IDEX SERIES FUND
ON BEHALF OF IDEX VALUE EQUITY PORTFOLIO
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
This Agreement, entered into as of October 30, is between IDEX SERIES FUND, a
Massachusetts business trust (referred to herein as the "Fund") and
INTERSECURITIES, INC., a Delaware corporation (referred to herein as
"InterSecurities"), to provide certain management and investment advisory
services to a certain series of shares of beneficial interest in the Trust,
namely, IDEX Series Fund Value Equity Portfolio (the "Portfolio").
The Fund is registered as an open-end investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and consists of more than one
series of shares, including the Portfolio. In managing the Portfolio, as well as
in the conduct of certain of its affairs, the Fund wishes to have the benefit of
the investment advisory services of InterSecurities and its assistance in
performing certain management, administrative and promotional functions.
InterSecurities desires to furnish such services for the Portfolio and to
perform the functions assigned to it under this Agreement for the considerations
provided. Accordingly, the parties have agreed as follows:
1. Appointment. The Fund hereby appoints InterSecurities as the Portfolio's
investment adviser and administrator for the period and on the terms set forth
in this Agreement. InterSecurities 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,
InterSecurities will act in conformity with the Fund's Declaration of Trust,
Bylaws and registration statement applicable to the Portfolio and with the
instructions and direction of the Board of Trustees of the Fund, 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 Portfolio, InterSecurities shall have the following responsibilities:
(a) to furnish continuous advice and recommendations to the Fund as to the
acquisition, holding or disposition of any or all of the securities or other
assets which the Portfolio may own or contemplate acquiring from time to time,
consistent with the Fund's Declaration of Trust and the Portfolio's investment
objectives and policies adopted and declared by the Board of Trustees and stated
in the Portfolio's current Prospectus;
(b) to cause the officers of InterSecurities to attend meetings and furnish
oral or written reports, as the Fund may reasonably require, in order to keep
the Trustees and appropriate officers of the Fund fully informed as to the
conditions of the investment securities of the Portfolio, the investment
recommendations of InterSecurities, and the investment considerations which have
given rise to those recommendations; and
(c) to supervise the purchase and sale of securities as directed by the
appropriate officers of the Fund, including the selection of brokers and dealers
to execute such transactions, consistent with paragraph 10 hereof.
It is understood and agreed that InterSecurities intends to enter into an
Investment Counsel Agreement with NWQ Investment Company, Inc. ("NWQ"), a
Massachusetts corporation, under which NWQ would furnish investment information
and advice to assist InterSecurities in carrying out its responsibilities under
this Section 2. The compensation to be paid to NWQ for such services and the
other terms and conditions under which the services shall be rendered by NWQ
shall be set forth in the Investment Counsel Agreement; provided, however, that
such Agreement shall be approved by the Board of Trustees and by the holders of
the outstanding voting securities of the Portfolio 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. InterSecurities shall furnish
and perform all administrative services, including recordkeeping, shareholder
relations, regulatory reporting and compliance, supervising and coordinating the
services of the Portfolio's custodian and transfer agent and such other
functions of the Portfolio, (other than the investment advisory services
provided for in Section 2), as the parties may agree. InterSecurities shall also
assist in the preparation of reports to shareholders of the Portfolio and
prepare sales literature promoting sale of the Portfolio shares as requested by
the Fund.
-1-
4. InterSecurities Expenses. In addition to the expenses which
InterSecurities may incur in the performance of its services pursuant to
Sections 2 and 3 above, InterSecurities shall incur and pay the following
expenses allocable to the Portfolio's operations:
(a) Reasonable compensation, fees and related expenses of officers of the
Fund and of those Trustees of the Fund who are interested persons (as that term
is defined in Section 2(a)(19) of the 0000 Xxx) of InterSecurities; and
(b) Rental of offices for the Portfolio.
5. Obligations of Fund. The Fund shall have the following obligations under
this Agreement:
(a) to keep InterSecurities continuously and fully informed as to the
composition of the investment securities of the Portfolio and the nature of all
of its assets and liabilities from time to time;
(b) to furnish InterSecurities with a certified copy of any financial
statement or report prepared for the Portfolio 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 InterSecurities with any further materials or information
which InterSecurities may reasonably request to enable it to perform its
functions under this Agreement; and
(d) to compensate InterSecurities for its services in accordance with the
provisions of Section 6 hereof.
6. Compensation. The Portfolio shall pay to InterSecurities for its
services an annual 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 1.00% of first $750 million of the Portfolio's average daily net assets,
0.90% of the next $250 million of the Portfolio's average daily net assets, and
0.85% of the average daily net assets of the Portfolio in excess of $1 billion.
For the month during which this Agreement becomes effective and the month during
which it terminates, however, there shall be an appropriate proration of the fee
payable for such month based on the number of calendar days of such month during
which this Agreement is effective.
7. Expenses Paid by Portfolio. Subject to the provisions of Section 8,
below, and except as provided in this paragraph, nothing in this Agreement shall
be construed to impose upon InterSecurities the obligation to incur, pay, or
reimburse the Portfolio for any expenses not specifically assumed by
InterSecurities under Sections 2, 3 and 4 above. The Fund shall pay all of its
other expenses (or pay such expenses of the Fund attributable to the Portfolio)
including, but not limited to, custodian and transfer agent fees; advisory fees;
brokerage commissions and all other expenses in connection with the execution of
portfolio transactions; administrative, clerical, recordkeeping, bookkeeping,
legal, auditing and accounting expenses; interest and taxes; expenses of
preparing tax returns; expenses of shareholders' meetings and of preparing,
printing and mailing proxy statements (unless otherwise agreed to by the Fund
and InterSecurities); expenses of preparing and typesetting periodic reports to
its shareholders (except for those reports the Portfolio permits to be used as
sales literature); its allocable share of the fees and expenses of the Fund's
non-interested Trustees; and the costs, including filing fees, of registering
and renewing or maintaining registration of the Portfolio's shares under federal
and state law. Nothing in this Section 7 shall prohibit the Fund from entering
into other agreements or adopting plans which provide for the allocation of
expenses of the Fund or the Portfolio to other entities, or the assumption of
other expenses by the Fund or the Portfolio.
