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EXHIBIT (d).1
INTERIM INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS AGREEMENT is made this 2nd day of April 2001, by and between
Fortis Series Fund, Inc., a Minnesota corporation (the "Fund") and HL Investment
Advisors, LLC, a Connecticut limited liability company ("HL Advisors").
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES.
The Fund hereby engages HL Advisors, and HL Advisors hereby agrees to
act, as investment adviser for, and to manage the affairs, business and the
investment of the assets of the Series of the Fund identified in Exhibit A. Each
such Series is herein individually referred to as a "Series," and the Series are
herein collectively referred to as the "Series."
The investment of the assets of the Series shall at all times be
subject to the applicable provisions of the Articles of Incorporation and
By-laws of the Fund and the current Registration Statement (including the
Prospectus and Statement of Additional Information) of the Series and shall
conform to the policies and restrictions of the Series as set forth in such
Registration Statement and any additional limitations as may be adopted from
time to time by the Board of Directors of the Fund and communicated to HL
Advisors. Within the framework of the investment policies, restrictions and
limitations of the Series, HL Advisors shall have the sole and exclusive
responsibility for the management of the Series and the making and execution of
all investment decisions for the Series, provided that:
HL Advisors may, at its option and expense, with respect to each
Series, appoint a sub-adviser or sub-advisers, which shall assume such
responsibilities and obligations of HL Advisors pursuant to this Investment
Advisory and Management Agreement as shall
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be delegated to the sub-adviser or sub-advisers; provided, however, that any
discretionary investment decisions made by a sub-adviser on behalf of any of the
series shall be subject to approval or ratification by HL Advisors, and,
notwithstanding any delegation of responsibilities and obligations to a
sub-adviser, HL Advisors shall retain the right, in its discretion, to make
investment decisions for the Series. Any appointment of a sub-adviser and
assumption of responsibilities and obligations of HL Advisors by such
sub-adviser shall be subject to approval by the Board of Directors of the Fund
and, to the extent (if any) required by law, by the shareholders of the Series.
Any appointment of a sub-adviser for a Series pursuant hereto shall in no way
limit or diminish HL Advisors' obligations and responsibilities under this
Investment Advisory and Management Agreement, and HL Advisors shall be
responsible for monitoring compliance by the sub-adviser(s) with the investment
policies, restrictions, and limitations on the Series, and will also be
responsible for ensuring that the Series are managed in a way so that: (1) they
meet the requirements of Subchapter M of the Internal Revenue Code to be taxed
as a regulated investment company; and (2) they comply with the provisions of
Section 817(h) of the Internal Revenue Code, and the regulations promulgated
thereunder.
HL Advisors shall report to the Board of Directors regularly at such
times and in such detail as the Board may from time to time determine to be
appropriate, in order to permit the Board to determine the adherence of HL
Advisors to the investment policies, restrictions and limitations of such
Series.
HL Advisors shall, at its own expense, furnish the Fund suitable office
space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. HL Advisors shall arrange, if required by
the Fund, for officers, employees, or
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other affiliates of HL Advisors to serve without compensation from the Fund as
directors, officers, or employees of the Fund if duly elected to such positions
by the shareholders or directors of the Fund.
HL Advisors shall create and maintain all reports, books and records
relating to its activities and obligations under this Agreement in such a manner
as will meet the obligations of the Fund under the Investment Company Act of
1940, applicable federal and state tax and insurance laws and regulations and
any other law or regulation which may be or become applicable to the Fund. All
such reports, books and records shall be the property of the Fund. Furthermore,
such reports, books and records shall at all times be available for copying and
otherwise open to inspection and audit by the Securities and Exchange
Commission, banking and insurance regulators and other authorities and
regulators having authority over the Fund, and by officers and employees of, and
auditors employed by, the Fund. HL Advisors hereby further agrees that, upon the
termination of this Agreement, all reports, books and records pertaining to HL
Advisors' activities under this Agreement shall be promptly segregated and
returned to the Fund free from any claim or retention of rights by HL Advisors.
