INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT made this ___ day of April 0000, xxxxxxx XXXXX XXXXXXX
FUND, INC., a Maryland Corporation with offices at One Granite Place, Concord,
New Hampshire (the "Fund"), and CHUBB INVESTMENT ADVISORY CORPORATION, a
Tennessee corporation with offices at One Granite Place, concord, New Hampshire
("Chubb Investment");
WITNESSETH
WHEREAS, the Fund is engaged in business as a diversified open-end
management investment company and is registered as such under the Investment
Company of 1940 (the "Investment Company Act");
WHEREAS, the Fund is authorized to issue shares of common stock, $.01
par value, ("Stock") in separate classes or series with each such class or
series representing an interest in a separate portfolio of securities and other
assets, and each with its own investment objectives, investment policies and
restrictions (individually, a "Portfolio", and collectively, the "Portfolios");
WHEREAS, Chubb Investment is engaged in the business of rendering
investment advisory services and its registered as an investment adviser under
the Investment Advisers Act of 1940;
WHEREAS, the Board of Directors of the Fund desires to retain Chubb
Investment to render investment management and corporate administrative services
to the Fund's Portfolios set forth in Schedule A hereto, as such may be revised
from time to time, in the manner and on the terms set forth herein; and
WHEREAS, the Board of Directors of the Fund believes that Chubb
Investment's expertise and business contacts are and will be of material benefit
to the Fund in employing and supervising and investment subadviser
("Subadviser"), as further described below;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and Chubb Investment hereby agree as follows:
1. Appointment of Manager. The Fund hereby appoints Chubb Investment
as the investment manager ("Manager") for each of the Portfolios of the Fund
specified in Appendix A to this Agreement, as such Appendix A may be amended by
the Manager and the Fund from time to time, subject to the supervision of the
Directors of the Fund and in the manner and under the terms and conditions set
forth in this Agreement.
2. (a) Duties of Chubb Investment. Chubb Investment hereby agrees,
subject to the supervision of the Board of Directors of the Fund (i) to act as
the investment manager of the Portfolios and, in that connection, (ii) to select
and contract, at its own expense, with investment advisers ("Subadvisers") to
manage the investment operations and composition of each and every Portfolio of
the Fund, including the purchase, retention, and disposition of the investments,
securities and cash contained in each Portfolio. In taking any action
hereunder, Chubb
Investment shall always be subject to, and shall follow at all times (i) any
restrictions of the fund's Articles of Incorporation and By-Laws, as amended
from time to time, (ii) the applicable provisions of the Investment Company Act,
and any rules and regulations adopted thereunder, (iii) the statements relating
to the Portfolios' investment objectives, policies and restrictions as the same
are set forth in the prospectus of the Fund and Statement of additional
Information then currently effective under the Securities Act of 1933 (the
"Prospectus"), and (iv) any other provisions of state and federal law applicable
to it in connection with its duties hereunder, including any applicable
provisions imposed by state insurance regulations and under the Internal Revenue
Code of 1986, as amended, and regulations thereunder (the "Code").
(b) Interim Arrangements. Notwithstanding the provisions of
subsection (a) of this paragraph, the Manager may, in the event a Subadviser
becomes unable to provide portfolio management services to a Portfolio, itself
provide to the Portfolio those services normally provided by the Subadviser
under the Subadviser's agreement with the Manager, until such time as the
Manager selects and contracts with a replacement Subadviser.
