AMENDED AND RESTATED
MANAGEMENT AND INVESTMENT
ADVISORY AGREEMENT
This AMENDED AND RESTATED MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT (the
"Amended Agreement") is made effective as of the 1st day of May, 2003, between
AMERICAN FIDELITY ASSURANCE COMPANY, an insurance corporation organized under
the laws of the State of Oklahoma and having its principal place of business in
Oklahoma City, Oklahoma (the "Manager"), and AMERICAN FIDELITY DUAL STRATEGY
FUND, INC.(R), a Maryland corporation, having its principal place of business in
Oklahoma City, Oklahoma (the "Fund"), with reference to the following:
A. The Fund is engaged in business as an open-end management investment
company registered under the Investment Company Act of 1940.
B. The Fund and the Manager are parties to a Management and Investment
Advisory Agreement dated December 22, 1998, as amended effective August 1, 2002
(the "Advisory Agreement"), pursuant to which the Fund retained the Manager as
its manager and investment advisor, and the Manager agreed to assume certain
obligations of the Fund in connection therewith.
C. The Fund and the Manager desire to amend and restate the Advisory
Agreement to document with greater specificity the services to be provided by
the Manager to the Fund and the manner in, and the terms and conditions upon,
which such services are provided.
The parties hereby agree as follows:
1. The Fund hereby employs the Manager to provide investment advisory,
statistical and research facilities and services, to supervise the composition
of the Fund's portfolio and to determine the nature and timing of changes
therein and the manner of effectuating such changes, subject to supervision of
the Fund's Board of Directors and for the period and on the terms set forth in
this Amended Agreement. The Manager hereby accepts such employment and agrees to
render the services and to assume the obligations set forth herein, for the
compensation provided below.
2. The Manager shall:
(a) Furnish to the Fund research and statistical and other factual
information and reports with respect to securities held by the
Fund or which the Fund might purchase. It will also furnish to
the Fund such information as may be appropriate concerning
developments which may affect issuers of securities held by the
Fund or which the Fund might purchase or the business in which
such issuers may be engage. Such statistical and other factual
information and reports shall include information and reports on
industries, business, corporations and all types of securities,
whether or not the Fund has at any time any holdings in such
industries, business, corporations or securities. The Manager
reserves the right, in its discretion, to purchase statistical
information and other services from other sources, including
affiliated persons of the Manager.
(b) Furnish to the Fund, from time to time, advice, information and
recommendations with respect to the acquisition, holding or
disposal by the Fund of securities.
(c) Furnish to the Fund necessary assistance in:
i. The preparation of all reports now or hereafter required by
federal law or other laws.
ii. The preparation of prospectuses, registration statements and
amendments thereto that may be required by federal law or
other laws or by the rules or regulations of any duly
authorized commission or administrative body.
(d) Furnish to the Fund, at the Manager's expense, office space in
the offices of the manager or in such other place or places as
may be agreed upon from time to time, and all necessary office
facilities, business equipment, supplies, utilities and telephone
service for managing the affairs and investments and keeping the
general accounts of the Fund (exclusive of the necessary records
of any dividend disbursing agent, transfer agent, registrar or
custodian). Manager shall compensate all personnel, officers and
directors of the Fund. The Manager agrees to pay any legal
expenses and other expenses incident to any reorganization of the
Fund and to any registration with federal and state authorities
of any offering of the Fund's shares, including registration
fees, legal and accounting fees and other costs and expenses
incurred in connection with any federal or other registrations of
Fund shares and all amendments and supplements to any
registration of Fund shares.
(e) Provide and maintain a bond issued by a reputable insurance
company authorized to do business in the place where the bond is
issued, against larceny and embezzlement covering each officer
and employee of the Fund, who may singly or jointly with others
have access to securities of the Fund, with direct or indirect
authority to draw upon such funds or to direct generally the
disposition of such funds. The bond shall be in such reasonable
amount as a majority of the Board of Directors of the Fund who
are not officers or employees of the Fund shall determine with
due consideration to the aggregate assets of the Fund to which
any such officer or employee may have access.
