1
EXHIBIT (d).1
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 3rd day of March 2000, by and between Fortis
Series Fund, Inc., a Minnesota corporation (the "Fund") and Fortis Advisers,
Inc., a Minnesota corporation ("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 Series of
the Fund identified in Exhibit A. Each such Series is herein individually
referred to as a "Series," and the Series are herein collectively referred to as
the "Series."
The investment of the assets of the Series shall at all times be subject
to the applicable provisions of the Articles of Incorporation and Bylaws of the
Fund and the current Registration Statement (including the Prospectus and
Statement of Additional Information) of the Series and shall conform to the
policies and restrictions of the Series as set forth in such Registration
Statement and any additional limitations as may be adopted from time to time by
the Board of Directors of the Fund and communicated to Advisers. Within the
framework of the investment policies, restrictions and limitations of the
Series, Advisers shall have the sole and exclusive responsibility for the
management of the Series and the making and execution of all investment
decisions for the Series, provided:
Advisers may, at its option and expense, with respect to each Series,
appoint a sub-adviser or sub-advisers, which shall assume such
responsibilities and obligations of Advisers pursuant to this Investment
Advisory and Management Agreement as shall be delegated to the
sub-adviser or sub-advisers; provided, however, that any discretionary
investment decisions made by a sub-adviser on behalf of any of the Series
shall be subject to approval or ratification by Advisers, and, not
withstanding any delegation of responsibilities and obligations to a
sub-adviser, Advisers shall retain the right, in its discretion, to make
investment decisions for the Series. Any appointment of a sub-adviser
and assumption of responsibilities and obligations of Advisers by such
sub-adviser
1
2
shall be subject to approval by the Board of Directors of the Fund and,
to the extent (if any) required by law, by the shareholders of the
Series. Any appointment of a sub-adviser for a Series pursuant hereto
shall in no way limit or diminish Advisers' obligations and
responsibilities under this Investment Advisory and Management Agreement,
and Advisers shall be responsible for monitoring compliance by the
sub-adviser(s) with the investment policies, restrictions, and
limitations on the Series, and will also be responsible for ensuring that
the Series are managed in a way so that: (1) they meet the requirements
of Subchapter M of the Internal Revenue Code to be taxed as a regulated
investment company; and (2) they comply with the provisions of Section
817(h) of the Internal Revenue Code, and the regulations promulgated
thereunder.
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, restrictions and limitations of such Series.
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 required 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 shall create and maintain all reports, books and records relating
to its activities and obligations under this Agreement in such a manner as will
meet the obligations of the Fund under the Investment Company Act of 1940,
applicable federal and state tax and insurance laws and regulations and any
other law or regulation which may be or become applicable to the Fund. All
such reports, books and records shall be the property of the Fund.
Furthermore, such reports, books and records shall at all times be available
for copying and otherwise open to inspection and audit by the Securities and
Exchange Commission, banking and insurance regulators and other authorities and
regulators having authority over the Fund, and by officers and employees of,
and auditors employed by, the Fund. Advisers hereby further
2
3
agrees that, upon the termination of this Agreement, all reports, books and
records pertaining to Adviser's activities under this Agreement shall be
promptly segregated and returned to the Fund free from any claim or retention
of rights by Advisers.
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 for each Series, 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. Each 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
Series as determined as of the close of each business day of the month pursuant
to the Articles of Incorporation, By-Laws and currently effective Prospectus
and Statement of Additional Information of the Series. Exhibit A sets forth
the fee on an annual basis.
A Series' monthly fee is one-twelfth (1/12) of its annual fee. The fee
shall be prorated for any fraction of a month at the commencement or
termination of this Agreement.
3. ALLOCATION OF EXPENSES.
(a) In addition to the fee described in Section 2 hereof, the Fund shall
pay all its expenses which are not assumed by Advisers, Fortis Investors, Inc.
("Investors") or any other person. 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 and Statements of Additional Information
annually to existing shareholders and existing insurance contract owners,
custodian charges, auditing and legal expenses, insurance expenses, association
membership dues, and the expense of reports to shareholders, shareholders'
meetings, and proxy solicitations. Advisers shall bear the costs of acting as
the Fund's transfer agent, registrar, and dividend disbursing agent.
