5
INVESTMENT ADVISORY AGREEMENT
STEINROE VARIABLE INVESTMENT TRUST
LIBERTY FEDERAL SECURITIES FUND, VARIABLE SERIES
XXXXX XXX BALANCED FUND, VARIABLE SERIES
XXXXX XXX GROWTH STOCK FUND, VARIABLE SERIES
XXXXX XXX MONEY MARKET FUND, VARIABLE SERIES
XXXXX XXX SMALL COMPANY GROWTH FUND, VARIABLE SERIES
FUND ADVISORY AGREEMENT dated November 1, 2001 between STEINROE VARIABLE
INVESTMENT TRUST, a business trust organized under the laws of the Commonwealth
of Massachusetts (the "Trust"), on behalf of the Liberty Federal Securities
Fund, Variable Series, Xxxxx Xxx Balanced Fund, Variable Series, Xxxxx Xxx
Growth Stock Fund, Variable Series, Xxxxx Xxx Money Market Fund, Variable
Series, Xxxxx Xxx Small Company Growth Fund, Variable Series, (the "Fund(s)"),
and XXXXX XXX & XXXXXXX INCORPORATED, a corporation organized under the laws of
the State of Delaware (the "Investment Adviser").
WHEREAS, the Trust has been organized as an open-end management investment
company registered as such under the Investment Company Act of 1940 ("Investment
Company Act") and is authorized to issue shares of beneficial interest in one or
more separate series each representing interests in a separate portfolio of
securities and other assets, including the Fund, which shares are to be issued
and sold to and held by various separate accounts of insurance companies
("Participating Insurance Company");
WHEREAS, the Trust desires the Investment Adviser to render investment
management services to the Fund in the manner and on the terms and conditions
hereinafter set forth;
WHEREAS, the Trust is entering into a Fund Administration Agreement (the
"Administration Agreement") of even date herewith with Xxxxx Xxx & Farnham
Incorporated (the "Administrator") providing for certain administrative services
to the Trust other than investment management services;
WHEREAS, the Investment Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940 and as a commodities trading advisor under the
Commodity Exchange Act, and desires to provide services to the Fund in
consideration of and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the Trust, on behalf of the Fund, and the Investment Adviser
agree as follows:
1. Employment of the Investment Adviser. The Trust hereby engages the Investment
Adviser to manage the investment and reinvestment of the Trust's assets
represented by Fund shares ("Fund assets" or "assets of the Fund") and to advise
with respect thereto for the period, in the manner, and on the terms hereinafter
set forth. The Investment Adviser hereby accepts such engagement and agrees
during such period to render the services and to assume the obligations herein
set forth. The Investment Adviser shall for all purposes herein be deemed to be
an independent contractor and shall, except as expressly provided or authorized
(whether herein or otherwise), have no authority to act for or represent the
Trust or the Fund in any way or otherwise be deemed an agent of the Trust or the
Fund.
2. Management Services. (a) The Investment Adviser will manage and supervise the
investment and reinvestment of the assets of the Fund and advise with respect
thereto, subject to the direction and overall control of the Board of Trustees
of the Trust and giving due consideration to the investment objective of the
Fund and the investment policies and investment restrictions of and the other
statements concerning the Fund set forth from time to time in the Trust's then
current prospectus and statement of additional information and other governing
documents, and to the provisions of the Internal Revenue Code and regulations
thereunder applicable to the Fund as a regulated investment company and as the
designated investment vehicle for variable annuity, endowment, or life insurance
contracts. In furtherance of its duties set forth above, the Investment Adviser
is authorized on behalf of the Fund (i) to buy, sell, exchange, convert, lend
and otherwise trade in the Fund's portfolio securities and assets, and (ii) to
place orders for the execution of transactions in the Fund's portfolio
securities with or through such brokers, dealers, underwriters or issuers as the
Investment Adviser may select, and to negotiate the terms of such transactions,
including brokerage commissions on brokerage transactions, all in accordance
with the Trust's policies concerning allocation of its portfolio brokerage, as
permitted by law including but not limited to
Section 28(e) of the Securities Exchange Act of 1934, and with the statements
concerning the allocation of orders for the purchase and sale of securities
among the Fund and other accounts of the Investment Adviser set forth from time
to time in the Trust's then current prospectus and statement of additional
information, and in doing so the Investment Adviser shall not be required to
make any reduction of its investment advisory fee hereunder.
(b) The Investment Adviser shall provide to the Trust and the Administrator such
information, records and reports concerning the Investment Adviser and its
investment management of the Fund's portfolio securities pursuant hereto as the
Trust and the Administrator may reasonably request.
