August 1, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Post-Effective Amendment No. 42 to
Registration Statement of Maxim Series Fund, Inc.
File No. 2-75503
Ladies and Gentlemen:
On behalf of Maxim Series Fund, Inc. (the "Fund"), this EDGAR filing is
made pursuant to Rule 485(b) under the Securities Act of 1933. The
purpose of this filing is to effect a definitive filing of a new portfolio to
the
Fund, incorporating the Investment Advisory Agreement for the Fund
including the new portfolio (Short-Term Maturity Bond Portfolio).
If you have any comments or questions regarding the foregoing, please
call Thomas C. Mira of Jorden Burt & Berenson at (202) 965-8158 or me
at (303) 689-3817.
Sincerely,
/s/ Beverly A. Byrne
Beverly A. Byrne
Assistant Secretary
Maxim Series Fund, Inc.As filed with the Securities and Exchange Commission
on August1,1995 Registration No. 2-75503
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 (X)
Pre-Effective Amendment No. ( )
Post-Effective Amendment No. <42/R> (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. <42/R> (X)
MAXIM SERIES FUND, INC.
(Exact Name of Registrant as Specified in Charter)
8515 E. Orchard Road
Englewood, Colorado 80111
Registrant's Telephone Number, including Area Code: (303) 689-3000
W. T. McCallum
President and Chief Executive Officer
Great-West Life & Annuity Insurance Company
8515 E. Orchard Road
Englewood, Colorado 80111
(Name and Address of Agent for Service)
Copies of Communications to:
James F. Jorden, Esquire
Jorden Burt & Berenson
1025 Thomas Jefferson St. N. W.
Suite 400 East
Washington, D. C. 20007-0805
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485
Xon August 1, 1995 pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a)(1) of Rule 485
on pursuant to paragraph (a)(1) of Rule 485
75 days after filing pursuant to paragraph (a)(2) of Rule 485
on pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following:
this post-effective amendment designates a new effective date for
a previously filed post-effective amendment
The Registrant has previously filed a declaration of indefinite registration
of its shares pursuant to Rule 24f-2 under the Investment Company Act
of 1940. MAXIM SERIES FUND, INC.
REGISTRATION STATEMENT ON FORM N-1A
CROSS-REFERENCE SHEET
PART A
Form N-1A Item Prospectus Caption
1. Cover Page Cover Page
2. Synopsis Not Applicable
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Introduction; Fund
Portfolios; The Fund and
Its Shares
5. Management of the Fund Management of the Fund
6. Capital Stock and Other Securities The Fund and Its Shares
7. Purchase of Securities Being Offered Introduction; Purchase
and Redemption of
Shares; Valuation of
Shares
8. Redemption or Repurchase Purchase and
Redemption of Shares
9. Pending Legal Proceedings Not Applicable
PART B
Statement of Additional
Form N-1A Item Information Caption
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Not Applicable
13. Investment Objectives and Policies The Fund Portfolios
14. Management of the Registrant Management of the Fund
15. Control Persons and Principal Purchase and
Holders of Securities Redemption of Shares
16. Investment Advisory and Other Services Management of Fund
17. Brokerage Allocation Portfolio Transactions and
Brokerage
18. Capital Stock and Other Securities Not Applicable
19. Purchase, Redemption and Price of Purchase and
Securities Being Offered Redemption of Shares
20. Tax Status Taxes
21. Underwriters Not Applicable
22. Calculation of Yield Quotations Calculation of Yields
of Performance Data and Total Return
23. Financial Statements Financial Statements
PART C
Form N-1A Item Part C Caption
24. Financial Statements and Exhibits Financial Statements and
Exhibits
25. Persons Controlled by or Under Persons Controlled by
Common Control or Under Common
Control
26. Number of Holders of Securities Number of Holders of
Securities
27. Indemnification Indemnification
28. Business and Other Connections Business and Other
Connections of
Investment Adviser of
Investment Adviser
29. Principal Underwriters Principal Underwriters
30. Location of Accounts and Records Location of Accounts and
Records
31. Management Services Management Services
32. Undertakings Undertakings
33. Signatures Signatures
MAXIM SERIES FUND, INC.
8515 E. Orchard Rd.
Englewood, Colorado 80111
Phone No. (303) 689-3000
Maxim Series Fund, Inc. (the "Fund"), an open-end
management investment company, includes the following non-
diversified investment portfolio: the Short Term Maturity Bond
Portfolio.
The investment objective of the Short-Term Maturity
Bond Portfolio is preservation of capital, liquidity, and
maximum total return through investment in an actively
managed portfolio of debt securities.
This Prospectus sets forth concisely the information
about the Fund that prospective investors ought to know before
investing. Additional information about the Fund has been filed
with the Securities and Exchange Commission and is available
upon request, without charge by calling or writing the Fund.
The Statement of Additional Information bears the same
date as this Prospectus and is incorporated by reference into
this Prospectus in its entirety.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS SHOULD BE READ
AND RETAINED FOR FUTURE REFERENCE.
THE GREAT-WEST LIFE ASSURANCE COMPANY
Investment Adviser
The date of this Prospectus is August 1, 1995.
INTRODUCTION
Maxim Series Fund, Inc. (the Fund) is an open-end
management investment company (a mutual fund) that sells its
shares to the Maxim Series Account, FutureFunds Series
Account and Pinnacle Series Account of Great-West Life &
Annuity Insurance Company (GWL&A) and TNE Series(k)
Account and TNE Retirement Plan Series Account (collectively,
the "Series Accounts") of The New England Mutual Life
Insurance Company ("TNE"). The shares in the Series
Accounts are currently used to fund benefits under certain
individual and group variable annuity contracts and variable life
insurance policies (the Variable Contracts) issued by
GWL&A and TNE. For information concerning your rights
under a variable contract, see the applicable Series Account
prospectus. Shares of the Fund are, and may in the future be,
used to fund benefits under other contracts issued by GWL&A,
its affiliates, TNE or other insurance companies. The
Great-West Life Assurance Company (Great-West) is the
Investment Adviser for the Fund.
THE FUND PORTFOLIOS
Each Portfolio of the Fund has its own investment
objective and investment strategy. The investment objective
may not be changed without a vote of a majority of the shares
of the Portfolio. A more detailed description of the Fund's
investment policies and a glossary further describing certain
investment securities mentioned in the discussions that follow
are contained in the Statement of Additional Information. The
Short-Term Maturity Bond Portfolio is the only Portfolio
offered in this prospectus and is described below.
Short-Term Maturity Bond Portfolio
The investment objective of the Short-Term Maturity
Bond Portfolio (the "Portfolio") is preservation of capital,
liquidity, and maximum total return through investment in an
actively managed portfolio of debt securities. It is classified as
a non-diversified portfolio.
The Portfolio will pursue its objectives primarily through
investment in a portfolio of investment grade bonds and other
debt securities of similar quality. The weighted average quality
of the Portfolio will be A rated or higher. The Portfolio will
consist only of individual securities with maturities of no longer
than three years.
Other debt securities in which the Portfolio may invest
include securities of, or guaranteed by, the U.S. Government, its
agencies or instrumentalities, corporate debt obligations, asset-
backed securities (including mortgage-related securities),
commercial paper, certificates of deposits, bankers' acceptances
and other short-term instruments relating to such securities.
Securities may be issued by both domestic and foreign entities
but may be denominated in U.S. dollars only.
U.S. Government securities are issued or guaranteed by
the U.S. Treasury or by an agency or instrumentality of the U.S.
Government. Not all U.S. Government securities are backed by
the full faith and credit of the United States. Some are
supported only by the credit of the agency that issued them.
The Portfolio may invest in repurchase agreements
relating to the securities in which it may invest. In a repurchase
agreement, the Portfolio buys a security at one price and
simultaneously agrees to sell it back at a higher price. Delays
or losses could result if the party to the agreement defaults or
becomes bankrupt.
The Portfolio may purchase securities on a when-issued
or forward delivery basis. When-issued and forward delivery
transactions are trading practices wherein payment for and
delivery of the securities take place at a future date. The
market value of a security could change during this period,
which could effect the market value of the Portfolio's assets.
See the Statement of Additional Information for further
information about when-issued and forward delivery securities.
In order to generate additional income, the Portfolio may
lend up to one-third of the portfolio securities to financial
borrowers of securities. This practice could cause a Portfolio to
experience a loss or a delay in recovering its securities. The
Statement of Additional Information contains more information
regarding the lending of securities.
The Portfolio can use various techniques to increase or
decrease its exposure to changing security prices, interest rates,
commodity prices, or other factors that effect securities values.
These techniques include buying and selling options and certain
futures contracts, entering into swap agreements and purchasing
index securities. Further information regarding such techniques
is contained in the Statement of Additional Information. These
techniques will be used for hedging purposes only.
Generally, the Portfolio intends to invest in investment
grade securities. An investment grade security is one rated in
one of the top four categories by one or more nationally
recognized security rating organizations or which is deemed by
the Investment Adviser to be of comparable creditworthiness.
However, if a security's rating were to drop below investment
grade (commonly referred to as "junk bonds"), the Portfolio may
determine to retain the security until such time as it is deemed
appropriate to sell the security, which could mean that the
security may be held to maturity. Lower rated fixed-income
securities generally provide higher yields, but are subject to
greater credit and market risks than higher quality fixed-income
securities and are considered predominately speculative with
respect to the ability of the issuer to meet principal and interest
payments. In addition, the secondary market may be less liquid
for lower-rated fixed-income securities which may make the
valuation and sale of the securities more difficult. The
Statement of Additional Information contains more information
about securities ratings.
The Portfolio may invest in money market securities as
part of the ongoing investment strategy or as a cash reserve.
It is estimated that the portfolio turnover rate will be in
excess of 100%, but generally is not expected to exceed 300%.
Turnover rates in excess of 100% generally result in higher
transaction costs (which are borne directly by the Portfolio).
