EX-99.B5-tmkima
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 1st day of July, 1990, by and between TMK/UNITED FUNDS, INC.
(hereinafter called "United", and XXXXXXX & XXXX, INC.
WITNESSETH:
In consideration of the mutual promises and agreements herein contained and
other good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed by and between the parties hereto as follows:
I. In General.
Xxxxxxx & Xxxx, Inc., agrees to act as investment adviser to
United with respect to the investment of its assets and in general to supervise
the investments of United, subject at all times to the direction and control of
the Board of Directors of United, all as more fully set forth herein.
II. Duties of Xxxxxxx & Xxxx, Inc., with respect to investment
of assets of United.
X. Xxxxxxx & Xxxx Inc., shall regularly provide investment
advice to United and shall, subject to the succeeding provisions of this
section, continuously supervise the investment and reinvestment of cash,
securities or other property comprising the assets of the investment portfolios
of United; and in furtherance thereof, Xxxxxxx & Xxxx, Inc., shall:
1. obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or one or more of
the portfolios of United, and whether concerning the individual companies whose
securities are included in United's portfolios or the industries in which they
engage, or with respect to securities which Xxxxxxx & Xxxx, Inc., considers
desirable for inclusion in United's portfolios;
2. furnish continuously an investment program for each
of the portfolios of United;
3. determine what securities shall be purchased or sold
by United;
4. take, on behalf of United, all actions which appear
to Xxxxxxx & Xxxx, Inc., necessary to carry into effect such investment programs
and supervisory functions as aforesaid, including the placing of purchase and
sale orders.
X. Xxxxxxx & Xxxx, Inc., shall make appropriate and regular
reports to the Board of Directors of United on the actions it takes pursuant to
Section II.A. above. Any investment programs furnished by Xxxxxxx & Xxxx, Inc.,
under this section, or any supervisory function taken hereunder by Xxxxxxx &
Xxxx, Inc., shall at all times conform to and be in accordance with any
requirements imposed by:
1. the provisions of the Investment Company Act of 1940
and any rules or regulations in force thereunder;
2. any other applicable provision of law;
3. the provisions of the Articles of Incorporation of
United as amended from time to time;
4. the provisions of the Bylaws of United as amended
from time to time;
5. the terms of the registration statements of United,
as amended from time to time, under the Securities Act of 1933 and the
Investment Company Act of 1940.
C. Any investment programs furnished by Xxxxxxx & Xxxx,
Inc., under this section or any supervisory functions taken hereunder by Xxxxxxx
& Xxxx, Inc., shall at all times be subject to any directions of the Board of
Directors of United, its Executive Committee, or any committee or officer of
United acting pursuant to authority given by the Board of Directors.
III. Allocation of Expenses.
The expenses of United and the expenses of Xxxxxxx & Xxxx,
Inc., in performing its functions under this Agreement shall be divided into two
classes, to wit: (i) those expenses which will be paid in full by Xxxxxxx &
Xxxx, Inc., as set forth in subparagraph "A" hereof, and (ii) those expenses
which will be paid in full by United, as set forth in subparagraph "B" hereof.
A. With respect to the duties of Xxxxxxx & Xxxx, Inc.,
under Section II above, it shall pay in full, except as to the brokerage and
research services acquired through the allocation of commissions as provided in
Section IV hereinafter, for (a) the salaries and employment benefits of all
employees of Xxxxxxx & Xxxx, Inc. who are engaged in providing these advisory
services; (b) adequate office space and suitable office equipment for such
employees; and (c) all telephone and communications costs relating to such
functions. In addition, Xxxxxxx & Xxxx, Inc., shall pay the fees and expenses
of all directors of United who are employees of Xxxxxxx & Xxxx, Inc., or an
affiliated corporation and the salaries and employment benefits of all officers
of United who are affiliated persons of Xxxxxxx & Xxxx, Inc.
