INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 2nd day of April 1993, by and between FORTIS
INCOME PORTFOLIOS, INC.(formerly FORTIS U.S. GOVERNMENT SECURITIES FUND, INC.),
a Minnesota corporation (the "Fund") and FORTIS Advisers, Inc. (formerly AMEV
Advisers, Inc.), a Minnesota ("Advisers").
1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES
The Fund hereby engages Advisers, and Advisers hereby agrees to act,
as investment adviser for, and to manage the affairs, business and the
investment of the assets of the Fund's Portfolios, which shall consist of Fortis
U. S. Government Securities Fund and any further portfolios from time to time
created by the Board of Directors of the Fund. Each such Portfolio is herein
individually referred to as a "Portfolio," and the Portfolios are herein
collectively referred to as the "Portfolios."
The investment of the assets of the Portfolio shall at all times be
subject to the applicable provisions of the Articles of Incorporation, Bylaws,
Registration Statement and current Prospectus and Statement of Additional
Information of the Fund and shall conform to the policies and purposes of the
Fund as set forth in the Registration Statement and Prospectus and Statement of
Additional Information as interpreted from time to time by the Board of
Directors of the Fund. Within the framework of the investment policies of the
Portfolios, Advisers shall have the sole and exclusive responsibility for the
management of the Portfolios and the making and execution of all investment
decisions for the Fund. Advisers shall report to the Board of Directors
regularly at such times and in such detail as the Board may from time to time
determine to be appropriate, in order to permit the Board to determine the
adherence of Advisers to the investment policies of the Portfolios.
Advisers shall, at its own expense, furnish the Fund suitable office
space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. Advisers shall arrange, if requested by
the Fund, for officers, employees or other affiliates of Advisers to serve
without compensation from the Fund as directors, officers, or employees of the
Fund if duly elected to such positions by the shareholders or directors of the
Fund.
Advisers hereby acknowledges that all records necessary in the
operation of the Fund, including records pertaining to shareholders and
investments, are the property of the Fund, and in the event that a transfer of
management or investment advisory services to someone other than Advisers should
ever occur, Advisers will promptly, and at its own cost, take all steps
necessary to segregate such records and deliver them to the Fund.
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2. COMPENSATION FOR SERVICES.
In payment for all services, facilities, equipment and personnel, and
for other costs of Advisers hereunder, the Fund shall pay to Advisers a monthly
fee, which fee shall be paid to Advisers not later than the fifth business day
of the month following the month in which such services are rendered. Such
monthly fee shall be at the rate or rates set forth below and shall be based on
the average of the net asset values of all of the issued and outstanding shares
of the respective Portfolio as determined as of the close of each business day
of the month pursuant to the Articles of Incorporation, Bylaws and currently
effective Prospectus and Statement of Additional Information of the Fund. The
following table sets forth the fee on a monthly and annual basis:
Monthly Equivalent Average Asset
Rate Annual Rate Values of the Fund
------- ----------- ------------------
1/15 of 1% 8/10 of 1% On the first $50,000,000
7/120 of 1% 7/10 of 1% On average net assets over $100,000,000
The fee shall be prorated for any fraction of a month at the
commencement or termination of this Agreement.
The investment advisory fee for any future Portfolio(s) shall be
determined by the Board of Directors of the Fund upon the creation of any such
Portfolio(s).
3. ALLOCATION OF EXPENSES.
In addition to the fee described in Section 2 hereof, the Fund shall
pay all its expenses which are not assumed by Advisers and/or Fortis Investors,
Inc. ("Investors"). These Fund expenses include, by way of example, but not by
way of limitation, the fees and expenses of directors and officers of the Fund
who are not "affiliated persons" of Advisers, interest expenses, taxes,
brokerage fees and commissions, fees and expenses of registering and qualifying
the Fund and its shares for distribution under federal and state securities
laws, expenses of preparing prospectuses and of printing and distributing
prospectuses annually to existing shareholders, custodian charges, auditing and
legal expenses, insurance expenses, association membership dues, and the
expenses of reports to shareholders, shareholders' meetings and proxy
solicitations. Advisers shall bear the costs of acting as the Portfolio's
transfer agent, registrar and dividend disbursing agent.
Advisers or Investors shall bear all promotional expenses in
connection with the distribution of the Fund's shares, including paying for
prospectuses and shareholder reports for new shareholders and the costs of sales
literature.
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4. FREEDOM TO DEAL WITH THIRD PARTIES.
Advisers shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
5. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
. The effective date of this Agreement shall be April 2, 1993. Wherever
referred to in this Agreement, the vote or approval of the holders of a majority
of the outstanding voting securities of the Fund shall mean the vote of 67% or
more of such securities if the holders of more than 50% of such securities are
present in person or by proxy or the vote of more than 50% of such securities,
whichever is less.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect only so long as such continuance is specifically approved at
least annually (a) by the Board of Directors of the Fund, or with respect to a
particular Portfolio by the vote of the holders of a majority of the outstanding
voting securities of such Portfolio, and (b) by a majority of the directors who
are not interested persons of Advisers or of the Fund cast in person at a
meeting called for the purpose of voting on such approval; provided that if a
majority of the outstanding voting securities of any of the Portfolios approves
this Agreement, this Agreement shall continue in effect with respect to such
approving Portfolio whether or not the shareholders of any other Portfolio of
the Fund approve this Agreement.
This Agreement may be terminated at any time without the payment of
any penalty by the vote of the Board of Directors of the Fund or by Advisers
upon sixty (60) days written notice to the other party. This Agreement may be
terminated with respect to a particular Portfolio at any time without the
payment of any penalty by the vote of the holders of a majority of the
outstanding voting securities of such Portfolios, upon sixty (60) days written
notice to Advisers. Any such termination may be made effective with respect to
both the investment advisory and management services provided for in this
Agreement or with respect to either of such kinds of services. This Agreement
shall automatically terminate in the event of its assignment.
6. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until
approved by a vote of the holders of a majority of the outstanding voting
securities of the Portfolios which have approved and are subject to this
Agreement. In addition, if a majority of the outstanding voting securities of
any Portfolio of the Fund votes to amend this Agreement, such amendment shall be
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effective with respect to such Portfolio whether or not the shareholders of any
other Portfolio vote to adopt such amendment.
7. NOTICES.
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Fund and Advisers have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
FORTIS U.S. GOVERNMENT SECURITIES
FUND, INC.
By /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Its Vice President
FORTIS ADVISERS, INC.
By /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Its Vice President
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