The Portfolio is classified as non-diversified. This means
that the proportion of the Portfolio's assets that may be invested
in the securities of a single issuer is not limited by the
Investment Company Act of 1940. Because a relatively high
percentage of the Portfolio's assets may be invested in the
securities of a limited number of issuers, primarily within the
same industry or economic sector, the Portfolio's securities may
be more susceptible to any single economic, political or
regulatory occurrence than that experience by a diversified
portfolio.
Illiquid Securities
The Portfolio may invest up to 15% of its total assets in
"illiquid securities" (taken as of the time of acquisition of an
illiquid security). Illiquid securities are securities that may not
be sold in the ordinary course of business within seven days at
approximately the price used in determining the net asset value
of the Portfolio. This restriction applies to securities for which
a ready market does not exist, such as restricted securities, but
does not necessarily encompass all restricted securities.
Institutional markets for restricted securities have developed as
a result of the promulgation of Rule 144A under the Securities
Act of 1933 which provides a "safe harbor" from 1933 Act
registration requirements for qualifying sales to institutional
investors. When Rule 144A securities present an attractive
investment opportunity and otherwise meet selection criteria,
the Portfolio may make such investments. Whether or not such
securities are "illiquid" depends on the market that exists for
the particular security.
The staff of the Securities and Exchange Commission has
taken the position that the liquidity of Rule 144A securities is
a question of fact for the board of directors to determine, such
determination to be based on a consideration of the readily
available trading markets and the review of any contractual
restrictions. The staff also acknowledges that while the board
retains ultimate responsibility, it may delegate this function to
an investment adviser. The Board of Directors of the Fund has
delegated this responsibility to the Investment Adviser.
It is not possible to predict with assurance exactly how
the market for Rule 144A securities or any other security will
develop. A security which when purchased enjoyed a fair
degree of marketability may subsequently become illiquid and,
accordingly, a security which was deemed to be liquid at the
time of acquisition may subsequently become illiquid. In such
event, appropriate remedies will be considered to minimize the
effect on the Portfolio's liquidity.
<PAGE>
FOREIGN INVESTMENT RISKS
Investments in foreign securities present risks not
typically associated with investments in comparable securities of
U.S. issuers.
There may be less information publicly available about
a foreign corporate or government issuer than about a U.S.
issuer, and foreign corporate issuers are not generally subject to
accounting, auditing and financial reporting standards and
practices comparable to those in the United States. The
securities of some foreign issuers are less liquid and at times
more volatile than securities of comparable U.S. issuers.
Foreign brokerage commissions and securities custody costs are
often higher than those in the United States, and judgments
against foreign entities may be more difficult to obtain and
enforce. With respect to certain foreign countries, there is a
possibility of governmental expropriation of assets, confiscatory
taxation, political or financial instability and diplomatic
developments that could affect the value of investments in those
countries. The receipt of interest on foreign government
securities may depend on the availability of tax or other
revenues to satisfy the issuer's obligations.
The Portfolio's investments in foreign securities may
include investments in countries whose economies or securities
markets are not yet highly developed. Special considerations
associated with these investments (in addition to the
considerations regarding foreign investments generally) may
include, among other things, greater political uncertainties, an
economy's dependence on revenues from particular
commodities or on international aid or development assistance,
currency transfer restrictions, highly limited numbers of
potential buyers for such securities, delays and disruptions in
securities settlement procedures.
MANAGEMENT OF THE FUND
Overall responsibility for management and supervision of
the Fund rests with the Fund's directors. There are currently
five directors, three of whom are not interested persons of
the Fund within the meaning of that term under the Investment
Company Act of 1940. The Board meets regularly four times
each year and at other times as necessary. By virtue of the
functions performed by Great-West as Investment Adviser, the
Fund requires no employees other than its executive officers,
none of whom devotes full time to the affairs of the Fund.
These officers are employees of Great-West and receive
compensation from it. The Statement of Additional
Information contains the names of, and general background
information regarding, each Director and executive officer of
the Fund.
Investment Adviser
Great-West, located at 8515 E. Orchard Rd., Englewood,
Colorado 80111, serves as the Fund's Investment Adviser.
Through Power Corporation of Canada, a holding and
management company, the Investment Adviser is controlled by
a Canadian investor, Paul Desmarais, and his associates. The
Investment Adviser presently acts as the investment adviser for
Great-West Variable Annuity Account A, a separate account of
GWL&A registered as a management investment company, and
certain non-registered, qualified corporate pension plan
separate accounts of GWL&A. Great-West is a registered
investment adviser with the Securities and Exchange
Commission.
Subject to the supervision and direction of the Fund's
Board of Directors, the Investment Adviser manages the
Portfolio in accordance with its stated investment objective and
policies, makes investment decisions for the Portfolio and places
orders to buy and sell securities on behalf of the Fund. The
Investment Adviser provides investment advisory services and
pays all the expenses of the Portfolio, except extraordinary
expenses. As compensation for its services to the Portfolio, the
Investment Adviser receives monthly compensation at the
annual rate of 0.60% of the average daily net assets of Portfolio.
The day-to-day lead portfolio manager for the Short-
Term Maturity Bond Portfolio is B.G. Masters. Mr. Masters is
Manager, Public Bond Investments, Great-West, 1993 to
Present; Manager, Bond, Investment Grade Corporate Bond
and Zero-Coupon Treasury 1995 Portfolios of Maxim Series
Fund, June 1994 to Present. Previously, he was Assistant
Manager, Public Bond Investments, Great-West, 1987 to 1993.
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
Dividends from investment income of the Short-Term
Maturity Bond Portfolio shall be declared and reinvested
monthly. Distributions of net realized capital gains, if any, are
declared in the fiscal year in which they have been earned and
are reinvested in additional shares of the Portfolio at net asset
value.
The Fund has qualified, and intends to continue to
qualify, as a registered investment company under Subchapter
M of the Internal Revenue Code (Code). Each Portfolio of
the Fund is treated as a separate corporation for federal income
tax purposes. The Fund intends to distribute all of its net
income so as to avoid any Fund-level tax. Therefore, dividends
derived from interest and distributions of any realized capital
gains will be taxable, under Subchapter M, to the Fund's
shareholders, which in this case are GWL&A's and TNE's
Series Accounts. The Fund also intends to distribute sufficient
income to avoid the imposition of the Code Section 4982 excise
tax.
For a discussion of the taxation of GWL&A/TNE and
the Series Accounts, see Federal Tax Considerations included
in the applicable Series Account prospectus.
PURCHASE AND REDEMPTION OF SHARES
Shares of the Fund are sold and redeemed at their net
asset value next determined after initial receipt of a purchase
order or notice of redemption without the imposition of any
sales commission or redemption charge. However, certain
deferred sales and other charges may apply to the variable
contracts. Such charges are described in the applicable Series
Account prospectus.
VALUATION OF SHARES
The Portfolio's net asset value per share is determined
as of 4:00 p.m., EST/EDT once daily Monday through Friday,
except on holidays on which the New York Stock Exchange is
closed.
Net asset value of a portfolio share is computed by
dividing the value of the net assets of the Portfolio by the total
number of portfolio shares outstanding. Portfolio securities that
are traded on the stock exchange are valued at the last sale
price as of the close of business on the day the securities are
being valued, or, lacking any sales, at the mean between closing
bid and asked price. Securities traded in the over-the-counter
market are valued at the mean between the bid and asked
prices or yield equivalent as obtained from one or more dealers
that make markets in the securities. Portfolio securities that are
traded both in the over-the-counter market and on an exchange
are valued according to the broadest and most representative
market. Securities and assets for which market quotations are
not readily available are valued at fair value as determined in
good faith by or under the direction of the Board of Directors,
including valuations furnished by a pricing service that may be
retained by the Fund. Such a determination may take into
account, for example, quotations by dealers or issuers for
securities of similar type, quality, and maturity, or valuations
furnished by a pricing service retained by the Fund.
Money market securities held by the Fund are valued on
an amortized cost basis, which involves valuing a portfolio
instrument at its cost initially and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless
of the impact of fluctuating interest rates on the market value
of the instrument. While this method provides certainty in
valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price
the Fund would receive if it sold the security.
THE FUND AND ITS SHARES
The Fund was incorporated under the laws of the State
of Maryland on December 7, 1981 and is registered with the
Securities and Exchange Commission as an open-end,
management investment company. The Fund commenced
operations on February 25, 1982.
The Fund offers a separate class of common stock for
each portfolio. All shares will have equal voting rights, except
that only shares of a respective portfolio will be entitled to vote
on matters concerning only that portfolio. Each issued and
outstanding share of the Portfolio is entitled to one vote and to
participate equally in dividends and distributions declared by the
Portfolio and, upon liquidation or dissolution, to participate
equally in the net assets of the Portfolio remaining after
satisfaction of outstanding liabilities. The shares of the
Portfolio, when issued, will be fully paid and non-assessable,
have no preference, preemptive, conversion, exchange or similar
rights, and will be freely transferable. Shares do not have
cumulative voting rights and the holders of more than 50% of
the shares of the Fund voting for the election of directors can
elect all of the directors of the Fund if they choose to do so
and, in such event, holders of the remaining shares would not
be able to elect any directors.
The Series Accounts, as part of GWL&A or of TNE, and
Great-West, which provided the Fund's initial capitalization, and
the affiliates of Great-West, will be holders of the shares and be
entitled to exercise the rights directly as described in the
applicable Series Account prospectus.
The Fund offers its shares to the Series Accounts. For
various reasons, it may become disadvantageous for one or
more of the Series Accounts to continue to invest in Fund
shares. In such an event, one or more Series Accounts may
redeem its Fund shares. For further information, see the
Statement of Additional Information.
PERFORMANCE RELATED INFORMATION
The Fund may advertise certain performance related
information. Performance information about the Portfolio is
based on the Portfolio's past performance only and is no
indication of future performance.
The Fund may include total return in advertisements or
other sales materials regarding the Portfolio. When the Fund
advertises the total return of the Portfolio, it will usually be
calculated for one year, five years, and ten years or some other
relevant period if the Portfolio has not been in existence for at
least ten years. Total return is measured by comparing the
value of an investment in the Portfolio at the beginning of the
relevant period to the value of the investment at the end of the
period (assuming immediate reinvestment of any dividends or
capital gains distributions).
