Exhibit 5.(h)
STRATUS FUND, INC.
AMENDMENT TO INVESTMENT ADVISORY AGREEMENT
CAPITAL APPRECIATION PORTFOLIO
THIS AMENDMENT TO INVESTMENT ADVISORY AGREEMENT (the
"Amendment"), made as of the 16th day of December, 1997, by and between Stratus
Fund, Inc., a Minnesota corporation (the "Fund") and Union Bank & Trust Company,
a Nebraska state bank (the "Investment Adviser") (together, the "Parties"),
amends the Investment Advisory Agreement for the Capital Appreciation Portfolio
between the Parties dated October 30, 1992 (the "Agreement"):
WITNESSETH:
WHEREAS, the Parties wish to amend the Agreement to revise the
compensation paid by the Fund on behalf of the Capital Appreciation Portfolio
for services provided by the Investment Adviser to the Capital Appreciation
Portfolio under the Agreement.
NOW, THEREFORE, for good and valuable consideration, the Parties agree
that "Exhibit 1" to the Agreement is hereby replaced by the attached Exhibit 1.
IN WITNESS WHEREOF, the parties hereto have executed, accepted and
delivered this Amendment on the day and year first above written.
STRATUS FUND, INC.
By __________________________
Chairman
UNION BANK AND TRUST COMPANY
By___________________________
President
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Exhibit 1
As compensation for the Investment Adviser's services to the Fund during
the period of this Agreement, the Fund will pay to the Investment Adviser a fee
calculated and paid pursuant to the provisions of this exhibit. The fee
described below will be calculated and paid monthly. The period which forms the
basis for each monthly fee calculation shall be the 12 months ending with the
month for which such fee calculation is made, and such 12-month period shall be
referred to below as the "fee period".
(1) BASIC FEE. As primary compensation for the services
rendered and the expenses assumed by the Investment Adviser,
the Fund shall pay the Investment Adviser a monthly basic
advisory fee, based on the net asset value of the Capital
Appreciation Portfolio averaged daily over the fee period
("Average Daily Net Asset Value"), in an amount equal to
1/12th of (i) 1.4% of that portion of the Average Daily Net
Asset Value during the fee period. The Average Daily Net
Asset Value will be computed by averaging the net asset
values of the Capital Appreciation Portfolio at the close of
each business day during the fee period.
(2) INCENTIVE FEE. The monthly basic advisory fee shall be
subject to an incentive adjustment depending upon the
investment performance of the Capital Appreciation Portfolio
relative to the Xxxxxxx 2000 Index (herein called the
"Index") during the fee period. The incentive adjustment; if
any, shall be computed as of the end of each fee period,
shall be added to or subtracted from the monthly basic
advisory fee calculated for such fee period and shall be
calculated as follows:
(i) There shall be added to the net asset value of a share of the
Capital Appreciation Portfolio outstanding at the close of business on
the last business day of the fee period: (A) the value of all cash
distributions per share of the Capital Appreciation Portfolio made
during such fee period,
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accumulated to the end of such fee period, which amount shall be
treated as if reinvested in shares of the Capital Appreciation
Portfolio at the net asset value per share, after giving effect to any
such distributions; in effect at the close of business on the
respective record date or dates for the payment thereof, and (B) the
value of capital gains taxes per share of the Capital Appreciation
Portfolio paid or payable on undistributed realized long-term capital
gains during the fee period, accumulated to the end of such fee
period, which amount shall be treated as reinvested in shares of the
Capital Appreciation Portfolio at the net asset value per share, alter
giving effect of such taxes, in effect at the close of business on the
date on which such provision is made therefore. The adjusted net asset
value per share of the Capital Appreciation Portfolio, as so
calculated, shall then be compared with the net asset value of a share
of the Capital Appreciation Portfolio at the close of business on the
business day immediately preceding the first day of the fee period.
