Exhibit (d) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
INVESTMENT ADVISORY CONTRACT
This Investment Advisory Contract is made as of this 3rd day of March,
2000, between WACHOVIA VARIABLE INSURANCE FUNDS, a Massachusetts business trust
(the "Trust"), and WACHOVIA BANK, N.A. (the "Adviser").
WHEREAS, the Trust is a Massachusetts business trust, consisting of one or
more series ("Portfolios"), which operates as an open-end management investment
company and will so register under the Investment Company Act of 1940, as
amended ("1940 Act"); and
WHEREAS, the Adviser is engaged in the business of rendering
investment advisory and management services;
WHEREAS, the Trust desires to retain the Adviser as investment adviser to
those of its Portfolios which are identified in an exhibit hereto, and the
Adviser is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties hereto agree as follows:
1. APPOINTMENT OF ADVISER; SERVICES AND DUTIES.
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(a) The Trust hereby appoints the Adviser as investment adviser for each
of the Portfolios of the Trust which executes an exhibit to this Contract, and
the Adviser accepts the appointments. Subject to the direction of the Trustees
of the Trust, the Adviser shall provide investment research and supervision of
the investments of such Portfolios and conduct a continuous program of
investment evaluation and of appropriate investment, sale or other disposition
and reinvestment of the Portfolios' assets.
(b) The Adviser shall direct the investments of each such Portfolio
subject to and in accordance with the Portfolio's investment objective,
policies, limitations and other provisions contained in the Portfolio's
prospectus and statement of additional information, as amended from time to
time, the Trust's Declaration of Trust and By-Laws, and any other directions and
policies which the Trustees of the Trust may issue to the Adviser from time to
time.
2. EXECUTION AND ALLOCATION OF BROKERAGE.
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(a) The Adviser, subject to the control and direction of the Trustees,
shall have authority and discretion to select brokers and dealers to execute
portfolio transaction for each Portfolio, and to select the markets on or in
which the transactions will be executed. In acting pursuant to this paragraph 2,
the Adviser will place orders through such brokers or dealers in conformity with
the policies with respect to portfolio transactions set forth in the applicable
Portfolio's prospectus and statement of additional information. It is understood
that neither the Trust nor the Adviser will adopt a formula for allocation of
each Portfolio's brokerage. It is understood that the Adviser may, to the extent
permitted by applicable laws and regulations, aggregate securities to be sold or
purchased for a Portfolio and for other clients in order to obtain the most
favorable price and efficient execution. In that event, allocation of the
securities purchased or sold, as well as expenses incurred in the transaction,
will be made by the Adviser in the manner it considers to be the most equitable
and consistent with its fiduciary obligations to the Trust and to its other
clients. The Adviser shall provide such reports as the Trustees may reasonably
request with respect to each Portfolio's total brokerage and portfolio
transaction activities and the manner in which that business was allocated.
(b) The Adviser agrees that in placing orders with brokers and dealers, it
will attempt to obtain the best net results in terms of price and execution;
provided that, on behalf of any Portfolio, the Adviser may, in its discretion,
purchase and sell portfolio securities to and from brokers and dealers who
provide research, analysis, advice and similar services, and the Adviser may pay
to those brokers and dealers, in return for research and analysis, a higher
commission or spread than may be charged by other brokers and dealers, subject
to the Adviser determining in good faith that such commission or spread is
reasonable in terms either of the particular transaction or of the overall
responsibility of the Adviser to such Portfolio and its other clients and that
the total commissions or spreads paid by such Portfolio will be reasonable in
relation to the benefits to the Portfolio over the long term. In no instance
will portfolio securities be purchased from or sold to the Adviser, or any
affiliated person thereof, except in accordance with the federal securities laws
and the rules, regulations and orders thereunder.
(c) The Trust hereby authorizes the Adviser and any entity or person
associated with the Adviser which is a member of a national securities exchange
to effect any transaction on such exchange for the account of any Portfolio,
which transaction is permitted by Section 11(a) of the Securities Exchange Act
of 1934 and Rule 11a2-2(T) thereunder, and the Trust hereby consents to the
retention of compensation by the Adviser or any person or entity associated with
the Adviser for such transactions in accordance with Rule 11a2-2(T)(a)(2)(iv).