The Portfolio may also advertise its yield in addition to
total return. This yield will be computed by dividing the net
investment income per share earned during a recent one-month
period by the net asset value of a Fund share (reduced by any
dividend expected to be paid shortly out of Fund income) on
the last day of the period.
GENERAL INFORMATION
Reports to Shareholders
The fiscal year of the Fund ends on December 31 of
each year. The Fund will send to its shareholders, at least
semiannually, reports showing performance of the Portfolio and
other information. An annual report, containing financial
statements, audited by independent certified public accountants,
will be sent to shareholders each year.
Custodian
Morgan Guaranty Trust Company of New York
("Morgan"), New York City, New York, acts as custodian of the
Fund's assets. Morgan has custody of the Fund's assets held
within and outside the United States. Morgan holds the Fund's
assets in safekeeping and collects and remits the income
thereon subject to the instructions of the Fund.
Independent Auditors
Deloitte & Touche LLP has been selected as the
independent auditors of the Fund. The selection of
independent auditors is subject to annual ratification by the
Fund's shareholders.
Legal Counsel
Jorden Burt & Berenson is counsel for the Fund.
Additional Information
The telephone number or the address of the Fund
appearing on the front page of this prospectus should be used
for requests for additional information.
_____________________________________________
MAXIM SERIES FUND, INC.
Short-Term Maturity Bond Portfolio
_____________________________________________
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional
Information is not a prospectus but
supplements and should be read in
conjunction with the Prospectus for
the Fund. A copy of the
Prospectus may be obtained from
the Fund by writing the Fund at
8515 E. Orchard Rd., Englewood,
Colorado 80111 or by calling the
Fund at (303) 689-3000.
_____________________________________________
THE GREAT-WEST LIFE
ASSURANCE COMPANY
Investment Adviser
_____________________________________________
The date of the Prospectus to which this Statement
of Additional Information relates and the date of
this Statement of Additional Information is
<August 1, 1995./>
TABLE OF CONTENTS
Cross-reference
to page(s) in
Page Prospectus
Sale of Shares...... 3 6
The Fund Portfolios. 3 2
Description of Investment
Securities..... 3 2
Information About
Securities Ratings.. 8 --
Investment
Limitations......... 11 2
Lending of Portfolio
Securities....... 12 2
Foreign Securities... 12 2
Management of
the Fund............ 13 4
Directors and
Officers............ 13 --
The Investment
Adviser............. 14 5
Portfolio Transactions
and Brokerage....... 14 5
Portfolio Turnover... 14 --
Placement of Portfolio
Brokerage...... 15 5
Calculation of Yield
and Return.......... 16 7
Financial Statements. 17 --
SALE OF SHARES
Shares of the Fund are sold to the FutureFunds Series Account and the
Maxim Series Account, which are separate accounts established by
GWL&A to receive and invest premiums paid under variable annuity
contracts issued by GWL&A. Shares of the Fund are also sold to TNE
Series (K) Account of The New England Mutual Life Insurance Company
("TNE") to fund benefits under variable annuity contracts. Shares of the
Fund are also sold to the Pinnacle Series Account, a separate account
established by GWL&A to fund variable life insurance policies. Shares of
the Fund are, and in the future may be, sold to other separate accounts
of GWL&A, its affiliates or other insurance companies. It is conceivable
that in the future it may be disadvantageous for variable life insurance
separate accounts and variable annuity separate accounts to invest in
the Fund simultaneously. Although no such disadvantages are currently
foreseen either to variable life insurance policyowners or to variable
annuity contract owners, the Fund's Board of Directors intends to monitor
events in order to identify any material conflicts between such
policyowners and contract owners and to determine what action, if any,
should be taken in response thereto. Material conflicts could result from,
for example, (1) changes in state insurance laws, (2) changes in Federal
income tax laws, (3) changes in the investment management of any
portfolio of the Fund, or (4) differences in voting instructions between
those given by policyowners and those given by contract owners.
THE FUND PORTFOLIOS
The discussion that follows provides supplemental information to the
discussion captioned "The Fund Portfolios" in the Prospectus.
The Fund commenced operations as a management investment
company in 1982. The Short-Term Maturity Bond Portfolio was added
effective July 31, 1995.
Description of Investment Securities
1. Asset-Backed Securities. Asset-backed securities may be
classified as pass-through certificates of collateralized
obligations. They depend primarily on the credit quality of the
assets underlying such securities, how well the entity issuing the
security is insulated from the credit risk of the originator or any
other affiliated entities and the amount and quality of any credit
support provided to the securities. The rate of principal payment
on asset-backed securities generally depends on the rate of
principal payments received on the underlying assets which in
turn may be affected by a variety of economic and other factors.
As a result, the yield on any asset-backed security is difficult to
predict with precision and actual yield to maturity may be more
or less than the anticipated yield to maturity.
Pass-through certificates are asset-backed securities which
represent an undivided fractional ownership interest in any
underlying pool of assets. Pass-through certificates usually
provide for payments of principal and interest received to be
passed through to their holders, usually after deduction for
certain costs and expenses incurred in administering the pool.
Because pass-through certificates represent an ownership
interest in the underlying assets, the holders thereof bear directly
the risk of any defaults by the obligors on the underlying assets
not covered by any credit support.
Asset-backed securities issued in the form of debt instruments,
also known as collateralized obligations, are generally issued as
the debt of a special purpose entity organized solely for the
purposes of owning such assets and issuing such debt. Such
assets are most often trade, credit card or automobile
receivables. The assets collateralizing the debt instrument are
pledged to a trustee or custodian for the benefit of the holders
thereof. Such issuers generally hold no assets other than those
underlying the security and any credit support provided. As a
result, although payments on such securities are obligations of
the issuers, in the event of a default on the underlying assets not
covered by credit support, the issuing entities are unlikely to
have sufficient assets to satisfy their obligations on the related
asset-backed securities.
2. Bankers' Acceptance. A bankers' acceptance is a time draft
drawn on a commercial bank by a borrower, usually in
connection with international commercial transactions (to finance
the import, export, transfer or storage of goods). The borrower
is liable for payment as well as the bank, which unconditionally
guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less
and are traded in secondary markets prior to maturity. The
Fund generally will not invest in acceptances with maturities
exceeding 7 days where to do so would tend to create liquidity
problems.
3. Certificate of Deposit. A certificate of deposit generally is a short-
term, interest bearing negotiable certificate issued by a
commercial bank or savings and loan association against funds
deposited in the issuing institution.
4. Collateralized Mortgage Obligations. A Collateralized Mortgage
Obligation ("CMO") is a bond which uses certificates issued by
the Government National Mortgage Association, or the Federal
National Mortgage Association or the Federal Home Loan
Mortgage Corporation as collateral in trust. The trust then issues
several bonds which will be paid using the cash flow from the
collateral. The trust can redirect cash flow temporarily, first
paying one bond before other bonds are paid. The trust can
also redirect prepayments from one bond to another bond,
creating some stable bonds and some volatile bonds. The
proportion of principal cash flow and interest cash flow from the
collateral flowing to each bond can also be changed, creating
bonds with higher or lower coupons to the extreme of passing
through the interest only to one bond and principal only to
another bond. Variable rate or floating coupon bonds are also
often created through the use of CMO's.
5. Commercial Paper. Commercial paper is a short-term promissory
note issued by a corporation primarily to finance short-term credit
needs.
6. Covered Options. There are two types of covered options. A
covered call option gives the purchaser the right to buy the
underlying securities from the seller at a stated exercise price.
In writing a covered call option, the seller must own the
underlying securities subject to the option (or comparable
securities satisfying the cover requirements of securities
exchanges). A covered put option gives the purchaser the right
to sell the underlying securities at a stated price. In the case of
a covered put option, the seller will hold cash and/or high-grade
short-term debt obligations equal to the price to be paid if the
option is exercised. The seller will be considered to have
covered a put or call option if and to the extent that it holds an
option that offsets some or all of the risk of the option it has
written. Combinations of covered puts and calls may be written
on the same underlying security.
Put options may be purchased to protect its portfolio holdings in
an underlying security against a decline in market value. Such
protection is provided during the life of the put option because
the holder of the option is able to sell the underlying security at
the put exercise price regardless of any decline in the underlying
security's market price. In order for a put option to be profitable,
the market price of the underlying security must decline
sufficiently below the exercise price to cover the premium and
transaction costs. By using put options in this manner, the seller
will reduce any profit it might otherwise have realized from
appreciation of the underlying security by the premium paid for
the put option and by transaction costs.
Premiums are received from writing a put or call option, which
increases the return on the underlying security in the event the
option expires unexercised or is closed out at a profit. The
amount of the premium reflects, among other things, the
relationship between the exercise price and the current market
value of the underlying security, the volatility of the underlying
security, the amount of time remaining until expiration, current
interest rates, and the effect of supply and demand in the
options market and in the market for the underlying security. By
writing a call option, the seller limits its opportunity to profit from
any increase in the market value of the underlying security above
the exercise price of the option but continues to bear the risk of
a decline in the value of the underlying security. By writing a put
option, the seller assumes the risk that it may be required to
purchase the underlying security for an exercises price higher
than its then-current market value, resulting in a potential capital
loss unless the security subsequently appreciates in value.
Call options may be purchased to hedge against an increase in
the price of securities that the purchaser wants ultimately to buy.
Such hedge protection is provided during the life of the call
option since the holder of the call option is able to buy the
underlying security at the exercise price regardless of any
increase in the underlying security's market price. In order for a
call option to be profitable, the market price of the underlying
security must rise sufficiently above the exercise price to cover
the premium and transactions costs.
Special risks are presented by internationally-traded options.
Because of time differences, and because different holidays are
observed in different countries, foreign options markets may be
open for trading during hours or on days when U.S. markets are
closed. As a result, option premiums may not reflect the current
prices of the underlying interest in the United States.
