EX-99.B(d)cpima
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 20th day of February, 2003, by and between W&R
FUNDS, INC. (hereinafter called "Fund"), and XXXXXXX & XXXX INVESTMENT
MANAGEMENT COMPANY, with respect to the series of the Fund currently known
as W&R Capital ProtectionPlus Fund (hereinafter called "Portfolio").
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 Investment Management Company agrees to
act as investment adviser to the Portfolio with respect to the investment
of its assets and in general to supervise the investments of the Portfolio,
subject at all times to the direction and control of the Board of Directors
of Fund, all as more fully set forth herein.
II. Duties of Xxxxxxx & Xxxx Investment Management Company
with respect to investment of assets of the Portfolio
X. Xxxxxxx & Xxxx Investment Management Company shall
regularly provide investment advice for the Portfolio 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 portfolio of the Portfolio; and in
furtherance thereof, Xxxxxxx & Xxxx Investment Management Company 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
the Portfolio, and whether concerning the individual companies whose
securities or other financial instruments are included in the Portfolio or
the industries in which they engage, or with respect to securities or other
financial instruments which Xxxxxxx & Xxxx Investment Management Company
considers desirable for inclusion in the Portfolio;
2. furnish continuously an investment program for
the Portfolio;
3. determine what securities or other financial
instruments shall be purchased or sold by the Portfolio;
4. take, on behalf of the Portfolio, all actions
which appear to Xxxxxxx & Xxxx Investment Management Company necessary to
carry into effect such investment programs and supervisory functions as
aforesaid, including the placing of purchase and sale orders.
B. Subject to the provisions of this Agreement and the
requirements of the Investment Company Act of 1940 (and any rules or
regulations in force thereunder), Xxxxxxx & Xxxx Investment Management
Company is authorized to appoint one or more qualified investment sub-
advisers (each, a "Sub-Adviser") to provide the Portfolio with certain
services required by this Agreement. Each Sub-Adviser shall have
such investment discretion and shall make all determinations with respect
to the investment of the Portfolio's assets as shall be assigned to that
Sub-Adviser by Xxxxxxx & Xxxx Investment Management Company and the
purchase and sale of portfolio securities and other financial instruments
with respect to those assets.
Subject to the supervision and direction of the Board
of Directors of Fund, Xxxxxxx & Xxxx Investment Management Company shall:
1. have overall supervisory responsibility for the
general management and investment of the Portfolio's assts;
2. determine the allocation and reallocation of
assets among the Sub-Advisers, if any; and
3. have full investment discretion to make all
determinations with respect to the investment of Portfolio assets not
otherwise assigned to a Sub-Adviser.
Xxxxxxx & Xxxx Investment Management shall research and
evaluate each Sub-Adviser, if any, including: performing initial due
diligence on prospective Sub-Advisers and monitoring each Sub-Adviser's
ongoing performance; communicating performance expectations and evaluations
to each Sub-Adviser; and recommending to the Board of Directors of Fund
whether a Sub-Adviser's contract should be renewed, modified or terminated.
When appropriate, Xxxxxxx & Xxxx Investment Management Company shall also
recommend to the Board of Directors of Fund changes or additions to the
Sub-Advisers.
X. Xxxxxxx & Xxxx Investment Management Company shall
make appropriate and regular reports to the Board of Directors of Fund on
the actions it takes pursuant to Section II.A. or B. above. Any investment
programs furnished by Xxxxxxx & Xxxx Investment Management Company under
this section, or any supervisory function taken hereunder by Xxxxxxx & Xxxx
Investment Management Company, 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 Fund as amended from time to time;
4. the provisions of the Bylaws of Fund, as
amended from time to time;
5. the terms of the registration statement of
Fund, as applicable to the Portfolio, as amended from time to time, under
the Securities Act of 1933 and the Investment Company Act of 1940.
D. Any investment programs furnished by Xxxxxxx & Xxxx
Investment Management Company under this section or any supervisory
functions taken hereunder by Xxxxxxx & Xxxx Investment Management Company
shall at all times be subject to any directions of the Board of Directors
of Fund, its Executive Committee, or any committee or officer of Fund
acting pursuant to authority given by the Board of Directors.
