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EXHIBIT (d).2
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 1st day of December 1997, by and between Fortis
Income Portfolios, Inc., a Minnesota corporation (the "Company") and Fortis
Advisers, Inc., a Minnesota ("Advisers").
RECITALS
A. WHEREAS, the Board of Directors of the Company has amended the Company's
Articles of Incorporation to create a new series of $.01 par value common stock
designated as Series B Common Shares known as "Fortis Strategic Income Fund (the
"Portfolio"); and
B. WHEREAS, the Board of Directors of the Company desires to enter into
this Agreement pursuant to which Advisers will act as investment adviser for,
and manage the affairs, business and the investment assets of the Portfolio.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein made, the Company and Advisers agree as follows:
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES
The Company hereby engages Advisers, and Advisers hereby agrees to act, as
investment adviser for, and to manage the affairs, business and the investment
of the assets of the Portfolio.
The investment of the assets of the Portfolio shall at all times be
subject to the applicable provisions of the Articles of Incorporation, Bylaws,
Registration Statement and current Prospectus of the Portfolio and shall conform
to the policies and purposes of the Portfolio as set forth in the Registration
Statement and Prospectus and as interpreted from time to time by the Board of
Directors of the Company. Within the framework of the investment policies of the
Portfolio, Advisers shall have the sole and exclusive responsibility for the
management of the Portfolio and the making and execution of all investment
decisions for the Portfolio. Advisers shall report to the Board of Directors
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 Advisers to the investment policies of the Portfolio.
Advisers shall, at its own expense, furnish the Portfolio suitable office
space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Portfolio. Advisers shall arrange, if requested
by the Company, for officers, employees or other affiliates of Advisers to serve
without compensation from the Portfolio as directors, officers, or employees of
the Fund if duly elected to such positions by the shareholders or directors of
the Company.
Advisers hereby acknowledges that all records necessary in the operation of
the Portfolio, including records pertaining to shareholders and investments, are
the property of the Portfolio, and in the event that a transfer of management or
investment advisory services to someone other than Advisers should ever occur,
Advisers will promptly, and at its own cost, take all steps necessary to
segregate such records and deliver them to the Portfolio.
2. COMPENSATION FOR SERVICES.
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In payment for all services, facilities, equipment and personnel, and for
other costs of Advisers hereunder, the Portfolio shall pay to Advisers a monthly
fee, which fee shall be paid to Advisers not later than the fifth business day
of the month following the month in which such services are rendered. Such
monthly bee shall be at the rate or rates set forth below and shall be based on
the average of the net asset values of all of the issued and outstanding shares
of the Portfolio as determined as of the close of each business day of the month
pursuant to the Articles of Incorporation, Bylaws and currently effective
Prospectus of the Portfolio. The following table sets forth the fee on a monthly
and annual basis:
EQUIVALENT
MONTHLY RATE RATE AVERAGE ASSET VALUES OF THE FUND
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Strategic Income Fund 1/15 of 1.0% 8/10 of 1.0% On the first $50,000,000
7/120 of 1.0% 7/10 of 1.0% For assets over $50,000,000
The fee shall be prorated for any fraction of a month at the commencement
or termination of this Agreement.
3. ALLOCATION OF EXPENSES
In addition to the fee described in Section 2 hereof, the Portfolio shall
pay all its expenses which are not assumed by Advisers and/or Fortis Investors,
Inc. ("Investors"). These expenses include, by way of example, but not by way of
limitation, the fees and expenses of directors and officers of the Company who
are not "affiliated persons" of Advisers, interest expenses, taxes, brokerage
fees and commissions, fees and expenses of registering and qualifying the
Portfolio and its shares for distribution under federal and state securities
laws, expenses of preparing prospectuses and of printing and distributing
prospectuses annually to existing shareholders, custodian charges, auditing and
legal expenses, insurance expenses, association membership dues, and the
expenses of reports to shareholders, shareholders' meetings and proxy
solicitations. Advisers shall bear the costs of acting as the Portfolio's
transfer agent, registrar and dividend disbursing agent.
Advisers or Investors shall bear all promotional expenses in connection
with the distribution of the Portfolio's shares, including paying for
prospectuses and shareholder reports for new shareholders and the costs of sales
literature.
4. FREEDOM TO DEAL WITH THIRD PARTIES.
Advisers shall be free to render services to others 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.
5. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
The effective date of this Agreement shall be December 1, 1997. Wherever
referred to in this Agreement, the vote or approval of the holders of a majority
of the outstanding voting securities of the 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 less.
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Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect only so long as such continuance is specifically approved at
least annually by the Board of Directors of the Company, including the specific
approval of a majority of the directors who are not interested persons of
Advisers or of the Company cast in person at a meeting called for the purpose of
voting on such approval, or by the vote of the holders of a majority of the
outstanding voting securities of the Portfolio.
This Agreement may be terminated at any time without the payment of any
penalty by the vote of the Board of Directors of the Company or by the vote of
the holders of a majority of the outstanding voting securities of the Portfolio,
or by Advisers, upon sixty (60) days written notice to the other party. Any such
termination may be made effective with respect to both the investment advisory
and management services provided for in this Agreement or with respect to either
of such kinds of services. This Agreement shall automatically terminate in the
event of its assignment.
6. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until approved
by a vote of the holders of a majority of the outstanding voting securities of
the Portfolio.
7. 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 receipt of such notice.
IN WITNESS WHEREOF, the Company and Advisers have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
FORTIS INCOME PORTFOLIOS, INC.
By /s/ Xxxx X. Xxxxxxxx
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Its President
FORTIS ADVISERS, INC.
By /s/ Xxxx X. Xxxxxxxx
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Its President
