EXHIBIT 99.B5-4
EXHIBIT (d) (2) (kk)
FORM OF INVESTMENT COUNSEL AGREEMENT
FOR DIVIDEND GROWTH FUND AND SMALL CAP
FRONTIER FUNDS
FORM OF
IDEX SERIES FUND
INVESTMENT SUB-ADVISER AND COUNSEL AGREEMENT
This Agreement is entered into as of March 1, 1999 between IDEX
MANAGEMENT, INC., a Delaware corporation (referred to herein as "Idex
Management"), and X. Xxxx Price Associates, Inc., a Maryland corporation
(referred to herein as "X. Xxxx").
WHEREAS, Idex Management entered into a Management and Investment Advisory
Agreement (referred to herein as the "Advisory Agreement"), dated as of March 1,
1999 with IDEX Series Fund ("IDEX"), a Massachusetts business trust registered
as an open-end management investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), on behalf of the Dividend Growth Fund and
Small Cap Frontier Fund (each a "Fund," collectively, "Funds") of IDEX, pursuant
to which Idex Management has agreed, among other things, to act as investment
adviser to each Fund.
WHEREAS, the Advisory Agreement provides that Idex Management may engage
X. Xxxx to furnish investment information and advice to assist Idex Management
in carrying out its responsibilities under the Advisory Agreement as investment
adviser to each Fund.
WHEREAS, it is the purpose of this Agreement to express the mutual
agreements of the parties hereto with respect to the services to be provided by
X. Xxxx to Idex Management and the terms and conditions under which such
services will be rendered.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. SERVICES OF X. XXXX. X. Xxxx shall act as sub-adviser and investment
counsel to Idex Management with respect to each Fund. In this capacity, X. Xxxx
shall have the following responsibilities:
(a) to provide a continuous investment program for each Fund including
advice as to the acquisition, holding or disposition of any or all of
the securities or other assets which a Fund may own or contemplate
acquiring from time to time;
(b) to cause its officers to attend meetings of Idex Management or IDEX
and furnish oral or written reports, as Idex Management may reasonably
require, in order to keep Idex Management and its officers and the
Trustees of IDEX and appropriate officers of IDEX fully informed as to
the condition of the investment Portfolio of each Fund, the investment
recommendations of X. Xxxx, and the investment considerations which
have given rise to those recommendations;
(c) to furnish such statistical and analytical information and reports as
may reasonably be required by Idex Management from time to time; and
(d) to supervise the purchase and sale of securities and place orders and
negotiate the commissions for the execution of transactions in
securities or other assets with or through such brokers, dealers,
underwriters or issuers that X. Xxxx may select for each Fund.
2. OBLIGATIONS OF IDEX MANAGEMENT. Idex Management shall have the
following obligations under this Agreement:
(a) to keep X. Xxxx continuously and fully informed as to the composition
of each Fund's investment Fund and the nature of each Fund's assets
and liabilities from time to time;
(b) to furnish X. Xxxx with a certified copy of:
(1) any financial statement or report prepared for each Fund by
certified or independent public accountants, and with copies of any
financial statements or reports made by a Fund to its shareholders or
to any governmental body or securities exchange;
(2) The Declaration of Trust of IDEX, as filed with the Secretary of
State of the Commonwealth of Massachusetts, as in effect on the date
hereof and as amended from time to time ("Trust");
(3) The By-Laws of IDEX as in effect on the date hereof and as amended
from time to time ("By-Laws");
(4) Certified resolutions of IDEX's Board of Trustees authorizing the
appointment of Idex Management as investment adviser and X. Xxxx the
sub-adviser and approving the form of the Management and Investment
Advisory Agreement and this Agreement;
(5) IDEX's Registration Statement under the 1940 Act and the Securities
Act of 1933, as amended, on Form N-1A, as filed with the Securities and
Exchange Commission ("SEC") relating to each Fund and its shares and
all amendments thereto ("Registration Statement");
(6) The Notification of Registration of IDEX under the 1940 Act on
Form N-8A as filed with the SEC and any amendments thereto;
(7) The Funds' Prospectuses (as defined above); and
(c) to furnish X. Xxxx with any further materials or information which X.
Xxxx may reasonably request to enable it to perform its functions
under this Agreement;
(d) to compensate X. Xxxx for its services provided, and the expenses
assumed under this Agreement, by (i) the payment of a monthly
sub-advisory fee as set forth on schedule A attached to this
Agreement, as it may be amended from time to time in accordance with
Section 13 below. The sub-advisory fee shall be accrued daily and
payable monthly to X. Xxxx on or before the tenth (10th) day of the
next succeeding calendar month. In the event that this Agreement shall
be effective for only part of a period to which any such fee received
by Idex Management is attributable, then an appropriate pro-ration of
the fee that would have been payable hereunder if this Agreement had
remained in effect until the end of such period shall be made, based
on the number of calendar days in such period and the number of
calendar days during the period in which this Agreement was in effect.
