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EXHIBIT 99.B5
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this ___ day of ________, 199_,
between STRONG _______________________ FUNDS, INC., a Wisconsin corporation
(the "Corporation"), and STRONG CAPITAL MANAGEMENT, INC., a Wisconsin
corporation (the "Adviser");
WITNESSETH
WHEREAS, the Corporation is an open-end management investment company
under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Corporation is authorized to create separate series, each
with its own separate investment portfolio; and,
WHEREAS, the Corporation desires to retain the Adviser, which is a
registered investment adviser under the Investment Advisers Act of 1940, to act
as investment adviser for each series of the Corporation listed in Schedule A
attached hereto, and to manage each of their assets;
NOW, THEREFORE, the Corporation and the Adviser do mutually agree and
promise as follows:
1. Employment. The Corporation hereby appoints Adviser as investment
adviser for each series of the Corporation listed on Schedule A attached hereto
(a "Portfolio" or collectively, the "Portfolios"), and Adviser accepts such
appointment. Subject to the supervision of the Board of Directors of the
Corporation and the terms of this Agreement, the Adviser shall act as
investment adviser for and manage the investment and reinvestment of the assets
of any Portfolio. The Adviser is hereby authorized to delegate some or all of
its services subject to necessary approval, which includes without limitation,
the delegation of its investment adviser duties hereunder to a subadvisor
pursuant to a written agreement (a "Subadvisory Agreement") under which the
subadvisor shall furnish the services specified therein to the Adviser. The
Adviser will continue to have responsibility for all investment advisory
services furnished pursuant to a Subadvisory Agreement. The Adviser shall (i)
provide for use by the Corporation, at the Adviser's expense, office space and
all necessary office facilities, equipment and personnel for servicing the
investments of each Portfolio and maintaining the Corporation's organization,
(ii) pay the salaries and fees of all officers and directors of the Corporation
who are "interested persons" of the Adviser as such term is defined under the
1940 Act, and (iii) pay for all clerical services relating to research,
statistical and investment work.
2. Allocation of Portfolio Brokerage. The Adviser is authorized, subject
to the supervision of the Board of Directors of the Corporation, to place
orders for the purchase and sale of securities and to negotiate commissions to
be paid on such transactions. The Adviser may, on behalf of each Portfolio, pay
brokerage commissions to a broker which provides brokerage and research
services to the Adviser in excess of the amount another broker would have
charged for effecting the transaction, provided (i) the Adviser determines in
good faith that the amount is reasonable in relation to the value of the
brokerage and research services provided by the executing broker in terms of
the particular transaction or in terms of the Adviser's overall
responsibilities with respect to a Portfolio and the accounts as to which the
Adviser exercises investment discretion, (ii) such payment is made in
compliance with Section 28(e) of the Securities Exchange Act of 1934 and other
applicable
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state and federal laws, and (iii) in the opinion of the Adviser, the
total commissions paid by a Portfolio will be reasonable in relation to the
benefits to such Portfolio over the long term.
3. Expenses. Each Portfolio will pay all its expenses and the Portfolio's
allocable share of the Corporation's expenses, other than those expressly
stated to be payable by the Adviser hereunder, which expenses payable by a
Portfolio shall include, without limitation, interest charges, taxes, brokerage
commissions and similar expenses, expenses of issue, sale, repurchase or
redemption of shares, expenses of registering or qualifying shares for sale,
expenses of printing and distributing prospectuses to existing shareholders,
charges of custodians (including sums as custodian and for keeping books and
similar services of the Portfolios), transfer agents (including the printing
and mailing of reports and notices to shareholders), registrars, auditing and
legal services, clerical services related to recordkeeping and shareholder
relations, printing of share certificates, fees for directors who are not
"interested persons" of the Adviser, and other expenses not expressly assumed
by the Adviser under Paragraph 1 above. If expenses payable by a Portfolio,
except interest charges, taxes, brokerage commissions and similar fees, and to
the extent permitted, extraordinary expenses, in any given fiscal year exceed
that percentage of the average net asset value of the Portfolio for such year,
as determined by valuations made as of the close of each business day of such
year, which is the most restrictive percentage expense limitation provided by
the laws of the various states in which the Portfolio's shares are qualified
for sale, or if the states in which the shares qualified for sale impose no
restrictions, then 2%, the Adviser shall reimburse the Portfolio for such
excess. Reimbursement of expenses by the Adviser shall be made on a monthly
basis and will be paid to a Portfolio by a reduction in the Adviser's fee,
subject to later adjustment month by month for the remainder of the Portfolio's
fiscal year.
