Exhibit 23(d)(1)(bb)
Form of Advisory Agreement for Protected Principal Stock
IDEX MUTUAL FUNDS
INVESTMENT ADVISORY AGREEMENT
This Agreement, entered into as of April 1, 2002 between IDEX Mutual
Funds, a Massachusetts business trust (referred to herein as the "Trust") and
AEGON/Transamerica Fund Advisers, Inc., a Florida corporation (referred to
herein as "ATF Advisers"), to provide certain management and advisory services
to a certain series of shares of beneficial interest in the Trust, namely, IDEX
Protected Principal Stock (the "Fund").
The Trust is registered as an open-end investment company registered
under the Investment Company Act of 1940 ("1940 Act"), and consists of more than
one series of shares, including the Fund. In managing the Fund, as well as in
the conduct of certain of its affairs, the Trust wishes to have the benefit of
the investment advisory services of ATF Advisers and its assistance in
performing certain management, administrative and promotional functions. ATF
Advisers desires to furnish services for the Trust and to perform the functions
assigned to it under this Agreement for the considerations provided.
Accordingly, the parties of agreed as follows:
1. Appointment. The Trust hereby appoints ATF Advisers as the
Trust's investment adviser and administrator for the period and on the terms set
forth in this Agreement. ATF Advisers accepts such appointment and agrees to
render or cause to be rendered the services set forth for the compensation
herein specified. In all matters relating to the performance of this Agreement,
ATF Advisers will act in conformity with the Trust's Declaration of Trust,
Bylaws and current registration statement applicable to the Fund as it may be
supplemented from time to time, and with the instructions and direction of the
Board of Trustees of the Trust, and will conform to and comply with the 1940 Act
and all other applicable federal or state laws and regulations.
2. Investment Advisory Services. In its capacity as investment
adviser to the Trust, ATF Advisers shall have the following responsibilities:
(a) to provide a guaranteed investment strategy, and as part of that
investment strategy, provide a guarantee of its investment performance
for investors through a guaranteed minimum account value at specified
intervals, in connection with a continuous investment program for the
Fund, including advice as to the acquisition, holding or disposition of
any or all of the securities or other assets which the Fund may own or
contemplate acquiring from time to time, consistent with the Trust's
Declaration of Trust and the Fund's investment objective and policies
adopted and declared by the Board of Trustees and as stated in the
Fund's current Prospectus;
(b) to cause the officers of ATF Advisers to attend meetings and
furnish oral or written reports, as the Trust may reasonably require,
in order to keep the Trustees and appropriate officers of the Trust
fully informed as to the conditions of the investment securities of the
Fund, the investment recommendations of ATF Advisers, and the
investment considerations which have given rise to those
recommendations;
(c) to supervise the purchase and sale of securities as directed by the
appropriate officers of the Trust, including the selection of brokers
and dealers to execute such transactions, consistent with paragraph 8
hereof; and
It is understood and agreed that ATF Advisers intends to enter into a
Sub-Advisory Agreement with Gateway Investment Advisers, L.P. (the
"sub-adviser") pursuant to which ATF Advisers may delegate some or all of its
responsibilities under this Section 2. The compensation to be paid to the
sub-adviser for such services shall be set forth in the Sub-Advisory Agreement;
provided, however, that each such Agreement shall be approved by the Board of
Trustees, including a majority of the Trustees who are not parties to the
Sub-Advisory Agreement or interested persons (within the meaning of Section
2(a)(19) of the 0000 Xxx) of any such party (the "Disinterested Trustees"), and
by the holders of the outstanding voting securities of the Fund in accordance
with the requirements of Section 15 of the 1940 Act, and shall otherwise be
subject to, and contain such provisions as shall be required by, the 1940 Act.
3. Management and Administrative Services. ATF Advisers shall
furnish or make available to the Fund the services of executive and management
personnel to supervise the performance of all administrative, record-keeping,
shareholder relations, regulatory reporting and compliance, and all other
functions of the Fund, including supervising and coordinating the services of
the Fund's custodian and transfer agent. ATF Advisers shall also assist in the
preparation of reports to shareholders of the Fund and prepare sales literature
promoting sale of the Fund's shares as requested by the Trust.