B. United shall pay in full for all of its expenses which
are not listed above (other than those assumed by Xxxxxxx & Xxxx, Inc., or its
affiliates in its capacity as Accounting Services Agent for United), including
(a) the costs of preparing and printing prospectuses and reports to shareholders
of United including mailing costs; (b) the costs of printing all proxy
statements and all other costs and expenses of meetings of shareholders of
United; (c) interest, taxes, brokerage commission and premiums on fidelity and
other insurance; (d) audit fees and expenses of independent accountants and
legal fees and expenses of attorneys, but not of attorneys who are employees of
Xxxxxxx & Xxxx, Inc.; (e) fees and expenses of its directors; (f) custodian fees
and expenses; (g) fees payable by United under the Securities Act of 1933, the
Investment Company Act of 1940, and the securities or "Blue-Sky" laws of any
jurisdiction; (h) fees and assessments of the Investment Company Institute or
any successor organization; (i) such nonrecurring or extraordinary expenses as
may arise, including litigation affecting United and any indemnification by
United of its officers, directors, employees and agents with respect thereto;
(j) the costs and expenses of maintaining shareholder records and processing
transactions for the issuance and redemption of its shares; and (k) the costs
and expenses provided for in any Accounting Services Agreement, including
amendments thereto, contemplated by subsection C of this section III.
X. Xxxxxxx & Xxxx, Inc., or an affiliate of Xxxxxxx & Xxxx,
Inc., may also act as accounting services agent of United if at the time in
question there is a separate agreement, "Accounting Services Agreement,"
covering such functions between United and Xxxxxxx & Xxxx, Inc., or such
affiliate. The corporation, whether Xxxxxxx & Xxxx, Inc., or its affiliate,
which is the party to such Agreement with United is referred to as the "Agent."
Any such Agreement shall provide in substance that it shall not go into effect,
or may be amended, or a new agreement covering the same topics between United
and the Agent may be entered into only if the terms of such Agreement, such
amendment or such new agreement have been approved by the Board of Directors of
United, including the vote of a majority of the directors who are not
"interested persons" as defined in the Investment Company Act of 1940, of either
party to the Agreement, such amendment or such new agreement (considering
Xxxxxxx & Xxxx, Inc., to be such a party even if at the time in question the
Agent is an affiliate of Xxxxxxx & Xxxx, Inc.), cast in person at a meeting
called for the purpose of voting on such approval. Such a vote is referrer to
as a "disinterested director" vote. Any such Agreement shall also provide in
substance for its continuance, unless terminated, for a specified period which
shall not exceed two years from the date of its execution and from year to year
thereafter only if such continuance is specifically approved at least annually
by a disinterested director vote, and that any disinterested director vote shall
include a determination that (i) the Agreement, amendment, new agreement or
continuance in question is in the best interests of United and its shareholders;
(ii) the services to be performed under the Agreement, the Agreement as amended,
new agreement or agreement to be continued are services required for the
operation of United; (iii) the Agent can provide services the nature and quality
of which are at least equal to those provided by others offering the same or
similar services; and (iv) the fees for such services are fair and reasonable in
light of the usual and customary charges made by others for services of the same
nature and quality. Any such Agreement may also provide in substance that any
disinterested director vote may be conditioned on the favorable vote of the
holders of a majority (as defined in or under the Investment Company Act of
1940) of the outstanding shares of each class of United. Any such Agreement
shall also provide in substance that it may be terminated by the Agent at any
time without penalty upon giving United one hundred twenty (120) days' written
notice (which notice may be waived by United) and may be terminated by United at
any time without penalty upon giving the Agent sixty (60) days' written notice
(which notice may be waived by the Agent), provided that such termination by
United shall be directed or approved by the vote of a majority of the Board of
Directors of United in office at the time or by the vote of the holders of a
majority (as defined in or under the Investment Company Act of 1940) of the
outstanding shares of each class of United.