3. RECORDS. The Adviser shall create and maintain all necessary books and
records in accordance with all applicable laws, rules and regulations, including
but not limited to records required by Section 31(a) of the 1940 Act and the
rules thereunder, as the same may be amended from time to time, pertaining to
the investment advisory services performed by it and not otherwise created and
maintained by another party pursuant to contract with the Trust. Where
applicable, such records shall be maintained by the Adviser for the periods and
in the places required by Rule 31a-2 under the 1940 Act. The books and records
pertaining to the Trust which are in the possession of the Adviser shall be the
property of the Trust. The Trust, or the Trust's authorized representatives,
shall have access to such books and records at all times during the Adviser's
normal business hours. Upon the reasonable request of the Trust, copies of any
such books and records shall be provided promptly by the Adviser to the Trust or
the Trust's authorized representatives.
4. ACTIVITIES AND AFFILIATES OF THE ADVISER.
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(a) The services furnished by the Adviser hereunder to the Trust are not
to be deemed exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a material
manner, with the Adviser's ability to meet all of its obligations with respect
to rendering services to the Trust hereunder.
(b) The Trust acknowledges that the Adviser or one or more of its
affiliated persons may have investment responsibilities or render investment
advice to or perform other investment advisory services for other individuals or
entities and that the Adviser, its affiliated persons or any of its or their
directors, officers, agents or employees may buy, sell or trade in securities
for its or their respective accounts ("Affiliated Accounts"). Subject to the
provisions of paragraph 2, the Trust agrees that the Adviser or its affiliated
persons may give advice or exercise investment responsibility and take such
other action with respect to Affiliated Accounts which may differ from the
advice given or the timing or nature of action with respect to a Portfolio of
the Trust, provided that the Adviser acts in good faith. The Trust acknowledges
that one or more of the Affiliated Accounts may at any time hold, acquire,
increase, decrease, dispose of or otherwise deal with positions in investments
in which a Portfolio may have an interest. The Adviser shall have no obligation
to recommend for a Portfolio a position in any investment which an Affiliated
Account may acquire, and the Trust shall have no first refusal, co-investment or
other rights in respect of any such investment, either for its Portfolios or
otherwise.
(c) Subject to and in accordance with the Trust's Declaration of Trust and
By-Laws, as currently in effect and as amended from time to time, the 1940 Act
and the rules thereunder, and the Banking Act of 1933, it is understood that
Trustees, officers, agents and shareholders of the Trust are or may be
interested in the Adviser or its affiliated persons as directors, officers,
agents or shareholders of the Adviser or its affiliated persons; that directors,
officers, agents and shareholders of the Adviser or its affiliated persons are
or may be interested in the Trust as trustees, officers, agents, shareholders or
otherwise; that the Adviser or its affiliated persons may be interested in the
Trust as shareholders or otherwise; and that the effect of any such interests
shall be governed by said Declaration of Trust, By-Laws and the 1940 Act and the
rules thereunder.
5. EXPENSES. The Adviser shall be responsible for expenses incurred in
providing office space, equipment and personnel as may be necessary or
convenient to provide investment advisory services to the Trust. Each Portfolio
shall pay or cause to be paid all of its own expenses and its allocable share of
Trust expenses, including, without limitation, the expenses of organizing the
Trust and continuing its existence; fees and expenses of Trustees and officers
of the Trust; fees for administrative services; fees and expenses of preparing
and printing its Registration Statements under the Securities Act of 1933 and
the 1940 Act and any amendments thereto; expenses of registering and qualifying
the Trust, the Portfolios, and shares ("Shares") of the Portfolios under federal
and state laws and regulations; expenses of preparing, printing, and
distributing prospectuses (and any amendments thereto) to existing shareholders;
interest expense, taxes, fees, and commissions of every kind; expenses of issue
(including cost of Share certificates), purchase, repurchase, and redemption of
Shares, including expenses attributable to a program of periodic issue; charges
and expenses of custodians, transfer agents, dividend disbursing agents,
shareholder servicing agents, and registrars; printing and mailing costs,
auditing, accounting, and legal expenses; reports to shareholders and
governmental officers and commissions; expenses of meetings of Trustees and
shareholders and proxy solicitations therefor; insurance expenses; association
membership dues and such nonrecurring items as may arise, including all losses
and liabilities incurred in administering the Trust and the Portfolios. Each
Portfolio will also pay its allocable share of such extraordinary expenses as
may arise including expenses incurred in connection with litigation,
proceedings, and claims and the legal obligations of the Trust to indemnify its
officers and Trustees and agents with respect thereto.