(f) Reimburse the Fund to the fullest extent necessary for costs and
expenses incurred by the Fund in connection with one or more
indemnification agreements between the Fund and any of its
directors (each, a "Director Indemnification Agreement"). In this
regard, the Manager agrees to reimburse the Fund for any damages,
judgments, penalties, fines, losses, liabilities, settlement
amounts, costs and expenses (including, without limitation,
reasonable legal fees, costs and disbursements) (collectively,
"Losses") incurred, suffered or expended by the Fund as a result
of or in connection with a Director Indemnification Agreement,
except that, no reimbursement shall be paid to the Fund for
Losses incurred in violation of the terms of an Indemnification
Agreement. As soon as practicable after receipt by the Fund of a
claim for indemnification pursuant to an Indemnification
Agreement, the Fund shall notify the Manager of the claim
thereunder; however, failure by the Fund to notify the Manager
will not relieve the Manager from any liability it may have to
the Fund under this Amended Agreement or otherwise.
3. In connection with the management of the investment and reinvestment of
the assets of the Fund, the Manager, acting by its own officers, directors or
employees or by duly authorized subcontractor, is authorized to select the
brokers or dealers that will execute purchase and sale transactions for the Fund
and is directed to use its best efforts to obtain the best available price and
most favorable execution with respect to all such purchases and sales of
portfolio securities for the Fund. Subject to this primary requirement, and
maintaining as its first consideration the benefits to the Fund and its
shareholders, the Manager shall have the right, subject to the control of the
Fund's Board of Directors, to follow a policy of selecting brokers and dealers
who furnish statistical, research and other services to the Fund or to the
Manager.
4. For the services to be rendered and the charges and expenses assumed and
to be paid by the Manager, the Fund shall pay the Manager as a basic advisory
and service fee as soon as practical after the last day of each week and at the
close of each calendar week an amount equal to .0013698% (.50% on an annual
basis) of the current value of the Fund for each day of the valuation period for
investment services.
5. The Fund shall cause its books and accounts to be audited at least once
each year by a reputable, independent public accountant or organization of
public accountants who shall render a report to the Fund.
6. This Amended Agreement shall continue in full force and effect from year
to year, provided that it shall not continue for more than two years from the
date hereof unless such continuance is specifically approved at least annually
by the Board of Directors of the Fund, which affirmative vote shall include a
majority of the members of the Board of Directors of the Fund who are not
interested persons of the Manager or of the Fund. "Interested persons" are those
persons defined in Section 2(a)(19) of the Investment Company Act of 1940.
7. This Amended Agreement shall automatically terminate in the event of its
assignment, within the meaning of the Investment Company Act of 1940, as
amended, unless an order of the Securities and Exchange Commission is issued
exempting such assignment. This Amended Agreement may be terminated at any time,
on 60 days' written notice to the Manager, without payment of any penalty, by
the Board of Directors of the Fund or by shareholders of the Fund casting a
majority of the votes which may be cast by all shareholders. This Amended
Agreement may not be terminated by the Manager without the approval of a new
investment advisory agreement by the shareholders of the Fund casting a majority
of the votes which may be cast by all shareholders.
8. This Amended Agreement may be amended at any time by mutual consent of
the parties provided that such consent on the part of the Fund shall have been
approved by the shareholders of the Fund casting a majority of the votes which
may be cast by all shareholders.
9. No provision of this Amended Agreement shall be deemed to protect the
Manager against any liability to the Fund or its shareholders to which it might
otherwise be subject by reason of any willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations under this Amended Agreement. Nor shall any provision hereof be
deemed to protect any director or officer or the Fund against any such liability
to which he or she might otherwise be subject by reason of any willful
misfeasance, bad faith or gross negligence in the performance of his or her
duties or the reckless disregard of his or her obligations. If any provision of
this Amended Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the Amended Agreement shall not be
affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Amended Agreement
to be executed on the day and year first above written.
AMERICAN FIDELITY DUAL AMERICAN FIDELITY
STRATEGY FUND, INC.(R) ASSURANCE COMPANY
/s/ Xxxx X. Xxx /s/ Xxxx X. Xxx
By: ____________________________ By: ____________________________
Xxxx X. Xxx, President Xxxx X. Xxx, President