3. TREATMENT OF INVESTMENT ADVICE. Idex Management may direct X. Xxxx to
furnish its investment information, advice and recommendations directly to
officers of IDEX.
4. PURCHASES BY AFFILIATES. Neither X. Xxxx nor any of its officers or
Directors shall take a long or short position in the securities issued by the
Funds on terms not otherwise available to the public. This prohibition, however,
shall not prevent the purchase from a Fund of shares issued by the Fund on
behalf of the Funds by the officers and Directors of X. Xxxx (or deferred
benefit plans established for their benefit) at the current price available to
the public, or at such price with reductions in sales charge as may be permitted
in the Fund's current prospectus in accordance with Section 22(d) of the
Investment Company Act of 1940, as amended (the "1940 Act").
5. SERVICE OF OTHER CLIENTS. Nothing contained in this Agreement shall
limit or restrict (i) the freedom of X. Xxxx, or any affiliated person thereof,
to render investment management and corporate administrative services to other
investment companies, to act as investment manager or investment counselor to
other persons, firms, or corporations, or to engage in any other business
activities, or (ii) the right of any director, officer, or employee of X. Xxxx,
who may also be a trustee, officer, or employee of IDEX, to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any other business, whether of a similar nature or a dissimilar
nature.
6. X. XXXX'X USE OF THE SERVICES OF OTHERS. X. Xxxx may (at its cost
except as contemplated by Paragraph 5 of this Agreement) employ, retain, or
otherwise avail itself of the services or facilities of other persons or
organizations for the purpose of obtaining such statistical and other factual
information, such advice regarding economic factors and trends, such advice as
to occasional transactions in specific securities, or such other information,
advice, or assistance as X. Xxxx may xxxx necessary, appropriate, or convenient
for the discharge of its obligations hereunder or otherwise helpful to the
Funds, as appropriate, or in the discharge of X. Xxxx'x overall responsibilities
with respect to the other accounts that it serves as investment manager or
counselor, provided that X. Xxxx shall at all times retain responsibility for
making investment recommendations with respect to each Fund.
7. LIMITATION OF LIABILITY OF X. XXXX. X. Xxxx may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be provided by the 1940 Act, neither X. Xxxx nor its officers, directors,
employees or agents shall be subject to any liability to the Funds or any
shareholders of the Funds for any error of judgment, mistake of law or any loss
arising out of any investment or other act or omission in the course of,
connected with or arising out of any service to be rendered hereunder, except by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of reckless disregard of its obligations and duties
under this Agreement.
8. COMPLIANCE WITH LAWS. X. Xxxx represents that it is, and will continue
to be throughout the term of this Agreement,
an investment adviser registered under all applicable federal and state laws. In
all matters relating to the performance of this Agreement, X. Xxxx will act in
conformity with the IDEX Declaration of Trust, Bylaws, and current prospectus
and with the reasonable instructions and direction of Idex Management and IDEX's
Trustees regarding management of the Funds' investments and will conform to and
comply with the 1940 Act and all other applicable federal or state laws and
regulations.
9. BROKERAGE.
A. T. Xxxx agrees that, in placing orders with broker-dealers for
the purchase or sale of each Fund's securities, it shall attempt to obtain
quality execution at favorable security prices (best price and execution);
provided that, on behalf of the Fund, the X. Xxxx may, in its discretion, agree
to pay a broker-dealer that furnishes brokerage or research services as such
services are defined under Section 28(e) of the Securities Exchange Act of 1934,
as amended ("1934 Act"), a higher commission than that which might have been
charged by another broker-dealer for effecting the same transactions, if X. Xxxx
determines in good faith that such commission is reasonable in relation to the
brokerage and research services provided by the broker-dealer, viewed in terms
of either that particular transaction or the overall responsibilities of X. Xxxx
with respect to the accounts as to which it exercises investment discretion (as
such term is defined under Section 3(a)(35) of the 1934 Act). In no instance
will Fund securities be purchased from or sold to X. Xxxx, or any affiliated
person thereof, except in accordance with the federal securities laws and the
rules and regulations thereunder.
B. On occasions when X. Xxxx deems the purchase or sale of a
security to be in the best interest of the Funds as well as other clients of X.
