managed Equity Portfolio - .475%; Managed Diversified
Portfolio - .475%; 1990 Managed Zero Coupon Portfolio - .425%; 1995 Managed Zero
Coupon Portfolio - .425%; 2000 Managed Zero Coupon Portfolio - .425%; 2005
Managed Zero Coupon Portfolio - .425%; and 2010 Managed Zero Coupon Portfolio -
.425%. The "average daily net assets" of a Portfolio are defined as the average
of the values placed on the net assets of such Portfolio as of 4:00 p.m. (New
York time), on each day on which the net asset value of the Fund's Portfolios is
determined consistent with the provisions of Rule 22c-1 under the Investment
Company Act of 1940 or, if the Fund lawfully determines the value of the net
assets of a
-3-
Portfolio as of some other time on each business day, as of such time. The value
of net assets of each Portfolio shall be determined pursuant to the applicable
provisions of the Declaration of Trust of the Fund. If, pursuant to such
provisions, the determination of net asset value is suspended for any particular
business day, then for the purposes of this paragraph 5, the value of the net
assets of each Portfolio of the Fund as last determined shall be deemed to be
the value of the net assets as of the close of the New York Stock Exchange, or
as of such other time as the value of the net assets of the Fund's Portfolios
may lawfully be determined, on that day. If the determination of the net asset
value of the shares of the Fund's Portfolios has been suspended pursuant to the
Declaration of Trust of the Fund for a period including such month, your
compensation payable at the end of such month shall be computed on the basis of
the value of the net assets of the Portfolios of the Fund as last determined
(whether during or prior to such month). If the Fund determines the value of the
net assets of its Portfolios more than once on any day, the last such
determination thereof on that day shall be deemed to be the sole determination
thereof on that day for the purposes of this paragraph 5. You may waive all or a
portion of your fees provided for hereunder. In the event that others than you
agree to assume expenses of the Fund by way of reimbursement or otherwise, you
may as a matter of administrative convenience, but shall not be obligated to,
advance to the Fund an amount representing all or a portion of the expenses so
assumed. If you do advance such an amount to the Fund and you are not repaid
after a reasonable time by the party whose obligation it is to assume such
expense of the Fund, you shall be entitled to have the amount of such advance
returned to you upon request.
6. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither you nor any
of your managing directors, principals, directors, officers or employees will
act as a principal or agent or receive any commission. You or your agent shall
arrange for the placing of all orders for the purchase and sale of portfolio
securities for the Fund's account with brokers or dealers selected by you. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the Fund the most favorable execution and net
price available. If any occasion should arise in which you give any advice to
clients of yours concerning the shares of the Fund, you will act solely as
investment counsel for such clients and not in any way on behalf of the Fund.
Your services to the Fund pursuant to this Agreement are not to be deemed to be
exclusive and it is understood that you may render investment advice, management
and other services to others.
-4-
7. Limitation of Liability of Adviser. You shall not be liable for any
error of judgment 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 your part
in the performance of your duties or from reckless disregard by you of your
obligations and duties under this Agreement. Any person, even though also
employed by you, who may be or become an employee of and paid by the Fund shall
be deemed, when acting within the scope of his employment by the Fund, to be
acting in such employment solely for the Fund and not as your employee or agent.
8. Duration and Termination of this Agreement. This Agreement shall remain
in force with respect to each Portfolio until September 30, 1987, and from year
to year thereafter, but only so long as such continuance is specifically
approved at least annually by the vote of a majority of the Trustees who are not
interested persons of you or of the Fund, cast in person at a meeting called for
the purpose of voting on such approval and by a vote of the Trustees or of a
majority of the outstanding voting securities of such Portfolio. This Agreement
may, on 60 days' written notice, be terminated at any time without the payment
of any penalty, by the Trustees, by vote of a majority of the outstanding voting
securities of such Portfolio, or by you. This Agreement shall automatically
terminate in the event of its assignment. In interpreting the provisions of this
Agreement, the definitions contained in Section 2(a) of the Investment Company
Act of 1940, as modified by Rule 18f-2 under the Act, (particularly the
definitions of "interested person," "assignment" and "majority of the
outstanding voting securities"), as from time to time amended, shall be applied,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission by any rule, regulation or order.
9. Amendment of this Agreement. No provisions 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 with respect to any Portfolio until approved by vote of the holders of
a majority of the outstanding voting securities of such Portfolio and by the
Trustees, including a majority of the Trustees who are not interested persons of
you or of the Fund, cast in person at a meeting called for the purpose of voting
on such approval.
10. Miscellaneous. It is understood and expressly stipulated that neither
the holders of shares of the Fund nor the Trustees shall be personally liable
hereunder. The captions in
-5-
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. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
The name "Xxxxxxx Variable Life Investment Fund" is the designation of the
Trustees for the time being under a Declaration of Trust dated March 15, 1985
and all persons dealing with the Fund must look solely to the property of the
Fund for the enforcement of any claims against the Fund as neither the Trustees,
officers, agents or shareholders assume any personal liability for obligations
entered into on behalf of the Fund.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Fund, whereupon this letter shall become a binding contract.
Yours very truly,
XXXXXXX VARIABLE LIFE
INVESTMENT FUND
By /s/ Xxxxx X. Xxxxx
------------------------
President
The foregoing Agreement is hereby accepted as of the date thereof.
XXXXXXX, XXXXXXX & XXXXX LTD.
By /s/ Xxxxxx Xxxxxx
-----------------------
Managing Director
-6-
