INVESTMENT SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made this 1st day of May, 1996, by and between MIMLIC
Asset Management Company, a Minnesota corporation registered as an Investment
Adviser under the Investment Advisers Act of 1940 (the "Adviser"), and Xxxxxxx
Capital Management, Inc., a Minnesota Corporation registered as an Investment
Adviser under the Investment Advisers Act of 1940 (the "Sub-Adviser").
WHEREAS, the Adviser is the Investment Adviser to MIMLIC Series Fund, Inc.
(the "Fund"), an open-end diversified management investment company organized as
a series fund, registered under the Investment Company Act of 1940, as amended
(the "1940 Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish ongoing
portfolio selection and related research and statistical services in connection
with the Adviser's investment advisory activities on behalf of the Fund's
Capital Appreciation Portfolio, and the Sub-Adviser desires to furnish such
services to the Capital Appreciation Portfolio; and
WHEREAS, the Adviser also desires to retain the Sub-Adviser to furnish the
Capital Appreciation Portfolio with investment advisory services on an interim
basis in compliance with the provisions of Rule 15a-4 under the 1940 Act;
NOW, THEREFORE, in consideration of the premises and the terms and
conditions hereinafter set forth, it is agreed as follows:
1. APPOINTMENT OF SUB-ADVISER
In accordance with and subject to the Supplemental Investment
Advisory Agreement between the Fund and the Adviser dated April 28, 1987,
and the Investment Advisory Agreement between the Fund and the Adviser
dated January 30, 1986, as incorporated therein (collectively, the
"Investment Advisory Agreement"), the Adviser hereby appoints the
Sub-Adviser to perform portfolio selection services described herein for
investment and reinvestment of the Fund's Capital Appreciation Portfolio,
subject to the control and direction of the Fund's Board of Directors,
for the period and on the terms hereinafter set
forth. The Sub-Adviser accepts such appointment and agrees to furnish
the services hereinafter set forth for the compensation herein provided.
The Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, except as expressly provided or
authorized, have no authority to act for or represent the Fund or the
Adviser in any way or otherwise be deemed an agent of the Fund or the
Adviser.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY THE SUB-ADVISER
(a) The Sub-Adviser shall provide the following services and assume the
following obligations with respect to the Fund's Capital
Appreciation Portfolio:
(1) The investment of the assets of the Capital Appreciation
Portfolio shall at all times be subject to the applicable
provisions of the Articles of Incorporation, the Bylaws, and
the Registration Statement of the Fund, as amended from time to
time under the Securities Act of 1933 and the 1940 Act (the
"Registration Statement"), and shall conform to the investment
objectives, policies and restrictions of the Capital
Appreciation Portfolio as set forth in such documents and as
interpreted from time to time by the Board of Directors of the
Fund and by the Adviser. Within the framework of the
investment objectives, policies and restrictions of the Capital
Appreciation Portfolio, and subject to the supervision of the
Adviser, the Sub-Adviser shall have the sole and exclusive
responsibility for the making and execution of all investment
decisions for the Capital Appreciation Portfolio.
(2) In carrying out its obligations to manage the investments and
reinvestments of the assets of the Capital Appreciation
Portfolio, the Sub-Adviser shall: (1) obtain and evaluate
pertinent economic, statistical, financial and other
information affecting the economy generally and individual
companies or industries the securities of which are included in
the Capital Appreciation Portfolio or are under consideration
for inclusion therein; (2) formulate and implement a continuous
investment program for the Capital Appreciation
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Portfolio consistent with the investment objective and related
investment policies for such Portfolio as set forth in the
Fund's Registration Statement; and (3) take such steps as are
necessary to implement the aforementioned investment program by
purchase and sale of securities including the placing of orders
for such purchases and sales.
(3) In connection with the purchase and sale of securities of the
Fund's Capital Appreciation Portfolio, the Sub-Adviser shall
arrange for the transmission to the Adviser on a daily basis
such confirmation, trade tickets and other documents as may be
necessary to enable it to perform its administrative
responsibilities with respect to the Fund's Capital
Appreciation Portfolio. With respect to portfolio securities
to be purchased or sold through the Depository Trust Company,
the Sub-Adviser shall arrange for the automatic transmission of
the I.D. confirmation of the trade to the Adviser. The Sub-
Adviser shall render such reports to the Adviser and/or to the
Fund's Board of Directors concerning the investment activity
and portfolio composition of the Fund's Capital Appreciation
Portfolio in such form and at such intervals as the Adviser or
the Board may from time to time require.
(4) The Sub-Adviser shall, in the name of the Fund, place orders
for the execution of portfolio transactions in accordance with
the policies with respect thereto, as set forth in the Fund's
Registration Statement. In connection with the placement of
orders for the execution of the Fund's portfolio transactions,
the Sub-Adviser shall create and maintain all necessary
brokerage records of the Fund in accordance with all applicable
law, rules and regulations, including but not limited to,
records required by Section 31(a) of the 1940 Act. All records
shall be the property of the Fund and shall be available for
inspection and use by the Securities and Exchange Commission,
the Fund or any person retained by the Fund. Where applicable,
such records shall be maintained by the Sub-
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Adviser for the period and in the place required by Rule 31a-2
under the 0000 Xxx.