3
4
(b) Advisers (or Investors or Fortis Benefits Insurance Company or First
Fortis Life Insurance Company) shall bear all promotion expenses in
connection with the distribution of the Fund's shares, including
paying for prospectuses and shareholder reports for new shareholders
and new insurance contract owners, and the costs of sales literature.
4. LIMIT ON EXPENSES.
Out of its advisory fee, but not in excess thereof, Advisers shall
reimburse the Fund for each Series' expenses from the date of the initial
public offering until the date a Series' aggregate net assets first reach
$10,000,000, to the extent that the aggregate expenses of the Series (including
the investment advisory and management fees for such Series under paragraph 2
of this Agreement, but excluding interest, taxes, brokerage fees and
commissions) exceed an amount equal, on an annual basis, to the percentage of
the average daily net assets of the Series set forth in Exhibit B.
5. 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.
6. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
The effective date of this Agreement shall be March 3, 2000. 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 Series, by the vote of the holders of a majority of the outstanding
4
5
voting securities of such Series, 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 Series approves
this Agreement, this Agreement shall remain in effect with respect to such
approving Series whether or not the shareholders of any other Series 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
terminated with respect to a particular Series 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 Series, upon sixty (60) days' written notice to
Advisers. Any 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.
7. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until approved
by vote of the holders of a majority of the outstanding voting securities of
the Series that have approved and are subject to this Agreement. In addition,
if a majority of the outstanding voting securities of any Series of the Fund
votes to amend this Agreement, such amendment shall be effective with respect
to such Series whether or not the shareholders of any other Series vote to
adopt such amendment.
8. 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.
5
6
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 SERIES FUND, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its President
FORTIS ADVISERS, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its Chief Executive Officer
6
7
EXHIBIT A
Investment
Advisory and
Series Average Net Assets Management Fee
--------------------------------- ---------------------------- --------------
Money Market Series For the first $500 million .30%
For assets over $500 million .25%
U.S. Government Securities Series For the first $50 million .50%
For assets over $50 million .45%
Diversified Income Series For the first $50 million .50%
For assets over $50 million .45%
Multisector Bond Series For the first $100 million .75%
For assets over $100 .65%
High Yield Series For the first $250 million .50%
For assets over $250 million .45%
Global Asset Allocation Series For the first $100 million .90%
For assets over $100 million .85%
Asset Allocation Series For the first $250 million .50%
For assets over $250 million .45%
American Leaders Series For the first $35 million .90%
$35 million - $100 million .75%
For assets over $100 million .65%
Value Series For the first $100 million .70%
For assets over $100 million .60%
Capital Opportunities Series For the first $200 million .90%
$200 million - $500 million .85%
For assets over $500 million .80%
Growth & Income Series For the first $100 million .70%
For assets over $100 million .60%
S&P 500 Index Series All levels of assets .40%
Blue Chip Stock Series For the first $100 million .90%
For assets over $100 million .85%
Blue Chip Stock Series II For the first $200 million .95%
For assets over $200 million .90%
International Stock Series For the first $100 million .85%
For assets over $100 million .80%
Mid Cap Stock Series For the first $100 million .90%
For the next $150 million .85%
For assets over $250 million .80%
Small Cap Value Series For the first $50 million .90%
For assets over $50 million .85%
Global Growth Series For the first $500 million .70%
For assets over $500 million .60%
Global Equity Series For the first $200 million 1.00%
$200 million - $500 million .95%
For assets over $500 million .90%
1
8
EXHIBIT A - CONTINUED
Investment
Advisory and
Series Average Net Assets Management Fee
--------------------------------- ---------------------------- --------------
Large Cap Growth Series For the first $100 million .90%
$100 million - $200 million .85%
For assets over $200 million .80%
Investors Growth Series For the first $200 million .90%
$200 million - $500 million .85%
For assets over $500 million .80%
Growth Stock Series For the first $100 million .70%
For assets over $100 million .60%
Aggressive Growth Series For the first $100 million .70%
For assets over $100 million .60%
2
9
EXHIBIT B
Series Average Daily Net Assets
---------------------------- --------------------------
American Leaders Series 1.25%
Capital Opportunities Series 1.25%
Blue Chip Stock Series II 1.30%
Global Equity Series 1.35%
Investors Growth Series 1.25%
3
