AMENDED AND RESTATED
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
INDEPENDENCE CAPITAL MANAGEMENT, INC.
AND
LORD, XXXXXX & CO. LLC
AMENDED AND RESTATED INVESTMENT SUB-ADVISORY AGREEMENT, made as of
August 1, 2004 by and between INDEPENDENCE CAPITAL MANAGEMENT, INC. ("Adviser"),
a corporation organized and existing under the laws of the State of
Pennsylvania, and LORD, XXXXXX & CO. LLC ("Sub-Adviser"), a general partnership
organized and existing under the laws of the State of New York.
WITNESSETH:
WHEREAS, Penn Series Funds, Inc. ("Penn Series") is a Maryland
corporation and an open-end management investment company registered as such
under the Investment Company Act of 1940, as amended (the "Act"), and is
authorized to issue shares in separate series with each series representing
interests in a separate fund of securities and other assets;
WHEREAS, Adviser and Sub-Adviser are engaged principally in the
business of rendering investment advisory services and are registered as
investment advisers under the Investment Advisers Act of 1940, as amended;
WHEREAS, Adviser is authorized to render investment advisory services
to Penn Series and to enter into a sub-advisory agreement with a sub-adviser for
the rendering of investment advisory services to Penn Series;
WHEREAS, Adviser desires Sub-Adviser to render investment sub-advisory
services to Penn Series in the manner and on the terms and conditions
hereinafter set forth; and Sub-Adviser desires to render such services, in such
manner and under such terms;
WHEREAS, Sub-Adviser presently provides investment sub-advisory
services to the Strategic Value Fund, a portfolio of Penn Series, pursuant to an
Investment Sub-Advisory Agreement, dated as of May 1, 2002; and
WHEREAS, Adviser and Sub-Adviser desire to amend their existing
Investment Sub-Advisory Agreement to reflect, inter alia, the addition of the
Large Cap Value Fund, a portfolio of Penn Series, to the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. INVESTMENT SUB-ADVISORY SERVICES. Sub-Adviser shall serve as investment
sub-adviser and shall supervise and direct the investments of each portfolio of
Penn Series listed on Schedule A (each, a "Fund"), and to exercise all rights
incidental to ownership in accordance with the investment objectives, program
and restrictions applicable to the Fund as provided in Penn Series' Prospectus
and Statement of Additional Information ("SAI"), as amended from time to time,
and such other limitations as may be imposed by law or as Penn Series or Adviser
may impose with notice in writing to Sub-Adviser. To enable Sub-Adviser to fully
exercise its discretion, Adviser hereby appoints Sub-Adviser as agent and
attorney-in-fact for the Fund with full power and authority to buy, sell and
otherwise deal in securities and contracts for the Fund. No investment will be
made by Sub-Adviser for the Fund if the investment would violate the investment
objectives, investment restrictions or limitations of the Fund set out in the
Prospectus and the SAI delivered to the Sub-Adviser and as may be amended and
delivered to Sub-Adviser in the future. Sub-Adviser shall not take custody of
any assets of Penn Series, but shall issue settlement instructions to the
custodian designated by Penn Series (the "Custodian"). Sub-Adviser shall, in its
discretion, obtain and evaluate such information relating to the economy,
industries, businesses, securities markets and securities as it may deem
necessary or useful in the discharge of its obligations hereunder and shall
formulate and implement a continuing program for the management of the assets
and resources of the Fund in a manner consistent with the investment objectives
of the Fund. In furtherance of this duty, Sub-Adviser, as agent and
attorney-in-fact with respect to Adviser and Penn Series, is authorized, in its
discretion and without prior consultation with Adviser or Penn Series, to:
(i) buy, sell, exchange, convert, lend, and otherwise trade in any
stocks, bonds, and other securities or assets; and
(ii) place orders and negotiate the commissions (if any) for the
execution of transactions in securities with or through such
brokers, dealers, underwriters or issuers as Sub-Adviser may
select, in conformance with the provisions of Paragraph 4
herein; and
(iii) take such other actions Sub-Adviser deems to be appropriate;
provided, however, that Sub-Adviser shall make no investment for the Fund that
would violate the objectives, investment program, or restrictions or limitations
of the Fund.