(c) The Investment Adviser will preserve for the Trust all records it maintains
for the Trust as prescribed by the rules and regulations of the Securities and
Exchange Commission in the manner and for the time periods prescribed by such
rules. The Investment Adviser agrees that all such records shall be the property
and under the control of the Trust and shall be made available, within seven
business days of request therefor, to the Trust's Board of Trustees or auditors
during regular business hours at the Investment Adviser's offices. In the event
of termination of this Agreement for any reason, all such records shall be
returned, without charge, promptly to the Trust, free from any claim or
retention of rights by the Investment Adviser, except that the Investment
Adviser may retain copies of such records.
(d) The Investment Adviser will report to the Trustees of the Trust any
potential or existing material irreconcilable conflict among the interests of
shareholders (the separate accounts of insurance companies investing in the
Trust) of which it is aware. The Investment Adviser will assist the Trustees in
carrying out their responsibilities under an Order from the SEC, dated July 1,
1988, granting insurance companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of Sections 9(a),
13(a), l5(a), and l5(b) of the Investment Company Act and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Trust
to be sold to and held by variable annuity and variable life insurance separate
accounts of insurance companies affiliated and unaffiliated with each other. The
Investment Adviser shall provide the Trustees with all information reasonably
necessary for the Trustees to consider any issues raised.
(e) The Investment Adviser will not disclose or use any records or information
obtained pursuant to this Agreement in any manner whatsoever except as expressly
authorized herein, and will keep confidential any information obtained pursuant
to this Agreement, and disclose such information only if the Trust has
authorized such disclosure, or if such disclosure is expressly required by
applicable federal or state regulatory authorities.
3. Expenses Borne by Investment Adviser. To the extent necessary to perform its
obligations under this Agreement, the Investment Adviser, at its own expense,
shall furnish executive and other personnel and office space, equipment and
facilities, and shall pay any other expenses incurred by it, in connection with
the performance of its duties hereunder. The Investment Adviser shall pay all
salaries, fees and expenses of Trustees or officers of the Trust who are
employees of the Investment Adviser. The Investment Adviser shall not be
obligated to bear any other expenses incidental to the operations and business
of the Trust. The Investment Adviser shall not be required to pay or provide any
credit for services provided by the Trust's custodian, transfer agent or other
agents, including the Administrator.
4. Expenses Borne by the Trust and Fund. The Trust or the Fund, as appropriate,
shall pay all expenses incidental to the operations and business of the Trust
and the Fund not specifically assumed or agreed to be paid by the Investment
Adviser or the Administrator pursuant to this Agreement or the Administration
Agreement, or by any Participating Insurance Company, including, without
limitation:
(a) the fees of the Investment Adviser as provided in Section 5 below, and of
the Administrator;
(b) fees payable pursuant to any plan adopted by the Trust pursuant to Rule
12b-1 under the Investment Company Act;
(c) all fees and charges of depositories, custodians, and other agencies for
the safekeeping and servicing of the cash, securities,
and other property of the Trust;
(d) all fees and charges of transfer, shareholder servicing, shareholder record
keeping and dividend disbursing agents and all other expenses relating to the
issuance and redemption of shares of the Trust (including the shares of the
Fund) and the maintenance and servicing of shareholder accounts;
(e) all charges for equipment or services used for obtaining price quotations or
for communication among the Investment Adviser, any sub-adviser appointed by the
Trust, the Administrator, the Trust or any Participating Insurance Company, the
custodian or any sub-custodian, transfer agent or any other agent selected by
the Trust or the Fund;
(f) all expenses incurred in periodic calculations of the net asset value of
the shares of the Trust (including the shares of the Fund);
(g) all charges for bookkeeping, accounting and tax information services
provided to the Trust by the custodian or any subcustodian;
(h) all charges for services of the Trust's independent auditors;
(i) all charges and expenses of legal counsel for the Trust and for the Trustees
of the Trust in connection with legal matters relating to the Trust or the Fund;
(j) all compensation of the Trustees of the Trust other than those Trustees who
are interested persons of the Trust including, without limitation, Trustees who
are interested persons of the Investment Adviser, the Administrator or any
Participating Insurance Company, or the principal underwriter of the Trust, and
all expenses (including expenses incident to Trustees' meetings) incurred in
connection with their services to the Trust;
(k) all expenses of preparation, printing and mailing of notices and proxy
solicitation material and of reports and other communications to the