III. Allocation of Expenses
The expenses of the Portfolio and the expenses of
Xxxxxxx & Xxxx Investment Management Company 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 Investment Management
Company as set forth in subparagraph "A" hereof, and (ii) those expenses
which will be paid in full by the Portfolio, as set forth in subparagraph
"B" hereof.
A. With respect to the duties of Xxxxxxx & Xxxx
Investment Management Company 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
Investment Management Company 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. Xxxxxxx & Xxxx Investment Management shall compensate each of
the Portfolio's Sub-Advisers, if any. In addition, Xxxxxxx & Xxxx
Investment Management Company shall pay the fees and expenses of all
directors of Fund who are employees of Xxxxxxx & Xxxx Investment Management
Company or an affiliated corporation and the salaries and employment
benefits of all officers of Fund who are affiliated persons of Xxxxxxx &
Xxxx Investment Management Company.
B. The Portfolio shall pay in full for all of its
expenses which are not listed above (other than those assumed by Xxxxxxx &
Xxxx Investment Management Company or one of its affiliates in its capacity
as principal underwriter of the shares of the Portfolio, as Shareholder
Servicing Agent or as Accounting Services Agent for the Portfolio),
including (a) the costs of preparing and printing prospectuses and reports
to shareholders of the Portfolio, including mailing costs; (b) the costs of
printing all proxy statements and all other costs and expenses of meetings
of shareholders of the Portfolio (unless Fund and Xxxxxxx & Xxxx Investment
Management Company shall otherwise agree); (c) interest, taxes, brokerage
commissions 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
Investment Management Company or an affiliated company; (e) fees and
expenses of its directors not affiliated with Xxxxxxx & Xxxx, Inc.; (f)
custodian fees and expenses; (g) fees payable by the Portfolio 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 the Portfolio, and any indemnification by the Portfolio of its
officers, directors, employees and agents with respect thereto; (j) the
costs and expenses provided for in any Shareholder Servicing Agreement or
Accounting Services Agreement, including amendments thereto, contemplated
by subsection C of this Section III. In the event that any of the foregoing
shall, in the first instance, be paid by Xxxxxxx & Xxxx Investment
Management Company, the Portfolio shall pay the same to Xxxxxxx & Xxxx
Investment Management Company on presentation of a statement with respect
thereto.
X. Xxxxxxx & Xxxx Investment Management Company or an
affiliate of Xxxxxxx & Xxxx Investment Management Company, may also act as
(i) transfer agent or shareholder servicing agent of the Portfolio and/or
as (ii) accounting services agent of the Portfolio if at the time in
question there is a separate agreement, "Shareholder Servicing Agreement"
and/or "Accounting Services Agreement," covering such functions between the
Portfolio and Xxxxxxx & Xxxx Investment Management Company, or such
affiliate. The corporation, whether Xxxxxxx & Xxxx Investment Management
Company, or its affiliate, which is the party to either such Agreement with
Fund is referred to as the "Agent." Each such Agreement shall provide in
substance that it shall go into effect, or be amended, or a new agreement
covering the same topics between Fund 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 Fund, 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 Investment
Management Company to be such a party even if at the time in question the
Agent is an affiliate of Xxxxxxx & Xxxx Investment Management Company),
cast in person at a meeting called for the purpose of voting on such
approval. Such a vote is referred to as a "disinterested director" vote.
Each 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 the Portfolio 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 the Portfolio; (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 or series of the Portfolio.
Any such Agreement shall also provide in substance that it may be
terminated by the Agent at any time without penalty upon giving Fund one
hundred twenty (120) days' written notice (which notice may be waived by
Fund) and may be terminated by Fund 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 Fund shall be directed or
approved by the vote of a majority of the Board of Directors of Fund 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 or series of the Portfolio.
