EXHIBIT (d).5
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 22nd day of March 1996, by and between
Fortis Series Fund, Inc., a Minnesota corporation (the "Fund") and Fortis
Advisers, Inc., a Minnesota corporation ("Advisers").
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES.
The Fund hereby engages Advisers, and Advisers hereby agrees to act,
as investment adviser for, and to manage the affairs, business and the
investment of the assets of the Value Series, the S&P 500 Index Series, and the
Blue Chip Stock Series of the Fund. 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 Bylaws
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 the 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 Advisers. Within the
framework of the investment policies, restrictions, and limitations of the
Series, Advisers 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:
Advisers may, at is option and expense, with respect to each of the Series,
appoint a sub-adviser, which shall assume such responsibilities and
obligations of Advisers pursuant to this Investment Advisory and Management
Agreement as shall be delegated to the sub-adviser; 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 Advisers,
and, not withstanding any delegation of responsibilities and obligations to
the sub-adviser, Advisers 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 Advisers 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 the Series pursuant
hereto shall in no way limit or diminish Advisers' obligations and
responsibilities under this Investment Advisory and Management Agreement,
and Advisers shall be responsible for monitoring compliance by the
sub-adviser(s) with the investment policies, restrictions, and limitations
of 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.
Advisers 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 Advisers to the
investment policies of the Series.
Advisers 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. Advisers shall arrange, if required by
the Fund, for officers, employees or other affiliates of Advisers 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.
Advisers 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 reasonable 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. Advisers hereby further agrees that, upon the
termination of this Agreement, all reports, books and records pertaining to
Adviser's activities under this Agreement shall be promptly segregated and
returned to the Fund free from any claim or retention of rights by Advisers.
2. COMPENSATION FOR SERVICES.
In payment for all services, facilities, equipment and personnel, and
for other costs of Advisers hereunder, the Fund shall pay to advisers a monthly
fee for each Series, which fee shall be paid to Advisers 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
Article of Incorporation, Bylaws and currently effective Prospectus and
Statement of Additional Information of the Fund. The following table sets forth
the fees on a monthly and annual basis:
Equivalent
Monthly Annual Average Asset
Rate Rate Values of the Series
---- ---- --------------------
Value Series 1/12 of .70% .70% On the first $100,000,000
1/12 of .60% .60% On average assets over $100,000,000
S&P 500 Index Series 1/12 of .40% .40% All level of assets
Blue Chip Series 1/12 of .90% .90% On the first $100,000,000
1/12 of .85% .85% On average assets over $100,000,000
The fees shall be prorated for any fraction of a month at the
commencement or termination of this Agreement.
3. ALLOCATION OF EXPENSES.
(a) In addition to the fees described in Section 2 hereof, the Fund
shall pay all its expenses which are not assumed by Advisers, Fortis Investors,
Inc. ("Investors") or any other person. These Fund expenses include, by way of
example, but not by way of limitation, the fees and expenses of directors and
officers of the Fund who are not "affiliated persons" of Advisers, 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. Advisers shall bear the costs of acting as
the Fund's transfer agent, registrar, and dividend disbursing agent.
(b) Advisers (or Investors or Fortis Benefits Insurance Company or
First Fortis Life Insurance Company) shall bear all promotional 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, Advisers 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 following percentage of the
average daily net assets of the Series:
Value Series 1.25%
S&P 500 Index Series 1.25%
Blue Chip Stock Series 1.25%
5. FREEDOM TO DEAL WITH THIRD PARTIES.
Advisers 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 be effective as to each Series on May 1, 1996.
Wherever referred to in this Agreement, the vote or approval of the holders of a
majority of the outstanding voting securities of a Series or 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.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect only so long as such continuance is specifically approved at
least annually (a) by the Board of Directors of the Fund, or, with respect to a
particular Series, by the vote of the holders of a majority of the outstanding
voting securities of such Series, and (b) by a majority of the directors who are
not interested persons of Advisers or of the Fund cast in person at a meeting
called for the purpose of voting on such approval; provided that, if a majority
of the outstanding
voting securities of any of the Series approves this Agreement, this Agreement
shall continue in effect with respect to such approving Series whether or not
the shareholders of any other Series of the Fund approve this Agreement.
This Agreement may be terminated at any time without the payment of
any penalty by the vote of the Board of Directors of the Fund, or by Advisers,
upon sixty (60) days' written notice to the other party. This Agreement may be
terminated with respect to a particular Series at any time without the payment
of any penalty by the vote of the holders of a majority of the outstanding
voting securities of such Series, upon sixty (60) days' written notice to
Advisers. Any termination may be made effective with respect to both the
investment advisory and management services provided for in this Agreement or
with respect to either of such kinds of services. This Agreement shall
automatically terminate in the event of its assignment.
7. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until
approved by vote of the holders of majority of the outstanding voting securities
of the Series which 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.
IN WITNESS WHEREOF, the Fund and Advisers have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
FORTIS SERIES FUND, INC.
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------
Xxxx X. Xxxxxxxx
Its President
FORTIS ADVISERS, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Its President