shareholders and beneficial owners of the Trust, and all other expenses
(including proxy solicitation expenses) incidental to meetings of the
shareholders or beneficial owners of the Trust;
(1) all expenses of preparation (including type setting) and printing of annual
or more frequent revisions of the Trust's prospectuses and statements of
additional information and supplements thereto, of supplying each then-existing
shareholder or beneficial owner of shares of the Fund or purchaser thereof with
a copy of such revised prospectus or SAI supplements, and of supplying copies of
such statements of additional information to persons requesting the same;
(m) all expenses, if any, related to preparing, printing and engraving and
transmitting certificates representing shares of the Trust;
(n) all expenses of bond and insurance coverage required by law or deemed
advisable by the Board of Trustees;
(o) all brokers' commissions and other normal charges incident to the purchase
and sale of portfolio securities;
(p) costs, including interest expense, of borrowing money;
(q) all taxes and corporate fees payable to federal, state or other governmental
agencies, domestic or foreign, and all costs and expenses incident to the
maintenance of the Trust's legal existence;
(r) all expenses of registering and maintaining the registration of the Trust
under the Investment Company Act and the shares of the Trust under the
Securities Act of 1933, and all expenses, if any, of qualifying and maintaining
the qualification of the shares of the Trust for sale under securities laws of
various states or other jurisdictions and of registration and qualification of
the Trust under all other laws applicable to the Trust or its business
activities;
(s) all fees, dues, and other expenses incurred by the Trust in connection with
its membership in any trade association or other investment organization; and
(t) all miscellaneous business expenses.
The Trust or the Fund, as appropriate, shall also bear all extraordinary
non-recurring expenses as may arise, including but not limited to expenses
incurred in connection with litigation, proceedings and claims and expenses
incurred in connection with any obligation of the Trust or the Fund to indemnify
any person.
Expenses which are directly charged to or attributable to the Fund or any other
Fund of the Trust shall be borne by that Fund, and expenses which are not solely
attributable to any one Fund of the Trust shall be allocated among the Funds of
the Trust on a basis that the Trustees of the Trust deem fair and equitable.
5. Investment Advisory Fee. For the services to be rendered by the Investment
Adviser hereunder, the Trust, for the benefit of the Fund, shall pay the
Investment Adviser out of Fund assets an annual fee in the amount shown in
Schedule A attached hereto and made a part hereof.
6. Non-Exclusivity. The services of the Investment Adviser to the Fund hereunder
are not to be deemed exclusive and the Investment Adviser shall be free to
render similar services to others.
7. Standard of Care. Neither the Investment Adviser, nor any of its directors,
officers or stockholders (or partners of stockholders), agents or employees
shall be liable or responsible to the Trust or the Fund or their shareholders
(or the beneficial owners of their shares) for any error of judgment, mistake of
law or any loss arising out of any investment, or for any other act or omission
in the performance by the Investment Adviser of its duties under this Agreement,
except for liability resulting from willful misfeasance, bad faith or gross
negligence on the Investment Adviser's part or from reckless disregard by the
Investment Adviser of its obligations and duties under this Agreement.
8. Amendment. This Agreement may be amended at any time by a written agreement
executed by both parties hereto, provided that with respect to amendments of
substance such execution on behalf of the Fund shall have been approved by the
vote of a majority of the outstanding voting securities of the Fund and by the
vote of a majority of those Trustees who are not interested persons of the
Trust, the Investment Adviser, the Administrator or a Participating Insurance
Company cast in person at a meeting called for the purpose of voting on such
approval.
9. Term and Termination. This Agreement shall begin on the date first written
above, and may be terminated at any time, without payment of any penalty, by the
Board of Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Fund, upon sixty (60) days' written notice to the
Investment Adviser. This Agreement may be terminated by the Investment Adviser
at any time upon sixty 60 days' written notice to the Trust. This Agreement
shall terminate automatically in the event of its assignment. Unless terminated
as hereinabove provided, this Agreement shall continue in effect until July 31,
2003, and thereafter from year to year only so long as such continuance is
specifically approved at least annually in conformity with the requirements of
the Investment Company Act and the rules and regulations thereunder (a) by the
vote of a majority of those Trustees who are not parties to this Agreement or
interested persons of the Trust, the Investment Adviser, the Administrator or a
Participating Insurance Company, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by either the Board of Trustees of
the Trust or by the vote of a majority of the outstanding voting securities of
the Fund.