IV. Brokerage.
(a)Xxxxxxx & Xxxx, Inc., may select brokers to effect the
portfolio transactions of United on the basis of its estimate of their ability
to obtain, for reasonable and competitive commissions, the best execution of
particular and related portfolio transactions. For this purpose, "best
execution" means prompt and reliable execution at the most favorable price
obtainable. Such brokers may be selected on the basis of all relevant factors
including the execution capabilities required by the transaction or
transactions, the importance of speed, efficiency, or confidentiality, and the
willingness of the broker to provide useful or desirable investment research
and/or special execution services. Xxxxxxx & Xxxx, Inc., shall have no duty to
seek advance competitive commission bids and may select brokers based solely on
its current knowledge of prevailing commission rates.
(b) Subject to the foregoing, Xxxxxxx & Xxxx, Inc.,
shall have discretion, in the interest of United, to direct the execution of its
portfolio transactions to brokers who provide brokerage and/or research services
(as such services are defined in Section 28(e) of the Securities Exchange Act of
1934) for United and/or other accounts for which Xxxxxxx & Xxxx, Inc., and its
affiliates exercise "investment discretion" (as that term is defined in Section
3(a)(35) of the Securities Act of 1934); and in connection with such
transactions, to pay commission in excess of the amount another adequately
qualified broker would have charged if Xxxxxxx & Xxxx, Inc., determines, in good
faith, that such commission is reasonable in relation to the value of the
brokerage and/or research services provided by such broker, viewed in terms of
either that particular transaction or the overall responsibilities of Xxxxxxx &
Xxxx, Inc., and its investment advisory affiliates with respect to the accounts
for which they exercise investment discretion. In reaching such determination,
Xxxxxxx & Xxxx, Inc., will not be required to attempt to place a specified
dollar amount on the brokerage and/or research services provided by such broker;
provided that Xxxxxxx & Xxxx, Inc., shall be prepared to demonstrate that such
determinations were made in good faith, and that all commissions paid by United
over a representative period selected by its Board of Directors were reasonable
in relation to the benefits to United.
(c)Subject to the foregoing provisions of this Paragraph
"IV," Xxxxxxx & Xxxx, Inc., may also consider sales of insurance policies funded
by United's shares and sales of shares of investment companies distributed by
Xxxxxxx & Xxxx, Inc., or its affiliates, and portfolio valuation or pricing
services as a factor in the selection of brokers to execute brokerage and
principal portfolio transactions.
V. Compensation of Xxxxxxx & Xxxx, Inc.
As compensation in full for services rendered and for the
facilities and personnel furnished under sections I, II, and IV of this
Agreement, United will pay to Xxxxxxx & Xxxx, Inc., for each day the fees
specified in Exhibit A hereto.
The amounts payable to Xxxxxxx & Xxxx, Inc., shall be
determined as of the close of business each day; shall, except as set forth
below, be based upon the value of net assets computed in accordance with the
Articles of Incorporation of United; and shall be paid in arrears whenever
requested by Xxxxxxx & Xxxx, Inc.
Notwithstanding the foregoing, if the laws, regulations or
policies of any state in which shares of United are qualified for sale limit the
operation and management expenses of United, Xxxxxxx & Xxxx, Inc., will refund
to United the amount by which such expenses exceed the lowest of such state
limitations.
VI. Undertakings of Xxxxxxx & Xxxx, Inc.; Liabilities.
Xxxxxxx & Xxxx, Inc., shall give to United the benefit of
its best judgment, efforts and facilities in rendering advisory services
hereunder.
Xxxxxxx & Xxxx, Inc., shall at all times be guided by and be
subject to United's investment policies, the provisions of its Articles of
Incorporation and Bylaws as each shall from time to time be amended, and to the
decision and determination of United's Board of Directors.
