Exhibit 6(A)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 31st day of January, 1995, by and between Franklin
Life Variable Annuity Fund A, a separate account established pursuant to
Article XIV-1/2 of the Illinois Insurance Code (the "Fund"), and The Franklin
Life Insurance Company, an Illinois corporation (the "Company")
W I T N E S S E T H :
WHEREAS, the Fund and the Company wish to enter into an agreement
setting forth the terms on which the Company will perform certain investment
management services for the Fund;
NOW THEREFORE, in consideration of the covenants and mutual promises
of the parties made to each other, it is hereby covenanted and agreed as
follows:
1. SERVICES TO BE RENDERED BY THE COMPANY TO THE FUND. The Fund
hereby engages the Company to act as investment manager for and to manage the
investment and reinvestment of the assets of the Fund, subject to the investment
objectives and restrictions of the Fund and such general or specific
instructions as may be given by the
Board of Managers of the Fund (the "Board"). Subject to such objectives and
restrictions and such instructions, and to the control of the Board (by all of
which the Company agrees to abide) the Company may order the purchase and sale
of securities on behalf of the Fund. The Company hereby agrees, at its own
expense, to do all things necessary or appropriate for the management of the
investment and reinvestment of the assets of the Fund, to furnish such
information pertaining thereto to the Board of Managers of the Fund as they
shall request, to render the other services and to assume the obligations herein
set forth, all for the compensation herein provided.
In carrying out its obligations to manage the investment and
reinvestment of the assets of the Fund, the Company shall pay all investment
expenses of the Fund other than: (i) taxes, if any, based on the income of,
capital gains of, assets in, or existence of, the Fund, (ii) taxes, if any, in
connection with the acquisition, disposition or transfer of assets of the Fund,
(iii) commissions or other capital items payable in connection with the purchase
or sale of the Fund's investments, and (iv) interest on account of any
borrowings by the Fund, all of which shall be paid by the Fund.
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2. COMPENSATION TO BE PAID BY THE FUND TO THE COMPANY. For the
services rendered hereunder, the Fund shall pay to the Company at such times
during the year as the Company may request a sum which is equal to a daily
charge of 0.0012% (0.438% on an annual basis) of the value of the assets held in
respect of each contract which depends in whole or in part upon the investment
performance of the Fund, computed each day as of the most recent Valuation Date.
The compensation will be computed through a daily deduction of 0.0012% in
calculating the net investment rate for the purposes of the calculations of the
value of an Accumulation Unit and an Annuity Unit under the Contracts which
depend in whole or in part on the investment performance of the Fund (the
"Contracts").
3. SERVICE OF THE COMPANY TO THE FUND NOT EXCLUSIVE. The services
of the Company to the Fund under this Agreement are not to be deemed exclusive
and the Company shall be free to render similar services to others.
4. INTERESTED AND AFFILIATED PERSONS. It is understood that members
of the Board, officers, employees or agents of the Fund may also be directors,
officers, employees or agents of the Company. It is also understood that the
Company may have the financial interest in the Fund
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set forth in Section 4 of the Administration Agreement between the Fund and the
Company dated June 30, 1971.
5. LIABILITY OF THE COMPANY. In the absence of willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
of reckless disregard of its obligations and duties under this Agreement,
neither the Company nor any of its officers, directors, employees or agents
shall be subject to liability for any act or omission in the course of, or
connected with, rendering services hereunder.