4. Authority of Adviser. The Adviser shall for all purposes herein be
considered an independent contractor and shall not, unless expressly authorized
and empowered by the Corporation or any Portfolio, have authority to act for or
represent the Corporation or any Portfolio in any way, form or manner. Any
authority granted by the Corporation on behalf of itself or any Portfolio to
the Adviser shall be in the form of a resolution or resolutions adopted by the
Board of Directors of the Corporation.
5. Compensation of Adviser. For the services to be furnished during any
month by the Adviser hereunder, each Portfolio listed in Schedule A shall pay
the Adviser, and the Adviser agrees to accept as full compensation for all
services rendered hereunder, an Advisory Fee as soon as practical after the
last day of such month. The Advisory Fee shall be an amount equal to 1/12th of
the annual fee as set forth in Schedule B of the average of the net asset value
of the Portfolio determined as of the close of business on each business day
throughout the month (the "Average Asset Value"). In case of termination of
this Agreement with respect to any Portfolio during any month, the fee for that
month shall be reduced proportionately on the basis of the number of calendar
days during which it is in effect and the fee computed upon the Average Asset
Value of the business days during which it is so in effect.
6. Rights and Powers of Adviser. The Adviser's rights and powers with
respect to acting for and on behalf of the Corporation or any Portfolio,
including the rights and powers of the Adviser's officers and directors, shall
be as follows:
(a) Directors, officers, agents and shareholders of the Corporation are or
may at any time or times be interested in the Adviser as officers, directors,
agents, shareholders or otherwise. Correspondingly, directors,
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officers, agents and shareholders of the Adviser are or may at any time or times
be interested in the Corporation as directors, officers, agents and as
shareholders or otherwise, but nothing herein shall be deemed to require the
Corporation to take any action contrary to its Articles of Incorporation or any
applicable statute or regulation. The Adviser shall, if it so elects, also have
the right to be a shareholder in any Portfolio.
(b) Except for initial investments in a Portfolio, not in excess of
$100,000 in the aggregate for the Corporation, the Adviser shall not take any
long or short positions in the shares of the Portfolios and that insofar as it
can control the situation it shall prevent any and all of its officers,
directors, agents or shareholders from taking any long or short position in the
shares of the Portfolios. This prohibition shall not in any way be considered
to prevent the Adviser or an officer, director, agent or shareholder of the
Adviser from purchasing and owning shares of any of the Portfolios for
investment purposes. The Adviser shall notify the Corporation of any sales of
shares of any Portfolio made by the Adviser within two months after purchase by
the Adviser of shares of any Portfolio.
(c) The services of the Adviser to each Portfolio and the Corporation are
not to be deemed exclusive and Adviser shall be free to render similar services
to others as long as its services for others does not in any way hinder,
preclude or prevent the Adviser from performing its duties and obligations
under this Agreement. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Adviser, the Adviser shall not be subject to liability to the
Corporation or to any of the Portfolios or to any shareholder for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security.
7. Duration and Termination. The following shall apply with respect to the
duration and termination of this Agreement:
(a) This Agreement shall begin for each Portfolio as of the date of this
Agreement and shall continue in effect for two years. With respect to each
Portfolio added by execution of an Addendum to Schedule A, the term of this
Agreement shall begin on the date of such execution and, unless sooner
terminated as hereinafter provided, this Agreement shall remain in effect to
the date two years after such execution. Thereafter, in each case, this
Agreement shall remain in effect, for successive periods of one year, subject
to the provisions for termination and all of the other terms and conditions
hereof if: (a) such continuation shall be specifically approved at least
annually by either (i) the affirmative vote of a majority of the Board of
Directors of the Corporation, including a majority of the Directors who are not
parties to this Agreement or interested persons of any such party (other than
as Directors of the Corporation), cast in person at a meeting called for that
purpose or (ii) by the affirmative vote of a majority of a Portfolio's
outstanding voting securities; and (b) Adviser shall not have notified a
Portfolio in writing at least sixty (60) days prior to the anniversary date of
this Agreement in any year thereafter that it does not desire such continuation
with respect to that Portfolio. Prior to voting on the renewal of this
Agreement, the Board of Directors of the Corporation may request and evaluate,
and the Adviser shall furnish, such information as may reasonably be necessary
to enable the Corporation's Board of Directors to evaluate the terms of this
Agreement.