4. Allocation of Expenses. During the term of this Agreement, the
Fund will bear all expenses not expressly assumed by ATF Advisers incurred in
the operation of the Fund and the offering of its shares. Without limiting the
generality of the foregoing:
(a) The Fund shall pay (i) fees payable to ATF Advisers pursuant to
this Agreement; (ii) the cost (including brokerage commissions, if any)
incurred in connection with purchases and sales of the Fund's portfolio
securities; (iii) expenses of organizing the Fund; (iv) filing fees and
expenses relating to registering and qualifying and maintaining the
registration and qualification of the Fund's shares for sale under
federal and state securities laws; (v) its allocable share of the
compensation, fees and reimbursements paid to the Trust's
non-interested Trustees; (vi) custodian and transfer agent fees; (vii)
legal and accounting expenses allocable to the Fund, including costs
for local representation in Massachusetts and fees of special counsel,
if any, for the independent Trustees; (viii) all federal, state and
local tax (including stamp, excise, income and franchise taxes and the
preparation and filing of all returns and reports in connection
therewith; (ix) cost of certificates and delivery to purchasers; (x)
expenses of preparing and filing reports with federal and state
regulatory authorities; (xi) expenses of shareholders' meetings and of
preparing, printing and distributing proxy statements (unless otherwise
agreed to by the Trust and ATF Advisers); (xii) costs of any liability,
uncollectible items of deposit and other insurance or fidelity bonds;
(xiii) any costs, expenses or losses arising out of any liability of or
claim for damage or other relief asserted against the Trust for
violation of any law; (xiv) expenses of preparing, typesetting and
printing prospectuses and supplements thereto for existing shareholders
and of reports and statements to shareholders; (xv) fees and expenses
in connection with membership in investment company organizations and
12b-1 fees; and (xvi) any extraordinary expenses incurred by the Trust
on behalf of the Fund;
(b) ATF Advisers shall pay (i) all expenses incurred by it in the
performance of its duties under this Agreement; and (ii) compensation,
fees and expenses of officers and Trustees of the Trust, except for
such Trustees who are not interested persons (as defined in the 0000
Xxx) of ATF Advisers;
(c) If, for any fiscal year, the total expenses of the Fund, including
but not limited to: the fees to ATF Advisers, compensation to its
custodian, transfer agent, registrar, auditors and legal counsel,
printing expense, and fees, compensation and expenses to Trustees who
are not interested persons, exceed any expense limitation imposed by
applicable state law, ATF Advisers shall reimburse the Fund for such
excess in the manner and to the extent required by applicable state
law; provided, however, that ATF Advisers shall reimburse the Fund for
the amount of such expenses which exceed the 1.90% Fund's average daily
net assets. For purposes of this sub-paragraph, "total expenses" shall
not include interest, taxes, litigation expenses, brokerage commissions
or other costs incurred in acquiring or disposing of any of the Fund's
portfolio securities, expenses incurred pursuant to the Fund's Plan of
Distribution under Rule 12b-1 of the 1940 Act, or any costs arising
other than in the ordinary and necessary course of the Fund's business.
5. Obligations of Trust. The Trust shall have the following
obligations under the Agreement:
(a) to keep ATF Advisers continuously and fully informed as to the
composition of its investment portfolio of the Fund and the nature of
all of its assets and liabilities from time to time;
(b) to furnish ATF Advisers with a certified copy of any financial
statement or report prepared for the Fund by certified or independent
public accountants, and with copies of any financial statements or
reports made to its shareholders or to any governmental body or
securities exchange;
(c) to furnish ATF Advisers with any further materials or information
which ATF Advisers may reasonably request to enable it to perform its
functions under this Agreement; and
(d) to compensate ATF Advisers for its services in accordance with the
provisions of Section 6 hereof.
6. Compensation. The Fund shall pay to ATF Advisers for its
services a fee, computed daily and paid monthly, payable on the last day of each
month during which or part of which this Agreement is in effect, equal to 1.30%
of the first $100 million of the Fund's average daily net assets, and 1.25% of
the next $100 million of the Fund's average daily net assets, as it may be
amended from time to time in accordance with Section 15 below. For the month
during which this Agreement becomes effective and the month during which it
terminates, however, there shall be an appropriate pro-ration of the fee payable
for such month based on the number of calendar days of such month during which
this Agreement is effective.
7. Treatment of Investment Advice. The Fund shall retain full
control over its own investment policies. However, the Trustees of the Trust may
delegate to the appropriate officers of the Trust, or to a committee of
Trustees, the power to authorize purchases, sales or other actions affecting the
Fund in the interim between meetings of the Trustees, provided such action is
consistent with the established investment policy of the Trustees and is
reported to the Trustees at their next meeting.
8. Brokerage Commissions. For purposes of this Agreement,
brokerage commissions paid by the Fund upon the purchase or sale of its
portfolio securities shall be considered a cost of securities of the Fund and
shall be paid by the Fund. ATF Advisers is authorized and directed to place the
Fund's securities transactions, or to delegate to the sub-adviser the authority
and direction to place the Fund's securities transactions, only with brokers and
dealers who render satisfactory service in the execution of orders at the most
favorable prices and at reasonable commission rates; provided, however, that ATF
Advisers or the sub-adviser, may pay a broker or dealer an amount of commission
for effecting a securities transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if
ATF Advisers or the sub-adviser determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer viewed in terms of either that
particular transaction or the overall responsibilities of ATF Advisers or the
sub-adviser. ATF Advisers and the sub-adviser are also authorized to consider
sales of Fund shares (which shall be deemed to include also shares of other
registered investment companies with the same investment adviser) by a
broker-dealer or the recommendation of a broker-dealer to its customers that
they purchase Fund shares as a factor in selecting broker-dealers to execute the
Fund's securities transactions, provided that in placing fund business with such
broker-dealers, ATF Advisers and the sub-adviser shall seek the best execution
of each transaction and all such brokerage placement shall be consistent with
the Conduct Rules of the National Association of Securities Dealers, Inc.
