-5-
Exhibit d(2)
ADVISORY AGREEMENT
ADVISORY AGREEMENT, dated June 14, 1999, between SAMCO Fund, Inc., a
Maryland corporation (the "Fund"), and Seix Investment Advisors Inc., a New
Jersey corporation (the "Adviser").
In consideration of the mutual agreements herein made, the parties
hereto agree as follows:
1. Attorney-in-Fact. The Fund appoints the Adviser as its
attorney-in-fact to invest and reinvest the assets of the SAMCO Intermediate
Fixed Income Fund (the "Portfolio"), as fully as the Fund itself could do. The
Adviser hereby accepts this appointment.
2. Duties of the Adviser. (a) The Adviser shall be responsible for
managing the investment assets of the Portfolio, including, without limitation,
providing investment research, advice and supervision, determining which
portfolio securities shall be purchased or sold by the Portfolio, purchasing and
selling securities on behalf of the Portfolio and determining how voting and
other rights with respect to portfolio securities of the Portfolio shall be
exercised, subject in each case to the control of the Board of Directors of the
Fund (the "Board") and in accordance with the objective, policies and principles
of the Portfolio set forth in the Registration Statement, as amended, of the
Fund, the requirements of the Investment Company Act of 1940, as amended, (the
"Act") and other applicable law. In performing such duties, the Adviser shall
provide such office space, and such executive and other personnel as shall be
necessary for the investment operations of the Portfolio. In managing the
Portfolio in accordance with the requirements set forth in this paragraph 2, the
Adviser shall be entitled to act upon advice of counsel to the Fund or counsel
to the Adviser.
(b) Subject to Section 36 of the Act, the Adviser shall not be liable
to the Fund for any error of judgment or mistake of law or for any loss arising
out of any investment or for any act or omission in the management of the
Portfolio and the performance of its duties under this Agreement except for
losses arising out of the Adviser's willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement. It is agreed that
the Adviser shall have no responsibility or liability for the accuracy or
completeness of the Fund's Registration Statement under the Act and the
Securities Act of 1933 except for information about the Adviser contained in the
Prospectus included as part of such Registration Statement supplied by the
Adviser for inclusion therein. The Fund agrees to indemnify and hold the Adviser
harmless from and against all claims, losses, costs, damages and expenses,
including reasonable fees and expenses for counsel, incurred by it resulting
from any claim, demand, action or suit in connection with or arising out of any
action or omission by the Adviser in the performance of this Agreement except
for those claims, losses, costs, damages and expenses resulting from the
Adviser's willful misfeasance, bad faith, or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement.
(c) The Adviser and its officers may act and continue to act as
investment advisers and managers for others (including, without limitation,
other investment companies), and nothing in this Agreement will in any way be
deemed to restrict the right of the Adviser to perform investment management or
other services for any other person or entity, and the performance of such
services for others will not be deemed to violate or give rise to any duty or
obligation to the Fund.
(d) Except as provided in Section 5, nothing in this Agreement will
limit or restrict the Adviser or any of its officers, affiliates or employees
from buying, selling or trading in any securities for its or their own account
or accounts. The Fund acknowledges that the Adviser and its officers, affiliates
or employees, and its other clients may at any time have, acquire, increase,
decrease or dispose of positions in investments which are at the same time being
acquired or disposed of for the account of the Portfolio. The Adviser will have
no obligation to acquire for the Portfolio a position in any investment which
the Adviser, its officers, affiliates or employees may acquire for its or their
own accounts or for the account of another client, if in the sole discretion of
the Adviser, it is not feasible or desirable to acquire a position in such
investment for the account of the Portfolio, provided that the Adviser shall
have acted in good faith and in a manner deemed equitable to the Portfolio. The
Adviser represents that it has adopted a code of ethics governing personal
trading that complies in all material respects with the recommendations
contained in the Investment Company Institute "Report of the Advisory Group on
Personal Investing," dated May 9, 1994, and the Adviser agrees to furnish a copy
of such code of ethics to the Directors of the Fund.