2. COMPENSATION FOR SERVICES.
In payment for all services, facilities, equipment and personnel, and
for other costs of HL Advisors hereunder, the Fund shall pay to HL Advisors a
monthly fee for each Series, which fee shall be paid to HL Advisors not later
than the fifth business day of the month following the month in which such
services are rendered. Each such monthly fee shall be at the rate or rates set
forth below and shall be based on the average of the net asset values of all of
the issued and outstanding shares of the respective Series as determined as of
the close of each business day of the month pursuant to the Articles
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of Incorporation, By-Laws and currently effective Prospectus and Statement of
Additional Information of the Series. Exhibit A sets forth the fee on an annual
basis.
A Series' monthly fee is one-twelfth (1/12) of its annual fee. The fee
shall be prorated for any fraction of a month at the commencement or termination
of this Agreement.
Further:
(a) Any compensation paid under this Agreement shall be held in an
interest-bearing escrow account with the Series' custodian or a bank (as defined
in the Investment Company Act of 1940, as amended (the "Investment Company
Act"), mutually acceptable to the parties hereto.
(b) If holders of a majority of a Series' outstanding voting securities
approve a new Investment Management Agreement with HL Advisors before 150 days
after April __, 2001, the amount in the escrow account (including interest
earned thereon) with respect to such Series shall be paid to HL Advisors.
(c) If holders of a majority of a Series' outstanding voting securities
do not approve a new Investment Management Agreement with HL Advisors, HL
Advisors shall be paid, from the escrow account, an amount equal to the lesser
of:
(i) any costs incurred in performing this Agreement (plus
interest earned on that amount in the escrow account); and
(ii) the total amount in the escrow account (plus interest
earned thereon).
3. ALLOCATION OF EXPENSES.
(a) In addition to the fee described in Section 2 hereof, the Fund
shall pay all its expenses which are not assumed by HL Advisors, Fortis
Investors, Inc. ("Investors") or any other person. These Fund expenses include,
by way of example, but not by way of
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limitation, the fees and expenses of directors and officers of the Fund who are
not "affiliated persons" of HL Advisors, interest expenses, taxes, brokerage
fees and commissions, fees and expenses of registering and qualifying the Fund
and its shares for distribution under federal and state securities laws,
expenses of preparing Prospectuses and of printing and distributing Prospectuses
and Statements of Additional Information annually to existing shareholders and
existing insurance contract owners, custodian charges, auditing and legal
expenses, insurance expenses, association membership dues, and the expense of
reports to shareholders, shareholders' meetings, and proxy solicitations. HL
Advisors shall bear the costs of acting as the Fund's transfer agent, registrar,
and dividend disbursing agent.
(b) HL Advisors (or Investors or Fortis Benefits Insurance Company or
First Fortis Life Insurance Company) shall bear all promotion expenses in
connection with the distribution of the Fund's shares, including paying for
prospectuses and shareholder reports for new shareholders and new insurance
contract owners, and the costs of sales literature.
4. LIMIT ON EXPENSES.
Out of its advisory fee, but not in excess thereof, HL Advisors shall
reimburse the Fund for each Series' expenses from the date of the initial public
offering until the date a Series' aggregate net assets first reach $10,000,000,
to the extent that the aggregate expenses of the Series (including the
investment advisory and management fees for such Series under paragraph 2 of
this Agreement, but excluding interest, taxes, brokerage fees and commissions)
exceed an amount equal, on an annual basis, to the percentage of the average
daily net assets of the Series set forth in Exhibit B.
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5. FREEDOM TO DEAL WITH THIRD PARTIES.
