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 _____ day of _________, 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
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".
(a) 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.
(b) 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,
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").
(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
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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.
(c) 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").
(d) 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 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