(e) If the purchase or sale of securities consistent with the
investment policies of the Portfolio and one or more other clients serviced by
the Adviser is considered at or about the same time, transactions in such
securities will be allocated among the Portfolio and clients in a manner deemed
fair and reasonable by the Adviser. Although there is no specified formula for
allocating such transactions, the various allocation methods used by the
Adviser, and the results of such allocations, are subject to periodic review by
the Board.
3. Expenses. The Adviser shall pay all of its expenses arising from the
performance of its obligations under this Agreement. Except as provided below,
the Adviser shall not be required to pay any other expenses of the Fund
(including out-of-pocket expenses, but not including the Adviser's overhead or
employee costs), including without limitation, organization expenses of the
Fund; brokerage commissions; maintenance of books and records which are required
to be maintained by the Fund's custodian or other agents of the Fund; telephone,
telex, facsimile, postage and other communications expenses; expenses relating
to investor and public relations; freight, insurance and other charges in
connection with the shipment of the Fund's portfolio securities; indemnification
of Directors and officers of the Fund; travel expenses (or an appropriate
portion thereof) of Directors and officers of the Fund to the extent that such
expenses relate to attendance at meetings of the Board of Directors of the Fund
or any committee thereof or advisors thereto held outside of the Adviser's
offices; interest, fees and expenses of independent attorneys, auditors,
custodians, accounting agents, transfer agents, dividend disbursing agents and
registrars; payment for portfolio pricing or valuation service to pricing
agents, accountants, bankers and other specialists, if any; taxes and government
fees; cost of stock certificates and any other expenses (including clerical
expenses) of issue, sale, repurchase or redemption of shares; expenses of
registering and qualifying shares of the Fund under Federal and state laws and
regulations; expenses of printing and distributing reports, notices, dividends
and proxy materials to existing stockholders; expenses of printing and filing
reports and other documents filed with governmental agencies, expenses of
printing and distributing prospectuses; expenses of annual and special
stockholders' meetings; costs of stationery, fees and expenses (specifically
including travel expenses relating to Fund business) of Directors of the Fund
who are not employees of the Adviser or its affiliates; membership dues in the
Investment Company Institute; insurance premiums and extraordinary expenses such
as litigation expenses.
4. Compensation. (a) As compensation for the services performed and the
facilities and personnel provided by the Adviser pursuant to this Agreement, the
Fund will pay to the Adviser promptly at the end of each calendar month, a fee,
calculated on each day during such month, at an annual rate of 0.25% of the
Portfolio's average daily net assets. The Adviser shall be entitled to receive
during any month such interim payments of its fee hereunder as the Adviser shall
request, provided that no such payment shall exceed 50% of the amount of such
fee then accrued on the books of the Portfolio and unpaid.
(b) If the Adviser shall serve hereunder for less than the whole of any month,
the fee payable hereunder shall be prorated.
(c) For purposes of this Section 4, the "average daily net assets" of the
Portfolio shall mean the average of the values placed on the Portfolio's net
assets on each day pursuant to the applicable provisions of the Fund's
Registration Statement, as amended.
5. Purchase and Sale of Securities. The Adviser shall purchase
securities from or through and sell securities to or through such persons,
brokers or dealers as the Adviser shall deem appropriate in order to carry out
the policy with respect to the allocation of portfolio transactions as set forth
in the Registration Statement of the Fund, as amended, or as the Board may
direct from time to time. The Adviser will use its reasonable efforts to execute
all purchases and sales with dealers and banks on a best net price basis. The
Adviser will consider the full range and quality of services offered by the
executing broker or dealer when making these determinations. Neither the Adviser
nor any of its officers, affiliates or employees will act as principal or
receive any compensation from the Portfolio in connection with the purchase or
sale of investments for the Portfolio other than the fee referred to in
Paragraph 4 hereof.