IV. Brokerage
(a) Xxxxxxx & Xxxx Investment Management Company may
select brokers to effect the portfolio transactions of the Portfolio 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 Investment Management Company 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
Investment Management Company shall have discretion, in the interest of the
Portfolio, 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 the
Portfolio and/or other accounts for which Xxxxxxx & Xxxx Investment
Management Company exercises "investment discretion" (as that term is
defined in Section 3(a)(35) of the Securities Exchange 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 Investment Management Company 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
Investment Management Company with respect to the accounts for which it
exercises investment discretion. In reaching such determination, Xxxxxxx &
Xxxx Investment Management Company 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 Investment Management
Company shall be prepared to demonstrate that such determinations were made
in good faith, and that all commissions paid by the Portfolio over a
representative period selected by its Board of Directors were reasonable in
relation to the benefits to the Portfolio.
(c) Subject to the foregoing provisions of this
Paragraph "IV," Xxxxxxx & Xxxx Investment Management Company may also
consider sales of the Portfolio's shares and shares of investment companies
distributed by Xxxxxxx & Xxxx, Inc. or one of 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 Investment Management
Company
As compensation in full for services rendered and for
the facilities and personnel furnished under sections I, II, and IV of this
Agreement, the Portfolio will pay to Xxxxxxx & Xxxx Investment Management
Company for each day the fees specified in Exhibit A hereto.
The amounts payable to Xxxxxxx & Xxxx Investment
Management Company 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 Fund;
and shall be paid in arrears whenever requested by Xxxxxxx & Xxxx
Investment Management Company. In computing the value of the net assets of
the Portfolio, there shall be excluded the amount owed to the Portfolio
with respect to shares which have been sold but not yet paid to the
Portfolio by Xxxxxxx & Xxxx, Inc.
Notwithstanding the foregoing, if the laws, regulations
or policies of any state in which shares of the Portfolio are qualified for
sale limit the operation and management expenses of the Portfolio, Xxxxxxx
& Xxxx Investment Management Company will refund to the Portfolio the
amount by which such expenses exceed the lowest of such state limitations.
VI. Undertakings of Xxxxxxx & Xxxx Investment Management
Company; Liabilities
Xxxxxxx & Xxxx Investment Management Company shall give
to Fund the benefit of its best judgment, efforts and facilities in
rendering advisory services hereunder.
Xxxxxxx & Xxxx Investment Management Company shall at
all times be guided by and be subject to the Portfolio's investment
policies, the provisions of the Articles of Incorporation and Bylaws of
Fund as each shall from time to time be amended, and to the decision and
determination of Fund's Board of Directors.
This Agreement shall be performed in accordance with
the requirements of the Investment Company Act of 1940, the Investment
Advisers 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 Investment Management Company, as an investment adviser and
affiliated person of Fund, Xxxxxxx & Xxxx Investment Management Company
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 Investment Management Company, it shall not be
subject to liability to Fund, the Portfolio or any stockholder of the
Portfolio 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 or financial instrument.
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 or series of the Portfolio 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
Investment Management Company at any time without penalty upon giving Fund
one hundred twenty (120) days' written notice (which notice may be waived
by Fund) and may be terminated by Fund at any time without penalty upon
giving Xxxxxxx & Xxxx Investment Management Company sixty (60) days'
written notice (which notice may be waived by Xxxxxxx & Xxxx Investment
Management Company), provided that such termination by Fund shall be
directed or approved by the vote of a majority of the Board of Directors of
Fund 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 the
Portfolio. 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 WHEREOF, 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) W&R Funds, Inc., for its
Capital ProtectionPlus Fund
By: _____________________
Xxxxxxx X. Xxxxxxxx
Vice President and Secretary
ATTEST:
By: ___________________
Xxxxxx X. Xxxxxxx
Assistant Secretary
(Seal) XXXXXXX & XXXX INVESTMENT
MANAGEMENT COMPANY
By: ____________________
Xxxxx X. Xxxxxxxx
President
ATTEST:
By: ___________________
Xxxxxx X. Xxxxxxx
Secretary
EXHIBIT A TO INVESTMENT MANAGEMENT AGREEMENT
W&R FUNDS, INC.
Capital ProtectionPlus Fund
FEE SCHEDULE
A cash fee computed each day on net asset value for the Portfolio at the
annual rate listed below.
Net Assets Fee
Up to $200 million 0.70%
Over $200 million and up to $500 million 0.60%
Over $500 million 0.50%