(c) Administrative Services. Subject to the direction and control of
the Board of Directors of the Fund, Chubb Investment shall perform
administrative services in connection with the management of the Portfolios and
will supervise all aspects of the Portfolios' operations. In this connection,
Chubb Investment agrees to perform the following administrative functions:
(1) Determine the value of each Portfolio's assets and
liabilities, compute the daily income and net asset value of each Portfolio and
compute the yield and/or total return of each Portfolio as may be required, in
accordance with applicable law;
(2) Schedule, plan agendas for and conduct directors and
shareholders meetings;
(3) Recommend auditors, counsel, Custodian and others;
(4) Coordinate, supervise and direct any Sub-Investment Advisor,
the Fund's Custodian and the Fund's Distributor, auditors and counsel on a day-
to-day basis;
(5) Prepare and distribute all required proxy statements, reports,
and other communications with shareholders;
(6) Prepare and file tax returns, reports due and other required
filings with the Securities and Exchange Commission ("SEC"), the National
Association of Securities Dealers, Inc., state blue sky authorities, and
generally monitor compliance with all federal and state securities laws and the
Code;
(7) Supply clerical, secretarial, accounting and bookkeeping
services, data processing services, office supplies and stationery;
(8) Provide persons to perform such professional, administrative
and clerical functions as are necessary in connection with shareholder
relations, reports, redemption
PAGE 2
requests and account adjustments, including the receipt, handling and
coordination of shareholder complaints;
(9) Provide adequate office space and related services (including
telephone and other utility service) necessary for the Fund's operations;
(10) Maintain corporate records not otherwise maintained by the
Fund's Custodian, Distributor, or any Subadviser; and
(11) Assist, generally, in all aspects of the Fund's operations
with respect to the Portfolios.
The Manager may enter into arrangements with its parent or other persons
affiliated or unaffiliated with the Manager for the provision of certain
personnel and facilities to the Manager to enable the Manager to fulfill its
duties and obligations under this Agreement. Nothing herein will be construed
to restrict the Fund's right, at its own expense, to contract for services to be
performed by third parties.
(c) Arrangements with Subadvisers. Notwithstanding any other
provision hereof, Chubb Investment, with the approval of the Board of Directors
of the Fund, may contract with one or more Subadvisers to perform any of the
investment management services required by the Fund, and may contract with one
or more Subadvisers or other parties to perform any of the administrative
services required of Chubb Investment hereunder; provided, however, that the
compensation of such other parties will be the sole responsibility of Chubb and
the duties and responsibilities of such other Subadvisers or other parties shall
be as set forth in an agreement or agreements between Chubb Investment and such
other parties.
Chubb Investment shall exercise reasonable care in recommending,
monitoring, and supervising the performance of Subadvisers and others serving
pursuant to the foregoing paragraph, but Chubb Investment shall not otherwise be
liable or legally responsible for the conduct of any Subadviser. In this
connection, it shall be a particular responsibility of Chubb Investment to
evaluate the investment performance of Subadvisers and that of potential
Subadvisers, and Chubb Investment shall supply the Board of Directors of the
Fund with such statistical and research data bearing on each Portfolio's
performance and that of Subadvisers and potential Subadvisers as they and Chubb
Investment to supervise and monitor the practices of Subadvisers in placing
orders and selecting brokers and dealers to effect Portfolio transactions and in
negotiating commission rates with them, and the services provided by such
brokers and dealers.
It also is understood that Chubb Investment, at its expense, will
enter into an agreement with Chubb America Service Corporation, a New Hampshire
corporation, pursuant to which Chubb Investment will obtain from said
corporation most staff, facilities and services necessary to meet its
obligations hereunder. Entering into said agreement shall in no way diminish
any obligation or liability of chubb Investment hereunder.
PAGE 3
3. (a) Purchase and Sale of Assets. Nothing in this Investment
Management Agreement shall preclude the combining of orders for the sale or
purchase of securities or other investments with other accounts managed by Chubb
Investment, provided that Chubb Investment does not favor any account over any
other account and provided further that any purchase or sale orders executed
contemporaneously shall be allocated in a manner that Chubb Investment deems to
be equitable to all accounts involved and, under normal circumstances, such
transactions will be (1) done on a pro rata basis substantially in proportion to
the amounts ordered by each account (2) entered into only if, in Chubb
Investment's opinion, the trade is likely to produce a benefit for the
Portfolio, and (3) is at a price which is approximately the same for all parties
involved. Neither Chubb Investment, nor any of its directors, officers, or
employees, nor any person, firm, or corporation controlling, controlled by or
under common control with it shall act as a principal or receive any commission
as agent in connection with the purchase or sale of assets for the Portfolios.
