EX-99.(D)(2)
INTERIM INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made this 1st day of May, 2003, by and between Advantus
Series Fund, Inc., a Minnesota corporation (the "Fund") and Xxxxxxx & Xxxx
Investment Management Company, a _________ corporation ("Adviser");
WITNESSETH:
WHEREAS, the Fund is engaged in business as a diversified open-end
management investment company registered as such under the Investment Company
Act of 1940 (the "Investment Company Act") and offers for sale distinct series
of shares of common stock, each of which series pursues its investment
objectives through separate policies;
WHEREAS, the Adviser is engaged in rendering investment advisory services
and is registered as an investment adviser under the Investment Advisers Act of
1940; and
WHEREAS, the Fund desires to appoint the Adviser to provide investment
advisory and management services to each series of the Fund set forth in Exhibit
A hereto (each such series a "Portfolio" and together the "Portfolios") in the
manner and on the terms hereinafter set forth, and the Adviser is willing to
furnish such services.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties do hereby agree as follows:
Section 1. Appointment of Adviser
The Fund appoints the Adviser to act as the investment adviser to and
manager of the Portfolios, to manage the investment and reinvestment of the
assets of the Portfolios and to administer each Portfolio's affairs subject to
the supervision of the Board of Directors of the Fund on the terms and
conditions set forth in this Agreement. The Adviser accepts such appointment and
agrees to render the services and to assume the obligations set forth in this
Agreement.
-1-
The Adviser will for all purposes provided in this Agreement be deemed to
be an independent contractor and will have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent of the Fund, unless
otherwise expressly provided or authorized either in this Agreement or in
another writing by the Fund. The Fund retains the ultimate responsibility and
authority for direction and control of the services provided by the Adviser
pursuant to this Agreement.
Section 2. Duties of the Adviser
The investment of the assets of the Portfolios shall at all times be
subject to the applicable provisions of the Articles of Incorporation, the
Bylaws, the Registration Statement, the current Prospectus and the Statement of
Additional Information of the Fund and shall conform to the investment
objectives, policies and restrictions of the Portfolios as set forth in such
documents and as interpreted from time to time by the Board of Directors of the
Fund. Within the framework of the investment objectives, policies and
restrictions of the Portfolios, the Adviser shall have the sole and exclusive
responsibility for the management of the Portfolios and the making and execution
of all investment decisions for the Portfolios.
In carrying out its obligations to manage the investments and reinvestments
of the assets of the Portfolios, the Adviser shall: (1) obtain and evaluate
pertinent economic, statistical, financial and other information affecting the
economy generally and individual companies or industries the securities of which
are included in the Portfolios or are under consideration for inclusion therein;
(2) formulate and implement a continuous investment program for each Portfolio
consistent with the investment objective and related investment policies for
each such Portfolio as set forth in the Fund's registration statement, as
amended; and (3) take such steps as are necessary to implement the
aforementioned investment programs by purchase and sale of securities including
the placing of orders for such purchases and sales.
-2-
The Adviser shall report to the Board of Directors of the Fund regularly at
such times and in such detail as the Board may from time to time determine to be
appropriate in order to permit the Board to determine the adherence of the
Adviser to the investment objectives, policies and restrictions of the
Portfolios.
The Adviser shall, at its own expense, furnish the Fund office space and
all necessary office facilities, equipment and personnel for servicing the
investments of the Portfolios. The Adviser shall arrange for officers or
employees of the Adviser to serve without compensation from the Fund as
directors, officers or employees of the Fund if duly elected or appointed to
such positions by the shareholders, directors or officers of the Fund.
The Adviser shall maintain all records necessary in the operation of the
Portfolios including records pertaining to each Portfolio's shareholders and
investments. The Adviser hereby acknowledges that all such records are the
property of the Fund, and in the event that a transfer of management or
investment advisory services to someone other than the Adviser should ever
occur, the Adviser will promptly and at its own cost, take all steps necessary
to segregate such records and deliver them to the Fund.
Section 3. Compensation for Services
In payment for the investment advisory services to be rendered by the
Adviser hereunder, the Fund shall pay to the Adviser as full compensation for
all services hereunder a fee computed separately for each Portfolio at an annual
rate, as set forth in Schedule A to this Agreement.
The amount of the fees as set forth in Schedule A hereto will be deducted
on each business day from the value of each Portfolio prior to determining the
Portfolio's net asset value for the day and it shall be transmitted or credited
to the Adviser. The fee shall be based on the net asset values of all of the
issued and outstanding shares of such Portfolio as determined as of the close of
each
-3-
business day pursuant to the Articles of Incorporation, Bylaws and currently
effective Prospectus and Statement of Additional Information of the Fund.
Provided, however:
(a) Any compensation paid under this Agreement shall be held in an
interest-bearing escrow account with the Portfolio's custodian or a bank as
defined in the Investment Company Act, mutually acceptable to the parties
hereto.
(b) If holders of a majority of a Portfolio's outstanding voting securities
approve this Interim Investment Advisory Agreement within 150 days after May 1,
2003, the amount in the escrow account (including interest earned thereon) with
respect to such Portfolio shall be paid to the Adviser.
(c) If holders of a majority of a Portfolio's outstanding voting securities
do not approve this Interim Investment Advisory Agreement within 150 days after
May 1, 2003, the Adviser shall be paid, from the escrow account, an amount equal
to the lesser of:
(i) any costs incurred in performing this Agreement on behalf of such
Portfolio (plus interest earned on that amount in the escrow account) or
(ii) the total amount in the escrow account (plus interest earned
thereon).