Notwithstanding the foregoing, the Trust shall retain the right to direct the
placement of all securities transactions of the Fund, and the Trustees may
establish policies or guidelines to be followed by ATF Advisers and the
sub-adviser in placing portfolio transactions for the Fund pursuant to the
foregoing provisions. ATF Advisers shall report on the placement of portfolio
transactions each quarter to the Trustees of the Trust.
9. Purchases by Affiliates. Neither ATF Advisers nor any officer
or Director thereof shall take a long or short position in the securities issued
by the Fund. This prohibition, however, shall not prevent the purchase from the
Fund of shares issued by the Fund on behalf of the Trust, by the officers or
Directors of ATF Advisers (or by deferred benefit plans established for their
benefit) at the current price available to the public, or at such price with
reductions in sales charge as may be permitted by the Fund's current prospectus,
in accordance with Section 22(d) of the 1940 Act.
10. Term. This Agreement shall continue in effect, unless sooner
terminated in accordance with its terms, for an initial term ending April 30,
2003, and shall continue in effect from year to year thereafter, provided such
continuance is specifically
approved at least annually by the vote of a majority of the Trustees of the
Trust who are not parties hereto or interested persons (as that term is defined
in Section 2(a)(19) of the 1940 Act, as amended) of any such party, cast in
person at a meeting called for the purpose of voting on the approval of the
terms of such renewal, and by either the Trustees of the Trust or the
affirmative vote of a majority of the outstanding voting securities of the Fund
(as that phrase is defined in Section 2(a)(42) of the 1940 Act.
11. Termination. This Agreement may be terminated at any time,
without penalty, by the Trustees of the Trust, or with respect to the Fund, by
the shareholders of the Fund acting by vote of at least a majority of its
outstanding voting securities (as that phrase is defined in Section 2(a)(42) of
the 1940 Act), provided in either case that 60 days' written notice of
termination be given to ATF Advisers at its principal place of business. This
Agreement may be terminated by ATF Advisers at any time by giving 60 days'
written notice of termination to the Trust, addressed to its principal place of
business.
12. Use of Name. If this Agreement is terminated and ATF Advisers
no longer serves as investment adviser to the Fund, ATF Advisers reserves the
right to withdraw from the Trust the use of the name "IDEX" with respect to the
Fund or any name misleadingly implying a continuing relationship between the
Fund and ATF Advisers or any of its affiliates.
13. Liability of ATF Advisers. ATF Advisers may rely on
information reasonably believed by it to be accurate and reliable. Except as may
otherwise be provided by the 1940 Act, neither ATF Advisers nor its officers,
directors, employees or agents shall be subject to any liability to the Trust or
the Fund or any shareholder of the Fund for any error of judgment, mistake of
law or any loss arising out of any investment or other act or omission in the
course of, connected with or arising out of any service to be rendered
hereunder, except by reason of willful misfeasance, bad faith or gross
negligence in its performance of its duties or by reason of reckless disregard
of its obligations and duties under this Agreement.
14. Assignment. This Agreement shall terminate automatically in
the event of its assignment (as the term is defined in Section 2(a)(4) of the
1940 Act).
15. Amendments. This Agreement may be amended only with the
approval by the affirmative vote of a majority of the outstanding voting
securities of the Fund (as that phrase is defined in Section 2(a)(42) of the
0000 Xxx) and the approval by the vote of a majority of Trustees of the Trust
who are not parties hereto or interested persons (as that phrase is defined in
Section 2(a)(19) of the 0000 Xxx) of any such party, cast in person at a meeting
called for the purpose of voting on the approval of such amendment, unless
otherwise permitted by the 1940 Act.
16. Prior Agreements. This Agreement supersedes all prior
agreements between the parties relating to the subject matter hereof, and all
such prior agreements are deemed terminated upon the effectiveness of this
Agreement.
17. Limitation of Liability. A copy of the Trust's Declaration of
Trust is on file with the Secretary of The Commonwealth of Massachusetts, and
notice is hereby given that this Agreement is executed on behalf of the Trustees
as Trustees of the Trust and not individually, and that the obligations under
this Agreement are not binding upon any of the Trustees, officers, shareholders,
agents or employees of the Trust individually, but binding only upon the assets
and property of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized signatories as of the date and year first above
written.
ATTEST: AEGON/TRANSAMERICA FUND ADVISERS, INC.
By:
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Xxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx
Vice President, General Counsel, Chief Executive Vice President
Compliance Officer and Secretary
ATTEST: IDEX MUTUAL FUNDS
By:
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Xxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx
Vice President, Secretary & Executive Vice President, Treasurer
Counsel & Principal Financial Officer