6. COMPENSATION.
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(a) The Trust shall pay to the Adviser, for all services rendered to each
Portfolio by the Adviser hereunder, the fees set forth in the exhibits attached
hereto. If applicable, for purposes of calculating such fees, the value of each
Portfolio's net assets shall be determined pursuant to the applicable provisions
of the Portfolio's prospectus and statement of additional information, the
Trust's Declaration of trust and By-laws and the 0000 Xxx.
(b) The Adviser agrees to reimburse the Trust or to waive all or part of
its advisory fee, with the same frequency with which the advisory fee is paid to
the Adviser, to the extent the annual operating expenses of any Portfolio or
class thereof exceeds the highest applicable expense limitation established
pursuant to the statutes or regulations of any jurisdiction in which the Shares
of the Portfolios are qualified or registered for offer and sale.
(c) The Adviser may from time to time and for such periods as it deems
appropriate reduce its compensation from a Portfolio (and, if appropriate,
assume expenses of one or more of the Portfolios or classes thereof) to the
extent the expenses of any Portfolio or a class thereof exceed such lower
expense limitation as the Adviser may, by notice to the Portfolio, voluntarily
declare to be effective.
(d) To the extent the Adviser has reimbursed the Trust or waived all or
part of its advisory fee, the Trust agrees to reimburse the Adviser if so
requested by the Adviser, provided that such reimbursement does not cause the
annual operating expenses of any Portfolio or class thereof to exceed the
highest applicable expense limitation established pursuant to the statutes or
regulations of any jurisdiction in which the Shares of the Portfolios are
qualified or registered for offer and sale.
7. EFFECTIVE DATE; TERM. This Contract shall begin for each Portfolio as
of the date of execution of the applicable exhibit and shall continue in effect
with respect to each Portfolio initially set forth on an exhibit (and any
subsequent Portfolios added pursuant to an exhibit during the initial term of
this contract) for two years from the date of this contract set forth above,
provided that this Contract has first been approved by a vote of a majority of
(a) those Trustees who are not parties to this Contract or interested persons of
any such party, cast in person at a meeting called for the purpose of voting on
such approval and (b) the Portfolio's outstanding voting securities. Thereafter,
this Contract shall continue for successive periods of one year, subject to the
provisions for termination and all of the other terms and conditions hereof, but
only so long as such continuance is specifically approved at least annually (a)
by the vote of a majority of the Trustees who are not parties to this Contract
or interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval and (b) by the Board of Trustees or with
respect to any given Series by vote of a majority of the outstanding voting
securities. If a Portfolio is added after the first approval by the Trustees as
described above, this Contract will be effective as to that Portfolio upon
execution of the applicable exhibit and will continue in effect until the next
annual approval of this Contract by the Trustees and thereafter for successive
periods of one year, subject to approval as described above.
8. TERMINATION. Notwithstanding any provision in this Contract, it may be
terminated at any time with respect to any Portfolio, without the payment of any
penalty, by the Trustees of the Trust or by a vote of the majority of the
outstanding voting securities of that Portfolio on sixty (60) days' written
notice to the Adviser, or by the Adviser on sixty (60) days' written notice to
the Trust. Termination of this Contract with respect to any given Portfolio
shall in no way affect the continued validity of this Contract or the
performance thereunder with respect to any other Portfolio. This Contract will
terminate automatically in the event of its assignment.
9. ASSIGNMENT. This Contract may not be assigned by the Adviser and
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shall automatically terminate in the event of any assignment. The Adviser
shall notify the Trust in writing in advance of any proposed change of
control of the Adviser to enable the Trust to take the steps necessary to
enter into a new advisory contract.
