EXHIBIT 5(b)
INVESTMENT ADVISORY
AGREEMENT
BETWEEN
MAXIM SERIES FUND, INC.
AND
G W CAPITAL MANAGEMENT,
INC.
INVESTMENT ADVISORY
AGREEMENT
INVESTMENT ADVISORY AGREEMENT made this 1st day of
November, 1996, by and between
Maxim Series Fund, Inc., a Maryland corporation ("the Fund"), and
GW Capital Management, Inc., a
Colorado corporation registered as an investment adviser under the
Investment Advisers Act of 1940 ("the
Adviser"), whereby the Adviser will act as investment adviser to
the Fund as follows:
ARTICLE I
Duties of the Adviser
The Fund hereby employs the Adviser to act as the
investment adviser to and manager of the
Fund, and, subject to the review of the Board of Directors of the
Fund ("the Board"), to manage the
investment and reinvestment of the assets of its existing portfolio
and of each portfolio it may create in
the future ("the Portfolios") and to administer its affairs, for
the period and on the terms and conditions set
forth in this Agreement. The Adviser hereby accepts such
employment and agrees during such period,
at its own expense, to render the services and to assume the
obligations herein set forth for the
compensation provided for herein. The Adviser shall for all
purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority
to act for or represent the Fund in any way or otherwise be deemed
an agent of the Fund.
A. Investment Advisory Services. In carrying out its
obligations to manage the investment and
reinvestment of the assets of the Fund, the Adviser shall, when
appropriate and consistent with the
limitations set forth in Section C hereof:
(a) perform research and obtain and evaluate
pertinent economic, statistical, and
financial data relevant to the investment policies of the
Fund;
(b) consult with the Board and furnish to the
Board recommendations with respect
to an overall investment plan for approval, modification,
or rejection by the Board;
(c) seek out, present, and recommend specific
investment opportunities, consistent
with any overall investment plan approved by the Board;
(d) take such steps as are necessary to
implement any overall investment plan
approved by the Board, including making and carrying out
decisions to acquire or dispose of
permissible investments, management of investments and any
other property of the Fund, and
providing or obtaining such services as may be necessary
in managing, acquiring or disposing
of investments;
(e) regularly report to the Board with respect
to the implementation of any approved
overall investment plan and any other activities in
connection with management of the assets of
the Account;
(f) maintain all required accounts, records,
memoranda, instructions or authorizations
relating to the acquisition or disposition of investments
for the Fund; and
(g) determine the net asset value of the Fund
as required by applicable law.
If, in the judgment of the Adviser, the Fund would be
benefitted by supplemental investment
research from other persons or entities, outside the context of a
specific brokerage transaction, the
Adviser is authorized to obtain and pay a reasonable flat fee for
such information. Supplemental
investment research shall be limited to statistical and other
factual information, advice regarding economic
factors and trends, and advice as to occasional transactions in
specific securities, and shall not involve
general advice or recommendations regarding the purchase or sale of
securities. The expense of the
Adviser may not be necessarily reduced as a result of the receipt
of such supplement information. The
advisor shall regularly report to the Board when it has secured or,
where time permits, intends to secure
said supplemental investment research. It is understood and agreed
that the Board retains the right to
limit the scope of or to disapprove of said research.
B. Administrative Services. In addition to the
performance of investment advisory services, the
Adviser shall perform, or supervise the performance of,
administrative services in connection with the
management of the Fund and the Portfolios, including all financial
reporting for the Fund. In this
connection, the Adviser agrees to (i) assist in supervising all
aspects of the Fund's operations, including
the co-ordination of all matters relating to the functions of the
custodian, transfer agent or other
shareholder service agents, if any, accountants, attorneys and
other parties performing services or
operational functions for the Fund, (ii) provide the Fund, at the
Adviser's expense, with services of
persons, who may be the Adviser's officers, competent to perform
such administrative and clerical
functions as are necessary in order to provide effective
administration of the Fund, including duties in
connection with certain reports and the maintenance of certain
books and records of the Fund, and (ii)
provide the Fund, at the Adviser's expense, with adequate office
space and related services necessary
for its operations as contemplated in this Agreement. Nothing
contained herein will be construed to
restrict the Fund's right to hire its own employees or to contract
for services to be performed by third
parties.