6. TERM OF AGREEMENT. This Agreement is subject to approval by the
owners of the Contracts (the "Contract Owners") by a vote of a majority of the
votes available to the Contract Owners of all outstanding Contracts (as such
majority is defined in Section 2(a)(42) of the Investment Company Act of 1940),
and shall continue for two years from the date hereof, and thereafter if its
continuance is specifically approved at least annually either by (a) the Board
of Managers of the Fund, or (b) a majority of the votes available to the
Contract Owners of outstanding Contracts, as so defined, provided that in either
event the continuance is also approved by the vote of a majority of the Board of
Managers who are not "interested persons" (as
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that term is defined in Section 2(a)(19) of the Investment Company Act of 1940)
of the Fund or of the Company, cast in person at a meeting called for the
purpose of voting on such approval; and provided further, however, that (1) this
Agreement may at any time be terminated by the Fund on 60 days' written notice
to the Company without the payment of any penalty either by vote of the Board of
Managers of the Fund or by a majority of the votes (so defined) available to the
Contract Owners of all outstanding contracts; (2) this Agreement shall
immediately terminate in the event of its assignment (within the meaning of the
Investment Company Act of 1940); and (3) this Agreement may be terminated by the
Company on 60 days' written notice to the Fund without the payment of any
penalty, but the Company shall not effect any such termination unless there has
been approved a new investment advisory or management agreement by Contract
Owners casting a majority of the votes available to the Contract Owners of all
outstanding Contracts, as so defined.
7. GENERAL. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, to the other party at the
principal office of such party.
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This Agreement may be amended at any time by mutual consent of the
parties, provided that such consent on the part of the Fund shall have been
approved at a meeting by a majority of the votes available to Contract Owners of
all outstanding Contracts, as defined above.
This Agreement is subject to the provisions of the Investment Company
Act of 1940, as amended, and the rules and regulations of the Securities and
Exchange Commission.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day and year first above written.
FRANKLIN LIFE VARIABLE ANNUITY FUND A
By
---------------------------------
Xxxxxxx X. Xxxxxx, Xx.
Secretary, Board of Managers
THE FRANKLIN LIFE INSURANCE COMPANY
By
---------------------------------
Xxxxxx X. Xxxxxxxx
Chairman of the Board, President
and Chief Executive Officer
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ADDENDUM TO INVESTMENT MANAGEMENT AGREEMENT
ADDENDUM dated as of January 31, 1995 to the Investment Management
Agreement of even date (the "Investment Management Agreement") by and between
Franklin Life Variable Annuity Fund A (the "Fund"), a separate account of The
Franklin Life Insurance Company, an Illinois legal reserve stock life insurance
corporation ("The Franklin"), established pursuant to Article XIV-1/2 of the
Illinois Insurance Code, and The Franklin.
W I T N E S S E T H :
WHEREAS, the Fund and The Franklin have entered into the Investment
Management Agreement setting forth the terms on which The Franklin will perform
certain investment management services for the Fund; and
WHEREAS, Section 15(a) of the Investment Company Act of 1940, as
amended (the "1940 Act"), requires that the Investment Management Agreement be
approved by the contract owners of the Fund; and
WHEREAS, the Fund and The Franklin have applied to the Securities and
Exchange Commission for an order conditionally exempting them from the
requirements of Section 15(a) until the Investment Management Agreement is
approved by contract owners; and
WHEREAS, the Fund and The Franklin have offered, as a condition to the
receipt of the requested exemptive order, to cause all investment management
fees payable to The Franklin under the Investment Management Agreement during
the period from the date hereof until the Investment Management Agreement is
approved by contract owners (the "Interim Period") to be held in an escrow
account;
NOW THEREFORE, it is hereby agreed as follows:
1. Fees earned by The Franklin and paid by the Fund during the
Interim Period in accordance with the terms of the Investment Management
Agreement will be maintained in an interest-bearing escrow account. Amounts in
the account (including interest) will be paid to The Franklin only upon approval
of the Investment Management Agreement by the contract owners of the Fund. If
the Investment Management
Agreement is not approved by the contract owners of the Fund, the fees will
revert to the Fund.
2. This Addendum is subject to the provisions of the 1940 Act and the
rules and regulations of the Securities and Exchange Commission.
3. This Addendum shall terminate and shall be of no further force and
effect upon approval by contract owners of the Investment Management Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
FRANKLIN LIFE VARIABLE ANNUITY FUND A
By
--------------------------------
Xxxxxxx X. Xxxxxx, Xx.
Secretary of the Board of Managers
THE FRANKLIN LIFE INSURANCE COMPANY
By
---------------------------------
Xxxxxx X. Xxxxxxxx
Chairman of the Board, President
and Chief Executive Officer
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