SERVICE AGREEMENT
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois
corporation (Auto Company), STATE FARM INVESTMENT MANAGEMENT CORP., a Delaware
corporation and a wholly-owned second-tier subsidiary of Auto Company
(Manager), and STATE FARM INCOME FUND, INC., a Maryland corporation and an
open-end diversified management investment company registered under the
Investment Company Act of 1940 (Fund) to which Manager is investment adviser
under an Investment Advisory and Management Services Agreement dated April 1,
1972 agree that:
1. Manager shall have the right to use, and Auto Company shall make
available for the use of Manager, (i) such part-time services of employees of
Auto Company engaged in its investment operations, and such services of
administrative and other employees of Auto Company, for periods to be agreed
upon by Manager and Auto Company, and (ii) such administrative, clerical,
stenographic and other support services and office supplies and equipment, as
may in each case be reasonably required by Manager in the performance of its
obligations as investment adviser to the Fund under their Investment Advisory
and Management Services Agreement and any agreements amending or superseding
such agreement.
2. Manager shall have the right to use, and Auto Company shall
furnish for the use of Manager such office space as is reasonably needed by
Manager in the performance of its obligations as investment adviser to the Fund.
3. In performing services for manager under this agreement, the
employees of Auto Company may, to the full extent that they deem appropriate,
have access to and utilize statistical and economic data, investment research
and reports and other information prepared for or contained in the files of the
Auto Company which are relevant to making investment decisions within the
investment objectives of the Fund, and may make such information available to
Manager; provided, that any such information prepared or obtained in connection
with a private placement or other nonpublic transaction need not be made
available to Manager if Auto Company deems such information confidential.
4. Employees of Auto Company performing services for Manager
pursuant hereto shall report and be responsible solely to the officers and
directors of Manager or persons designated by them. Auto Company shall have no
responsibility for investment recommendations and decisions of Manager based
upon information or advice given or obtained by or through such Auto Company
employees; provided, however, that the foregoing shall not be construed to
relieve Auto Company of any liability to the Fund or its security holders to
which the Auto Company would otherwise be subject by reason of its willful
misfeasance, bad faith or gross negligence, in the performance of its duties
hereunder, or by reason of its reckless disregard of its obligations and duties
hereunder.
5. The obligation of performance of the Investment Advisory and
Management Services Agreement of Manager with the Fund is solely that of
Manager, for which Auto Company assumes no responsibility except as otherwise
expressly provided herein.
6. In consideration of the services to be rendered and the
facilities to be provided to Manager by Auto Company and its employees pursuant
to this agreement, Manager agrees to reimburse Auto Company for such costs,
direct and indirect, as may be fairly attributable to the services performed
and the facilities provided for Manager. Such costs shall include, but shall
not be limited to, an appropriate portion of salaries, employee benefits,
general overhead expense, and supplies and equipment, and a charge in the
nature of rent for the cost of space in the Auto Company offices fairly
allocable to activities of Manager under its Investment Advisory and Management
Services Agreement with the Fund. In the event of disagreement between Manager
and Auto Company, as to a fair basis for allocating or apportioning costs, such
basis shall be fixed by the independent public accountants for the Fund.
7. This agreement shall become effective upon execution by the
parties hereto and shall continue in effect until April 1, 1977, and thereafter
shall continue in effect from year to year if its continuance is specifically
approved by (i) the vote of a majority of the outstanding voting securities of
the Fund (as defined in section 2(a)(42) of the Investment Company Act of 1940
("Act")), or (ii) the vote of a majority of the Board of Directors of the Fund,
and in either case by a majority of the Directors of the Fund who are not
parties to the agreement or interested persons (as defined in section 2(a)(19)
of the Act) of the Fund, Auto Company or Manager, voting in person at a meeting
called for such purpose; provided,
however, that this Agreement (a) may be terminated at any time, without the
payment of any penalty, either by the Board of Directors of the Fund or by vote
of a majority of the outstanding voting securities of the Fund, on sixty days'
written notice to Manager and to Auto Company, (b) shall terminate automatically
in the event of its assignment (as defined in section 2(a)(4) of the Act), and
(c) may be terminated by Manager or by Auto Company on sixty days' written
notice to each other and to the Fund.
8. This agreement may be amended at any time by mutual consent of the
parties, provided that such amendment shall not become effective until it has
been approved by vote of a majority of the outstanding voting securities of the
Fund.
9. Any notice under this agreement shall be in writing, addressed and
delivered or mailed postage prepaid to the other parties, at such addresses as
such other parties may designate for the receipt of such notices. Until further
notice to the other parties, it is agreed that the address of Auto Company, that
of Manager and that of the Fund for this purpose shall be Xxx Xxxxx Xxxx Xxxxx,
Xxxxxxxxxxx, Xxxxxxxx 00000.
Dated: March 17, 1976
STATE FARM INVESTMENT MANAGEMENT CORP.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Xxxxx Xxxxxx, Vice President
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Xxxxxx X. Xxxx, President
STATE FARM INCOME FUND, INC.
By: /s/ Xxx X. Xxxxx
-------------------------------------
Xxx X. Xxxxx, Vice President