2. ACCOUNTING AND RELATED SERVICES. Sub-Adviser agrees to cooperate with the
Accounting Services Agent appointed by Penn Series pursuant to the Accounting
Services Agreement entered into by Penn Series and the Accounting Services
Agent. As requested from time to time, Sub-Adviser shall provide Penn Series and
its Accounting Services Agent with such information as may be reasonably
necessary to properly account for financial transactions with respect to the
Fund.
-2-
3. SUB-ADVISORY FEE.
A. PAYMENT OF FEE. For the services Sub-Adviser renders to Penn Series
under this Agreement, Adviser will pay Sub-Adviser fees based on the average
daily net assets of the Fund.
B. FEE RATE. The fee rate payable under this Agreement with respect to
a Fund is set forth on Schedule B, which is attached hereto and made a part of
this Agreement.
C. METHOD OF COMPUTATION. The fee shall be accrued for each calendar
day and the sum of the daily fee accruals shall be paid monthly to Sub-Adviser
as of the first business day of the next succeeding calendar month. The daily
fee will be computed by multiplying the fraction of one over the number of
calendar days in the year by the annual rate applicable to the Fund as set forth
above, and multiplying this product by the net assets of the Fund. A Fund's net
assets, for purposes of the calculations described above, will be determined in
accordance with Penn Series' Prospectus and Statement of Additional Information
as of the close of business on the most recent previous business day on which
Penn Series was open for business.
4. BROKERAGE. In executing portfolio transactions and selecting brokers or
dealers for the Fund, Sub-Adviser will use its best efforts to seek the best
price and execution of its orders. In assessing the best price and the execution
for any transaction, Sub-Adviser shall consider the breadth of the market in the
security, the price of the security, the skill, financial condition and
execution capability of the broker or dealer, and the reasonableness of the
commission, if any. In determining whether it is receiving best price and
execution, the Sub-Adviser may take into account the research and related
services that the broker has provided to Penn Series or Sub-Adviser for Penn
Series. Sub-Adviser may pay certain brokers a higher commission than may be
charged by other brokers, in return for research and brokerage advice, provided
that payment of such commission is in accord with the provisions of Section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"). It is
understood that Sub-Adviser will not be deemed to have acted unlawfully or to
have breached a fiduciary duty to the Fund or be in breach of any obligation
owing to the Fund under this Agreement, or otherwise, by reason of its having
directed a securities transaction on behalf of the Fund to a broker-dealer in
compliance with the provisions of Section 28(e) of the 1934 Act, or as described
from time to time in Penn Series' Prospectus and Statement of Additional
Information. Sub-Adviser shall advise Penn Series' Board of Directors, when
requested, as to all payments of commissions and as to its brokerage policies
and practices and shall follow such instructions with respect thereto as may be
given by Penn Series' board. Penn Series has identified all broker-dealers
affiliated with either Penn Series or Adviser, other than those whose sole
business is the distribution of mutual fund shares, who effect securities
transactions for customers. Adviser shall promptly furnish a written notice to
Sub-Adviser if the information so provided is no longer accurate.
5. USE OF THE SERVICES OF OTHERS. Sub-Adviser may (at its cost except as
contemplated by Section 4 of this Agreement) employ, retain or otherwise avail
-3-
itself of the services or facilities of other persons or organizations for the
purpose of providing Penn Series, Adviser or itself, as appropriate, with such
statistical and other factual information, such advice regarding economic
factors and trends, such advice as to occasional transactions in specific
securities or such other information, advice or assistance as Sub-Adviser may
deem necessary, appropriate or convenient for the discharge of its obligations
hereunder or otherwise helpful to Penn Series and Adviser, or in the discharge
of Sub-Adviser's overall responsibilities with respect to the other accounts
which it serves as investment adviser.
6. PERSONNEL, OFFICE SPACE, AND FACILITIES. Sub-Adviser at its own expense shall
furnish or provide and pay the cost of such office space, office equipment,
office personnel, and office services as it, or any affiliated corporation of
Sub-Adviser, requires in the performance of services under this Agreement.
7. OWNERSHIP OF SOFTWARE AND RELATED MATERIAL. All computer programs, magnetic
tapes, written procedures and similar items developed and used by Sub-Adviser or
any affiliate in performance of this Agreement are the property of Sub-Adviser
and will not become the property of Penn Series or Adviser.
