Exhibit 24(b)(5)
INVESTMENT ADVISER CONTRACT
AGREEMENT, made by and between SCM Portfolio Fund Inc., a
Georgia Corporation, (hereinafter called "Fund") and SCM Associates, Inc., a
Georgia Corporation, (hereinafter called "Investment Adviser").
WITNESSETH:
WHEREAS, Fund engages in the business of investing and
reinvesting its assets and property in various stocks and securities and
Investment Adviser engages in the business of providing investment advisory
services.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, each of the parties hereto intending to be legally bound, it is
agreed as follows:
1. The Fund hereby employs the Investment Adviser, for the
period set forth in Paragraph 8 hereof, and on the terms set forth herein, to
render investment advisory services to the Fund, subject to the supervision and
direction of the Board of Directors of the Fund. The Investment Adviser hereby
accepts such employment and agrees, during such periods, to render the services
and assume the obligations herein set forth, for the compensation provided. The
Investment Adviser shall, for all purposes herein, be deemed to be an
independent contractor, and shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent the Fund in any way, or in
any way be deemed an agent of the Fund.
2. As a compensation for the services to be rendered to the
Fund by the Investment Adviser under the provisions of this Agreement, the Fund
shall pay to the Investment, Adviser a monthly fee equal to one-twelfth of
seventy-four one hundredths of one per cent per month (the equivalent of .74 of
one per cent per annum), of the daily average net assets of the Fund during the
month, less all amounts paid as compensation to interested members of the Board
of Directors of the Fund in respect to the same period. The first payment of fee
hereunder shall be prorated on a daily basis from the date this Agreement takes
effect.
3. It is expressly understood and agreed that the services to
be rendered by the Investment Adviser to the Fund under the provisions of this
Agreement arc, not to be deemed to be exclusive, and the Investment Adviser
shall be free to render similar or different services to others so long as its
ability to render the services provided for in this Agreement shall not be
impaired thereby.
4. It is understood and agreed that directors, officers,
employees, agents and shareholders of the Fund may be interested in the
Investment Adviser as directors, officers, employees, agents and shareholders,
and that directors, officers, employees, agents and shareholders of the
Investment Adviser may be interested in the Fund, as directors, officers,
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employees, agents and shareholders or otherwise, and that the Investment
Adviser, itself, may be interested in the Fund as a shareholder or otherwise.
Specifically, it is understood and agreed that directors, officers, employees,
agents and shareholders of the Investment Adviser may continue as directors,
officers, employees, agents and shareholders of the Fund; that the Investment
Adviser, its directors, officers, employees, agents and shareholders may engage
in other business, may render investment, advisory services to other investment
companies, or to any other corporation, association, firm or individual, may
render underwriting services to the Fund or to any other investment company-,
corporation, association, firm or individual.
5. The Fund shall bear expenses and salaries necessary and
incidental to the conduct of its business, including but not in limitation of
the foregoing, the costs incurred in the maintenance of its own books, records,
and procedures; dealing with its own shareholders; the payment of dividends;
transfers of stock (including issuance and redemption of shares); reports and
notices to shareholders; expenses of annual stockholders' meetings;
miscellaneous office expenses; and brokerage commissions, custodian fees, legal
and accounting fees, including preparation of tax returns; local, state and
federal taxes; local, state and federal registration fees and licenses.
Officers, employees and agents of the Investment Adviser who axe, or may in the
future be, directors and/or senior officers of the Fund shall receive no
salaries from the Fund for acting in such capacities for the Fund.
6. In the conduct of the respective businesses of the parties
hereto and in the performance of this agreement, the Fund and Investment Adviser
may share common facilities and personnel common to each, with appropriate
proration of expenses.
7. The Investment Adviser shall give the Fund the benefit of
its best judgment and efforts in rendering these services, and except for
negligence, malfeasance, or violations of applicable laws, the Investment
Adviser shall not be liable hereunder for any action performed, any errors of
judgment in managing the Fund or any losses that may be sustained in the
purchase, holding or sale of any security, provided that nothing herein shall
constitute a waiver or limitation of any right which a shareholder may have
under any federal securities laws.
8. This agreement shall continue in effect until the 23rd day
of January, 1999, and thereafter, only so long as such continuance is approved
at least annually by votes of the Fund's Board of Directors cast in person at a
meeting called for the purpose of voting on such approval, including the votes
of a majority of the Directors who are not parties to such agreement or
interested persons of any such party, or by a resolution of consent signed by,
all Directors and otherwise in compliance with the laws of the State of Georgia.
This agreement may be terminated at any time upon 60 days'
prior written notice, without the payment of any penalty, by the Fund's Board of
Directors or by vote of a majority of the outstanding voting securities of the
Fund. The contract will automatically terminate in the event of its assignment
by the Investment Adviser (within the meaning of the Investment Company Act of
1940), which shall be deemed to include a transfer of control of the Investment
Adviser. Upon the termination of this agreement, the obligations of all the
parties hereunder shall cease and terminate as of the date of such termination,
except for any obligation to respond for a breach of this Agreement committed
prior to such termination and except for the obligation
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of the Fund to pay to the Investment Adviser the fee provided in Paragraph 2
hereof, prorated to the date of termination.
9. This Agreement shall not be assigned by the Fund without
prior written consent thereto of the Investment Adviser. This Agreement shall
terminate automatically in the event of its assignment by the Investment Adviser
unless an exemption from such automatic termination is granted by order or rule
of the Securities and Exchange Commission.
10. In the event that the total expenses to the Fund exceed
two percent (2%) of the daily average net assets of the Fund for one fiscal year
then in that event the Adviser shall refund to the Fund an amount equal to the
amount by which the total expenses exceed such two percent (2%).
IN WITNESS WHEREOF, this 6th day of December, 1997.
SCM PORTFOLIO FUND, INC.
Attest: /s/ Xxxxxxx X. Xxxxx By:/s/ Xxxxxxx X. XxXxxxxxxx
President
SCM ASSOCIATES, INC.
Attest: /s/ Xxxxxxx X. Xxxxx By:/s/ Xxxxxxx X. XxXxxxxxxx
President
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