ADVISORY AGREEMENT
Agreement, made this _____ day of June, 1981 between Lincoln National Money
Market Fund, Inc., a Maryland corporation (the "Fund"), and Lincoln National
Pension Insurance Company (the "Adviser"),
WHEREAS, the Fund is an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund desires to retain the Adviser to render investment
advisory and administrative services to the Fund, and the Adviser is willing to
render such services;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. APPOINTMENT OF ADVISER. The Fund hereby appoints the Adviser to act
as investment adviser to the Fund and to administer its corporate affairs,
subject to the supervision of the Board of Directors of the Fund for the period
and on the terms set forth in this Agreement. The Adviser accepts such
appointment and agrees to render the services herein se-forth, for the
compensation herein provided.
2. INVESTMENT ADVISORY DUTIES. Subject to the supervision of the Board
of Directors of the Fund, the Adviser shall manage the investment operations of
the Fund, subject to the following:
(a) the Adviser shall provide supervision of the Fund's investments,
furnish a continuous investment program for the Fund's portfolio, determine
from time to time what securities will be purchased, retained or sold by
the Fund, and what portion of the assets will be invested or held
uninvested as cash;
(b) the Adviser shall use the same skill and care in the management
of the Fund's portfolio as it uses in the management of other accounts for
which it has investment responsibility;
(c) the Adviser, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Articles of
Incorporation, By-laws and Prospectus of the Fund and with the instructions
and directions of the Board of Directors of the Fund and will conform to
and comply with the requirements of the 1940 Act and all other applicable
Federal and state laws and regulations;
(d) the Adviser shall determine the securities to be purchased or
sold by the Fund and will place orders pursuant to its determinations
either directly with the issuer or with any broker and/or dealer who
specializes in the securities in which the Fund is active, but shall in no
event place such orders with any affiliated person of the Adviser. In
placing orders with brokers and/or dealers the Adviser shall attempt to
obtain the best price and the most favorable execution of its orders,
subject to such other considerations as may be set forth in the then most
recent prospectus of the Fund;
(e) the Adviser shall maintain books and records with respect to the
Fund's securities transactions and shall render to the Fund's Board of
Directors such periodic and special reports as the Fund's Board of
Directors may reasonably request;
(f) the investment advisory services of the Adviser to the Fund under
this Agreement are not to be deemed exclusive, and the Adviser shall be
free to render similar services to others. In addition, it is understood
that the persons employed by the Adviser to assist in the performance of
its duties under this Agreement will not necessarily devote their full time
to such activity.
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The Adviser may contract with other entities to assist it in rendering
services described herein; provided, however, that the Adviser will continue to
be contractually bound with respect to the performance of its duties and
obligations as set forth herein.
3. ADMINISTRATIVE FUNCTIONS. The Adviser will administer the Fund's
corporate affairs, subject to the overall supervision of the Board of Directors
of the Fund and, in connection therewith, shall furnish the Fund with office
space and all necessary office facilities, equipment and personnel, and shall
provide all necessary executive and other personnel (including certain of its
officers and employees) for managing the investments and affairs of the Fund.
In connection with its administration of the affairs of the Fund, the
Adviser will bear all of the following expenses:
(i) the salaries and expenses of all personnel, except the
fees and expenses of directors who are not "interested persons" of the
Fund, as that term is defined in the 1940 Act;
(ii) all expenses incurred by the Adviser in connection with
administering the Fund's business other than those assumed by the Fund
herein; and
(iii) the organizational expenses of the Fund.