10. LIABILITIES OF THE ADVISER.
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(a) Except as provided below, in the absence of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the obligations or duties
under this Contract on the part of the Adviser, the Adviser shall not be liable
to the Trust or to any of the Portfolios or to any shareholder for any act or
omission in the course of or connected in any way with rendering services or for
any losses that may be sustained in the purchase, holding, or sale of any
security or the making of any investment for or on behalf of the Trust.
(b) No provision of this Contract shall be construed to protect any
Trustee or officer of the Trust, or the Adviser, from liability in violation of
Sections 17(h), 17(i) or 36(b) of the 1940 Act.
11. AMENDMENT. This Contract may be amended at any time by agreement of
the parties provided that the amendment shall be approved both by the vote of a
majority of the Trustees of the Trust, including a majority of the Trustees who
are not parties to this Contract or interested persons of any such party to this
Contract (other than as Trustees of the Trust) cast in person at a meeting
called for that purpose, and, where required by the 1940 Act, on behalf of a
Portfolio by a majority of the outstanding voting securities of such Portfolio.
12. LIMITATION OF LIABILITY. The Adviser is expressly put on notice of the
limitation of liability as set forth in the Trust's Declaration of Trust and
agrees that the obligations assumed by the Trust or any Portfolio pursuant to
this Agreement shall be limited in any case to the Trust and its assets and that
the Adviser shall not seek satisfaction of any such obligations from the
Shareholders of the Trust, the Trustees, officers, employees or agents of the
Trust, or any of them.
13. DEFINITIONS. As used in this Contract, the terms "affiliated person,"
"assignment," "control," "interested person" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the 1940 Act
and the rules and regulations thereunder, subject to any applicable orders of
exemption issued by the Securities and Exchange Commission.
14. GOVERNING LAW. This Contract shall be construed in accordance with and
governed by the laws of the State of North Carolina, provided, however, that
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation promulgated by the Securities and Exchange Commission
thereunder.
EXHIBIT A
to the
Investment Advisory Contract
WACHOVIA BALANCED FUND II
For all services rendered by the Adviser hereunder, the above-named
Portfolio of the Trust shall pay to the Adviser and the Adviser agrees to accept
as full compensation for all services rendered hereunder, an annual investment
advisory fee equal to 0.70% of the average daily net assets of the Portfolio.
The portion of the fees based upon the average daily net assets of the
Portfolio shall be accrued daily at the annual rate of 0.70% applied to the
daily net assets of the Portfolio.
The advisory fee so accrued shall be paid to the Adviser daily.
Witness the due execution hereof this 3RD day of MARCH, 2000.
WACHOVIA BANK, N.A.
By:
Name:
Title:
WACHOVIA VARIABLE INSURANCE FUNDS
By:
Name:
Title:
EXHIBIT B
to the
Investment Advisory Contract
WACHOVIA EQUITY FUND II
For all services rendered by the Adviser hereunder, the above-named
Portfolio of the Trust shall pay to the Adviser and the Adviser agrees to accept
as full compensation for all services rendered hereunder, an annual investment
advisory fee equal to 0.70% of the average daily net assets of the Portfolio.
The portion of the fees based upon the average daily net assets of the
Portfolio shall be accrued daily at the annual rate of 0.70% applied to the
daily net assets of the Portfolio.
The advisory fee so accrued shall be paid to the Adviser daily.
Witness the due execution hereof this 3RD day of MARCH, 2000.
WACHOVIA BANK, N.A.
By:
Name:
Title:
WACHOVIA VARIABLE INSURANCE FUNDS
By:
Name:
Title:
EXHIBIT C
to the
Investment Advisory Contract
WACHOVIA SPECIAL VALUES FUND II
For all services rendered by the Adviser hereunder, the above-named
Portfolio of the Trust shall pay to the Adviser and the Adviser agrees to accept
as full compensation for all services rendered hereunder, an annual investment
advisory fee equal to 0.80% of the average daily net assets of the Portfolio.
The portion of the fees based upon the average daily net assets of the
Portfolio shall be accrued daily at the annual rate of 0.80% applied to the
daily net assets of the Portfolio.
The advisory fee so accrued shall be paid to the Adviser daily.
Witness the due execution hereof this 3RD day of MARCH, 2000.
WACHOVIA BANK, N.A.
By:
Name:
Title:
WACHOVIA VARIABLE INSURANCE FUNDS
By:
Name:
Title:
