INVESTMENT ADVISORY AGREEMENT
-----------------------------
THE REGIS FUND, INC.
SAMI PREFERRED STOCK INCOME PORTFOLIO
AGREEMENT made this 18th day of May, 1992 by and between The Regis Fund, Inc.,
a Maryland corporation (the "Fund") and Spectrum Asset Management, Inc.
("SAMI"), a Connecticut Corporation, (the "Adviser").
1. DUTIES OF ADVISER. THE FUND HEREBY APPOINTS THE ADVISER TO ACT AS
INVESTMENT adviser to the Fund's SAMI Preferred Stock Income Portfolio for the
period and on such terms set forth in this Agreement. The Fund employs the
Adviser to manage the investment and reinvestment of the assets of the Fund's
SAMI Preferred Stock Income Portfolio, to continuously review, supervise and
administer the investment pro ram of the SAMI Preferred Stock, Income Portfolio,
to determine in its discretion the securities to be purchased or sold and the
portion of such Portfolio's assets to be held uninvested, to provide the Fund
with records concerning the Adviser's activities which the Fund is required to
maintain, and to render regular reports to the Fund's officers and Board of
Directors concerning the Adviser's discharge of the foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities subject to the
control of the officers and the Board of Directors of the Fund, and in
compliance with the objectives, policies and limitations set forth in the Fund's
prospectus and applicable laws and regulations. The Adviser accepts such
employment and agrees to render the services and to provide, at its own expense,
the office space, furnishings and equipment and the personnel required by it to
perform the services on the terms and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of securities of
the Fund's SAMI Preferred Stock Income Portfolio and is directed to use its best
efforts to obtain the best available price and most favorable execution, except
as prescribed herein. Subject to policies established by the Board of Directors
of the Fund, the Adviser may also be authorized to effect individual securities
transactions at commission rates in excess of the minimum commission rates
available, if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage or research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities with respect to
the Fund. The execution of such transactions shall not be deemed to represent an
unlawful act or breach of any duty created by this Agreement or otherwise. The
Adviser will promptly communicate to the officers and Directors of the Fund such
information relating to portfolio transactions as they may reasonably request.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser in monthly installments, an advisory fee calculated by applying the
following annual percentage rates to the SAMI Preferred Stock Income Portfolio's
average daily net assets for the month:
SAMI Preferred Stock Income Portfolio .700%
In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last business
day on which this Agreement is in effect subject to a pro rata adjustment based
on the number of days elapsed in the current fiscal month as a percentage of the
total number of days in such month.
-2-
4. OTHER SERVICES. At the request of the Fund, the Adviser in its
discretion may make available to the Fund office facilities, equipment,
personnel and other services. Such office facilities, equipment, personnel and
services shall be provided for or rendered by the Adviser and billed to the Fund
at the Adviser's cost.
5. REPORTS. The Fund and the Adviser agree to furnish to each other
current prospectuses, proxy statements, reports to shareholders, certified
copies of their financial statements, and such other information with regard to
their affairs as each may reasonably request.
6. STATUS OF ADVISER. The services of the Adviser to the Fund are not to
be, deemed exclusive, and the Adviser shall be free to render similar services
to others so long as its services to the Fund are not impaired thereby.
7. LIABILITY OF ADVISER. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder, or (iii) a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act of 1940 ("1940
Act"), the Adviser shall not be subject to any liability whatsoever to the Fund,
or to any shareholder of the Fund, for any error or judgment, mistake of law or
any other act or omission in the course of, or connected with, rendering
services hereunder including, without limitation, for any losses that may be
sustained in connection with the purchase, holding, redemption or sale of any
security on behalf of the SAMI Preferred Stock Income Portfolio of the Fund.
-3-
8. PERMISSIBLE INTERESTS. Subject to and in accordance with the Articles
of Incorporation of the Fund and the Articles of Incorporation of the Adviser,
Directors, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents and shareholders
of the Adviser are or may be interested in the Fund as Directors, officers,
agents, shareholders or otherwise; and the Adviser (or any successor) is or may
be interested in the Fund as a shareholder or otherwise; and that the effect of
any such interrelationships shall be governed by said Articles of Incorporation
and the provisions of the 1940 Act.
9. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall continue until the earlier of May 18, 1994 or the date of
the first annual or special meeting of the shareholders of the Fund and, if
approved by a majority of the outstanding voting securities of the SAMI
Preferred Stock Income Portfolio of the Fund, thereafter shall continue for
periods of one year so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Board of
Directors of the Fund 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, and (b) by the Board of Directors of the Fund or (c) by
vote of a majority of the outstanding voting securities of the SAMI Preferred
Stock Income Portfolio of the Fund; provided however, that if the holders of the
-------- -------
SAMI Preferred Stock Income Portfolio fail to approve the Agreement as provided
herein, the Adviser may continue to serve in such capacity in the manner and to
the extent permitted by the 1940 Act and Rules thereunder. This Agreement may be
terminated by the SAMI Preferred Stock Income Portfolio at any time, without the
payment of any penalty, by vote of a majority of the entire Board of Directors
of the Fund or by vote of a majority of the outstanding voting securities of the
-4-
SAMI Preferred Stock Income Portfolio on 60 days written notice to the Adviser.
This Agreement may be terminated by the Adviser at any time, without the payment
of any, penalty, upon 90 days written notice to the Fund. This agreement will
automatically and immediately terminate in the event of its assignment. Any
notice under this Agreement shall be given in writing, addressed and delivered
or mailed postpaid, to the other party at the principal office of such party.
As used in this Section 9, the terms "assignment", "interested persons"
and "a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)( 19) and Section
2(a)(42) of the 1940 Act.
10. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those members of the Board of Directors of the Fund 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 amendment, and (b) by vote of a
majority of the outstanding voting securities of the SAMI Preferred Stock Income
Portfolio of the Fund.
11. SEVERABILITY. If any provisions of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
-5-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of this 18th day of May, 1992.
SPECTRUM ASSET MANAGEMENT, INC. THE REGIS FUND, INC.
By /s/ Xxxx X. Xxxx By /s/ Norton X. Xxxxxx
---------------- -------------------
Xxxx X. Xxxx Norton X. Xxxxxx
President Chairman of the Board
-6-