8. REPORTS TO PENN SERIES AND COOPERATION WITH ACCOUNTANTS. Sub-Adviser, and any
affiliated corporation of Sub-Adviser performing services for Adviser and Penn
Series described in this Agreement, shall furnish to or place at the disposal of
Penn Series and Adviser, such information, reports, evaluations, analyses and
opinions as Penn Series and Adviser may, at any time or from time to time,
reasonably request or as Sub-Adviser may deem helpful, to reasonably ensure
compliance with applicable laws and regulations or for any other purpose.
Sub-Adviser and its affiliates shall cooperate with Penn Series' independent
public accountants and take all reasonable action in the performance of services
and obligations under this Agreement to assure that the information needed by
such accountants is made available to them for the expression of their opinion
without any qualification as to the scope of their examination, including, but
not limited to, their opinion included in Penn Series' annual report under the
Act and annual amendment to Penn Series' registration statement under the Act.
9. REPORTS TO SUB-ADVISER. Penn Series and/or Adviser shall furnish or otherwise
make available to Sub-Adviser such prospectuses, statements of additional
information, financial statements, proxy statements, reports, and other
information relating to the business and affairs of Penn Series, as Sub-Adviser
may, at any time or from time to time, reasonably require in order to discharge
its obligations under this Agreement.
10. OWNERSHIP OF RECORDS. All records required to be maintained and kept current
by Penn Series pursuant to the provisions of rules or regulations of the
Securities and Exchange Commission under Section 31(a) of the Act and that are
maintained and kept current by Sub-Adviser or any affiliated corporation of
Sub-Adviser on behalf of Penn Series are the property of Penn Series, except to
the extent Sub-Adviser is separately required to maintain such records pursuant
to applicable laws or regulations, in which case Penn Series and Sub-Adviser
shall be deemed co-owners of such records. Such records will be preserved by
Sub-Adviser itself or through an affiliated corporation for the periods
prescribed in Rule 3la-2 under the Act, where applicable, or in such other
applicable rules that may be adopted time under the Act. Such records may be
inspected by representatives of Penn Series and Adviser at reasonable times and,
-4-
in the event of termination of this Agreement, such records, or copies of such
records in the case of co-owned records, will be promptly delivered to Adviser
and Penn Series upon request.
11. SERVICES TO OTHER CLIENTS. Nothing herein contained shall limit the freedom
of Sub-Adviser or any affiliated person of Sub-Adviser to render investment
advisory, supervisory and other services to other investment companies, to act
as investment adviser or investment counselor to other persons, firms or
corporations or to engage in other business activities; but so long as this
Agreement or any extension, renewal or amendment hereof shall remain in effect
as to Fund, or until Sub-Adviser shall otherwise consent, Sub-Adviser shall be
the only investment sub-adviser to the Fund. It is understood that Sub-Adviser
may give advice and take action for its other clients which may differ from
advice given, or the timing or nature of action taken, for a Fund. Sub-Adviser
is not obligated to initiate transactions for a Fund in any security which
Sub-Adviser, its principals, affiliates or employees may purchase or sell for
its or their own accounts or other clients.
12. CONFIDENTIAL RELATIONSHIP. Information furnished by Penn Series or by one
party to another, including Penn Series' or a party's respective agents and
employees, is confidential and shall not be disclosed to third parties unless
required by law. Adviser and Sub-Adviser, on behalf of themselves and their
affiliates and representatives, agree to keep confidential all records and other
information relating to the other party or Penn Series (as the case may be),
except after prior notification to and approval in writing by Adviser,
Sub-Adviser or Penn Series (as the case may be), which approval shall not be
unreasonably withheld, and may not be withheld, where Adviser, Sub-Adviser or
any affiliate may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, when so requested by Adviser, Sub-Adviser or Penn
Series.
13. PROXIES. Subject to such oversight by Penn Series as the Board of Directors
of Penn Series shall deem appropriate, Sub-Adviser shall vote proxies solicited
by or with respect to the issuers of securities held in a Fund.
14. INSTRUCTIONS, OPINION OF COUNSEL AND SIGNATURES. At any time Sub-Adviser may
apply to an officer of Penn Series for instructions, and may consult legal
counsel for Penn Series, in respect of any matter arising in connection with
this Agreement, and Sub-Adviser shall not be liable for any action taken or
omitted by it or by any affiliate in good faith in accordance with such
instructions or with the advice or opinion of Penn Series' legal counsel.