C. Limitations on Advisory Services. The Adviser shall
perform the services under this Agreement
subject to the review of the Board and in a manner consistent with
the investment objectives, policies, and
restrictions of the Fund as stated in its Registration Statement,
as amended from time to time, filed with
the Securities and Exchange Commission, its Articles of
Incorporation and Bylaws, as amended from time
to time and the provisions of the Investment Company Act of 1940,
as amended (the "Investment
Company Act").
The Fund has furnished or will furnish the Adviser with
copies of the Fund's Prospectus, Articles
of Incorporation, and Bylaws as currently in effect and agrees
during the continuance of this Agreement
to furnish the Adviser with copies of any amendments or supplements
thereto before or at the time the
amendments or supplements become effective. The Adviser will be
entitled to rely on all documents
furnished by the Fund.
ARTICLE II
Compensation of the
Adviser
A. Investment Advisory Fee. As compensation for its
services to the Fund, the Adviser receives
monthly compensation at the annual rate of 0.46% of the average
daily net assets of the Money Market
Portfolio; 0.50% of the average daily net assets of the Zero-Coupon
Treasury Portfolio; 0.53% of the
average daily net assets of the Maxim Vista Growth & Income
Portfolio; 0.60% of the average daily net
assets of each of the Bond Portfolio, the Investment Grade Bond
Portfolio, the U.S. Government Securities
Portfolio, the Total Return Portfolio, the Stock Index Portfolio,
the U.S. Governmental Mortgage Securities
Portfolio, the Small-Cap Index Portfolio, the Growth Index
Portfolio, the Value Index Portfolio and the Short-
Term Maturity Bond Portfolio; 0.80% of the average daily net assets
of the Maxim X. Xxxx Price
Equity/Income Portfolio; 0.90% of the average daily net assets of
the Corporate Bond Portfolio; 0.95% of
the average daily net assets of each of the Mid-Cap Portfolio and
the Maxim INVESCO Small-Cap Growth
Portfolio; and 1.00% of the average daily net assets of each of the
Maxim INVESCO Balanced Portfolio,
Small-Cap Value Portfolio, the Maxim INVESCO ADR Portfolio, the
Foreign Equity Portfolio, the Small-Cap
Aggressive Growth Portfolio and the International Equity Portfolio.
B. Allocation of Expenses. Except with respect to the
Portfolios indicated below, the Adviser shall
be responsible for all expenses incurred in performing the services
set forth in this Agreement and all
other expenses, and the Fund shall pay only extraordinary expenses,
including the cost of litigation.
With respect to the Small-Cap Value, the Mid-Cap,
Small-Cap Aggressive Growth, Foreign Equity,
Maxim X. Xxxx Price Equity/Income, Maxim INVESCO Small-Cap Growth,
Maxim INVESCO ADR and the
International Equity Portfolios:
(a) The Adviser shall be responsible for all of its
expenses incurred in performing the services
set forth in Article I hereunder. Such expenses
include, but are not limited to, costs
incurred in providing investment advisory
services; compensating and furnishing office
space for officers and employees of the Adviser
connected with investment and economic
research, trading, and investment management of
the Fund; and paying all fees of all
directors of the Fund who are affiliated persons
of the Adviser or any of its subsidiaries.
(b) The Fund pays all other expenses incurred in its
operation and all of its general
administrative expenses, including, but not
limited to, redemption expenses, expenses of
portfolio transactions, shareholder servicing
costs, pricing costs (including the daily
calculation of net asset value), interest, charges
of the custodian and transfer agent, if
any, cost of auditing services, directors' fees,
legal expenses, state franchise and other
taxes, expenses of registering the shares under
Federal and state securities laws,
Securities and Exchange Commission fees, advisory
fees, insurance premiums, costs of
maintenance of corporate existence, investor
services (including allocable personnel and
telephone expenses), cost of printing proxies,
stock certificates, costs of corporate
meetings, and any extraordinary expenses,
including litigation costs. Accounting services
are provided for the Fund by the Adviser and the
Fund shall reimburse the Adviser for its
costs in connection therewith.
C. Notwithstanding the second paragraph of Section B,
above, with respect to the following
Portfolios of the Fund, the Adviser shall pay Expenses which exceed
an annual rate of: 1.35% of the
average daily net assets of the Small-Cap Value Portfolio; 1.10% of
the average daily net assets of the
Mid-Cap and Maxim INVESCO Small-Cap Growth Portfolios; 1.30% of the
average daily net assets of the
Small-Cap Aggressive Growth Portfolio; 0.95% of the Maxim X. Xxxx
Price Equity/Income Portfolio; 1.50%
of the Maxim INVESCO ADR, Foreign Equity and International Equity
Portfolios. For purposes of this
Section C, "Expenses" with respect to a Portfolio shall mean the
sum of (a) the investment advisory fee
described in Section A, above, for such Portfolio, and (b) expenses
to be paid directly by the Fund, as
described in clause (b) of the second paragraph of Section B,
above, with respect to such Portfolio.
