EX99.23(d)(1)
MANAGEMENT AGREEMENT
between
AFBA INVESTMENT MANAGEMENT COMPANY
and
AFBA FIVE STAR FUND, INC.
This AGREEMENT, made and entered into this 2nd day of June,
1997, by and between AFBA FIVE STAR FUND, INC., (a Maryland
corporation, hereinafter referred to as the "Fund") and AFBA
INVESTMENT MANAGEMENT COMPANY, a corporation organized under the
laws of the State of Virginia (hereinafter referred to as the
"Manager"), and which Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute but one instrument.
WHEREAS, the Fund was founded and incorporated by the
Manager for the purpose of engaging in the business of investing
and reinvesting its property and assets and to operate as an
open-end, diversified , management investment company, as defined
in the Investment Company Act of 1940 as amended ("Act"), under
which it is registered with the Securities and Exchange
Commission, and
WHEREAS, the Manager was formed for and is engaged in the
business of supplying investment advice and management service to
the Fund, as an Independent contractor, and
WHEREAS, the Fund Manager desires to enter into a
contractual arrangement whereby the Manager provides investment
advice and management service to the Fund for a fee,
NOW THEREFORE, in consideration of the mutual promises
herein contained, and other good and valuable consideration,
receipt of which is hereby acknowledged, it is mutually agreed
and contracted by and between the parties hereto that:
1. The Fund hereby employs the Manager, for the period set
forth in Paragraph 5 hereof, and on the terms set forth herein,
to render investment advice and management service to the Fund,
subject to the supervision and direction of the Board of
Directors of the Fund. The Manager hereby accepts such employment
and agrees, during such period, w render the services and assume
the obligations herein set forth, for the compensation herein
provided. The Manager shall, for all purposes herein, be deemed
to be an independent contractor, and shall, unless otherwise
expressly provided and authorized, have no authority to act for
or represent the Fund in any way, or in any other way be deemed
an agent of the Fund.
The Manager shall furnish the Fund investment management and
administrative services. Investment management shall include
analysis, research and portfolio recommendations consistent with
the Fund's objectives and policies. Administrative services shall
include the services and compensation of such members of the
manager's organization as shall be duly elected officers and or
Directors of the Fund and such other personnel as shall be
necessary to carry out its normal Operations; fees of the
independent Directors, the custodian, the independent public
accountant and legal counsel (but not legal and audit fees and
other costs in contemplation of or arising out of litigation or
administrative actions to which the Fund, its officers or
Directors are a party or incurred in anticipation of becoming a
party); rent; the cost of a transfer and dividend disbursing
agent or similar in-house services; bookkeeping; accounting and
all other clerical and administrative functions as may be
reasonable and necessary to maintain the Fund's records and for
it to operate as an open-end management investment company.
Exclusive of the management fee, the Fund shall bear the cost of
any interest, taxes, dues, fees and other charges of governments
and their agencies including the cost of qualifying the Fund's
shares for sale in any jurisdiction, brokerage commissions, or
any other expenses incurred by it which are not assumed herein by
the Manager.
All property, equipment and information used by the Manager
in the management and administration of the Fund shall belong to
the manager. Should the management and administrative
relationship between the Fund and the manager terminate, the Fund
shall be entitled to, and the manager shall provide the Fund, a
copy of all information and records in the Manager's file
necessary for the Fund to continue its functions, which shall
include computer systems and programs in use as of the date of
such termination; but nothing herein shall prohibit thereafter
the use of such information, Systems or programs by the manager,
so long as such does not unfairly interfere with the continued
operation of the Fund.
2. As compensation for the services to be rendered to the
Fund by the Manager under the provisions of this agreement, the
Fund agrees to pay semimonthly to the Manager an annual fee based
on the average total net assets of the Fund computed daily in
accordance with its Certificate of Incorporation and By-Laws as
follows:
a. one percent (1%) of the average total net assets
of the Fund.
b. Should the Fund's normal operating expenses
exclusive of taxes, interest, brokerage commission and
extraordinary costs exceed limits established by any law, rule or
regulation of any jurisdiction in which the Fund's shares are
registered for sale, the Manager shall reimburse the Fund in the
amount of the excess.
3. It is understood and agreed that the services to be
rendered by the Manager to the Fund under the provisions of the
Agreement are not to be deemed exclusive, and the Manager shall
be free to render similar or different services to others so long
as its ability to render the services provided for in this
Agreement shall not be impaired thereby.
4. It is understood and agreed that the Directors,
officers, agents, employees, and shareholders of the Fund may be
interested in the Manager as owners, employees, agents or
otherwise, and that owners, employees and agents of the Manager
may be interested in the Fund as shareholders or otherwise. It is
understood and agreed that shareholders, officers. Directors, and
other personnel of the Manager are and may continue to be
officers and Directors of the Fund, but that they receive no
remuneration from the Fund solely for acting in those capacities.