Sub-Adviser and its affiliates shall be protected in acting upon any
instruction, advice, or opinion provided by Penn Series or its legal counsel and
upon any other paper or document delivered by Penn Series or its legal counsel
believed by Sub-Adviser to be genuine and to have been signed by the proper
person or persons and shall not be held to have notice of any change of
authority of any officer or agent of Penn Series, until receipt of written
notice thereof from Penn Series. Sub-Adviser shall inform Adviser of all
applications to Penn Series for instructions and all consultations with legal
counsel for Penn Series at the time of such application or consultation.
15. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. Except as such
responsibility may be placed upon Sub-Adviser or any affiliate by the terms of
-5-
this Agreement, and except for the accuracy of information furnished to Penn
Series by Sub-Adviser or any affiliate, Sub-Adviser does not assume
responsibility for the preparation, contents and distribution of the
prospectuses for Penn Series, for complying with any applicable requirements of
the Act, the Securities Exchange Act of 1934, the Securities Act of 1933 (the
"1933 Act"), or any other laws, rules and regulations of governmental
authorities having jurisdiction over Penn Series.
16. LIMITATION OF LIABILITY. Neither Sub-Adviser nor any of its affiliates,
their respective officers, directors, employees or agents, or any person
performing executive, administrative, trading, or other functions for Penn
Series (at the direction or request of Sub-Adviser), or Sub-Adviser or its
affiliates in connection with the discharge of obligations undertaken or
reasonably assumed with respect to this Agreement, shall be liable for any error
of judgment or mistake of law or for any loss suffered by Penn Series in
connection with the matters to which this Agreement relates, except for such
error, mistake or loss resulting from willful misfeasance, bad faith, negligence
or willful misconduct in the performance of its, his or her duties on behalf of
Penn Series or constituting or resulting from a failure to comply with any term
of this Agreement. Sub-Adviser shall not be responsible for any loss incurred by
reason of any act or omission of the Custodian or of any broker, dealer,
underwriter or issuer selected by Sub-Adviser with reasonable care.
17. OBLIGATIONS OF ADVISER AND SUB-ADVISER. It is expressly agreed that the
obligations of Adviser and Sub-Adviser hereunder shall not be binding upon any
of their directors, shareholders, nominees, officers, agents or employees,
personally. The execution and delivery of this Agreement have been authorized in
accordance with the governing documents of each party and in accordance with
applicable law, and shall be signed by an authorized officer of each party,
acting as such, and shall be binding on each party.
18. INDEMNIFICATION BY ADVISER. Adviser will indemnify and hold Sub-Adviser
harmless from all loss, cost, damage and expense, including reasonable expenses
for legal counsel, incurred by Sub-Adviser resulting from: (i) any action or
omission of Sub-Adviser or any affiliate, with respect to any service described
in this Agreement, upon instructions reasonably believed by Sub-Adviser or any
affiliate to have been executed by an individual who has been identified in
writing by Penn Series or Adviser as a duly authorized officer of Penn Series or
Adviser; (ii) any action of Sub-Adviser or any affiliate, with respect to any
service described in this Agreement upon information provided by Penn Series or
Adviser in form and under policies agreed to by Sub-Adviser and Adviser; or
(iii) any claim, demand, action or suit arising out of Adviser's or any
affiliate's failure to comply with any term of this Agreement or which arise out
of the willful misfeasance, bad faith, negligence or willful misconduct of
Adviser, its affiliates, their agents or contractors. Sub-Adviser shall not be
entitled to such indemnification in respect of actions or omissions constituting
negligence or willful misconduct of Sub-Adviser or its affiliates, agents or
contractors, or constituting a failure by Sub-Adviser or any affiliate to comply
with any term of this Agreement; provided, that such negligence or willful
misconduct is not attributable to Adviser or any person that is an affiliate of
Adviser or an affiliate of an affiliate of Adviser. Prior to the confession of
any claim against Sub-Adviser which may be subject to this indemnification,
Sub-Adviser shall give Adviser reasonable opportunity to defend against said
claim in its own name or in the name of Sub-Adviser.