(b) Brokerage Fees. In placing orders for the purchase or sale of
investments for the Portfolios, in the mane of the Portfolio of their nominees,
Chubb Investment shall use its best efforts to obtain for the Portfolios the
most favorable price and best execution available, considering all of the
circumstances, and shall maintain records adequate to demonstrate compliance
with their requirement. Notwithstanding the foregoing, however, and subject to
appropriate policies and procedures as then approved by the Board of Directors
of the Fund, Chubb Investment may, to the extent authorized by Section 28(3) of
the Securities Exchange Act of 1934, cause the Fund to pay a broker or dealer
that provides research or other brokerage services to Chubb Investment and the
Fund with respect to the Portfolio an amount of commission for effecting a
portfolio transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if Chubb Investment's
overall responsibilities to the Portfolios or its other advisory clients. to the
extent authorized by said Section 28(e) and the Fund's Board of Directors, Chubb
Investment shall not be deemed to have acted unlawfully or to have breached any
duty created by this Investment Management Agreement or otherwise solely by
reasons of such action.
4. Compensation of Chubb Investment. Except as hereinafter provided,
for the services rendered and expenses assumed by Chubb Investment, while this
Investment Management Agreement is in effect, the Fund shall pay to Chubb
Investment Fees at an annual rate set forth in Schedule A attached hereto. Fees
will accrue daily and will be payable as agreed by the Fund and Chubb
Investment, but not more frequently than monthly. The average asset value of
the Portfolios shall be determined and computed in accordance with the
description of the method of determining net asset value contained in the
Prospectus.
The fees payable to Chubb Investment by the Fund hereunder shall be
reduced by any tender solicitation fees or similar payments received by Chubb
Investment, or any affiliated person of Chubb Investment, in connection with the
tender of investments of any Portfolio (less any direct expenses incurred by
Chubb Investment, or any affiliated person of Chubb Investment, in connection
with obtaining such fees or payments). Chubb Investment shall use its best
efforts to recapture all available tender offer solicitation fees and similar
payments in connection with tenders of the securities of any Portfolio,
provided, however, that Chubb Investment shall not be required to register as a
broker-dealer for this purpose. Chubb Investment shall advise the Board of
Directors of any fees or payments of whatever type which
PAGE 4
it may be possible for Chubb Investment to receive in connection with the
purchase or sale of investment securities for any Portfolio.
5. Non-Exclusivity. The Fund agrees that the services of Chubb
Investment are not to be deemed exclusive and Chubb Investment is free to act as
investment manager to various investment companies and as fiduciary for other
managed accounts. Chubb Investment shall, for all purposes herein, be deemed to
be an independent contractor and shall, unless otherwise provided or authorized,
have no authority to act for or represent the Fund with respect to the
Portfolios in any way or otherwise be deemed an agent of the Fund with respect
to the Portfolios other than in furtherance of its duties and responsibilities
as set forth in this Investment Management Agreement. It is understood and
agreed that the directors, officers and employees of Chubb Investment 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,
trustees, or employees of any other firm or corporation, including other
investment companies.
6. Books and Records. Chubb Investment will maintain all books and
records required for the Fund with respect to the Portfolios, to the extent not
maintained by the Custodian or any Sub-investment Manager. Chubb Investment
agrees that all books and records which it maintains for the Fund are the Fund's
property, and, in the event of termination of this Investment Management
Agreement for any reason, Chubb Investment agrees promptly to return to the
Fund, free from any claim or retention of right by Chubb Investment, all records
relating to the Fund. Chubb Investment also agrees, upon request of the Fund,
promptly to surrender such books and records to the Fund or, at the Fund's
expense, to make copies thereof available to the Fund or to make such books and
records available for inspection by representatives of regulatory authorities or
other persons reasonably designated by the Fund. Chubb Investment further
agrees to maintain, prepare and preserve such books and records in accordance
with the Investment Company Act and rules thereunder, including but not limited
to Rules 31a and 31a-2.
Chubb Investment will use records or information obtained under this
Investment Management Agreement only for the purposes contemplated hereby, and
will not disclose such records or information in any manner other than as
expressly authorized by the Board of Directors or officers of the Fund, or
unless disclosure is expressly required by applicable federal or state
regulatory authorities or by this Investment Management Agreement. Chubb
Investment shall supply all information requested by any insurance regulatory
authorities to determine whether all insurance laws and regulations are being
complied with.
