MANAGEMENT AGREEMENT
XXXXX XXXXXX/TRAVELERS SERIES FUND INC.
(AIM Capital Appreciation Portfolio)
October 10, 1995
XXXXX XXXXXX MUTUAL FUNDS MANAGEMENT INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxx Xxxxxx/Travelers Series Fund Inc. (the "Company"), a corporation
organized under the laws of the State of Maryland, on behalf of the AIM
Capital Appreciation Portfolio (the "Portfolio"), confirms its agreement with
Xxxxx Xxxxxx Mutual Funds Management Inc. (the "Manager"), as follows:
1. Investment Description; Appointment
The Company desires to employ its capital relating to the Portfolio by
investing and reinvesting in investments of the kind and in accordance with
the investment objective(s), policies and limitations specified in the
prospectus (the "Prospectus") and the statement of additional information (the
"Statement") filed with the Securities and Exchange Commission as part of the
Company's Registration Statement on Form N-1A on February 23, 1994 as amended
from time to time, and in the manner and to the extent as may from time to
time be approved by the Board of Directors of the Company (the "Board").
Copies of the Prospectus and the Statement have been or will be submitted to
the Manager. The Company agrees promptly to provide copies of all amendments
to the Prospectus and the Statement to the Manager on an on-going basis. The
Company desires to employ and hereby appoints the Manager to act as manager of
the Portfolio. The Manager accepts the appointment and agrees to furnish the
services for the compensation set forth below.
2. Services as Investment Manager
Subject to the supervision, direction and approval of the Board of the
Company the Manager shall administer the Portfolio's corporate affairs and, in
connection therewith, shall furnish the Portfolio with office facilities and
with clerical, bookkeeping and recordkeeping services at such office
facilities, and, subject to the provisions of the Subadvisory Agreement (as
hereinafter defined), the Manager will manage the investment operations of the
Portfolio and will furnish or cause to be furnished to the Portfolio advice
and assistance with respect to the acquisition, holding or disposal of the
Portfolio's investments, in accordance with the Portfolio's investment
objective, policies and restrictions as stated in the Prospectus and
Statement. It is expressly understood and the Company hereby agrees that the
Manager will enter into an agreement, dated the date hereof (the "Subadvisory
Agreement") with AIM Capital Management, Inc. ("AIM Capital") pursuant to
which AIM Capital is authorized, in its sole discretion and without prior
consultation with the Manager to provide to the Portfolio the investment
advisory services specified therein and that so long as such agreement remains
in effect the Manager shall have no obligation hereunder to render to the
Portfolio the services specified therein.
3. Information Provided to the Company
The Manager shall keep the Company informed of developments materially
affecting the Portfolio, and shall, on its own initiative, furnish the Company
from time to time with whatever information the Manager believes is
appropriate for this purpose.
4. Standard of Care
The Manager shall exercise its best judgment and shall act in good faith
in rendering the services listed in paragraph 2 above. The Manager shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Company in connection with the matters to which this Agreement relates,
provided that nothing in this Agreement shall be deemed to protect or purport
to protect the Manager against any liability to the Company or the
shareholders of the Portfolio to which the Manager would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or by reason of the Manager's reckless disregard
of its obligations and duties under this Agreement.
5. Compensation
In consideration of the services rendered pursuant to this Agreement,
the Portfolio will pay the Manager an annual fee calculated at the rate of
0.80% of the Portfolio's average daily net assets; the fee is calculated daily
and paid monthly. The fee for the period from the Effective Date (defined
below) of the Agreement to the end of the month during which the Effective
Date occurs shall be prorated according to the proportion that such period
bears to the full monthly period. Upon any termination of this Agreement
before the end of a month, the fee for such part of that month shall be
prorated according to the proportion that such period bears to the full
monthly period and shall be payable upon the date of termination of this
Agreement. For the purpose of determining fees payable to the Manager, the
value of the Portfolio's net assets shall be computed at the times and in the
manner specified in the Prospectus and/or the Statement.