-6-
19. INDEMNIFICATION BY SUB-ADVISER. Sub-Adviser will indemnify and hold harmless
Penn Series and Adviser from all loss, cost, damage and expense, including
reasonable expenses for legal counsel, incurred by Penn Series and Adviser and
resulting from any claim, demand, action or suit arising out of Sub-Adviser's or
any affiliate's failure to comply with any term of this Agreement or which arise
out of the willful misfeasance, bad faith, negligence or willful misconduct of
Sub-Adviser, its affiliates, their agents or contractors. Neither Penn Series
nor Adviser shall be entitled to such indemnification in respect of actions or
omissions constituting negligence or willful misconduct of Penn Series or
Adviser, or their agents or contractors or constituting a failure by Adviser to
comply with any term of this Agreement; provided, that such negligence or
willful misconduct is not attributable to Sub-Adviser or any person that is an
affiliate of Sub-Adviser or an affiliate of an affiliate of Sub-Adviser. Prior
to confessing any claim against it which may be subject to this indemnification,
Adviser shall give Sub-Adviser reasonable opportunity to defend against said
claim in its own name or in the name of Adviser. For purposes of this Section 19
and of Section 18 hereof, no broker or dealer shall be deemed to be acting as
agent or contractor of Sub-Adviser or any affiliate of Sub-Adviser, in effecting
or executing any portfolio transaction for the Fund.
20. FURTHER ASSURANCES. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. TERM OF AGREEMENT. The term of this Agreement shall begin on the date first
above written, and unless sooner terminated as hereinafter provided, this
Agreement shall remain in effect until two years from date of execution.
Thereafter, this Agreement shall continue in effect from year to year with
respect to the Fund, subject to the termination provisions and all other terms
and conditions hereof, so long as such continuation shall be specifically
approved at least annually (a) by either the Board of Directors of Penn Series,
or by a vote of a majority of the outstanding voting securities of the series of
shares of Penn Series representing interests in the Fund and (b) in either event
by the vote, cast in person at a meeting called for the purpose of voting on
such approval, of a majority of the directors of Penn Series who are not parties
to this Agreement or interested persons of any such party. Sub-Adviser shall
furnish to Penn Series, promptly upon its request, such information as may
reasonably be necessary to evaluate the terms of this Agreement with respect to
the Fund or any extension, renewal or amendment hereof.
22. AMENDMENT OF AGREEMENT. This Agreement may be amended only by written
agreement of the Adviser and the Sub-Adviser and only in accordance with the
provisions of the Act, the rules and regulations promulgated under the Act and
the provisions of any other applicable law or regulation.
23. ASSIGNMENT OF AGREEMENT. This Agreement shall terminate automatically in the
event of its assignment, as required by the Act and rules and regulations
promulgated thereunder.
24. TERMINATION OF AGREEMENT. This Agreement may be terminated by Adviser, Penn
Series or by Sub-Adviser, with respect to a Fund, without payment of any
penalty, upon 60 days' prior notice in writing from Adviser to Sub-Adviser, or
upon 90 days' prior notice in writing from Sub-Adviser to Adviser; provided,
-7-
that in the case of termination by Adviser or Penn Series, such action shall
have been authorized by resolution of a majority of its directors who are not
interested persons of any party to this Agreement, or by vote of a majority of
the outstanding voting securities of the series of shares of Penn Series
representing interests in the affected Fund. Notwithstanding any such
termination, the provisions of Sections 18 and 19 of this Agreement shall remain
in full force and effect and both the Adviser and the Sub-Adviser shall remain
entitled to the benefit of such provisions.
25. MISCELLANEOUS.
A. CAPTIONS. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
B. INTERPRETATION. Nothing herein contained shall be deemed to require Penn
Series to take any action contrary to its Articles of Incorporation or By-Laws,
or any applicable statutory or regulatory requirement to which it is subject or
by which it is bound, or to relieve or deprive the board of directors of Penn
Series of its responsibility for and control of the conduct of the affairs of
Penn Series.
C. DEFINITIONS. Any question of interpretation of any terms or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Act shall be resolved by reference to such term or provision of the Act
and to interpretations thereof, if any, by the United States courts or, in the
absence of any controlling decision of any such court, by rules, regulations or
orders of the Securities and Exchange Commission validly issued pursuant to the
Act. Specifically, the terms "vote of a majority of the outstanding voting
securities," "interested person," "assignment," and "affiliated person," as used
herein, shall have the meanings assigned to them by Section 2(a) of the Act. In
addition, where the effect of a requirement of the Act reflected in any
provision of this Agreement is relaxed by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or of general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
D. NOTICE. Notice under the Agreement shall be in writing, addressed and
delivered or sent by registered or certified mail, postage prepaid, to the
addressed party at such address as such party may designate for the receipt of
such notices. Until further notice, it is agreed that for this purpose the
address of Adviser is Independence Capital Management, Inc., Attention:
President, 000 Xxxxxxx Xxxx, Xxxxxxx, XX 00000, and that of Sub-Adviser is Lord,
Xxxxxx & Co. LLC, Attention: General Counsel, 00 Xxxxxx Xxxxxx, Xxxxxx Xxxx, XX
00000-0000.