5. This Agreement shall become effective pursuant to its
approval by the Fund's Board of Directors and by the vote of a
majority of the outstanding shares of the Fund as prescribed by
the Act. It shall remain in force through the 31st day of
October, 1998 and thereafter may be renewed for successive
periods not exceeding one year only so long as such renewal and
continuance is specifically approved at least annually by the
Board of Directors or by vote of a majority of the outstanding
shares of the Fund as prescribed by the Act, and only if the
terms and the renewal of this Agreement have been approved by a
vote of a majority of the Directors of the Fund including a
majority of the Directors who are not parties to the Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval. No amendment
to this Agreement shall be effective unless the terms thereof
have been approved by the vote of a majority of outstanding
shares of the Fund as prescribed by the Act and by vote of a
majority of the Directors of the Fund who are not parties to the
Agreement or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such approval.
It shall be the duty of the Directors of the Fund to request and
evaluate, and the duty of the Manager to furnish, such
information as may reasonably be necessary to evaluate the terms
of this Agreement and any amendment thereto. This Agreement may
be terminated at any time, without the payment of any penalty, by
the Directors of the Fund, or by the vote of a majority of the
outstanding voting shares of the Fund as prescribed by the Act on
not more than sixty days written notice to the Manager, and it
may be terminated by the Manager upon not less than sixty days
written notice to the Fund. It shall terminate automatically in
the event of its assignment by either party unless the parties
hereby, by agreement, obtain an exemption from the Securities and
Exchange Commission from the provisions of the Act pertaining to
the subject matter of this paragraph. Any notice, request or
instruction provided for herein, or for the giving of which, the
occasion may arise thereunder, shall be deemed duly given, if in
writing and mailed by registered mail, postage prepaid, addressed
to the regular executive office of the Fund or the Manager as the
case may be. As used in this Agreement, the terms "assignment",
"a majority of the outstanding voting shares", and interested
persons" shall have the same meaning as similar terms contained
in the Act.
6. It is specifically provided in this Agreement that the
Manager is to secure the services of XXXXXXXXX CAPITAL
MANAGEMENT, INC. of Shawnee Mission, Kansas (at the sole expense
of the Manager), as its Investment Counsel to furnish advice and
recommendations with respect to the purchase and sale of
securities and the -ting of portfolio commitments; to place at
the disposal of the Manager such statistical information as may
reasonably be required and in general to superintend the
investments of the Fund, subject to the control and approval of
the Board of Directors of the Manager and the Board of Directors
of the Fund.
It is also specifically provided in this Agreement that
the Manager is to secure the services of XXXXX & BABSON, INC. of
Kansas City, Missouri (at the sole expense of the Manager), to
provide all clerical and administrative functions as may be
reasonable and necessary to maintain the Fund's records and for
it to operate as an open-end management investment company,
including serving as transfer and dividend disbursing agent.
7. As a condition of this agreement, the Fund shall have
the right to use the name "AFBA" as part of its name, so long as
the Manager, or any successor in interest, continues as a manager
to the Fund. However, nothing herein shall prohibit the right of
the Manager from granting to another investment company with the
Manager as its manager, and which has investment objectives and
policies different from those of the Fund, to use in its name the
name "AFBA". Should the Fund terminate the Manager, or its
successor, as its investment manager, either XXXXX & XXXXXX,
INC., KORNIIZER CAPITAL MANAGEMENT, INC., or the Manager, or
their respective successors in interest, may elect to notify the
Fund in writing that permission to use the name "AFBA" has been
withdrawn, whereupon the Fund, its officers, directors and
shareholders, expressly agree to take all necessary corporate
action and to proceed expeditiously to change the name of the
Fund and not use any other name or take any other action which
would indicate the Fund's continued association with the Manager.
If the use of the name "AFBA" is so withdrawn as aforesaid, the
Fund, its officers, directors and shareholders, understand and
agree that there shall be no limitation with respect to the
future use of the name "AFBA" by the Manager, or its successor in
interest, or with the permission of the Manager, or its
successor, by XXXXX & BABSON, INC. or its successor.
8. It is further agreed that the provisions of Paragraph
7 shall inure to the benefit of the Manager and may be imposed by
it or any successor in interest as if it or such successor in
interest were parties to this Agreement.
10. The Manager shall not be liable for any error in
judgment or mistake at law for any loss suffered by the Fund in
connection with any matters to which this Agreement relates,
except that nothing herein contained shall be construed to
protect the Investment Manager against any liability by reason of
willful misfeasance, bad faith or gross negligence in the
performance of duties or by reckless disregard of its obligations
or duties under this Agreement.
11. This Agreement may not be amended, transferred,
assigned, sold or in any manner hypothecated or pledged nor may
any new Agreement become effective without affirmative vote or
written consent of the holders of a majority of the shares of the
Fund.
AFBA INVESTMENT MANAGEMENT COMPANY
By /s/X.X. Xxxxxxx
X.X. Xxxxxxx
Lt. General, USAF (Ret.)
Chairman of the Board
Attest:
/s/Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Secretary
AFBA INVESTMENT MANAGEMENT COMPANY
By /s/X.X. Xxxxxxx
X.X. Xxxxxxx
Lt. General, USAF (Ret.)
Chairman of the Board
Attest:
/s/Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Secretary