(b) Notwithstanding whatever may be provided herein to the contrary, this
Agreement may be terminated at any time with respect to any Portfolio, without
payment of any penalty, by affirmative vote of a
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majority of the Board of Directors of the Corporation, or by vote of a majority
of the outstanding voting securities of that Portfolio, as defined in Section
2(a)(42) of the 1940 Act, or by the Adviser, in each case, upon sixty (60)
days' written notice to the other party and shall terminate automatically in
the event of its assignment.
8. Amendment. This Agreement may be amended by mutual consent of the
parties, provided that the terms of each such amendment shall be approved by
the vote of a majority of the Board of Directors of the Corporation, including
a majority of the Directors who are not parties to this Agreement or interested
persons of any such party to this Agreement (other than as Directors of the
Corporation) cast in person at a meeting called for that purpose, and, where
required by Section 15(a)(2) of the 1940 Act, on behalf of a Portfolio by a
majority of the outstanding voting securities (as defined in Section 2(a)(42)
of the 0000 Xxx) of such Portfolio. If such amendment is proposed in order to
comply with the recommendations or requirements of the Securities and Exchange
Commission or state regulatory bodies or other governmental authority, or to
obtain any advantage under state or federal laws, the Corporation shall notify
the Adviser of the form of amendment which it deems necessary or advisable and
the reasons therefor, and if the Adviser declines to assent to such amendment,
the Corporation may terminate this Agreement forthwith.
9. Notice. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be in writing, addressed and
delivered, or mailed postpaid to the other party at the principal place of
business of such party.
10. Assignment. This Agreement shall neither be assignable nor subject to
pledge or hypothecation and in the event of assignment, pledge or hypothecation
shall automatically terminate. For purposes of determining whether an
"assignment" has occurred, the definition of "assignment" in Section 2(a)(4) of
the 1940 Act shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the day and year first stated above.
Attest: Strong Capital Management, Inc.
______________________________________ ______________________________________
Xxxxxxx X. Xxxxxxxxxxx, Vice President Xxxxxx X. Xxxxx, Senior Vice President
Attest: Strong Conservative Equity Funds, Inc.
______________________________________ ______________________________________
Xxxx X. Xxxxxxx, Vice President Xxxxxxx X. Xxxxxxxxxxx, Vice President
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SCHEDULE A
The Portfolio(s) of the Strong ___________Funds, Inc. currently subject to this
Agreement are as follows:
Date of Addition
Portfolio(s) to this Agreement
Strong __________ Fund _______________
Attest: Strong Capital Management, Inc.
______________________________________ ______________________________________
Xxxxxxx X. Xxxxxxxxxxx, Vice President Xxxxxx X. Xxxxx, Senior Vice President
Attest: Strong Conservative Equity Funds, Inc.
______________________________________ ______________________________________
Xxxx X. Xxxxxxx, Vice President Xxxxxxx X. Xxxxxxxxxxx, Vice President
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SCHEDULE B
Compensation pursuant to Paragraph 5 of this Agreement shall be calculated in
accordance with the following schedules:
Portfolio(s) Annual Fee
Strong __________ Fund ______%
Attest: Strong Capital Management, Inc.
______________________________________ ______________________________________
Xxxxxxx X. Xxxxxxxxxxx, Vice President Xxxxxx X. Xxxxx, Senior Vice President
Attest: Strong Conservative Equity Funds, Inc.
______________________________________ ______________________________________
Xxxx X. Xxxxxxx, Vice President Xxxxxxx X. Xxxxxxxxxxx, Vice President