The Fund assumes and will pay the following expenses, except to the extent
incurred in connection with the organization of the Fund:
(a) the fee of the Adviser;
(b) the compensation and expenses of directors who are not
"interested persons" of the Fund;
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(c) the fees and expenses of the custodian of the Fund's assets;
(d) the fees and expenses of independent accountants for the
Fund;
(e) brokerage commissions and securities transaction costs
incurred by the Fund, including any portion of such commissions
attributable to research and brokerage services as defined by Section
28(e) of the Securities Exchange Act of 1934, as amended;
(f) all taxes and corporate fees payable by the Fund to federal,
state or other governmental agencies;
(g) the fees of any trade association of which the Fund may be
a member;
(h) the cost of stock certificates representing shares of the Fund;
(i) the fees and expenses involved in registering and
maintaining registrations of the Fund and its shares with the Securities
and Exchange Commission (the "Commission"), and qualifying its shares
under state securities laws, including the preparation and printing of the
Fund's registration statements and prospectuses;
(j) expenses of stockholders' and directors' meetings and of
preparing and printing proxy material and mailing reports to stockholders;
(k) the charges and expenses of outside legal counsel for the
Fund, including legal services rendered in connection with the Fund's
corporate existence, corporate and financial structure and relations
with its stockholders, registrations and qualifications of securities and
litigation; and
(l) expenses of any extraordinary nature (including litigation
and indemnification expenses) which are not incurred in the ordinary
course of the Fund's business.
4. BOOKS AND RECORDS. The Adviser shall keep the Fund's books and
records required to be maintained by it pursuant to paragraph 2 hereof. The
Adviser agrees that
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all records which it maintains for the Fund are the property of the Fund and it
will surrender promptly to the Fund any of such records upon the Fund's request.
The Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
of the Commission under the 1940 Act any such records as are required to be
maintained by Rule 31a-1 of the Commission under the 1940 Act.
5. COMPENSATION. The Fund shall pay the Adviser, as full compensation
for all services rendered and all facilities and personnel furnished hereunder,
a monthly fee at the annual rate of .323 of 1% of the average daily net asset
value of the Fund during the fiscal year computed in the manner used for the
determination of the offering price of shares of the Fund. The fee for each
month shall be payable to the Adviser not later than the tenth day of the
following month.
6. REIMBURSEMENT OF EXPENSES. If, in any fiscal year, the total of the
Fund's expenses (including the fee payable pursuant to paragraph 5 hereof, but
excluding taxes, interest, brokerage commissions relating to the purchase or
sale of portfolio securities and extraordinary non-recurring expenses) exceeds
1-1/2% of the average daily net asset value of the Fund, computed in the manner
above described, the Adviser will pay such excess. For purposes of this
paragraph, the term "fiscal year" shall include the portion of any fiscal year
which shall have elapsed at the date of termination of this Agreement, and the
expense limitation shall be that part of 1-1/2% proportioned to the portion of a
full fiscal year elapsed.
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7. LIMITATION OF LIABILITY. The Adviser shall not be liable for any
error of judgment or mistake of law or fact or for any loss suffered by the Fund
in connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard of its obligations and
duties under this Agreement.
8. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall continue until the earlier of one year from the effective
date of the Fund's Registration Statement or the date of the first annual or
special meeting of the stockholders of the Fund, and, if approved by a majority
of the Fund's outstanding voting securities (as defined in the 1940 Act),
thereafter shall continue automatically for periods of one calendar year so long
as such continuance is specifically approved at least annually (a) by the vote
of a majority of the Fund's outstanding voting securities or by the Fund's Board
of Directors, and (b) by the vote of a majority of those members of the Board of
Directors of the Fund who are not parties to this Agreement or interested
persons (as defined in the 0000 Xxx) of any such party, cast in person at a
meeting called for the purpose of voting on such approval; provided, however,
that this Agreement may be terminated by the Fund at any time, without the
payment of any penalty, by vote of a majority of the entire Board of Directors
of the Fund or by vote of a majority of the Fund's outstanding voting securities
on 60 days' written notice to the
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Adviser, or by the Adviser at any time, without the payment of any penalty, on
90 days' written notice to the Fund. This Agreement will automatically and
immediately terminate in the event of its "assignment" (as defined in the 1940
Act).
9. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those members of the Board of Directors of the Fund who are not "interested
persons" of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such amendment, and (b) by vote of a majority of the
Fund's outstanding voting securities, provided, however, that compliance with
subparagraph (b) of this paragraph 9 shall not be required to amend this
Agreement so as to lower the Adviser's compensation under paragraph 5 hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Lincoln National Money Market Fund,
Inc.
(CORPORATE SEAL)
By
--------------------------------
Vice President
ATTEST:
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Lincoln National Pension Insurance
Company
(CORPORATE SEAL)
By
--------------------------------
Vice President
ATTEST:
-------------------------------
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