Exhibit 5(k)
FORM OF INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this day of , 2000 between Xxxxxxx Xxxxx
Variable Series Funds, Inc., a Maryland corporation (the "Company"), and Xxxxxxx
Xxxxx Asset Management L.P., a Delaware limited partnership (the "Adviser");
W I T N E S S E T H:
WHEREAS, the Company is engaged in business as a diversified
open-end management investment company and is registered as such under the
Investment Company Act of 1940 (the "Investment Company Act"); and
WHEREAS, the Company is currently comprised of twenty separate
Funds, each of which pursues its investment objective through separate
investment policies; and
WHEREAS, the Adviser is engaged principally in rendering advisory
services and is registered as an investment adviser under the Investment
Advisers Act of 1940; and
WHEREAS, the Adviser is currently serving as the Investment Adviser
to the Company's Reserve Assets Fund pursuant to an Investment Advisory
Agreement dated November 10, 1981 as amended on April 23, 1985; to the Company's
Prime Bond Fund, High Current Income Fund, Quality Equity Fund and Equity Growth
Fund pursuant to an Investment Advisory Agreement dated April 21, 1982 as
amended on April 23, 1985; to the Company's Natural Resources Focus Fund and
American Balanced Fund pursuant to an Investment Advisory Agreement dated April,
1988; and to the Company's Domestic Money Market Fund and Global Strategy Focus
Fund pursuant to an Investment Advisory Agreement dated October 16, 1991; to the
Company's Basic Value Focus Fund, Global Bond Focus Fund (formerly known as the
World Income Focus Fund), Utilities and Telecommunications Fund (formerly known
as the Global Utility Focus Fund) and International Equity Focus Fund pursuant
to an Investment Advisory Agreement dated June, 1993; to the Company's
Developing Capital Markets Focus Fund and Government Bond Fund (formerly known
as the Intermediate Government Bond Fund) pursuant to an Investment Advisory
Agreement dated April, 1994; to the Company's Index 500 Fund pursuant to an
Investment Advisory Agreement dated December, 1996; to the Company's Global
Growth Focus Fund and Balanced Capital Focus Fund (formerly known as the Capital
Focus Fund) pursuant to an Investment Advisory Agreement dated April, 1998; and
to the Company's Fundamental Growth Focus Fund pursuant to an Investment
Advisory Agreement dated March 20, 2000.
WHEREAS, the Company desires to retain the Adviser to render
investment supervisory and corporate administrative services to the Company's
Focus Twenty Select Fund (hereinafter the "Fund"), in the manner and on the
terms hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Company and the Adviser hereby agree as follows:
ARTICLE 1
Duties of the Adviser
The Company hereby employs the Adviser to act as the investment
adviser to and manager of the Fund and to manage the investment and reinvestment
of the assets of the Fund, and to
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administer its affairs, subject to the supervision of the Board of Directors of
the Company, for the period and on the terms and conditions set forth in this
Agreement. The Adviser hereby accepts such employment and agrees during such
period, at its own expense, to render the services and to assume the obligations
herein set forth for the compensation provided for herein. The Adviser shall for
all purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Company in any way or otherwise be deemed an agent of the Company.
(a) Investment Advisory Services. In acting as investment adviser to
the Fund, the Adviser shall regularly provide the Fund with such investment
research, advice and supervision as the latter may from time to time consider
necessary for the proper supervision of the Fund and shall furnish continuously
an investment program and shall determine from time to time what securities
shall be purchased, sold or exchanged and what portion of the assets of the
Fund's portfolio shall be held in the various securities in which it may invest,
subject always to the restrictions of the Company's Articles of Incorporation
and Bylaws, as amended from time to time, the provisions of the Investment
Company Act and the statements relating to the Fund's investment objectives,
investment policies and investment restrictions set forth in the currently
effective prospectus of the Company relating to the Fund under the Securities
Act of 1933 (the "Prospectus"). Should the Board of Directors of the Company at
any time, however, make any definitive determination as to the investment policy
of the Fund and notify the Adviser thereof, the Adviser shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Adviser shall
take, on behalf of the Company, all actions which it deems necessary to
implement the investment policies determined as provided above, and in
particular to place all orders for the purchase or sale of portfolio securities
for the Fund with brokers or dealers selected by it. In connection with the
selection of such brokers or dealers and the placing of such orders, the Adviser
is directed at all times to seek to obtain for the Fund the most favorable net
results for the Fund as determined by the Board of Directors and set forth in
the Prospectus. Subject to this requirement and the provisions of the Investment
Company Act, the Securities Exchange Act of 1934, and other applicable
provisions of law, nothing shall prohibit the Adviser from selecting brokers or
dealers with which it or the Company is affiliated.
(b) Administrative Services. In addition to the performance of
investment advisory services, the Adviser shall perform, or supervise the
performance of, administrative services in connection with the management of the
Company insofar as such services relate to and are required by the Fund. In this
connection, the Adviser agrees to (i) assist in supervising all aspects of the
Company's operations relating to the Fund, including the coordination of all
matters relating to the functions of the custodian, transfer agent, other
shareholder service agents, accountants, attorneys and other parties performing
services or operational functions for the Company relating to the Fund, (ii)
provide the Company, at the Adviser's expense, with services of persons
competent to perform such administrative and clerical functions as are necessary
in order to provide effective administration of the Company to the extent
required by the Fund, including duties in connection with shareholder relations,
reports, redemption requests and account adjustments and the maintenance of
certain books and records of the Company insofar as they relate to the Fund, and
(iii) provide the Company, at the Adviser's expense, with adequate office space
and related services necessary for its operations as contemplated in the
Agreement.