7. Dealer (Over-the-Counter) Options. A dealer option is an option
which is not traded on an exchange and may be exercised
through the dealer from whom it had purchased the option. If a
Portfolio were to purchase a dealer option, failure by the dealer
to perform on the option would result in the loss of the premium
paid as well as loss of the expected benefit of the transaction.
Dealer options do not have a continuous liquid market as do
exchange-traded options. Consequently, the value of a dealer
option may be realized only be exercising it or reselling it to the
dealer who issued it. Dealer options will only be entered into
with dealers who will agree to and which are expected to be
capable of entering into closing transactions; however, there can
be no assurance the a dealer option may be liquidated at a
favorable price at any time prior to expiration. In the event of an
insolvency of the contra party, a dealer option may not be
liquidated.
The staff of the SEC has taken the position that purchased
dealer options and the assets used to secure the written dealer
options are illiquid securities. The cover used for written over-
the-counter options may be treated as liquid if the dealer agrees
that the over-the-counter option which the dealer has written may
be repurchased for a maximum price to be calculated by a
predetermined formula. In such cases, the over-the-counter
option would be considered illiquid only to the extent the
maximum repurchase price under the formula exceeds the
intrinsic value of the option. Accordingly, dealer options will be
treated as subject to the limitation on illiquid securities. If the
SEC changes its position on the liquidity of dealer options, the
Fund will change its treatment of such instrument accordingly.
8. Eurodollar Certificate of Deposit. A Eurodollar certificate of
deposit is a short-term obligation of a foreign subsidiary of a U.S.
bank payable in U.S. dollars.
9. Floating Rate Note. A floating rate note is debt issued by a
corporation or commercial bank that is typically several years in
term but has a resetting of the interest rate on a one to six month
rollover basis.
10. Forward Contracts. A forward contract involves an obligation to
purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract
agreed upon by the parties, at a price set at the time of the
contract. These contracts may be bought or sold to protect the
seller, to some degree, against a possible loss resulting from an
adverse change in the relationship between foreign currencies
and the U.S. dollar. Forward contracts can be used to protect
the value of a seller's investment securities by establishing a rate
of exchange that the seller can achieve at some future point in
time; they do not simulate fluctuations in the underlying prices of
the securities. Additionally, although forward contracts tend to
minimize the risk of loss due to a decline in the value of the
hedged currency, at the same time, they tend to limit any
potential gains that might result should the value of such
currency increase.
11. Hybrid Instruments. Hybrid instruments have recently been
developed and combine the elements of futures contracts or
options with those of debt, preferred equity or a depository
instrument. Often these hybrid instruments are indexed to the
price of a commodity, particular currency, or a domestic or
foreign debt or equity securities index. Hybrid instruments may
take a variety of forms, including, but not limited to, debt
instruments with interest or principal payments or redemption
terms determined by reference to the value of a currency or
commodity or securities index at a future point in time, preferred
stock with dividend rates determined by reference to the value of
a currency, or convertible securities with the conversion terms
related to a particular commodity. The risks associated with
hybrid instruments reflect a combination of the risks of investing
in securities, options, futures and currencies, including volatility
and lack of liquidity. Further, the prices of the hybrid instrument
and the related commodity or currency may not move in the
same direction or at the same time.
12. Index Futures Contracts. An index futures contract obligates the
seller to deliver (and the purchaser to take) an amount of cash
equal to a specific dollar amount times the difference between
the value of a specific index at the close of the last trading day
of the contract and the price at which the agreement is made.
No physical delivery of the underlying security in the index is
made. When purchasing an index futures contract or selling
index futures, (1) a segregated account consisting of cash, U.S.
Government securities, or other liquid high-grade debt securities
must be maintained with the custodian bank (and marked to
market daily) which, when added to any amounts deposited with
a futures commission merchant as margin, are equal to the
market value of the futures contract; or (2) the Fund must "cover"
its position.
13. Interest Rate Transactions. Interest rate swaps and interest rate
caps and floors are types of hedging transactions which are
utilized to attempt to protect the Portfolio against and potentially
benefit from fluctuations in interest rates and to preserve a return
or spread on a particular investment or portion of the Portfolio's
holdings. These transactions may also be used to attempt to
protect against possible declines in the market value of the
Portfolio's assets resulting from downward trends in the debt
securities markets (generally due to a rise in interest rates) or to
protect unrealized gains in the value of the Portfolio's holdings,
or to facilitate the sale of such securities.
Interest rate swaps involve the exchange with another party of
commitments to pay or receive interest; e.g., an exchange of
fixed rate payments for variable rate payments. The purchase of
an interest rate cap entitles the purchaser, to the extent that a
specified index exceeds a predetermined interest rate, to receive
payments of interest on a notional principal amount from the
party selling such interest rate cap. The purchase of an interest
rate floor entitles the purchaser, to the extent that a specified
index falls below a predetermined interest rate, to receive
payments of interest on a notional principal amount from the
party selling such interest rate floor.
The successful utilization of interest rate transactions depends on
the Portfolio manager's ability to predict correctly the direction
and degree of movements in interest rates. If the Portfolio
manager's judgment about the direction or extent of movement
in interest rates is incorrect, the Portfolio's overall performance
would be worse than if it had not entered into such transactions.
For example, if the Portfolio purchases an interest rate swap or
an interest rate floor to hedge against the expectation that
interest rates will decline but instead interest rates rise, the
Portfolio would lose part or all of the benefit of the increased
payments it would receive as a result of the rising interest rates
because it would have to pay amounts to its counterparts under
the swap agreement or would have paid the purchase price of
the interest rate floor.
The swap market has grown substantially in recent years with a
large number of banks and investment banking firms acting both
as principals and as agents utilizing standardized swap
documentation. Caps and floors are more recent innovations for
which standardized documentation has not yet been developed
and, accordingly, they are less liquid than swaps. Interest rate
swaps, caps and floors are considered by the Staff of the
Securities and Exchange Commission to be illiquid securities
and, therefore, the Portfolio may not invest more than 15% of its
assets in such instruments. Finally, there can be no assurance
that the Portfolio will be able to enter into interest rate swaps or
to purchase interest rate caps or floors at prices or on terms the
Portfolio manager believes are advantageous to the Portfolio. In
addition, although the terms of interest rate swaps, caps and
floors may provide for termination, there can be no assurance
that the Portfolio will be able to terminate an interest rate swap
or to sell or offset interest rate caps or floors that it has
purchased.
14. Repurchase Agreements. A repurchase agreement is an
instrument under which the purchaser acquires ownership of a
debt security and the seller agrees to repurchase the obligation
at a mutually agreed upon time and price. The total amount
received on repurchase is calculated to exceed the price paid by
the purchaser, reflecting an agreed upon market rate of interest
for the period from the time of purchase of the security to the
settlement date (i.e., the time of repurchase), and would not
necessarily relate to the interest rate on the underlying securities.
A purchaser will only enter repurchase agreements with
underlying securities consisting of U.S. Government or
government agency securities, certificates of deposit, commercial
paper or bankers' acceptances, and will be entered only with
primary dealers. While investment in repurchase agreements
may be made for periods up to 30 days, it is expected that
typically such periods will be for a week or less. The staff of the
Securities and Exchange Commission has taken the position that
repurchase agreements of greater than 7 days should be limited
to an amount not in excess of 10% of a purchaser's total assets.
Although repurchase transactions usually do not impose market
risks on the purchaser, the purchaser would be subject to the
risk of loss if the seller fails to repurchase the securities for any
reason and the value of the securities is less than the agreed
upon repurchase price. In addition, if the seller defaults, the
purchaser may incur disposition costs in connection with
liquidating the securities. Moreover, if the seller is insolvent and
bankruptcy proceedings are commenced, under current law, the
purchaser could be ordered by a court not to liquidate the
securities for an indeterminate period of time and the amount
realized by the purchaser upon liquidation of the securities may
be limited.
15. Reverse Repurchase Agreements. Reverse repurchase
agreements involve the sale of securities held by the seller, with
an agreement to repurchase the securities at an agreed upon
price, date and interest payment. The seller will use the
proceeds of the reverse repurchase agreements to purchase
other money market securities either maturing, or under an
agreement to resell, at a date simultaneous with or prior to the
expiration of the reverse repurchase agreement. The seller will
utilize reverse repurchase agreements when the interest income
to be earned from the investment of the proceeds from the
transaction is greater than the interest expense of the reverse
repurchase transaction.
16. Stripped Treasury Securities. Zero-Coupon Treasury Securities
come in two forms: U.S. Treasury bills issued directly by the U.S.
Treasury and U.S. Treasury bonds or notes and their unmatured
interest coupons which have been separated by their holder,
typically a custodian bank or investment brokerage firm. A
number of securities firms and banks have stripped the interest
coupons from Treasury bonds and notes and resold them in
custodial receipt programs with a number of different names.
The underlying Treasury bonds and notes themselves are held
in book-entry form at the Federal Reserve Bank or, in the case of
bearer securities, in trust on behalf of the owners thereof.
Publicly filed documents state that counsel to the underwriters of
these certificates or other evidences of ownership of the U.S.
Treasury securities have stated that for Federal tax and securities
purposes, purchasers of such certificates most likely will be
deemed the beneficial holders of the underlying U.S. Government
securities. In addition, such documents state that the terms of
custody for the custodial receipt programs generally provide that
the underlying debt obligations will be held separate from the
general assets of the custodian and will not be subject to any
right, charge, security interest, lien, or claim of any kind in favor
of the custodian or any person claiming through the custodian,
and the custodian will be responsible for applying all payments
received on these underlying debt obligations, if any, to the
related receipts or certificates without making any deductions
other than applicable tax withholding. The custodian is required
to maintain insurance in customary amounts to protect the
holders of the receipts or certificates against losses resulting
from the custody arrangement. The holders of receipts or
certificates, as the real parties in interest, are entitled to the
rights
and privileges of owners of the underlying debt obligations,
including the right, in the event of default, to proceed directly and
individually against the U.S. Government without acting in
concert with other holders of such receipts or the custodian.
When U.S. Treasury obligations have been stripped of their
unmatured interest coupons by the holder, the stripped coupons
are sold off separately. The principal or corpus is sold at a deep
discount because the buyer receives only the right to receive a
future fixed payment on the security and does not receive any
rights to periodic interest payments. Once stripped or separated,
the corpus and coupons may be sold separately. Typically, the
coupons are sold separately or grouped with other coupons with
like maturity dates and sold in bundled form. Purchasers of
Stripped Treasury Securities acquire, in effect, discount
obligations that are economically identical to the "zero coupon
bonds" that have been issued by corporations.
The U.S. Treasury has facilitated transfers of ownership of
Stripped Treasury Securities by accounting separately for the
beneficial ownership of particular interest coupon and corpus
payments on U.S. Treasury securities through the Federal
Reserve book-entry recordkeeping system. The Federal Reserve
program, as established by the U.S. Treasury Department, is
known as Separate Trading of Registered Interest and Principal
of Securities or "STRIPS". The plan eliminates the need for the
trust or custody arrangements.
17. Swap Deposit. Swap deposits are foreign currency short-term
investments consisting of a foreign exchange contract, a short-
term note in foreign currency and a foreign exchange forward
contract that is totally hedged in U.S. currency. This type of
investment can produce competitive yield in U.S. dollars without
incurring risks of foreign exchange.
18. Time Deposit. A time deposit is a deposit in a commercial bank
for a specified period of time at a fixed interest rate for which a
negotiable certificate is not received.
19. Variable Amount Master Demand Note. A variable amount
master demand note is a note which fixes a minimum and
maximum amount of credit and provides for lending and
repayment within those limits at the discretion of the lender.
Before investing in any variable amount master demand notes,
the liquidity of the issuer must be determined through periodic
credit analysis based upon publicly available information.
20. Warrants. Warrants are pure speculation in that they have no
voting rights, pay no dividends and have no rights with respect
to the assets of the corporation issuing them. Warrants basically
are options to purchase equity securities at a specific price valid
for a specific period of time. They do not represent ownership
of the securities, but only the right to buy them. Warrants differ
from call options in that warrants are issued by the issuer of the
security which may be purchased on their exercise, whereas call
options may be written or issued by anyone. The prices of
warrants do not necessarily move parallel to the prices of the
underlying securities.
21. When-issued Securities. When the purchase of securities on a
"when-issued" or on a "forward delivery" basis is permitted, it is
expected that, under normal circumstances, delivery of such
securities will be taken. When a commitment to purchase a
security on a "when-issued" or on a "forward delivery" basis is
made, procedures are established for such purchase consistent
with the relevant policies of the Securities and Exchange
Commission. Since those policies currently recommend that
assets equal to the amount of the purchase be held aside or
segregated to be used to pay for the commitment, cash, cash
equivalents, or high quality debt securities sufficient to cover any
commitments or to limit any potential risk are expected to be
held. However, although it is not intended that such purchases
would be made for speculative purposes and adherence to the
provisions of the Securities and Exchange Commission policies
is expected, purchase of securities on such bases may involve
more risk than other types of purchases. For example, the sale
of assets which have been set aside in order to meet
redemptions may be required. Also, if it is determined that it is
advisable as a matter of investment strategy to sell the "when-
issued" or "forward delivery" securities, the then available cash
flow or the sale of securities would be required to meet the
resulting obligations, or, although it would not normally be
expected, from the sale of the "when-issued" or "forward delivery"
securities themselves (which may have a value greater or less
than the payment obligation).
Information about Securities Ratings
Corporate Bonds - Moody's Investors Service, Inc.
Aaa - Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge". Interest payments are protected by a large or
by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-
term risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium-grade obligations.
Factors giving security to principal and interest are considered adequate
but elements may be present which suggest a susceptibility to
impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection
of interest and principal payments may be very moderate, and thereby
not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B - Bonds where are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
Caa - Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.
Ca - Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have
other marked shortcomings.
C - Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
Corporate Bonds - Standard & Poor's Corporation
AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal
and interest.
AA - Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority
of instances they differ from AAA issues only in a small degree.
A - Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
BBB - Bonds rated BBB are regarded as having an adequate capacity to
pay principal and interest. Whereas they normally exhibit protection
parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity for bonds rated BBB than for
bonds in the A category.
BB, B, CCC, and CC - Standard & Poor's describes the BB, B, CCC and
CC rated issues together with issues rated CCC and CC. Debt in these
categories is regarded on balance as predominantly speculative with
respect to capacity to pay interest and repay principal in accordance with
the terms of the obligation. BB indicates the lowest degree of
speculation and CC the highest degree of speculation. While such debt
will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse
conditions.
C - The rating C is reserved for income bonds on which no interest is
being paid.
D - Bonds rated D are in default, and payment of interest and/or
repayment of principal is in arrears.
Plus (+) or Minus (-): The ratings from "AA" to "B" may be modified by
the addition of a plus or minus sign to show relative standing within the
major rating categories.
Commercial Paper - Moody's Investors Service, Inc.
"Prime-1" - Commercial Paper issuers rated Prime-1 are judged to be of
the best quality. Their short-term debt obligations carry the smallest
degree of investment risk. Margins of support for current indebtedness
are large or stable with cash flow and asset protection well assured.
Current liquidity provides ample coverage of near-term liabilities and
unused alternative financing arrangements are generally available. While
protective elements may change over the intermediate or longer term,
such changes are most unlikely to impair the fundamentally strong
position of short-term obligations.
"Prime-2" - Issuers in the Commercial Paper market rated Prime-2 are
high quality. Protection for short-term holders is assured with liquidity
and value of current assets as well as cash generation in sound
relationship to current indebtedness. They are rated lower than the best
commercial paper issuers because margins of protection may not be as
large or because fluctuations of protective elements over the near or
immediate term may be of greater amplitude. Temporary increases in
relative short and overall debt load may occur. Alternative means of
financing remain assured.
"Prime-3" - Issuers in the Commercial Paper market rated Prime-3 have
an acceptable capacity for repayment of short-term promissory
obligations. The effect of industry characteristics and market composition
may be more pronounced. Variability in earning and profitability may
result in changes in the level of debt protection measurements and the
requirement for relatively high financial leverage. Adequate alternate
liquidity is maintained.
Commercial Paper - Standard & Poor's Corporation
"A" - Issuers assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issuers in this category are further
refined with the designation 1, 2 and 3 to indicate the relative degree of
safety.
"A-1" - This designation indicates that the degree of safety regarding
timely payment is very strong.
"A-2" - Capacity for timely payment for issuers with this designation is
strong. However, the relative degree of safety is not as overwhelming as
for issues designated "A-1".
"A-3" - Issuers carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the
adverse effects of changes in circumstances than obligations carrying the
higher designation.
<PAGE>
Investment Limitations
The Fund has adopted limitations on the investment activity of the
Portfolio which are fundamental policies and may not be changed without
the approval of the holders of a majority of the outstanding voting shares
of the Portfolio. "Majority" for this purpose and under the Investment
Company Act of 1940 means the lesser of (i) 67% of the shares
represented at a meeting at which more than 50% of the outstanding
shares are represented or (ii) more than 50% of the outstanding shares.
A complete statement of all such limitations are set forth below.
The Fund (i.e., the Portfolio) will not:
1. Invest more than 25% of its total assets (taken at market value at
the time of each investment) in the securities of issuers primarily
engaged in the same industry; utilities will be divided according
to their services; for example, gas, gas transmission, electric and
telephone each will be considered a separate industry for
purposes of this restriction; provided that there shall be no
limitation on the purchase of obligations issued or guaranteed by
the U.S. Government, or its agencies or instrumentalities, or of
certificates of deposit and bankers' acceptances.
2. Alone or together with any other investor make investments for
the purpose of exercising control over, or management of any
issuer.
3. Purchase or sell interests in commodities, commodities contracts,
oil, gas or other mineral exploration or development programs, or
real estate, except that the Fund may purchase securities of
issuers which invest or deal in any of the above; provided,
however, that the Short-Term Maturity Bond Portfolio may invest
in futures contracts based on financial indices and options on
such futures contracts.
4. Purchase any securities on margin (except that the Portfolio may
obtain such short-term credit as may be necessary for the
clearance of purchases and sales of portfolio securities, and the
Portfolio may make margin payments in connection with futures
contracts on financial indices (if required)) or make short sales of
securities or maintain a short position.
5. Make loans, except as provided in limitation (6) below and except
through the purchase of obligations in private placements (the
purchase of publicly-traded obligations are not being considered
the making of a loan).
6. Lend its portfolio securities in excess of 33 1/3% of the total
assets of the Portfolio, taken at market value at the time of the
loan, and provided that such loan shall be made in accordance
with the guidelines set forth under "Lending of Portfolio
Securities", in this Statement of Additional Information.
7. Borrow amounts in excess of 10% of its total assets, taken at
market value at the time of the borrowing, and then only from
banks as a temporary measure for extraordinary or emergency
purposes. At the time of such borrowing the Portfolio will have
an asset coverage of at least 300%.
8. Mortgage, pledge, hypothecate or in any manner transfer, as
security for indebtedness, any securities owned or held by the
Portfolio except as may be necessary in connection with
borrowings mentioned in limitation (7) above, and then such
mortgaging, pledging or hypothecating may not exceed 10% of
the Portfolio's total assets, taken at market value at the time
thereof. The Portfolio will not, as a matter of operating policy,
mortgage, pledge or hypothecate its portfolio securities to the
extent that at any time the percentage of the value of pledged
securities will exceed 10% of the value of the Portfolio's shares.
This restriction does not apply to segregated accounts.
9. Underwrite securities of other issuers except insofar as the
Portfolio may be deemed an underwriter under the Securities Act
of 1933 in selling portfolio securities.
10. Write, purchase or sell puts, calls or combinations thereof, except
that the Short-Term Maturity Bond Portfolio may buy and sell put
and call options (and any combination thereof) on securities
(including index options), on index futures contracts, on
securities indices, may buy and sell put and call warrants, the
values of which are based upon securities indices, and may buy
and sell put and call options (and any combination thereof) on
permissible futures contracts.
Lending of Portfolio Securities
Subject to investment limitation (6) under the caption "Investment
Limitations", above, the Portfolio may from time-to-time lend securities
from its portfolio to brokers, dealers and financial institutions and receive
as collateral cash or U.S. Treasury securities which, at all times while the
loan is outstanding, will be maintained in amounts equal to at least 100%
of the current market value of the loaned securities. Any cash collateral
will be invested in short-term securities, which will increase the current
income of the Portfolio. Such loans, which will not have terms longer
than 30 days, will be terminable at any time. The Portfolio will have the
right to regain record ownership of loaned securities to exercise
beneficial rights such as voting rights, subscription rights and rights to
dividends, interest or other distributions. The Portfolio may pay
reasonable fees to persons unaffiliated with the Fund for services in
arranging such loans.
Foreign Securities
Any Portfolio of the Fund, other than the Zero-Coupon Treasury Portfolio,
may purchase certain foreign securities. Investments in foreign
securities, particularly those of non-governmental issuers, involve
considerations which are not ordinarily associated with investing in
domestic issuers. The following describes certain of these considerations
in addition to those set forth in the Prospectus. Delays may be
encountered in settling securities transactions in certain foreign markets.
Also, it is possible that market quotations for foreign securities will not be
readily available. In such event, these securities shall be valued at fair
value as determined in good faith by the Board of Directors. If it should
become necessary, the Fund could encounter greater difficulties in
invoking legal processes abroad than would be the case in the United
States. Transaction costs in foreign securities may be higher. The
Investment Adviser will consider these and other factors before investing
in foreign securities, and will not make such investments unless, in its
opinion, such investments will meet the standards and objectives of the
Fund. In particular, management anticipates that these considerations
will be inapplicable to a variety of Canadian investments. The Portfolio
will not concentrate its investments in any particular foreign country, and
will purchase securities issued in dollar denominations only.
<PAGE>
MANAGEMENT OF THE FUND
Directors and Officers
The directors and executive officers of the Fund and their principal
occupations for at least the last five years are set forth below:
Name, Relationship with Principal
the Fund, and Address Occupation
Past Five Years
Rex Jennings Economic Development
Director2/ Consultant (since 1987);
Richard P. Koeppe, Ph.D. Professor, University of
Director3/ Colorado at Denver
(1987-1988 and Present);
Superintendent, Denver
Public Schools, District #1
(1988-1990)
Dennis Low The Great-West Life
Director1/ 5/ Assurance Company;
Executive Vice-President,
Financial Services (since
1991); Senior Vice-
President, Individual
(1987-1990)
James D. Motz The Great-West Life
Director1/ 5/ Assurance Company;
Senior Vice-President,
Employee Benefits (since
1991); Vice- President,
Group (1983-1990)
Sanford Zisman Attorney, Zisman &
Director4/ Ingraham, P.C.
Glen R. Derback The Great-West Life
Treasurer, Principal Assurance Company;
Financial and Accounting Vice-President, Financial
Officer1/ 5/ Control (since 1984);
Ruth B. Lurie The Great-West Life
Secretary1/ 5/ Assurance Company,
Vice-President and
Counsel (since 1988)
_________________________________
1/ Interested person as defined in the Investment Company
Act of 1940.
2/ 12501 East Evans Circle, Unit C, Aurora Colorado 80014
3/ 8679 East Kenyon Avenue, Denver, Colorado 80237
4/ 3773 Cherry Creek North Drive, Suite 250, Denver,
Colorado 80209.
5/ The Great-West Life Assurance Company, 8515 E.
Orchard Road, Englewood, Colorado 80111.
The Investment Adviser
The information that follows supplements the information provided about
the Investment Adviser under the caption "Management of the Fund -
Investment Adviser" in the Prospectus.
The Great-West Life Assurance Company (the "Investment Adviser")
serves as the investment adviser to the Fund pursuant to an Investment
Advisory Agreement dated April 1, 1982 with the Fund. The Investment
Adviser is a 99.4% owned subsidiary of Great-West Lifeco Inc., which in
turn is an 86.4% subsidiary of Power Financial Corporation, Montreal,
Quebec. A majority of the common stock of Power Financial Corporation
is owned by 171263 Canada Inc. 171263 Canada Inc is a wholly owned
subsidiary of Power Corporation of Canada, which, in turn, is controlled
by a Canadian investor, Paul Desmarais, and his associates.
The Investment Advisory Agreement, as amended, was considered by the
Fund's Board of Directors, including a majority of the Directors who are
not "interested persons" (as defined in the Investment Company Act of
1940), on April 11, 1995. The Agreement will remain in effect until April
1, 1996 and will continue in effect from year to year if approved annually
(a) by the Board of Directors of the Fund or by a majority of the
outstanding shares of the Fund, including a majority of the outstanding
shares of each portfolio, and (b) by a majority of the Directors who are
not parties to such contract or "interested persons" of any such party.
The agreement is not assignable and may be terminated without penalty
on 60 days' written notice at the option of either party or by the vote of
the shareholders of the Fund.
While the Investment Adviser is at all times subject to the direction of the
Board of Directors of the Fund, the Investment Advisory Agreement
provides that the Investment Adviser, subject to review by the Board of
Directors, is responsible for the actual management of the Fund and has
responsibility for making decisions to buy, sell or hold any particular
security. The Investment Adviser provides the portfolio managers for the
Fund. Such managers consider analysis from various sources, make the
necessary investment decisions and effect transactions accordingly. The
Investment Adviser also is obligated to perform certain administrative and
management services for the Fund and is obligated to provide all the
office space, facilities, equipment and personnel necessary to perform its
duties under the Agreement.
Advisory Fee.
The method of computing the investment advisory fee is fully described
in the Prospectus.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Portfolio Turnover
Brokerage costs to the Portfolio are commensurate with the rate of
portfolio activity. In computing the portfolio turnover rate for the Portfolio,
certain U.S. Government securities (long-term for periods before 1986
and short-term for all periods) and all other securities, the maturities or
expiration dates of which at the time of acquisition are one year or less,
are excluded. Subject to this exclusion, the turnover rate for a portfolio
is calculated by dividing (a) the lesser of purchases or sales of portfolio
securities for the fiscal year by (b) the monthly average value of portfolio
securities owned by the portfolio during the fiscal year.
There will be no fixed limitations regarding the portfolio turnover of
Portfolio. Portfolio turnover rates are expected to fluctuate under
constantly changing economic conditions and market circumstances.
Securities initially satisfying the basic policies and objectives of the
Portfolio may be disposed of when they are no longer deemed suitable.
A higher portfolio turnover rate may involve correspondingly greater
brokerage commissions and other expenses which might be borne by
the Fund and, thus, indirectly by its shareholders.
Placement of Portfolio Brokerage
The Fund does not have any obligation to deal with any broker, dealer
or group of brokers or dealers in the execution of transactions in portfolio
securities. Subject to policy established by the Board of Directors, the
Investment Adviser is primarily responsible for placement of the Fund's
portfolio transactions. In placing orders, it is the policy of the Fund to
obtain the most favorable net results, taking into account various factors,
including price, dealer spread or commissions, if any, size of the
transaction and difficulty of execution. While the Investment Adviser
generally will seek reasonably competitive spreads or commissions, the
Fund will not necessarily be paying the lowest spread or commission
available.
In placing portfolio transactions, the Investment Adviser may give
consideration to brokers who provide supplemental investment research,
in addition to such research obtained for a flat fee, to the Investment
Adviser, and pay commissions to such brokers or dealers furnishing such
services which are in excess of commissions which another broker or
dealer may charge for the same transaction. Such supplemental
research ordinarily consists of assessments and analyses of the business
or prospects of a company, industry, or economic sector. Supplemental
research obtained through brokers or dealers will be in addition to and
not in lieu of the services required to be performed by the Investment
Adviser. The expenses of the Investment Adviser will not necessarily be
reduced as a result of the receipt of such supplemental information. The
Investment Adviser may use any supplemental investment research
obtained for the benefit of the Fund in providing investment advice to its
other investment advisory accounts, and may use such information in
managing their own accounts. Conversely, such supplemental
information obtained by the placement of business for the Investment
Adviser will be considered by and may be useful to the Investment
Adviser in carrying out its obligations to the Fund.
Normally, the Fund will deal directly with the underwriters or dealers who
make a market in the securities involved unless better prices and
execution are available elsewhere. Such dealers usually act as principals
for their own account. On occasion, securities may be purchased directly
from the issuer. Bonds and money market securities are generally traded
on a net basis and do not normally involve either brokerage commissions
or transfer taxes. The cost of portfolio securities transactions of the Fund
that are not transactions with principals will consist primarily of brokerage
commissions or dealer or underwriter spreads between the bid and
asked price, although purchases from underwriters of portfolio securities
include a commission or concession paid by the issuer.
Securities held by the Fund may also be held by other separate accounts
or mutual funds for which the Investment Adviser serves as an adviser,
or held by GWL&A, the Investment Adviser for one or more clients when
one or more clients are selling the same security. If purchases or sales
of securities for the Fund or other entities for which they act as
investment adviser or for their advisory clients arise for consideration at
or about the same time, transactions in such securities will be made for
the respective entities and clients in a manner deemed equitable to all.
To the extent that transactions on behalf of more than one client of the
Investment Adviser during the same period may increase the demand for
securities being purchased or the supply of securities being sold, there
may be an adverse effect on price.
On occasions when the Investment Adviser deems the purchase or sale
of a security to be in the best interests of the Fund as well as other
accounts or companies, it may to the extent permitted by applicable laws
and regulations, but will not be obligated to, aggregate the securities to
be sold or purchased for the Fund with those to be sold or purchased for
such other accounts or companies in order to obtain favorable execution
and lower brokerage commissions. In that event, allocation of the
securities purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Investment Adviser in the manner it
considers to be most equitable and consistent with its fiduciary
obligations to the Fund and to such other accounts or companies. In
some cases this procedure may adversely affect the size of the position
obtainable for the Portfolio.