(b) The Sub-Adviser shall use the same skill and care in providing
services to the Fund as it uses in providing services to fiduciary
accounts for which it has investment responsibility. The Sub-
Adviser will conform with all applicable rules and regulations of
the Securities and Exchange Commission.
3. EXPENSES
During the terms of this Agreement, the Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this
Agreement.
4. COMPENSATION
In payment for the investment sub-advisory services to be rendered
by the Sub-Adviser in respect of the Capital Appreciation Portfolio
hereunder, the Adviser shall pay to the Sub-Adviser as full compensation
for all services hereunder a fee computed at an annual rate which shall
be a percentage of the average daily value of the net assets of the
Capital Appreciation Portfolio. The fee shall be accrued daily and shall
be based on the net asset value of the Capital Appreciation Portfolio as
determined as of the close of each business day pursuant to the Articles
of Incorporation, Bylaws and currently effective Registration Statement
of the Fund. The fee shall be payable in arrears on the last day of each
calendar month.
The amount of such annual fee, which reflects the substantial
assets managed by the Sub-Adviser hereunder, and as applied to the
average daily value of the net assets of the Capital Appreciation
Portfolio, shall be as described in the schedule below:
Portfolio Assets Fee
---------------- -----
On all Portfolio Assets .375%
5. APPROVAL, RENEWAL AND TERMINATION
(a) In compliance with Rule 15a-4 under the 1940 Act, this Agreement
shall continue in effect, after its approval by the Series Fund
Board of Directors, including a majority of the Fund's Board of
Directors who are not parties to this Agreement or interested
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persons of parties hereto, for the period not to exceed one hundred
and twenty days, from the termination of the most recent investment
Sub-Advisory Agreement for the Capital Appreciation Portfolio until
its approval by a majority of the outstanding voting securities of
the Capital Appreciation Portfolio.
(b) If so approved, this Agreement shall continue in effect for a period
more than two years from the date of this Agreement, only so long as
such continuance is specifically approved at least annually by a
vote of the holders of the majority of the outstanding voting
securities of the Fund's Capital Appreciation Portfolio, or by a
vote of the majority of the Fund's Board of Directors. And further
provided that such continuance is also approved annually by a vote
of the majority of the Fund's Board of Directors who are not parties
to this Agreement or interested persons of parties hereto, cast in
person at a meeting called for the purpose of voting on such
approval. This Agreement may be terminated at any time without
payment of penalty: (i) by the Fund's Board of Directors or by a
vote of a majority of the outstanding voting securities of the
Fund's Capital Appreciation Portfolio on sixty days' prior written
notice, or (ii) by either party hereto upon sixty days' prior
written notice to the other. This Agreement will terminate
automatically upon any termination of the Investment Advisory
Agreement between the Fund and the Adviser or in the event of its
assignment. The terms "interested person," "assignment" and "vote
of a majority of the outstanding voting securities" shall have the
meanings set forth in the 1940 Act.
6. GENERAL PROVISIONS
(a) The Sub-Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Adviser or the Fund's
Capital Appreciation Portfolio in connection with the subject matter
of this Agreement unless such loss arises from lack of good faith,
provided that nothing herein shall be deemed to protect, or purport
to protect, the Sub-Adviser against any liability to the Fund or to
its
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shareholders to which the Sub-Adviser would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of the Sub-
Adviser's reckless disregard of its obligations and duties
hereunder.
(b) Provided that this Agreement is first approved by a vote of the
majority of the Fund's Board of Directors who are not parties to
this Agreement or interested persons of parties hereto cast in
person at a meeting called for the purpose of voting on such
approval, it shall become effective on the last day of effectiveness
of the most recent investment Sub-Advisory Agreement for the Capital
Appreciation Portfolio.
(c) The Adviser understands that the Sub-Adviser now acts, will continue
to act, or may act in the future, as investment adviser to fiduciary
and other managed accounts, including other investment companies,
and the Adviser has no objection to the Sub-Adviser so acting,
provided that the Sub-Adviser duly performs all obligations under
this Agreement.
(d) Except to the extent necessary to perform its obligations hereunder,
nothing herein shall be deemed to limit or restrict the right of the
Sub-Adviser, or the right of any of its officers, directors or
employees who may also be an officer, director or employee of the
Fund, or persons otherwise affiliated with the Fund (within the
meaning of the 0000 Xxx) to engage in any other business or to
devote time and attention to the management or other aspects of any
other business, whether of a similar or dissimilar nature, or to
render services of any kind to any other trust, corporation, firm,
individual or association.
(e) Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Minnesota.
The captions in this Agreement are included for convenience only and
in
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no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect.
(f) Any notice under this Agreement shall be in writing, addressed and
delivered or mailed postage pre-paid to the appropriate party at the
following address: The Adviser and the Fund at 000 Xxxxx Xxxxxx
Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000-0000, and the Sub-Adviser at 4720
IDS Tower, 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
MIMLIC ASSET MANAGEMENT COMPANY
By
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Its President
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XXXXXXX CAPITAL MANAGEMENT, INC.
By
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Its
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