Investment Advisory Agreement
AGREEMENT, made this 1st day of August, 1993, by and between STRATUS
FUND, INC. a Minnesota corporation (the "Fund") and Union Bank & Trust Company,
a Nebraska state bank (the "Investment Adviser"):
WITNESSETH:
WHEREAS, the Fund intends to engage in business as a management
investment company and will register as such under the Investment Company Act of
1940, as amended (the "Act"); and
WHEREAS, the Fund desires to appoint the Investment Adviser to render
investment advisory services to the Fund in the manner and on the terms and
conditions hereinafter set forth; and
WHEREAS, the Investment Adviser desires to be appointed to perform
services on said terms and conditions;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained; the Fund and the Investment Adviser agree as follows:
1. APPOINTMENT AND DUTIES OF INVESTMENT ADVISER
The Fund hereby appoints the Investment Adviser to act as investment
adviser to the Union Equity/Income Portfolio and the Union Government Bond
Portfolio (the "Portfolios") of the Fund and, subject to the supervision of the
Board of Directors of the Fund, to supervise the investment activities of the
Portfolios as hereinafter set forth; to obtain and evaluate such information and
advice relating to the economy, securities markets and securities, as it deems
necessary or useful to discharge its duties hereunder; to continuously manage
the assets of the Portfolios in a manner consistent with the investment
objective and policies of the Portfolios as set forth in the most current
registration statement of the Fund; to determine the securities to be purchased,
sold or otherwise disposed of by the Portfolios and the timing of such
purchases, sales and dispositions; to take such further action, including the
placing of purchase and sale orders on behalf of the Fund, as it shall deem
necessary or appropriate; and to furnish to or place at the disposal of the Fund
such information, evaluations, analyses and opinions formulated or obtained by
it in the discharge of its duties as the Fund may, from time to time, reasonably
request.
It is agreed that the Investment Adviser may enter into sub-investment
advisory agreements with one or more persons registered under the Investment
Advisers Act of 1940 to assist the Investment Adviser, at its expense, in
performing its duties and responsibilities hereunder, including, but not limited
to, the placing of purchase and sell orders on behalf of the Fund.
2. EXPENSES OF INVESTMENT ADVISER.
The Investment Adviser shall, at its own expense, maintain such staff
and employ or retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the performance
of its obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Investment Adviser shall be deemed to
include persons employed or otherwise retained by the Investment Adviser to
furnish statistical and other factual data, advice regarding economic factors
and trends, information with respect to technical and scientific developments,
and such other information, advice and assistance as the Investment Adviser may
deem appropriate. The Investment Adviser shall maintain records as may be
required under the Act and the Investment Advisers Act of 1940 and such records
shall be made available to the Fund upon request.
3. EXPENSES AND DUTIES OF FUND.
Unless otherwise expressly agreed to by the Investment Adviser, the
Fund assumes and shall pay or cause to be paid all other expenses of the Fund,
including, without limitation: (a) the costs of shareholder reports; (b) any
fees pursuant to any investment advisory agreement and any management agreement
with the Fund; (c) fees pursuant to any plan of distribution that the Fund may
adopt; (d) the charges and expenses of any registrar, custodian, sub-custodian
or depository appointed by the Fund for the safekeeping of its cash, portfolio
securities and other property, as well as any stock transfer or dividend agent
appointed by the Fund; (e) brokers' commissions chargeable to the Fund in
connection with portfolio securities transactions to which the Fund is a party;
(f) all taxes and fees payable by the Fund to federal, state or other
governmental agencies or pursuant to any foreign laws; (g) the cost and expense
of engraving or printing of certificates representing shares of the Fund; (h)
all costs and expenses in connection with the registration and maintenance of
registration of the Fund and its shares with the Securities and Exchange
Commission and various states and other jurisdictions or pursuant to any foreign
laws (including filing fees and legal fees) and the expense of printing and
distributing prospectuses and supplements; (i) all expenses of shareholders' and
Directors' meetings and of preparing, printing and mailing of proxy statements
and reports to shareholders; (j) the fees and travel expenses of Directors or
members of any advisory board or committee who are not employees of the
Investment Adviser; (k) all expenses incident to the payment of any dividend,
distribution, withdrawal or redemption whether in shares or in cash; (l) charges
and expenses of any outside service used for pricing of the Funds shares; (m)
ordinary charges and expenses of legal counsel, including counsel to the
Directors of the Fund who are not interested persons (as defined in the Act) of
the Fund or the Investment Adviser, and of independent accountants, in
connection with any matter relating to the Fund; (n) membership dues of industry
associations; (o) interest payable on Fund borrowings; (p) postage; (q)
insurance premiums on property or personnel (including Officers and Directors)
of the Fund which inure to its benefit; (r) extraordinary legal, accounting, and
other expenses (including but not limited to legal claims and liabilities and
litigation costs and any indemnification related thereto); and (s) all other
costs of the Fund's operation.
The Fund will, from time to time, furnish or otherwise make available
to the Investment Adviser such financial reports, proxy statements, and other
information relating to the business and affairs of the Fund as the Investment
Adviser may reasonably require in order to discharge its duties and obligations
hereunder or to comply with any applicable law and regulations.