ARTICLE III
Portfolio Transactions and
Brokerage
The Adviser agrees to determine the securities to be
purchased or sold by the Portfolios, subject
to the provisions of Article I, and to place orders pursuant to its
determinations, either directly with the
issuer, with any broker-dealer or underwriter that specialized in
the securities for which the order is made,
or with any other broker or dealer selected by the Adviser, subject
to the following limitations.
The Adviser is authorized to select the brokers or dealers
that will execute the purchases and
sales of portfolio securities for the Fund and will use its best
efforts to obtain the most favorable net
results and execution of the Fund's orders, taking into account all
appropriate factors, including price,
dealer spread or commission, if any, size of the transaction, and
difficulty of the transaction. In evaluating
the net results of brokerage services offered by brokers or dealers
that also provide supplemental
investment research to the Adviser for a flat fee (see Article I)
the Adviser need not take such a flat fee
into consideration.
If, in the judgment of the Adviser, the Fund would be
benefitted by supplemental investment
research in addition to such research furnished for a flat fee, the
Adviser is authorized to pay spreads or
commissions to brokers or dealers furnishing such services in
excess of spreads or commissions which
another broker or dealer may charge for the same transaction. The
expenses of the Adviser may not
necessarily be reduced as a result of receipt of such supplemental
information.
Subject to the above requirements and the provisions of
the Investment Company Act of 1940,
the Securities Exchange Act of 1934, other applicable provisions of
law, and the terms of any exemption(s)
therefrom, nothing shall prohibit the Adviser from selecting
brokers or dealers with which it or the Fund
are affiliated.
ARTICLE IV
Activities of the Adviser
The services of the Adviser to the Fund under this
Investment Advisory Agreement are not to be
deemed exclusive and the Adviser will be free to render similar
services to others so long as its services
under this Investment Advisory Agreement are not impaired. It is
understood that directors, officers,
employees and shareholders of the Fund are or may become interested
in the Adviser, as directors,
officers, employees or shareholders or otherwise and that
directors, officers, employees or shareholders
of the Adviser are or may become similarly interested in the Fund,
and that the Adviser is or may become
interested in the Fund as shareholder or otherwise.
It is agreed that the Adviser may use any supplemental
investment research obtained for the
benefit of the Fund in providing investment advice to its other
investment advisory accounts. The Adviser
or its subsidiaries may use such information in managing their own
accounts. Conversely, such
supplemental information obtained by the placement of business for
the Adviser or other entities advised
by the Adviser will be considered by and may be useful to the
Adviser in carrying out its obligations to
the Fund.
Securities held by the Fund may also be held by separate
accounts or other mutual funds for
which the Adviser acts as an adviser or by the Adviser or its
subsidiaries. Because of different investment
objectives or other factors, a particular security may be bought by
the Adviser or its subsidiaries or for
one or more clients when one or more clients are selling the same
security. If purchases or sales of
securities for the Fund or other entities for which the Adviser or
its subsidiaries act as investment adviser
or for their advisory clients arise for consideration at or about
the same time, the Fund agrees that the
Adviser may make transactions in such securities, insofar as
feasible, for the respective entities and clients
in a manner deemed equitable to all. To the extent that
transactions on behalf of more than one client
of the Adviser during the same period may increase the demand for
securities being purchased or the
supply of securities being sold, the Fund recognizes that there may
be an adverse effect on price.
It is agreed that, on occasions when the Adviser deems the
purchase or sale of a security to be
in the best interests of the Fund as well as other accounts or
companies, it may, to the extent permitted
by applicable laws and regulations, but will not be obligated to,
aggregate the securities to be sold or
purchased for the Fund with those to be sold or purchased for other
accounts or companies in order to
obtain favorable execution and low brokerage commissions. In that
event, allocation of the securities
purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Adviser in the
manner it considers to be most equitable and consistent with its
fiduciary obligations to the Fund and to
such other accounts or companies. The Fund recognizes that in some
cases this procedure may
adversely affect the size of the position obtainable for a Fund
portfolio.