E. STATE LAW. The Agreement shall be construed and enforced in accordance with
and governed by the laws of Maryland except where such state laws have been
preempted by Federal law.
F. COUNTERPARTS. This Agreement may be entered into in counterparts, each of
which when so executed and delivered shall be deemed to be an original, and
together shall constitute one document.
-8-
G. ENTIRE AGREEMENT; SEVERABILITY. This Agreement is the entire agreement of the
parties and supersedes all prior or contemporaneous written or oral
negotiations, correspondence, agreements and understandings regarding the
subject matter hereof. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any and all
other provisions hereof. In the event the terms of this Agreement are applicable
to more than one portfolio of Penn Series, the Adviser is entering into this
Agreement with the Sub-Adviser on behalf of each respective Fund severally and
not jointly, with the express intention that the provisions contained in each
numbered section hereof shall be understood as applying separately with respect
to each Fund as if contained in separate agreements between the Adviser and
Sub-Adviser for each such Fund. In the event that this Agreement is made
applicable to any additional Funds by way of a Schedule executed subsequent to
the date first indicated above, provisions of such Schedule shall be deemed to
be incorporated into this Agreement as it relates to such Fund so that, for
example, the execution date for purposes of Section 21 of this Agreement with
respect to such Fund shall be the execution date of the relevant Schedule.
H. NO THIRD PARTY BENEFICIARIES. Neither party intends for this Agreement to
benefit any third-party not expressly named in this Agreement.
I. CHANGES IN SUB-ADVISER ORGANIZATION. The Sub-Adviser agrees to notify the
Adviser within a reasonable period of time regarding a material change in the
members of Sub-Adviser.
J. CONSULTATION AMONG SUB-ADVISERS. In performance of its duties and obligations
under this Agreement, the Sub-Adviser shall not consult with any other
sub-adviser to a Penn Series portfolio concerning transactions in securities or
other assets for a Fund, except as permitted by Rule 12d3-1 under the Act.
-9-
K. CERTIFICATION OF "ACCREDITED INVESTOR" AND "QUALIFIED INSTITUTIONAL BUYER"
STATUS. The Adviser represents that each Fund is an "accredited investor" as
defined in Rule 501 under the 1933 Act and a "qualified institutional buyer" as
defined in Rule 144A(1)(iv) under the 0000 Xxx. The Adviser appoints the
Sub-Adviser as agent and attorney-in-fact for each Fund to provide
certifications as to the Fund's status as an "accredited investor" and/or a
"qualified institutional buyer."
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized as of the day and
year first above written.
Attest: INDEPENDENCE CAPITAL MANAGEMENT, INC.
/s/ Xxxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxx
------------------- -----------------------------------
Xxxxxxx X. Xxxx Xxxxx X. Xxxxxxx
Secretary President
Attest: LORD, XXXXXX & CO. LLC
/s/ Xxxxxxxxx Xxxxxxx By: /s/ Xxxxxxxx X. Xxxxxx
------------------- -----------------------------------
Name: Xxxxxxxxx Xxxxxxx Name: Xxxxxxxx X. Xxxxxx
Title: Counsel Title: Member and Deputy General Counsel
-10-
SCHEDULE A
TO THE
AMENDED AND RESTATED INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
INDEPENDENCE CAPITAL MANAGEMENT, INC.
AND
LORD, XXXXXX & CO. LLC
DATED AS OF AUGUST 1, 2004
PENN SERIES FUNDS, INC.
-----------------------
Strategic Value Fund
Large Cap Value Fund
-11-
SCHEDULE B
TO THE
AMENDED AND RESTATED INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
INDEPENDENCE CAPITAL MANAGEMENT, INC.