CALCULATION OF YIELD AND RETURN
Yield
As summarized in the Prospectus under the heading "Performance
Related Information," yield of the Portfolio will be computed by
annualizing a recent month's net investment income, divided by the
Portfolio share's net asset value on the last trading day of that month
multiplied by the average number of outstanding shares for the period.
Net investment income will reflect amortization of any market value
premium or discount of fixed income securities and may include
recognition of a pro rata portion of the stated dividend rate of dividend
paying portfolio securities. The yield of the Portfolio will vary from time
to time depending upon market conditions and the composition of the
Portfolio. Yield should also be considered relative to changes in the
value of the shares of the Portfolio and to the relative risks associated
with the investment objectives and policies of the Portfolio.
<PAGE>
Total Return
As summarized in the Prospectus under the heading "Performance
Related Information," total return is a measure of the change in value of
an investment in the Portfolio over the period covered, which assumes
any dividends or capital gains distributions are reinvested in the Portfolio
immediately rather than paid to the investor in cash. The formula for total
return used herein includes four steps: (1) adding to the total number
of shares purchased by a hypothetical $1,000 investment in the Portfolio
all additional shares which would have been purchased if all dividends
and distributions paid or distributed during the period had been
immediately reinvested; (2) calculating the value of the hypothetical initial
investment of $1,000 as of the end of the period by multiplying the total
number of shares owned at the end of the period by the net asset value
per share on the last trading day of the period; (3) assuming redemption
at the end of the period and deducting any applicable contingent
deferred sales charge; and (4) dividing this account value for the
hypothetical investor by the initial $1,000 investment. Total return will be
calculated for one year, five years and ten years or some other relevant
periods if the Portfolio has not been in existence for at least ten years.
Performance Comparisons
The Portfolio may from time to time include its yield and/or total return in
advertisements or in information furnished to present or prospective
shareholders. The Portfolio may include in such advertisements the
ranking of those performance figures relative to such figures for groups
of mutual funds categorized by Lipper Analytical Services, relevant
indexes and Donoghue Money Fund Report as having the same or
similar investment objectives.
The manner in which total return and yield will be calculated for public
use is described above.
<PAGE>
PART B
The Portfolio described in this post-effective amendment is new.
Accordingly, there are no relevant financial statements.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements.
The Portfolio described in this post-effective
amendment is new. Accordingly, there are no
relevant financial statements.
(b) Exhibits.
Items (b)(1)-(4), (b)(6)-(7), (b)(12) and (b)(13) are
incorporated by reference to Registrant's Pre-
Effective Amendment No. 1 to its Registration
Statement dated March 10, 1982.
Item (b)(5) is attached hereto and sub-advisory
agreements are incorporated by reference to
Registrant's Post-Effective Amendments No. 28
and 29 dated September 1, 1994.
Item (b)(8) is incorporated by reference to
Registrant's Post-Effective Amendment No. 24
dated March 1, 1993.
Computation of Performance Quotations [Item
(b)(16)] is incorporated by reference to
Registrant's Post-Effective Amendment No. 18 to
its Registration Statement dated May 1, 1989.
Items (b)(9) and (b)(14)-(15) are not applicable.
(11) Written Consents
(a) Written consent of Jorden Burt &
Berenson.
(b) Written consent of Deloitte & Touche
LLP, Independent Auditors for the Fund.
Item 25. Persons Controlled by or under Common Control with
Registrant.
The organizational chart showing persons controlled by
or under common control with Registrant follows this
page.
C-1Item 26. Number of Holders of
Securities:
(1) (2)
Number of
Record Holders Title of Class
as of July 31, 1995
- 0 - Common Stock ($.10 par value)
Item 27. Indemnification.
Item 4, Part II, of Registrant's Pre-Effective Amendment
No. 1 to its Registration Statement is herein incorporated
by reference.
Item 28. Business and Other Connections of Investment Adviser.
Part A to Item 5, Part II to Registrant's Post-Effective
Amendment No. 7 to its Registration Statement is herein
incorporated by reference.
Item 29. Principal Underwriter.
Not applicable.
Item 30. Location of Accounts and Records.
Item 7, Part II, of Registrant's Pre-Effective Amendment
No. 1 to its Registration Statement is herein incorporated
by reference.
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
(a) The Registrant undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders upon
request and without charge.
(b) The Registrant agrees to file a post-effective
amendment relating to the Portfolio described in this
post-effective amendment, using financial statements
which need not be certified, within four to six months
from the effective date of this post-effective amendment.
C-2
<PAGE>
Exhibit 5(b) INVESTMENT
ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made this 1st day of
April, 1982, by and between Maxim Series Fund, Inc., a Maryland
corporation ("the Fund"), and The Great-West Life Assurance Company,
a Canadian stock life insurance company registered as an investment
adviser under the Investment Advisers Act of 1940 ("the Adviser"),
whereby the Adviser will act as investment adviser to the Fund as follows:
ARTICLE I
Duties of the Adviser
The Fund hereby employs the Adviser to act as the investment
adviser to and manager of the Fund, and, subject to the review of the
Board of Directors of the Fund ("the Board"), to manage the investment
and reinvestment of the assets of its existing portfolio and of each
portfolio it may create in the future ("the Portfolios") and to administer its
affairs, for the period and on the terms and conditions set forth in this
Agreement. The Adviser hereby accepts such employment and agrees
during such period, at its own expense, to render the services and to
assume the obligations herein set forth for the compensation provided for
herein. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or represent the Fund in any
way or otherwise be deemed an agent of the Fund.
A. Investment Advisory Services. In carrying out its obligations
to manage the investment and reinvestment of the assets of the Fund,
the Adviser shall, when appropriate and consistent with the limitations set
forth in Section C hereof:
(a) perform research and obtain and evaluate
pertinent economic, statistical, and financial data relevant to the
investment policies of the Fund;
(b) consult with the Board and furnish to the Board
recommendations with respect to an overall investment plan for
approval, modification, or rejection by the Board;
(c) seek out, present, and recommend specific
investment opportunities, consistent with any overall investment
plan approved by the Board;
(d) take such steps as are necessary to implement
any overall investment plan approved by the Board, including
making and carrying out decisions to acquire or dispose of
permissible investments, management of investments and any
other property of the Fund, and providing or obtaining such
services as may be necessary in managing, acquiring or
disposing of investments;
(e) regularly report to the Board with respect to the
implementation of any approved overall investment plan and any
other activities in connection with management of the assets of
the Account;
(f) maintain all required accounts, records,
memoranda, instructions or authorizations relating to the
acquisition or disposition of investments for the Fund; and
(g) determine the net asset value of the Fund as
required by applicable law.
If, in the judgment of the Adviser, the Fund would be benefitted
by supplemental investment research from other persons or entities,
outside the context of a specific brokerage transaction, the Adviser is
authorized to obtain and pay a reasonable flat fee for such information.
Supplemental investment research shall be limited to statistical and other
factual information, advice regarding economic factors and trends, and
advice as to occasional transactions in specific securities, and shall not
involve general advice or recommendations regarding the purchase or
sale of securities. The expense of the Adviser may not be necessarily
reduced as a result of the receipt of such supplement information.
B. Administrative Services. In addition to the performance of
investment advisory services, the Adviser shall perform, or supervise the
performance of, administrative services in connection with the
management of the Fund and the Portfolios, including all financial
reporting for the Fund. In this connection, the Adviser agrees to (i) assist
in supervising all aspects of the Fund's operations, including the co-
ordination of all matters relating to the functions of the custodian, transfer
agent or other shareholder service agents, if any, accountants, attorneys
and other parties performing services or operational functions for the
Fund, (ii) provide the Fund, at the Adviser's expense, with services of
persons, who may be the Adviser's officers, competent to perform such
administrative and clerical functions as are necessary in order to provide
effective administration of the Fund, including duties in connection with
certain reports and the maintenance of certain books and records of the
Fund, and (ii) provide the Fund, at the Adviser's expense, with adequate
office space and related services necessary for its operations as
contemplated in this Agreement. Nothing contained herein will be
construed to restrict the Fund's right to hire its own employees or to
contract for services to be performed by third parties.
C. Limitations on Advisory Services. The Adviser shall perform
the services under this Agreement subject to the review of the Board and
in a manner consistent with the investment objectives, policies, and
restrictions of the Fund as stated in its Registration Statement, as
amended from time to time, filed with the Securities and Exchange
Commission, its Articles of Incorporation and Bylaws, as amended from
time to time and the provisions of the Investment Company Act of 1940,
as amended (the "Investment Company Act").
The Fund has furnished or will furnish the Adviser with copies of
the Fund's Prospectus, Articles of Incorporation, and Bylaws as currently
in effect and agrees during the continuance of this Agreement to furnish
the Adviser with copies of any amendments or supplements thereto
before or at the time the amendments or supplements become effective.
The Adviser will be entitled to rely on all documents furnished by the
Fund.
ARTICLE II
Compensation of the Adviser
A. Investment Advisory Fee. As compensation for its services to
the Fund, the Adviser receives monthly compensation at the annual rate
of 0.25% of the average daily net assets of the Fund.
B. Allocation of Expenses. The Adviser shall be responsible for
all expenses incurred in performing the services set forth in Article I
hereunder. These expenses include costs incurred in providing
investment advisory services; compensating and furnishing office space
for officers and employees of the adviser connected with investment and
economic research, trading, and investment management of the Fund;
and paying the fees of all directors of the Fund who are affiliated persons
of the Adviser or any of its subsidiaries.