6. Term of Agreement. This Agreement shall continue in full force and
effect until two years from the date hereof, and will continue in effect from
year to year thereafter if such continuance is approved in the manner required
by the Act, provided that this Agreement is not otherwise terminated. The
Adviser may terminate this Agreement at any time, without the payment of any
penalty, upon 60 days' written notice to the Fund. The Fund may terminate this
Agreement with respect to the Portfolio at any time, without the payment of any
penalty, on 60 days' written notice to the Adviser by vote of either the
majority of the non-interested members of the Board or a majority of the
outstanding voting securities (as defined in Section 2(a)(42) of the Act) of the
Portfolio. This Agreement will automatically terminate in the event of its
assignment (the term "assignment" for this purpose having the meaning defined in
Section 2(a)(4) of the Act).
7. Changes in Membership. The Adviser is a corporation duly existing
under the laws of the State of New Jersey. In the event the Adviser changes
ownership, the Adviser shall notify the Fund of such change within a reasonable
time after the change.
8. Notices. Any notice or other communication authorized or required
hereunder shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notice shall be addressed to the Fund at c/o Investors
Capital Services, Inc., 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000,
Attention: Xx. Xxxx Xxxxxxxxx, Treasurer; and to Seix Investment Advisors Inc.,
Whiteweld Corporate Centre 000 Xxxx Xxxxxxxxx, Xxxxxxxxx Xxxx, XX 00000-0000,
Attention: Xx. Xxxxxxxxx Xxxx. Either party may designate a different address by
notice to the other party. Any such notice or other communication shall be
deemed given when actually received.
9. Amendment. This Agreement may be amended by the parties hereto with
respect to the Portfolio only if such amendment is specifically approved (i) by
the Board of Directors of the Fund or by the vote of a majority of outstanding
shares of the Portfolio ("Shares"), and (ii) by the Director(s) who are not
interested persons (the term "non interested" for this purpose having the
meaning defined in section 2 (a) (19) of the Act) of the Fund ("Non-Interested
Director(s)"), which vote must be cast in person at a meeting called for the
purpose of voting on such approval.
10. Right of Adviser In Corporate Name. The Adviser and the Fund each
agree that the phrase "SAMCO" which comprises a component of the Fund's
corporate name, is a property right of the Adviser. The Fund agrees and consents
that (i) it will only use the phrase "SAMCO" as a component of its corporate
name and for no other purpose; (ii) it will not purport to grant to any third
party the right to use the phrase "SAMCO" for any purpose; (iii) the Adviser or
any corporate affiliate of the Adviser may use or grant to others the right to
use the phrase "SAMCO" or any combination or abbreviation thereof, as all or a
portion of a corporate or business name or for any commercial purpose, including
a grant of such right to any other investment company, and at the request of the
Adviser, the Fund will take such action as may be required to provide its
consent to such use or grant; and (iv) upon the termination of any investment
advisory agreement into which the Adviser and the Fund may enter, the Fund
shall, upon request by the Adviser, promptly take such action, at its own
expense, as may be necessary to change the Fund's corporate name to one not
containing the phrase "SAMCO" and following such a change, shall not use the
phrase "SAMCO" or any combination thereof, as part of the Fund's corporate name
or for any other commercial purpose, and shall use its reasonable efforts to
cause its officers, directors and stockholders to take any and all actions which
the Adviser may request to effect the foregoing and recovery to the Adviser any
and all rights to such phrase.
11. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require or to
impose any duty upon either of the parties to do anything in violation of any
applicable laws or regulations.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement
to be executed by their duly authorized officers as of the date first written
above.
ATTEST SAMCO FUND, INC.
By: /s/ Xxxxx X. Xxxxxx By:/s/ Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx, Treasurer
ATTEST SEIX INVESTMENT ADVISORS INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxxxx Seix______________
Xxxxx X. Xxxxxx Xxxxxxxxx Xxxx, Chairman & CIO