The difference between such adjusted net asset value of share at the
close of business on the last day of the fee period and the net asset
value of a share at the close of business on the day immediately
preceding the first day of the fee period shall then be expressed as a
percentage of the net asset value of a share of the Capital
Appreciation Portfolio at the close of business on the day immediately
preceding the first day of the fee period (such percentage being
herein referred to as the "net asset value percentage change").
(ii) There shall be added to the level of the Index at the close of
business on the last business day of the fee period, in accordance
with Commission guidelines, the value, computed consistently with the
"Index", of cash distributions made during the fee period and
accumulated to the end of such fee period, by companies whose
securities comprised the Index. For this purpose cash distributions on
securities which comprise the Index made during the fee period shall
be treated as reinvested in the Index at the close of business on the
last day of each month following the payment of such distribution. The
adjusted level of the Index thus obtained shall then be compared to
the level of the Index at the close of business on the business day
immediately preceding the first day of the fee period and the
difference in the two levels shall be expressed as a percentage of the
Index level at the close of business on the business day immediately
preceding the first day of the fee period (such percentage being
hereinafter referred to as the "Index Percentage Change").
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(iii) The Index percentage change will then be subtracted from the net
asset value percentage change to determine the performance
differential, it being understood that any time either the percentage
change an/or the performance differential could result in a negative
figure. To the extent that there is a positive or negative performance
differential, an incentive adjustment for each such fee period shall
be an amount equal to 1/12th of the excess performance differential
multiplied by the average daily net asset value for the fee period
according to the attached chart, labeled Appendix 1 and incorporated
by reference herein. Notwithstanding any positive or negative
performance differential or incentive fee adjustment calculated
pursuant thereto, there shall in no event be an incentive adjustment
for any fee period exceeding 1/12th of 1.4% of the average daily net
asset value during such fee period.
(iv) For purpose hereof, the incentive adjustment shall be computed in
accordance with any applicable rules, regulations and attributable
releases promulgated by the Commission.
(3) REIMBURSEMENT. Notwithstanding any other provision in
this Investment Advisory Agreement, the Investment Adviser
agrees to reimburse the Capital Appreciation Portfolio for
its actual expenses incurred, exclusive of brokerage
commissions, interest, taxes, dividends on short sales and
the positive incentive adjustment, if any, in excess of the
lowest expense maximum permitted by the state securities
commission of the states in which the Capital Appreciation
Portfolio has registered its securities for sale
(hereinafter called the "maximum expense limitation").
(4) ACCRUAL AND PAYMENT OF THE FEE. The Capital
Appreciation Portfolio's expenses (including the monthly
basic advisory fee) and the incentive adjustment for each
fee period, shall be computed and accrued daily and taken
into account in computing the daily net asset value of the
Capital Appreciation Portfolio shares. However, expenses in
excess of the maximum
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expense limitation shall not be accrued for the purpose of
computing the daily net asset value of a Capital
Appreciation Portfolio share. The incentive adjustment for
any fee period will not be accrued for the purpose of
calculating the basic advisory fee for the incentive
adjustment for such period or for the purpose of determining
that performance differential for such period. The amount of
the basic advisory fee and any incentive adjustment will be
determined monthly promptly alter the close of the fee
period, and the fee for such period will be paid alter such
determination period.
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APPENDIX 1
Performance Total
Relative to
Xxxxxxx 2000 Index Adviser Fee Management Fee
--------------------------- ---------------- -------------------
-5.0% & under .40% Minimum Management Fee
-4.5 .50
-4.0 .60
-3.5 .70
-3.0 .80
-2.5 .90
-2.0 1.00
-1.5 1.10
-1.0 1.20
-0.5 1.30
0.0 1.40
0.5 1.50
1.0 1.60
1.5 1.70
2.0 1.80
2.5 1.90
3.0 2.00
3.5 2.10
4.0 2.20
4.5 2.30
5.0 2.40 Maximum Management Fee
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