HL Advisors shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
6. EFFECTIVE DATE DURATION AND TERMINATION OF AGREEMENT.
This Agreement shall become effective on April __, 2001 with respect to
each Series and will continue in effect with respect to a Series until the
earlier of (i) the date when a new Investment Management Agreement between the
Fund and HL Advisors is implemented with respect to that Series and (ii) the
date 150 days after the date of this Agreement.
This Agreement may be terminated at any time with respect to a Series,
without the payment of any penalty, by the Directors of the Fund or by the vote
of a majority of the outstanding voting securities of a Series, on ten days'
written notice to HL Advisors, or by HL Advisors on sixty days' written notice
to the Fund. This Agreement will automatically terminate, without the payment of
any penalty, in the event of its assignment (as defined in the Investment
Company Act).
Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities of the Fund shall
mean the vote of 67% or more of such securities if the holders of more than 50%
of such securities are present in person or by proxy or the vote of more than
50% of such securities, whichever is less.
7. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until
approved by vote of the holders of a majority of the outstanding voting
securities of the Series that
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have approved and are subject to this Agreement. In addition, if a majority of
the outstanding voting securities of any Series of the Fund votes to amend this
Agreement, such amendment shall be effective with respect to such Series whether
or not the shareholders of any other Series vote to adopt such amendment.
8. NOTICES.
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
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IN WITNESS WHEREOF, The Fund and HL Advisors have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
HL INVESTMENT ADVISORS, LLC.
/s/ Xxxxx X. Xxxxxxxxxxxx
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By:
Title: Senior Vice President
FORTIS SERIES FUND, INC.
/s/ Xxxx X. Xxxxxxxx
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By:
Title: President
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EXHIBIT A
Investment
Advisory and
Series Average Net Assets Management Fee
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Money Market Series For the first $500 million .30%
For assets over $500 million .25%
U.S. Government Securities Series For the first $50 million .50%
For assets over $50 million .45%
Diversified Income Series For the first $50 million .50%
For assets over $50 million .45%
Multisector Bond Series For the first $100 million .75%
For assets over $100 million .65%
High Yield Series For the first $250 million .50%
For assets over $250 million .45%
Global Asset Allocation Series For the first $100 million .90%
For assets over $100 million .85%
Asset Allocation Series For the first $250 million .50%
For assets over $250 million .45%
American Leaders Series For the first $35 million .90%
$35 million - $100 million .75%
For assets over $100 million
Value Series For the first $100 million .70%
For assets over $100 million .60%
Capital Opportunities Series For the first $200 million .90%
$200 million - $500 million .85%
For assets over $500 million
Growth & Income Series For the first $100 million .70%
For assets over $100 million .60%
S&P 500 Index Series All levels of assets .40%
Blue Chip Stock Series For the first $100 million .90%
For assets over $100 million .85%
Blue Chip Stock Series II For the first $200 million .95%
For assets over $200 million .90%
International Stock Series For the first $100 million .85%
For assets over $100 million .80%
Mid Cap Stock Series For the first $100 million .90%
For the next $150 million .85%
For assets over $250 million ..80%
Small Cap Value Series For the first $50 million .90%
For assets over $50 million .85%
Global Growth Series For the first $500 million .70%
For assets over $500 million .60%
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EXHIBIT A - CONTINUED
Global Equity Series For the first $200 million 1.00%
$200 million - $500 million .95%
For assets over $500 million .90%
Large Cap Growth Series For the first $100 million .90%
$100 million - $200 million .85%
For assets over $200 million .80%
Investors Growth Series For the first $200 million .90%
$200 million - $500 million .85%
For assets over $500 million .80%
Growth Stock Series For the first $100 million .70%
For assets over $100 million .60%
Aggressive Growth Series For the first $100 million .70%
For assets over $100 million .60%
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EXHIBIT B
Series Average Daily Net Assets
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American Leaders Series 1.25%
Capital Opportunities Series 1.25%
Blue Chip Stock Series II 1.30%
Global Equity Series 1.35%
Investors Growth Series 1.25%
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