The records maintained for the Fund hereunder by Chubb Investment
shall include records showing, for each shareholder's account, the following:
(a) name, address and tax identifying number; (b) number and class of shares
held; (c) historical information regarding the account of each shareholder,
including dividends paid and the date, class of Stock and price for all
transactions; (d) any stop or restraining order placed against the account; (e)
any dividend reinvestment order, dividend address and correspondence relating to
the current maintenance of the account; (f) certificate numbers and
denominations for any Stock certificates; (g) any other information required in
order for Chubb Investment to perform the calculations contemplated or required
by this Investment Management Agreement; and (h) such other records as the Fund
may from time to time reasonably request.
PAGE 5
7. Liability. Chubb Investment will not be liable for any loss
suffered by the Portfolios in connection with any investment policy established
by the Fund for the purchase, sale or redemption of any securities at the
direction of the Board of Directors of the Fund. Nothing herein contained shall
be construed to protect Chubb Investment against any liability resulting from
the willful misfeasance, bad faith or negligence of Chubb Investment in the
performance of its duties or from reckless disregard of its obligations and
duties under this Investment Management Agreement or by virtue of violation of
any applicable law.
8. (a) Initial Documents. The Fund's management shall file with
Chubb Investment the following documents: (i) certified copies of the Articles
of Incorporation of the Fund and all amendments thereto, made from time to time:
(ii) a certified copy of the By-Laws of the Funds as amended, from time to time;
(iii) a copy of the resolution of the Board of Directors of the Fund authorizing
this Investment Management Agreement; (iv) specimens of all forms of outstanding
and new stock certificates, if any, with respect to Portfolio Stock in the form
approved by the Board of Directors of the Fund accompanied by Board of
Directors' resolutions approving such forms, and with a certificate of the
Secretary of the Fund as to such approval; (v) an opinion of counsel for the
Fund with respect to the validity of the Portfolio Stock, the number of shares
authorized, the number of Shares allocated to the Portfolio's class of Shares,
the status of redeemed or repurchased Shares and the number of Shares with
respect to which a registration statement under the Securities Act of 1988 has
been filed and is in effect; and (vi) a listing of the insurance companies with
which Chubb Life through its general account or Separate Account A or any
additional separate accounts established by Chubb Life, its successors or
assigns, is affiliated.
(b) Further Documentation. The Fund's management will also
furnish to Chubb Investment from time to time the following documents: (i) each
resolution of the Board of Directors of the Fund authorizing the original issue
of the Portfolio's Shares; (ii) each registration statement filed with the SEC
under the Securities Act of 1988 or under the Investment Company Act and
amendments thereof, orders relating thereto and the Prospectus in effect with
respect to the sale of shares of the Fund; (iii) certified copies of each
resolution of the Board of Directors authorizing officers to give instructions
to Chubb Investment.
(c) Information. The Fund, its officers or agent will provide
timely information to Chubb Investment regarding such matters as purchases and
redemptions of shares in the Portfolios, cash requirements, and cash available
for investment in the Portfolios, and all other information as may be reasonably
necessary, or appropriate, in order for Chubb Investments to perform its
responsibilities hereunder.
(d) Reliance on Documents and Information. Chubb Investment will
be entitled to rely on all documentation and information furnished to it by the
Fund's management.
9. Authorized Shares. The Fund certifies to Chubb Investment, that
as of the close of business on the date of this Investment Management Agreement,
it has authorized one billion shares of its Stock, and further certifies that,
by virtue of its Articles of Incorporation and the provisions of the law of the
state of its incorporation, shares of its Stock which are redeemed or
repurchased by the Fund from its shareholder are restored to the status of
authorized and unissued shares.
PAGE 6
10. (a) Expenses of the Fund. As between the Fund and Chubb
Investment, the following expenses shall be borne exclusively by the Fund;
(i) Brokerage commissions and transfer taxes in connection with
portfolio transactions and similar fees and charges for the acquisition,
disposition, lending or borrowing of portfolio investments;
(ii) All other state, federal, local or foreign governmental
fees and taxes (including any insurance, transfer, franchise or income taxes)
payable by the Fund and all corporate or filing fees payable by the Fund to any
governmental entity or agency;
(iii) All expenses, incidental and otherwise, associated with
preparing and filing with appropriate state, federal, local or foreign
governments or agencies all tax returns, including the expenses associated with
any mailings to the policy owners with respect to such returns.