8. Limitation on Expenses of Portfolio. Whenever, for any fiscal year, the
total cost to the Portfolio for normal operating expenses chargeable to its
income account, including, but not limited to, the fees of the Portfolio's
investment adviser, the compensation of its custodian, transfer agent,
registrar, auditors and legal counsel, printing expenses, expenses incurred in
complying with all laws applicable to the sale of shares of the Portfolio and
any compensation, fees, or reimbursements which the Portfolio pays to Trustees
of the Fund who are not interested persons (as that phrase is defined in Section
2(a)(29) of the 0000 Xxx) of InterSecurities, but excluding all interest and all
federal, state and local taxes (such as stamp, excise, income, franchise and
similar taxes), exceeds any expense limitation imposed by applicable state law,
InterSecurities shall reimburse the Portfolio for the amount of said excess in
the manner and to the extent required by state law; provided, however, that
InterSecurities shall reimburse the Portfolio for the amount of such expenses,
exclusive of expenses incurred pursuant to the Fund's Plan of Distribution under
Rule 12b-1 of the 1940 Act, which exceed 2.50% of the Fund's average daily net
assets for the first full fiscal year of the Portfolio, and 1.50% thereafter.
-2-
9. Treatment of Investment Advice. With respect to the Portfolio, the Fund
shall treat the investment advice and recommendations of InterSecurities as
being advisory only, and shall retain full control over its own investment
policies. However, the Trustees of the Fund may delegate to the appropriate
officers of the Fund, or to a committee of Trustees, the power to authorize
purchases, sales or other actions affecting the securities of the Portfolio in
the interim between meetings of the Trustees, provided such action is consistent
with the established investment policy of the Fund and is reported to the
Trustees at their next meeting.
10. Brokerage Commissions. For purposes of this Agreement, brokerage
commissions paid by the Portfolio upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Portfolio and shall
be paid by the Portfolio. InterSecurities is authorized and directed to place
the Portfolio's securities transactions, or to delegate to NWQ the authority and
direction to place the Portfolio'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 InterSecurities or NWQ 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
InterSecurities or NWQ 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 InterSecurities or NWQ
InterSecurities and NWQ are also authorized to consider sales of Portfolio
shares by a broker-dealer or the recommendation of a broker-dealer to its
customers that they purchase Portfolio shares as a factor in selecting
broker-dealers to execute the Portfolio's securities transactions, provided that
in placing portfolio business with such broker-dealers, InterSecurities and NWQ
shall seek the best execution of each transaction and all such brokerage
placement shall be consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. Notwithstanding the foregoing, the Fund
shall retain the right to direct the placement of all securities transactions of
the Portfolio, and the Trustees may establish policies or guidelines to be
followed by InterSecurities and NWQ in placing securities transactions for the
Portfolio pursuant to the foregoing provisions. InterSecurities shall report on
the placement of portfolio transactions each quarter to the Trustees of the
Fund.
11. Liability of InterSecurities. InterSecurities may rely on information
reasonable believed by it to be accurate and reliable. Except as may otherwise
be provided by the 1940 Act, neither InterSecurities nor its officers,
directors, employees or agents shall be subject to any liability to the Fund or
the Portfolio or any shareholder of the Portfolio for any error or 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.
12. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Fund or by the shareholders of the Portfolio
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 InterSecurities at
its principal place of business. This Agreement may be terminated by
InterSecurities at any time by giving 60 days' written notice of termination to
the Fund, addressed to its principal place of business.
13. Assignment. This Agreement shall terminate automatically in the event
of any assignment (as the term is defined in Section 2(a)(4) of the 0000 Xxx) of
this Agreement.
14. Term. This Agreement shall continue in effect, unless sooner terminated
in accordance with its terms, for an initial term ending April 22, 1998, and
shall continue in effect from year to year thereafter only so long as such
continuance is specifically approved at least annually by the vote of a majority
of the Trustees of the Fund who are not parties hereto or interested persons (as
that term 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
the terms of such renewal, and by either the Trustees of the Fund or the
affirmative vote of a majority of the outstanding voting securities of the
Portfolio (as that phrase is defined in Section 2(a)(42) of the 1940 Act).
15. Amendments. The terms of this Agreement may be amended only with the
approval by the affirmative vote of a majority of the outstanding voting
securities of the Portfolio (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 Fund
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 in accordance with the 1940 Act.
-3-
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 Fund'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 Fund 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 Fund individually, but binding only upon the assets
and property of the Portfolio.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
October 30, 1996.
ATTEST: INTERSECURITIES, INC.
/s/ Xxxxxxx X. Xxxxxx /s/ G. Xxxx Xxxxxx
__________________________ By: __________________________
Xxxxxxx X. Xxxxxx, Secretary G. Xxxx Xxxxxx
President and Chief Executive Officer
ATTEST: IDEX SERIES FUND
/s/ Xxxxx X. Xxxxxxx /s/ G. Xxxx Xxxxxx
__________________________ By: __________________________
Xxxxx X. Xxxxxxx, Secretary G. Xxxx Xxxxxx
President and Chief Executive Officer
-4-