ARTICLE 2
Allocation of Charges and Expenses
(a) The Adviser. The Adviser assumes and shall pay for maintaining
the staff and personnel, and shall at its own expense provide the equipment,
office space and facilities, necessary to perform its obligations under this
Agreement, and shall pay all compensation of officers of the Company
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and the fees of all directors of the Company who are affiliated persons of
Xxxxxxx Xxxxx & Co., Inc. or its subsidiaries, and shall pay the organization
costs of the Fund.
(b) The Company. The Company assumes and shall pay all expenses of
the Fund, including, without limitation: insurance, taxes, expenses for legal
and auditing services, costs of printing proxies, stock certificates,
shareholder reports and prospectuses (except to the extent paid by the
Distributor), charges of the Custodian and Transfer Agent, expenses of
redemption of shares, Securities and Exchange Commission fees, expenses of
registering the shares under federal and state securities laws, fees and
expenses of directors who are not affiliated persons of Xxxxxxx Xxxxx & Co.,
Inc. or its subsidiaries, accounting and pricing costs (including the daily
calculation of net asset value), interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and other expenses properly payable by
the Company.
ARTICLE 3
Compensation of the Adviser
(a) Investment Advisory Fee. For the services rendered, the
facilities furnished and expenses assumed by the Adviser, the Company shall pay
to the Adviser at the end of each calendar month a fee at the annual rate of
0.85% of the average daily net assets of the Fund, as determined and computed in
accordance with the description of the method of determination of net asset
value contained in the Prospectus.
(b) Expense Limitations. In the event the operating expenses of the
Fund, including the investment advisory fee applicable to the Fund payable to
the Adviser pursuant to subsection (a) hereof, for any fiscal year ending on a
date on which this Agreement is in effect, exceeds the expense limitations under
state securities laws or published regulations thereunder, as such limitations
may be raised or lowered from time to time, the Adviser shall reduce its
investment advisory fee by the extent of such excess and, if required under any
such laws or regulations, will reimburse the Fund in the amount of such excess;
provided, however, to the extent permitted under law, there shall be excluded
from such expenses the amount of any interest, taxes, brokerage commissions and
extraordinary expenses (including but not limited to legal claims and
liabilities and litigation costs and any indemnification related thereto) paid
or payable by the Company and allocated to the Fund. Whenever the expenses of
the Fund exceeds a pro rata portion of the applicable annual expense
limitations, the estimated amounts of reimbursement under such limitations shall
be applicable as an offset against the monthly payment of the advisory fee due
to the Adviser.
ARTICLE 4
Limitation of Liability of the Adviser
The Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Company in connection with any investment
policy or the purchase, sale or redemption of any securities on the
recommendation of the Adviser. Nothing herein contained shall be construed to
protect the Adviser against any liability to the Company or its security holders
to which the Adviser shall otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of its duties on
behalf of the Company, reckless disregard of the Adviser's obligations and
duties under this Agreement or the violation of any applicable law.
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ARTICLE 5
Activities of the Adviser
The services of the Adviser under this Agreement are not to be
deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services hereunder are not impaired thereby. It is
understood that directors, officers, employees and shareholders of the Company
are or may become interested in the Adviser, as directors, officers, employees
or shareholders or otherwise and that directors, officers, employees or
shareholders of the Adviser are or may become similarly interested in the
Company, and that the Adviser is or may become interested in the Company as
shareholder or otherwise.
ARTICLE 6
Duration and Termination of this Agreement
This Agreement shall become effective as of the effective date of
the Company's Post Effective Amendment No. 35 to its Registration Statement, and
shall remain in force until the second anniversary of such effectiveness and
thereafter, but only so long as such continuance after the second anniversary is
specifically approved at least annually by (i) the Board of Directors of the
Company, or by the vote of a majority of the outstanding shares of the Fund, and
(ii) a majority of those directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purposes of voting on such approval.
This Agreement may be terminated at any time, as to the Fund,
without the payment of any penalty, by the Board of Directors of the Company or
by vote of a majority of the outstanding shares of the Fund, or by the Adviser,
on sixty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment.
ARTICLE 7
Definitions
The term "assignment", "affiliated person" and "interested person",
when used in this Agreement, shall have the respective meanings specified in the
Investment Company Act. As used with respect to the Company or the Fund, the
term "majority of the outstanding shares" means the lesser of (i) 67% of the
shares represented at a meeting at which more than 50% of the outstanding shares
are represented or (ii) more than 50% of the outstanding shares.
ARTICLE 8
Amendments of this Agreement
This Agreement may be amended by the parties only if such amendment
is specifically approved by (i) the Board of Directors of the Company, or by the
vote of the majority of outstanding shares of the Fund, and (ii) a majority of
those directors of the Company who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such approval.
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ARTICLE 9
Governing Law
The provisions of this Agreement shall be construed and interpreted
in accordance with the laws of the State of New York as at the time in effect
and the applicable provisions of the Investment Company Act. To the extent that
the applicable laws of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.
XXXXXXX XXXXX VARIABLE SERIES FUNDS,
INC.
ATTEST:
By:
---------------------------- ---------------------------------
Secretary President
XXXXXXX XXXXX ASSET MANAGEMENT, L.P.
By: Princeton Services, Inc., its
general partner
ATTEST:
By:
--------------------------- ---------------------------------
Secretary President
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