(iv) Fees and expenses incurred in the registration or
qualification (and maintaining said registration or qualification) of the Fund
and its shares under federal or state securities laws, if deemed applicable,
subsequent to the effective date of the registration statement including all
fees and expenses incurred in connection with the preparation, setting in type,
printing and mailing of the registration statement and any amendments or
supplements that may be made from time to time;
(v) Compensation paid to directors who are not "interested
persons" of the Fund within the meaning of the Investment Company Act and travel
expenses paid to all directors;
(vi) Interest and any other cost related to borrowings by the
Fund;
(vii) Any extraordinary or non-recurring expenses (such as legal
claims and liabilities, and litigation costs and any indemnification related
thereto);
(viii) Costs of printing and distributing to current policy
owners, shareholder reports, proxy statements, Prospectuses and any stickers and
supplements thereto, and otherwise communicating with the shareholders;
(ix) Costs and all incidental expenses associated with conducting
shareholder meetings;
(x) The cost of the fidelity bond required by Investment Company
Act Rule 17g-1 and any errors and omissions insurance or other liability
insurance covering the Fund and/or its officers, directors and employees;
(xi) The cost of obtaining quotes necessary for valuing the
assets and related liabilities for the Portfolios;
PAGE 7
(xii) The charges and expenses of the Custodian, independent
accountants and independent legal counsel retained by the Fund, the charges and
expenses of any independent proxy solicitation firm retained by the Fund to
solicit voting instructions from policy owners with respect to Portfolio Shares,
and the charges and expense of any trade association fees; and
(xiv) All other expenses not specifically assumed hereunder by
Chubb Investment.
(b) Expenses of Chubb Investment. As between the Fund and Chubb
Investment, the costs and expenses of providing the necessary facilities,
personnel, office equipment and supplies, office space, telephone service, and
other utility service necessary to carry out its obligations hereunder shall be
borne exclusively by Chubb Investment, except as otherwise herein expressly
provided. In addition, Chubb Investment shall pay and assume all expenses
specifically assumed by Chubb Investment as set forth in Paragraphs 1(b)(1),
(3), (4), (7), (8), (9), (10) and (11); and 1(c), (d), (e), (f) and (g) of this
Investment Management Agreement.
11. Duration and Termination of the Agreement. This Investment
Management Agreement shall become effective as of the date first written above
subject to approval by the majority of the outstanding shares of each of the
Portfolios. Thereafter, it shall continue in effect with respect to each of the
Portfolios from year to year, but only so long as such continuance is
specifically approved at least annually by the Board of Directors in conformity
with the requirements of the Investment Company Act. This Investment Management
Agreement may be terminated, with respect to each Portfolio, without the payment
of any penalty, by the Board of Directors of the Fund or by vote of a majority
of the outstanding shares of that Portfolio on sixty days' written notice to
Chubb Investment, or by Chubb Investment on sixty days' written notice to the
Fund. This Investment Management Agreement shall automatically terminate in the
event of its assignment.
12. Amendment of the Agreement. This Investment Management Agreement
may be amended with respect to any Portfolio only if, to the extent required by
law, such amendment is specifically approved by (a) the vote of a majority of
the outstanding shares of the Portfolio, and (b) by the vote of the Board of
Directors of the Fund, including a majority of those directors of the Fund who
are not parties to nor interested persons of any party to this Investment
Management Agreement cast in person at a meeting called for the purpose of
voting on such approval.
13. Definitions. The terms "assignment," "interested person," and
"majority of the outstanding shares," when used in this Investment Management
Agreement, shall have the respective meanings specified under the Investment
Company Act and rules thereunder.
14. Further Actions. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the purposes
hereof.
15. Name. This Investment Management Agreement is entered into in
recognition of an agreement, dated February 15, 1985, between the Fund and The
Chubb Corporation granting the Fund a license to use the word "Chubb" in its
corporate name and to use such words in connection with its business.