Section 4. Allocation of Expenses
In addition to the fee described in Section 3 hereof, the Fund shall pay
all its costs and expenses which are not assumed by the Adviser or by Advantus
Capital Management, Inc. ("Advantus"). These Fund expenses include, by way of
example, but not by way of limitation, all expenses incurred in the operation of
the Fund including, among others, interest, taxes, brokerage fees and
commissions, fees of the directors who are not employees of the Adviser or
Advantus or any of their affiliates, expenses of the directors' and
shareholders' meetings, including the cost of printing and mailing proxies,
expenses of insurance premiums for fidelity and other coverage,
-4-
association membership dues, charges of custodians, auditing and legal expenses.
The Fund will also pay the fees and bear the expense of registering and
maintaining the registration of the Fund and its shares with the Securities and
Exchange Commission and registering or qualifying its shares under state or
other securities laws and the expense of preparing and mailing prospectuses and
reports to shareholders.
Each Portfolio will bear all expenses that may be incurred with respect to
its individual operation, including but not limited to transaction expenses,
advisory fees, brokerage, interest, taxes and the charges of the custodian. The
Fund will pay all other expenses not attributable to a specific Portfolio or
other series of the Fund, but those expenses will be allocated among such
Portfolios and series on the basis of the size of their respective net assets
unless otherwise allocated by the Board of Directors of the Fund.
Section 5. Freedom to Deal with Third Parties
The Adviser shall be free to render services to others, including other
investment companies, similar to those rendered under this Agreement or of a
different nature except as such services may conflict with the services to be
rendered or the duties to be assumed hereunder. It is understood and agreed that
the officers, directors and employees of the Adviser are not prohibited from
engaging in any other business activity or from rendering services to any other
person, or from serving as partners, officers, directors or employees of any
other firm or corporation, including other investment companies.
Section 6. Conflicts of Interest
It is understood that directors, officers, agents and stockholders of the
Fund are or may be interested in the Adviser as directors, officers,
stockholders, or otherwise; that directors, officers, agents and stockholders of
the Adviser are or may be interested in the Fund as directors, officers,
stockholders or otherwise; that the Adviser may be interested in the Fund; and
that the existence of
-5-
any such dual interest shall not affect the validity hereof or of any
transactions hereunder except as otherwise provided in the Articles of
Incorporation of the Fund and the Adviser, respectively, or by specific
provision of applicable law.
Section 7. Regulation
The Adviser shall submit to all regulatory and administrative bodies having
jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
Section 8. Effective Date, Duration and Termination of Agreement
This Agreement shall become effective on May 1, 2003 with respect to each
Portfolio, and will continue in effect with respect to that Portfolio until the
earlier of (i) the effective date of the reorganization of such Portfolio into a
series of W&R Target Funds, Inc. or (ii) the date that is 150 days after May 1,
2003.
This Agreement may be terminated at any time with respect to a Portfolio,
without the payment of any penalty, by the Directors of the Fund or by the vote
of a majority of the outstanding voting securities of a Portfolio, on ten days'
written notice to the Adviser, or by the Adviser on sixty days' written notice
to the Fund. This Agreement will automatically terminate, without the payment of
any penalty, in the event of its assignment (as defined in the Investment
Company Act).
Wherever referred to in this Agreement, the vote or approval of the holders
of a majority of the outstanding voting securities of a Portfolio shall mean the
vote of 67% or more of such securities if the holders of more than 50% of such
securities are present in person or by proxy or the vote of more than 50% of
such securities, whichever is the lesser.
Section 9. Amendments to the Agreement
This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the outstanding voting
securities of the Fund and by the vote
-6-
of a majority of the directors of the Fund who are not interested persons of any
party to this Agreement cast in person at a meeting called for the purpose of
voting on such approval. The required shareholder approval shall be effective
with respect to any Portfolio to which this Agreement relates if a majority of
the outstanding voting securities of the capital stock of that Portfolio vote to
approve the amendment, notwithstanding that the amendment may not have been
approved by a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be amended without shareholder
approval to the extent such is permitted under then-current regulatory
interpretations of the Investment Company Act.
Section 10. Notice of Information
Each party hereto shall advise the others promptly of (a) any action of the
Securities and Exchange Commission or any authorities of any state or territory,
of which it has knowledge, affecting registration or qualification of the Fund,
and (b) the happening of any event which makes untrue any statement, or which
requires the making of any change, in the registration statement or prospectus
in order to make the statements therein not misleading.
Section 11. Entire Agreement
This Agreement contains the entire understanding and agreement of the
parties.
Section 12. Headings
The headings in the sections of this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
Section 13 Receipt of Notices
Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate in writing for the receipt of such notice.
-7-
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
Advantus Series Fund, Inc.
By
---------------------------------------------
Xxxxxx X. Xxxxxxx
President
Xxxxxxx & Xxxx Investment Management Company
By
---------------------------------------------
---------------
---------------
-8-
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
MAY 1, 2003
As compensation for the services to be rendered and the charges and
expenses to be assumed and paid by the Adviser, each Portfolio shall pay the
Adviser an annual fee based on the average daily net asset value of the
respective Portfolio in accordance with Section 3 of the Investment Advisory
Agreement and the following schedule:
Portfolio Fee Rate
--------- --------
Growth Portfolio 0.45% on the first $1 billion in assets
0.40% on all assets in excess of $1 billion
in assets
Asset Allocation Portfolio 0.35% on the first $1 billion in assets
0.30% on all assets in excess of $1 billion
in assets
Capital Appreciation Portfolio 0.50% on the first $1 billion in assets
0.45% on all assets in excess of $1 billion
in assets
Value Stock Portfolio 0.50% on the first $500 million in assets
0.45% on the next $500 million in assets
0.40% on all assets in excess of $1 billion
in assets
Core Equity Portfolio 0.50%