10. Non-Liability of Trustees and Shareholders. As provided in the Declaration
of Trust of the Trust, a copy of which is on file with the Secretary of the
Commonwealth of Massachusetts, any obligation of the Trust or the Fund hereunder
shall be binding only upon the assets and property of the Trust or the Fund, as
the case may be, and shall not be binding upon any Trustee, officer, employee,
agent or shareholder (or beneficial owner of shares) of the Trust, including,
without limitation, the officer of the Trust executing this Agreement on its
behalf. Neither the authorization of any action by the Trustees or shareholders
(or beneficial owners of shares) of the Trust nor the execution of this
Agreement on behalf of the Trust shall impose any liability upon any Trustee or
any shareholder (or beneficial owner of shares).
11. Use of Investment Adviser's Name. The Trust may use the name "SteinRoe
Variable Investment Trust" or any other name derived from the name "Xxxxx Xxx &
Xxxxxxx" only for so long as this Agreement or any extension, renewal, or
amendment hereof remains in effect, including any similar agreement with any
organization which shall have succeeded to the business of the Investment
Adviser. At such time as this Agreement or any extension, renewal or amendment
hereof, or such other similar agreement shall no longer be in effect, the Trust
will cease to use any name derived from the name "Xxxxx Xxx & Farnham," any name
similar thereto, or any other name indicating that it is advised by or otherwise
connected with Investment Adviser, or with any organization which shall have
succeeded to Investment Adviser's business as investment adviser.
12. Definitions, References and Headings. As used in this Agreement, the terms
"vote of a majority of the outstanding voting securities", "interested person",
"principal underwriter" and "assignment" shall have the respective meanings
provided in the Investment Company Act and the rules thereunder, subject,
however, to such exemptions or no-action responses as may be granted by the
Securities and Exchange Commission under said Act. Headings are placed herein
for convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this Agreement.
13. Interpretation; Governing Law. This Agreement shall be interpreted under,
and the performance of the Investment Adviser under this Agreement shall be
consistent with, the provisions of the Agreement and Declaration of Trust and
By-Laws of the Trust, as in effect from time to time, the terms of the
Investment Company Act, other applicable laws and regulations thereunder
(including any amendments hereafter adopted), the Internal Revenue Code of 1986,
and regulations thereunder, and the Trust's prospectus and statement of
additional information. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of Illinois (except Section 10 hereof
which shall be construed and interpreted in accordance with the laws of
Massachusetts), without giving effect to the conflict of laws provisions
thereof, provided, however, that if such law or any of the provisions of this
Agreement conflict with the applicable provisions of the Investment Company Act,
the latter shall control.
14. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, a statute, a rule, or
otherwise, the remainder of this Agreement shall not be affected thereby.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have duly executed this agreement on the
date first above written.
LIBERTY FEDERAL SECURITIES FUND, VARIABLE SERIES XXXXX XXX BALANCED FUND,
VARIABLE SERIES XXXXX XXX GROWTH STOCK FUND, VARIABLE SERIES XXXXX XXX MONEY
MARKET FUND, VARIABLE SERIES XXXXX XXX SMALL COMPANY GROWTH FUND, VARIABLE
SERIES
STEINROE VARIABLE INVESTMENT TRUST
By: /s/Xxxxxxx X. Xxxxxx
XXXXX XXX & XXXXXXX INCORPORATED
By: /s/Xxxxxxx X. Xxxxxx
Schedule A
Fund Advisory Agreement
Liberty Federal Securities Fund, Variable Series
Xxxxx Xxx Balanced Fund, Variable Series
Xxxxx Xxx Growth Stock Fund, Variable Series
Xxxxx Xxx Money Market Fund, Variable Series
Xxxxx Xxx Small Company Growth Fund, Variable Series
The annual investment advisory fee referred to in paragraph 5 of this Agreement
shall be the following percentage (%) of the net asset value of each Fund:
Liberty Federal Securities Fund, Variable Series 0.40%
Xxxxx Xxx Balanced Fund, Variable Series 0.45%
Xxxxx Xxx Growth Stock Fund, Variable Series 0.50% 0.45% in excess
of $1 billion
Xxxxx Xxx Money Market Fund, Variable Series 0.35%
Xxxxx Xxx Small Company Growth Fund, Variable Series 0.50%
The fee will be computed as hereinafter provided. The fee shall be accrued for
each calendar day and the sum of the daily fee accruals shall be paid monthly on
or before the tenth day of the following calendar month. The daily accruals of
the fee will be computed by multiplying the annual rate referred to above by the
fraction the numerator of which is one and the denominator of which is the
number of calendar days in the year, and multiplying such product by the net
asset value of the Fund as determined in accordance with the Fund's prospectus
as of the previous business day on which the Fund was open for business. The
foregoing fee shall be prorated for any month during which this Agreement is in
effect for only a portion of the month.