Xxxx, X. Xxxx, to the extent permitted by applicable laws and regulations, may,
but shall be under no obligation to, aggregate the securities to be purchased or
sold to attempt to obtain a more favorable price or lower brokerage commissions
and efficient execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction, will be
made by X. Xxxx in the manner X. Xxxx considers to be the most equitable and
consistent with its fiduciary obligations to the Funds and to its other clients,
subject to compliance with applicable laws and procedures adopted by the
Trustees of IDEX.
10. TERMINATION. This Agreement shall terminate automatically with respect
to a Fund upon the termination of the Advisory Agreement with respect to such
Fund. This Agreement may be terminated at any time with respect to a Fund,
without penalty, by Idex Management or by IDEX by giving 60 days' written notice
of such termination to X. Xxxx at its principal place of business, provided
that, if terminated by IDEX, such termination is approved by the Board of
Trustees of IDEX or by vote of a majority of the outstanding voting securities
(as that phrase is defined in Section 2(a)(42) of the 0000 Xxx) of the affected
Fund. This Agreement may be terminated at any time by X. Xxxx by giving 60 days'
written notice of such termination to IDEX and Idex Management at their
respective principal places of business.
11. ASSIGNMENT. This Agreement shall terminate automatically, with respect
to a Fund, in the event of any assignment (as that term is defined in Section
2(a)(4) of the 0000 Xxx) of this Agreement with respect to a Fund.
12. TERM. This Agreement shall continue in effect, with respect to a Fund,
unless sooner terminated in accordance with its terms, for an initial term
ending April 30, 2000, and shall continue in effect from year to year thereafter
so long as such continuance is specifically approved at least annually by the
vote of a majority of the Trustees of IDEX who are not parties hereto or
interested persons (as that term is defined in Section 2(a)(19) of the 0000 Xxx)
of any such party, cast in person at a meeting called for the purpose of voting
on the approval of the terms of such renewal, and by either the Trustees of IDEX
or the affirmative vote of a majority of the outstanding voting securities of
the Funds (as that phrase is defined in Section 2(a)(42) of the 1940 Act).
13. AMENDMENTS. This Agreement may be amended with respect to a Fund only
with the approval by the affirmative vote of a majority of the outstanding
voting securities (as that phrase is defined in Section 2(a)(42) of the 0000
Xxx) of such Fund and the approval by the vote of a majority of the Trustees of
IDEX who are not parties hereto or interested persons (as that term is defined
in Section 2(a)(19) of the 0000 Xxx) of any such party, cast in person at a
meeting called for the purpose of voting on the approval of such amendment,
unless otherwise permitted in accordance with the 1940 Act.
14. PRIOR AGREEMENTS. This agreement supersedes all prior agreements
between the parties relating to the subject matter hereof, and all such prior
agreements are deemed terminated upon the effectiveness of this agreement.
15. MISCELLANEOUS.
A. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Maryland without giving effect to the conflicts of laws
principles thereof, and the 1940 Act. To the extent that the applicable laws of
the State of Maryland conflict with the applicable provisions of the 1940 Act,
the latter shall control.
B. CAPTIONS. The captions contained in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
C. INTERPRETATION. Nothing herein contained shall be deemed to require
IDEX to take any action contrary to its Articles or By-Laws, or any applicable
statutory or regulatory requirement to which it is subject or by which it is
bound, or to relieve or deprive the Board of its responsibility for and control
of the conduct of the affairs of IDEX.
D. DEFINITIONS. Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations, or orders of the SEC validly issued pursuant to the 1940
Act. As used in this Agreement, the terms "majority of the outstanding voting
securities," "affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell," and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the SEC by any rule, regulation, or order. Where the effect
of a requirement of the federal securities laws reflected in any provision of
this Agreement is made less restrictive by a rule, regulation, or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation, or order, unless Idex
Management, Inc. and X. Xxxx agree to the contrary.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ATTEST: X. XXXX ASSOCIATES, INC.
_____________________________ By:______________________________________
Secretary Title:
ATTEST: IDEX MANAGEMENT, INC.
_____________________________ By:______________________________________
G. Xxxx Xxxxxx
President and Chief Executive Officer
Investment Counsel Agreement
SCHEDULE A
SUB-ADVISORY FEE
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FUND ANNUAL PERCENTAGE OF TERMINATION DATE
MONTHLY AVERAGE DAILY
NET ASSETS
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DIVIDEND GROWTH 0.50% of the first $100 April 30, 2000
million of the Fund's
average daily net assets;
0.40% of assets in excess
of $100 million (from
first dollar)
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SMALL CAP FRONTIER 0.35% of the Fund's April 30, 2000
average daily net assets
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