6. Expenses
The Manager shall bear all expenses (excluding brokerage costs,
custodian fees, auditors fees or other expenses to be borne by the Portfolio
or the Company) in connection with the performance of its services under this
Agreement and shall pay (a) AIM Capital, as sub-investment adviser to the
Portfolio under the Subadvisory Agreement, and (b) to any additional or
substitute sub-investment adviser or advisers retained by the Manager to
provide advisory services to the Portfolio (together with AIM Capital, each a
"Sub-Adviser"), the fees required to be paid to each Sub-Adviser. The
Portfolio will bear certain other expenses to be incurred in its operation,
including, but not limited to, investment advisory, sub-advisory and
administration fees, other than those payable to a Sub-Adviser or any
additional or substitute investment adviser; fees for necessary professional
and brokerage services; fees for any pricing service; the costs of regulatory
compliance; and pro rata costs associated with maintaining the Company's legal
existence and shareholder relations. All other expenses not specifically
assumed by the Manager hereunder on behalf of the Portfolio are borne by the
Company.
7. Reduction of Fee
If in any fiscal year the aggregate expenses of the Portfolio (including
fees pursuant to this Agreement and the Portfolio's administration agreement,
if any, but excluding interest, taxes, brokerage and extraordinary expenses)
exceed the expense limitation of any state having jurisdiction over the
Portfolio, the Manager shall reduce its fee to the Portfolio by the proportion
of such excess expense equal to the proportion that its fee hereunder bears to
the aggregate of fees paid by the Portfolio for investment management, advice
and administration in that year, to the extent required by state law. A fee
reduction pursuant to this paragraph 7, if any, shall be estimated, reconciled
and paid on a monthly basis. The Company confirms that, as of the date of
this Agreement, no such expense limitation is applicable to the Portfolio.
8. Services to Other Companies or Accounts
The Company understands that the Manager now acts, will continue to act
and may act in the future as investment manager or adviser to fiduciary and
other managed accounts, and as investment manager or adviser to other
investment companies, and the Company has no objection to the Manager's so
acting, provided that whenever the Portfolio and one or more other investment
companies or accounts managed or advised by the Manager have available funds
for investment, investments suitable and appropriate for each will be
allocated in accordance with a formula believed to be equitable to each
company and account. The Portfolio recognizes that in some cases this
procedure may adversely affect the size of the position obtainable for the
Portfolio. In addition, the Portfolio understands that the persons employed
by the Manager to assist in the performance of the Manager's duties under this
Agreement will not devote their full time to such service and nothing
contained in this Agreement shall be deemed to limit or restrict the right of
the Manager or any affiliate of the Manager to engage in and devote time and
attention to other businesses or to render services of whatever kind or
nature.
9. Term of Agreement
This Agreement shall become effective October 10, 1995 (the "Effective
Date") and shall continue for an initial two-year term and shall continue
thereafter so long as such continuance is specifically approved at least
annually as required by the Investment Company Act of 1940, as amended (the
"1940 Act"). This Agreement is terminable, without penalty, on 60 days'
written notice, by the Board of the Company or by vote of holders of a
majority (as defined in the 1940 Act and the rules thereunder) of the
outstanding voting securities of the Portfolio, or upon 60 days' written
notice, by the Manager. This Agreement will also terminate automatically in
the event of its assignment (as defined in the 1940 Act and the rules
thereunder).
10. Representation by the Company
The Company represents that a copy of the Articles of Incorporation is
on file with the Secretary of the State of Maryland.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning the
enclosed copy of this Agreement.
Very truly yours,
XXXXX XXXXXX/TRAVELERS SERIES FUND INC.
By:
Name: Xxxxx X. XxXxxxxx
Title: Chairman and Chief Executive Officer
Accepted:
XXXXX XXXXXX MUTUAL FUNDS MANAGEMENT INC.
By:
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
g:\funds\$sts\agreemts\mngt