AND
LORD, XXXXXX & CO. LLC
DATED AS OF AUGUST 1, 2004
1. STRATEGIC VALUE FUND.
A. FEE RATE. Pursuant to Section 3B, the Adviser shall pay the Sub-Adviser
compensation at an annual rate as follows:
(i) Forty-five basis points (0.45%) of the first $200,000,000 of
average daily net assets of the Fund;
(ii) Forty basis points (0.40%) of the next $300,000,000 of average
daily net assets of the Fund; and
(iii) Thirty-seven and one-half basis points (0.375%) of average
daily net assets of the Fund in excess of $500,000,000.
B. LOWEST THIRD PARTY FEE WARRANTY. Sub-Adviser represents and warrants
that the sub-advisory fee rate payable under this Agreement with
respect to the Strategic Value Fund is now and will in the future be
equal to or less than the fee rate payable to Sub-Adviser under other
sub-advisory agreements under which Sub-Adviser provides "comparable
investment sub-advisory services" under a "comparable sub-advisory
relationship." If at any time the fee rate payable to Sub-Adviser under
this Agreement is greater than the fee rate payable to Sub-Adviser for
"comparable investment sub-advisory services" under a "comparable
sub-advisory relationship," the sub-advisory fee payable by Adviser to
Sub-Adviser under this Agreement with respect to the Strategic Value
Fund will be reduced to comply with the aforementioned representation
and warranty, except and to the extent otherwise agreed in writing by
Adviser. The term "comparable investment sub-advisory services," as
used in this section, shall mean sub-advisory services provided by
Sub-Adviser to other mid cap value funds underlying variable annuity or
variable life insurance products. The term "comparable sub-advisory
relationship," as used in this section, shall mean a relationship where
the scope of the overall business relationship (i.e., breadth of
products and services) is comparable.
The Sub-Adviser will provide the Adviser written notice, in the manner
set forth in Section 25, promptly after entering into a sub-advisory
-12-
agreement with an investment adviser under which Sub-Adviser provides
"comparable investment sub-advisory services" and involving (a) a
relationship which Sub-Adviser has determined is not a "comparable
sub-advisory relationship" and (b) a sub-advisory fee rate that is
lower than the fee rate payable by Adviser to Sub-Adviser with respect
to the Strategic Value Fund.
2. LARGE CAP VALUE FUND.
A. FEE RATE. Pursuant to Section 3B, the Adviser shall pay the Sub-Adviser
compensation at an annual rate as follows:
(i) Thirty-five basis points (0.35%) of the first $200,000,000 of
average daily net assets of the Fund;
(ii) Thirty basis points (0.30%) of the next $200,000,000 of
average daily net assets of the Fund; and
(iii) Twenty-five basis points (0.25%) of average daily net assets
of the Fund in excess of $400,000,000.
B. LOWEST THIRD PARTY FEE WARRANTY. Sub-Adviser represents and warrants
that the sub-advisory fee rate payable under this Agreement with
respect to the Large Cap Value Fund is now and will in the future be
equal to or less than the fee rate payable to Sub-Adviser under other
sub-advisory agreements under which Sub-Adviser provides "comparable
investment sub-advisory services" under a "comparable sub-advisory
relationship." If at any time the fee rate payable to Sub-Adviser under
this Agreement is greater than the fee rate payable to Sub-Adviser for
"comparable investment sub-advisory services" under a "comparable
sub-advisory relationship," the sub-advisory fee payable by Adviser to
Sub-Adviser under this Agreement with respect to the Large Cap Value
Fund will be reduced to comply with the aforementioned representation
and warranty, except and to the extent otherwise agreed in writing by
Adviser. The term "comparable investment sub-advisory services," as
used in this section, shall mean sub-advisory services provided by
Sub-Adviser to other large cap value funds underlying variable annuity
or variable life insurance products. The term "comparable sub-advisory
relationship," as used in this section, shall mean a relationship where
the scope of the overall business relationship (i.e., breadth of
products and services) is comparable.
The Sub-Adviser will provide the Adviser written notice, in the manner
set forth in Section 25, promptly after entering into a sub-advisory
agreement with an investment adviser under which Sub-Adviser provides
"comparable investment sub-advisory services" and involving (a) a
relationship which Sub-Adviser has determined is not a "comparable
sub-advisory relationship" and (b) a sub-advisory fee rate that is
lower than the fee rate payable by Adviser to Sub-Adviser with respect
to the Large Cap Value Fund.
-13-