4. FEES OF INVESTMENT ADVISER.
For the services to be rendered, the facilities furnished, and the
obligations assumed by the Investment Adviser, the Fund, shall pay to the
Investment Adviser, commencing with the effective date of the first public
offering of shares of the Fund, a monthly investment advisory fee, computed
separately for the Portfolio, at the annual rate set forth on Exhibit 1 attached
hereto and incorporated by reference herein. The compensation for the period
from the effective date hereof to the next succeeding last day of the month
shall be prorated according to the proportion which such period bears to the
full month ending on such date, and provided further that, upon any termination
of this Agreement before the end of the month, such compensation for the period
from the end of the last month ending prior to such termination to the date of
termination, shall be prorated according to the proportion which such period
bears to a full month, and shall be payable upon the date of termination. For
the purpose of the Investment Adviser's compensation, the value of the
Portfolio's net assets shall be computed in the manner specified in its Bylaws
in connection with the determination of the net asset value of shares. Payment
of the Investment Adviser's compensation for the preceding month shall be made
as promptly as possible after the last day of such month.
5. BEST EFFORTS.
The Investment Adviser will use its best efforts in the supervision and
management of the investment advisory activities of the Portfolios but in the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations hereunder, the Investment Adviser shall not be
liable to the Fund or any of its investors for any error of judgment or mistake
of law or fact, for any act or omission by the Investment Adviser or for any
losses sustained by the Fund or investors.
6. INDEPENDENT CONTRACTOR.
Investment Adviser shall, for all purposes herein, be an independent
contractor and shall have no authority to act for or represent the Fund in its
investment commitments unless otherwise provided.
Nothing contained in this Agreement shall prevent the Investment
Adviser or any affiliated person of the Investment Adviser from acting as
investment adviser or manager for any other person, firm, corporation or other
entity, and shall not, in anyway, bind or restrict the Investment Adviser or any
such affiliated person from buying, selling or trading any securities or
commodities for their own accounts or for the account of others for whom they
may be acting. Nothing in this Agreement shall limit or restrict the right of
any Director, Officer or employeeof the Investment Adviser to engage in any
other business or to devote his time and attention in part to the management or
other aspects of any other business whether of a similar or dissimilarnature.
7. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective as of the close of business on
the date the Fund's Registration Statement becomes effective with the Securities
and Exchange Commission (the "Effective Date") and shall continue in effect
unless sooner terminated as herein provided until August 1, 1994 and thereafter
only if approved at least annually: (a) by the Board of Directors of the Fund;
or (b) by the vote of a majority of the outstanding shares of the Portfolios of
the Fund, as defined in the Act, and, in addition, (c) by the vote of a majority
of the Directors of the Fund who are not parties hereto nor interested persons
of any party, as required by the Act; provided, that the first such approval by
Directors under (a) or (c) shall take place within ninety (90) days prior to
August 1, 1994 and each subsequent, annual approval shall take place within
ninety (90) days prior to June 30 in each year thereafter, and each approval if
made by the vote of shareholders of the Fund shall be made at a meeting held
prior to June 30 in any fiscal year, and each such approval whetherunder (a) and
(c) or under (b) and (c) shall be effective to continue such Agreement for a
period ending June 30 of the next succeeding year.
This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Directors of the Fund, or by a vote of a majority of
the outstanding voting securities of the Money Market Portfolio Fund, within the
meaning of the Act, in either case upon not less than sixty (60) days' written
notice to Investment Adviser, and it may be terminated by Investment Adviser
upon sixty (60) days' written notice to the Fund. This Agreement shall
automatically terminate in the event of its assignment, within the meaning of
the Act, unless such automatic termination shall be prevented by an exemptive
order of the Securities and Exchange Commission.
8. AMENDMENT OF AGREEMENT.
This Agreement may be amended from time to time by agreement of the
parties provided that such amendment shall be approved both by the vote of a
majority of Directors of the Fund, including a majority of Directors who are not
parties to this Agreement or interested persons of any such party to this
Agreement (other than as Directors of the Fund) cast in person at a meeting
called for that purpose, and by the holders of a majority of the outstanding
voting securities of the Fund.
This Agreement may be amended by agreement of the parties without the
vote or consent of the shareholders of the Fund to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision hereof,
or if they deem it necessary to conform this Agreement to the requirements of
applicable federal laws or regulations, but neither the Fund nor the Investment
Adviser shall be liable for failing to do so.
9. INTERESTED PERSONS.
It is understood that Directors, Officers, agents and shareholders of
the Fund are or may be interested in the Investment Adviser (or any successor
thereof) as Directors, Officers, agents, shareholders, or otherwise; that
Directors, Officers, agents and shareholders of the Investment Adviser are or
may be interested in the Fund as Directors, Officers, agents, shareholders or
otherwise; that the Investment Adviser (or any such successor) is or may be
interested in the Fund as shareholder or otherwise.
10. DEFINITIONS.
For the purpose of this Agreement, the terms "vote of a majority of the
outstanding voting securities", "assignments", "affiliated person", and
"interested person" shall have the respective meanings specified in the
Investment Company Act of 1940, as amended; provided, however, that wherever in
this Agreement it is provided that this Agreement may be amended or terminated
by or with the consent of shareholders, such action shall only be effective with
respect to those Portfolios of the Fund the shareholders of which have taken the
requisite action.
11. APPLICABLE LAW.
This Agreement shall be construed in accordance with the laws of the
State of Nebraska and the applicable provisions of the Act and the Investment
Advisers Act of 1940, as amended.
IN WITNESS WHEREOF, the parties hereto have executed, accepted and
delivered this Agreement on the day and year first above written in Lincoln,
Nebraska.
(SEAL) STRATUS FUND, INC.
Attest:
/s/ Xxxxxxx Xxxxxx
------------------------ By ---------------------------
Secretary Chairman
UNION BANK AND TRUST COMPANY
Attest:
/s/ Xxxx Xxxxxx
------------------------ By ---------------------------
Secretary President
EXHIBIT I
Fees
Union Equity/Income Portfolio .50%
Union Government Bond Portfolio .50%