This Agreement shall be performed in accordance with the
requirements of the Investment Company Act of 1940, the Investment Advisors Act
of 1940, the Securities Act of 1933, and the Securities Exchange Act of 1934, to
the extent that the subject matter of this Agreement is within the purview of
such Acts. Insofar as applicable to Xxxxxxx & Xxxx, Inc., as an investment
adviser and affiliated person of United, Xxxxxxx & Xxxx, Inc., shall comply with
the provisions of the Investment Company Act of 1940, the Investment Advisers
Act of 1940 and the respective rules and regulations of the Securities and
Exchange Commission thereunder.
In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of Xxxxxxx & Xxxx, Inc., it shall not be subject to liability to United or to
any stockholder of United (direct of beneficial) for any act or omission in the
course of or connected with rendering services thereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
VII. Duration of this Agreement.
This Agreement shall become effective at the start of
business on the date hereof and shall continue in effect, unless terminated as
hereinafter provided, for a period of one year and from year-to-year thereafter
only if such continuance is specifically approved at least annually by the Board
of Directors, including the vote of a majority of the directors who are not
parties to this Agreement or "interested persons" (as defined in the Investment
Company Act of 1940) of any such party, cast in person at a meeting called for
the purpose of voting on such approval, or by the vote of the holders of a
majority (as so defined) of the outstanding voting securities of each class of
United and by the vote of a majority of the directors who are not parties to
this Agreement or "interested persons" (as so defined) of any such party, cast
in person at a meeting called for the purpose of voting on such approval.
VIII. Termination.
This Agreement may be terminated by Xxxxxxx & Xxxx,
Inc., at any time without penalty upon giving United one hundred twenty (120)
days' written notice (which notice may be waived by United) and may be
terminated by United at any time without penalty upon giving Xxxxxxx & Xxxx,
Inc. sixty (60) days' written notice (which notice may be waived by Xxxxxxx &
Xxxx, Inc.), provided that such termination by United shall be directed or
approved by the vote of a majority of the Board of Directors of United in office
at the time or by the vote of a majority (as defined in the Investment Company
Act of 1940) of the outstanding voting securities of United. This Agreement
shall automatically terminate in the event of its assignment, the term
"assignment" for this purpose having the meaning defined in Section 2(a)(4) of
the Investment Company Act of 1940 and the rules and regulations thereunder.
IN WITNESS WHEREROF, the parties hereto have caused the foregoing instrument to
be executed by their duly authorized officers and their corporate seal to be
hereunto affixed, all as of the day and year first above written.
(Seal) TMK/UNITED FUNDS, INC.
By:_______________________
Xxxxxx X. XxXxxxxxx
Vice President
ATTEST:
______________
Xxxxxx X. Xxxxxx
Secretary
(Seal) XXXXXXX & XXXX, INC.
By:_______________________
Xxxxxx X. Xxxxxxx
Executive Vice President
ATTEST:
____________________
Xxxxxx X. XxXxxxxxx
Secretary
EXHIBIT A TO INVESTMENT MANAGEMENT AGREEMENT
TMK/UNITED FUNDS, INC.
FEE SCHEDULE
1. A "specific" fee computed each day on net asset value at the annual
rates listed below:
Class of Shares
Money Market Portfolio None
Bond Portfolio .03 of 1%
High Income Portfolio .15 of 1%
Growth Portfolio .20 of 15
Income Portfolio .20 of 1%
International Portfolio .30 of 1%
Small Cap Portfolio .35 of 1%
Balanced Portfolio .10 of 1%
Limited-Term Bond Portfolio .05 of 1%
Asset Strategy Portfolio .30 of 1%
Science and Technology Portfolio .20 of 1%
2. A "base" fee computed each day on the combined net asset values of all
the portfolios of TMK/United Funds, Inc. and allocated among the eleven classes
of shares based on their relative net asset size at the annual rates shown in
the following table:
Base Fee Rate
Combined Net Asset Level Annual Base
(all dollars in millions) Fee Rate for Each Level
-------------------------- -----------------------
From $ 0 to $ 750 .51 of 1%
From $ 750 to $1,500 .49 of 1%
From $1,500 to $2,250 .47 of 1%
Over $2,250 .45 of 1%