PAGE 8
16. Governing Law. The provisions of this Investment Management
Agreement shall be construed and interpreted in accordance with the laws of the
State of New Hampshire, as at the time in effect, and the applicable provisions
of the Investment Company Act and rules thereunder or other federal laws and
regulations which may be applicable. To the extent that the applicable law of
the State of New Hampshire, or any of the provisions herein, conflict with the
applicable provisions of the Investment Company Act and rules thereunder or
other federal laws and regulations which maybe applicable the latter shall
control.
17. Provision of Certain Information by Manager. The Manager will
promptly notify the Fund in writing of the occurrence of any of the following
events:
(a) the Manager fails to be registered as an investment adviser
under the Advisers Act or under the laws of any jurisdiction in which the
Manager is required to be registered as an investment adviser in order to
perform its obligations under this Agreement.
(b) the Manager is served or otherwise receives notice of any
action, suit, proceeding, inquiry or investigation, at law or in equity, before
or by any court, public board or body, involving the affairs of the Fund; and/or
(c) the chief executive officer or controlling stockholder of the
Manager or the portfolio manager of any Portfolio changes or there is otherwise
an actual change in control or management of the Manager.
18. Entire Agreement. This Agreement contains the entire understanding
and agreement of the parties.
19. Headings. The headings in the sections of this Agreement are
inserted for convenience of reference only and shall not constitute a part
hereof.
20. Notices. All notices required to be given pursuant to this
Agreement shall be delivered or mailed to the last known business address of the
Fund or Manager in person or by registered mail or a private mail or delivery
service providing the sender with notice of receipt. Notice shall be deemed
given on the date delivered or mailed in accordance with this section.
21. Force Majeure. The Manager shall not be liable for delays or
errors occurring by reason of circumstances beyond its control, including, but
not limited to, acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of nature, insurrection, war, riot, or
failure of communication or power supply. In the event of equipment breakdowns
beyond its control, the Manager shall take reasonable steps to minimize service
interruptions but shall have no liability with respect to such undertakings.
22. Severability. Should any portion of this Agreement for any
reason be held to be void in law or in equity, the Agreement shall be construed,
insofar as is possible, as if such portion had never been contained in the
Agreement.
CHUBB AMERICA FUND, INC.
PAGE 9
Attest: By:
Title: Title:
CHUBB INVESTMENT ADVISORY CORPORATION
Attest: By:
Title: Title:
PAGE 10
SCHEDULE A
CHUBB AMERICA FUND INC.
--------------------------------------------------------------------------------
NAME OF PORTFOLIO ANNUAL FEE AS A PERCENTAGE
OF
AVERAGE DAILY NET ASSETS
--------------------------------------------------------------------------------
World Growth Stock Portfolio .75% of first $200 Million
.70% of next $1.1 Billion
.65% over $1.3 Billion
--------------------------------------------------------------------------------
Money Market Portfolio .50% of first $200 Million
.45% of next $1.1 Billion
.40% over $1.8 Billion
--------------------------------------------------------------------------------
Gold Stock Portfolio .75% of first $200 Million
.70% of next $1.1 Billion
.65% over $1.8 Billion
--------------------------------------------------------------------------------
Bond Portfolio .50% of first $200 Million
.45% of next $1.1 Billion
.40% over $1.8 Billion
--------------------------------------------------------------------------------
Domestic Growth Stock Portfolio .75% of first $200 Million
.70% of next $1.1 Billion
.65% over $1.8 Billion
--------------------------------------------------------------------------------
Growth and Income Portfolio .75% of first $200 Million
.70% of next $1.1 Billion
.65% over $1.8 Billion
--------------------------------------------------------------------------------
Capital Growth Portfolio 1.00% of first $200 Million
.95% of next $1.1 Billion
.90% over $1.8 Billion
--------------------------------------------------------------------------------
Balanced Portfolio .75% of first $200 Million
.70% of next $1.1 Billion
.65% over $1.8 Billion
--------------------------------------------------------------------------------
Emerging Growth Portfolio .80% of first $200 Million
.75% of next $1.1 Billion
.70% over $1.8 Billion
================================================================================
PAGE 11