ARTICLE V
Effectiveness of the
Agreement
This Investment Advisory Agreement shall not become
effective (and the Adviser shall not serve
or act as investment adviser) unless and until it is approved by
the Board including a majority of directors
who are not parties to this Agreement or interested persons of any
such party to this Agreement, and by
the sole shareholder; and this Agreement shall come into full force
and effect on the date on which it is
so approved.
ARTICLE VI
Term of the Agreement
This Investment Advisory Agreement shall remain in effect
until the earlier of one year from its
effective date or the date of the first annual or special meeting
of shareholders of the Fund and shall
continue so long as such continuance is specifically approved by a
majority of the outstanding shares
of the Fund at that time and at least annually thereafter (a) by
the vote of the majority of the Board, or by
vote of a majority of the outstanding shares of the Fund, including
a majority of the outstanding shares
of each Portfolio, and (b) by the vote of a majority of the members
of the Board, who are not parties to
this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose
of voting on such approval. In connection with such approvals, the
Board shall request and evaluate, and
the Adviser shall furnish, such information as may be reasonably
necessary to evaluate the terms of this
Agreement. This Agreement:
(a) shall not be terminated by the Adviser without
sixty days' prior written notice and without
the prior approval of a new investment advisory
agreement by vote of a majority of the
outstanding shares of the Fund;
(b) shall be subject to termination, without the
payment of any penalty, by the Board or by
vote of a majority of the outstanding voting
securities of the Fund, on sixty days' written
notice to the Adviser;
(c) shall not be amended without specific approval of
such amendment by (i) the Board, or
by the vote of a majority of the outstanding
shares of the Fund, including a majority of the
outstanding shares of each Portfolio, and (ii) a
majority of those directors who are not
parties to this Agreement or interested persons of
such a party, cast in person at a
meeting called for the purpose of voting on such
approval; and
(d) shall automatically terminate upon assignment by
either party.
ARTICLE VII
Recordkeeping
The Adviser agrees that all accounts and records which it
maintains for the Fund shall be the
property of the Fund and that it will surrender promptly to the
designated officers of the Fund any or all
such accounts and records upon request. The Adviser further agrees
to preserve for the period
prescribed by the rules and regulations of the Securities and
Exchange Commission all such records as
are required to be maintained pursuant to said rules. The Adviser
also agrees that it will maintain all
records and accounts regarding the investment activities of the
Fund in a confidential manner. All such
accounts or records shall be made available, within five (5)
business days of the request, to the Fund's
accountants or auditors during regular business hours at the
Adviser's offices upon reasonable prior
written notice. In addition, the Adviser will provide any
materials, reasonably related to the investment
advisory services provided hereunder, as may be reasonably
requested in writing by the directors or
officers of the Fund or as may be required by any governmental
agency having jurisdiction.
ARTICLE VIII
Liability of the Adviser
In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of
obligations or duties on the part of the Adviser (or its officers,
directors, agents, employees, controlling
persons, shareholders, and any other person or entity affiliated
with the Adviser or retained by it to
perform or assist in the performance of its obligations under this
Agreement), neither the Adviser nor any
of its officers, directors, employees or agents shall be subject to
liability to the Fund or to any shareholder
for any act or omission in the course of, or connected with,
rendering services hereunder, including
without limitation any error of judgment or mistake of law or for
any loss suffered by the Fund or any
shareholder in connection with the matters to which this Agreement
relates, except to the extent specified
in Section 36(b) of the Investment Company Act concerning loss
resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services.
ARTICLE IX
Governing Law
This Investment Advisory Agreement is subject to the
provisions of the Investment Company Act,
as amended, and the rules and regulations of the Securities and
Exchange Commission thereunder,
including such exemptions therefrom as the Securities and Exchange
Commission may grant. Words and
phrases used herein shall be interpreted in accordance with that
Act and those rules and regulations.
As used with respect to the Fund or any of its Portfolios, the term
"majority of the outstanding shares"
means the lesser of (i) 67% of the shares represented at a meeting
at which more than 50% of the
outstanding shares are represented or (ii) more than 50% of the
outstanding shares.
IN WITNESS WHEREOF, the parties have caused this
Investment Advisory Agreement to be
signed by their respective officials duly authorized, as of the day
and year first above written.
MAXIM SERIES
FUND, INC.
Witness: /s/ X.X. Xxxx
President
/s/ X.X. Xxxxx
Secretary
GW CAPITAL
MANAGEMENT, INC.
Witness: /s/ X. Xxxxxxx
President
/s/ X.X. Xxxxx
Secretary