The Fund pays all other expenses incurred in its operation and
all of its general administrative expenses, including redemption expenses,
expenses of portfolio transactions, shareholder servicing costs, pricing
costs (including the daily calculation of net asset value), interest, charges
of the custodian and transfer agent, if any, cost of auditing services,
directors' fees, legal expenses, state franchise taxes, certain other taxes,
expenses of registering the shares under Federal and state securities
laws, Securities and Exchange Commission fees, advisory fees, certain
insurance premiums, costs of maintenance of corporate existence,
investor services (including allocable personnel and telephone expenses),
costs of printing proxies, stock certificates, costs of corporate meetings,
and any extraordinary expenses, including litigation costs. Accounting
services are provided for the Fund by the Adviser and the Fund
reimburses the Adviser for its costs in connection therewith. The
organizational expenses of the Fund were paid by the Adviser, and the
Adviser will be reimbursed by the Fund for such expenses through
payments amortized over five years, with such payments not to exceed
$20,000 annually. In the event that these payments do not fully
reimburse the Investment Adviser for organization expense, payments not
to exceed $20,000 annually will be made in subsequent years. The sum
of all organizational expenses reimbursed by the Fund in the aggregate
shall not exceed $125,000.
C. Notwithstanding the foregoing, when expenses, as hereinafter
described, exceed at the annual rate of 1% of the average daily net
assets of the Fund, such excess will be paid by the Adviser. The
expense is the sum of the Investment Advisory fee (A above) and
expenses paid directly by the Fund (described in B above).
ARTICLE III
Portfolio Transactions and Brokerage
The Adviser agrees to determine the securities to be purchased
or sold by the Portfolios, subject to the provisions of Article I, and to
place orders pursuant to its determinations, either directly with the issuer,
with any broker-dealer or underwriter that specialized in the securities for
which the order is made, or with any other broker or dealer selected by
the Adviser, subject to the following limitations.
The Adviser is authorized to select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Fund and
will use its best efforts to obtain the most favorable net results and
execution of the Fund's orders, taking into account all appropriate
factors, including price, dealer spread or commission, if any, size of the
transaction, and difficulty of the transaction. In evaluating the net results
of brokerage services offered by brokers or dealers that also provide
supplemental investment research to the Adviser for a flat fee (see Article
I) the Adviser need not take such a flat fee into consideration.
If, in the judgment of the Adviser, the Fund would be benefitted
by supplemental investment research in addition to such research
furnished for a flat fee, the Adviser is authorized to pay spreads or
commissions to brokers or dealers furnishing such services in excess of
spreads or commissions which another broker or dealer may charge for
the same transaction. The expenses of the Adviser may not necessarily
be reduced as a result of receipt of such supplemental information.
Subject to the above requirements and the provisions of the
Investment Company Act of 1940, the Securities Exchange Act of 1934,
other applicable provisions of law, and the terms of any exemption(s)
therefrom, nothing shall prohibit the Adviser from selecting brokers or
dealers with which it or the Fund are affiliated.
ARTICLE IV
Activities of the Adviser
The services of the Adviser to the Fund under this Investment
Advisory Agreement are not to be deemed exclusive and the Adviser will
be free to render similar services to others so long as its services under
this Investment Advisory Agreement are not impaired. It is understood
that directors, officers, employees and shareholders of the Fund are or
may become interested in the Adviser, as directors, officers, employees
or shareholders or otherwise and that directors, officers, employees or
shareholders of the Adviser are or may become similarly interested in the
Fund, and that the Adviser is or may become interested in the Fund as
shareholder or otherwise.
It is agreed that the Adviser may use any supplemental
investment research obtained for the benefit of the Fund in providing
investment advice to its other investment advisory accounts. The Adviser
or its subsidiaries may use such information in managing their own
accounts. Conversely, such supplemental information obtained by the
placement of business for the Adviser or other entities advised by the
Adviser will be considered by and may be useful to the Adviser in
carrying out its obligations to the Fund.
Securities held by the Fund may also be held by separate
accounts or other mutual funds for which the Adviser acts as an adviser
or by the Adviser or its subsidiaries. Because of different investment
objectives or other factors, a particular security may be bought by the
Adviser or its subsidiaries or for one or more clients when one or more
clients are selling the same security. If purchases or sales of securities
for the Fund or other entities for which the Adviser or its subsidiaries act
as investment adviser or for their advisory clients arise for consideration
at or about the same time, the Fund agrees that the Adviser may make
transactions in such securities, insofar as feasible, for the respective
entities and clients in a manner deemed equitable to all. To the extent
that transactions on behalf of more than one client of the Adviser during
the same period may increase the demand for securities being
purchased or the supply of securities being sold, the Fund recognizes
that there may be an adverse effect on price.
It is agreed that, on occasions when the Adviser deems the
purchase or sale of a security to be in the best interests of the Fund as
well as other accounts or companies, it may, to the extent permitted by
applicable laws and regulations, but will not be obligated to, aggregate
the securities to be sold or purchased for the Fund with those to be sold
or purchased for other accounts or companies in order to obtain
favorable execution and low brokerage commissions. In that event,
allocation of the securities purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Adviser in the manner it
considers to be most equitable and consistent with its fiduciary
obligations to the Fund and to such other accounts or companies. The
Fund recognizes that in some cases this procedure may adversely affect
the size of the position obtainable for a Fund portfolio.
ARTICLE V
Effectiveness of the Agreement
This Investment Advisory Agreement shall not become effective
(and the Adviser shall not serve or act as investment adviser) unless and
until it is approved by the Board including a majority of directors who are
not parties to this Agreement or interested persons of any such party to
this Agreement, and by the sole shareholder; and this Agreement shall
come into full force and effect on the date on which it is so approved.
<PAGE>
ARTICLE VI
Term of the Agreement
This Investment Advisory Agreement shall remain in effect until
the earlier of one year from its effective date or the date of the first annual
or special meeting of shareholders of the Fund and shall continue so
long as such continuance is specifically approved by a majority of the
outstanding shares of the Fund at that time and at least annually
thereafter (a) by the vote of the majority of the Board, or by vote of a
majority of the outstanding shares of the Fund, including a majority of the
outstanding shares of each Portfolio, and (b) by the vote of a majority of
the members of the Board, who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called
for the purpose of voting on such approval. In connection with such
approvals, the Board shall request and evaluate, and the Adviser shall
furnish, such information as may be reasonably necessary to evaluate the
terms of this Agreement. This Agreement:
(a) shall not be terminated by the Adviser without sixty days'
prior written notice and without the prior approval of a
new investment advisory agreement by vote of a majority
of the outstanding shares of the Fund;
(b) shall be subject to termination, without the payment of
any penalty, by the Board or by vote of a majority of the
outstanding voting securities of the Fund, on sixty days'
written notice to the Adviser;
(c) shall not be amended without specific approval of such
amendment by (i) the Board, or by the vote of a majority
of the outstanding shares of the Fund, including a
majority of the outstanding shares of each Portfolio, and
(ii) a majority of those directors who are not parties to
this Agreement or interested persons of such a party,
cast in person at a meeting called for the purpose of
voting on such approval; and
(d) shall automatically terminate upon assignment by either
party.
ARTICLE VII
Recordkeeping
The Adviser agrees that all accounts and records which it
maintains for the Fund shall be the property of the Fund and that it will
surrender promptly to the designated officers of the Fund any or all such
accounts and records upon request. The Adviser further agrees to
preserve for the period prescribed by the rules and regulations of the
Securities and Exchange Commission all such records as are required
to be maintained pursuant to said rules. The Adviser also agrees that
it will maintain all records and accounts regarding the investment
activities of the Fund in a confidential manner. All such accounts or
records shall be made available, within five (5) business days of the
request, to the Fund's accountants or auditors during regular business
hours at the Adviser's offices upon reasonable prior written notice. In
addition, the Adviser will provide any materials, reasonably related to the
investment advisory services provided hereunder, as may be reasonably
requested in writing by the directors or officers of the Fund or as may be
required by any governmental agency having jurisdiction.
ARTICLE VIII
Liability of the Adviser
In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties on the part of the Adviser
(or its officers, directors, agents, employees, controlling persons,
shareholders, and any other person or entity affiliated with the Adviser or
retained by it to perform or assist in the performance of its obligations
under this Agreement), neither the Adviser nor any of its officers,
directors, employees or agents shall be subject to liability to the Fund or
to any shareholder for any act or omission in the course of, or connected
with, rendering services hereunder, including without limitation any error
of judgment or mistake of law or for any loss suffered by the Fund or any
shareholder in connection with the matters to which this Agreement
relates, except to the extent specified in Section 36(b) of the Investment
Company Act concerning loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services.
ARTICLE IX
Governing Law
This Investment Advisory Agreement is subject to the provisions
of the Investment Company Act, as amended, and the rules and
regulations of the Securities and Exchange Commission thereunder,
including such exemptions therefrom as the Securities and Exchange
Commission may grant. Words and phrases used herein shall be
interpreted in accordance with that Act and those rules and regulations.
As used with respect to the Fund or any of its Portfolios, the term
"majority of the outstanding shares" means the lesser of (i) 67% of the
shares represented at a meeting at which more than 50% of the
outstanding shares are represented or (ii) more than 50% of the
outstanding shares.
IN WITNESS WHEREOF, the parties have caused this Investment
Advisory Agreement to be signed by their respective officials duly
authorized, as of the day and year first above written.
MAXIM SERIES FUND, INC.
By: /s/ G.R. Dinney
President
Witness:
/s/ D.C. Lennox
Secretary
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By: /s/ J. Crysdale
Senior Vice President,
Investments
Witness:
/s/ E.R. Allden /s/ R.K. Siddall
Associate Secretary Vice President and
Secretary
<PAGE>
Amendments to
INVESTMENT ADVISORY AGREEMENT
between
MAXIM SERIES FUND, INC.
and
THE GREAT-WEST LIFE ASSURANCE COMPANY
The following amendments are made to this Agreement dated April 1st,
1982, and are hereby incorporated into and made a part of this
Agreement as of January 18, 1983:
1. Article I, Section A, last full paragraph, is amended by adding the
following two sentences at the end of the paragraph:
"The advisor shall regularily report to the
Board when it has secured or, where
time permits, intends to secure said
supplemental investment research. It is
understood and agreed that the Board
retains the right to limit the scope of or
to disapprove of said research."
2. Article II, Section B, is amended by deleting from the first
sentence in the second paragraph thereof, the words "certain
other taxes", and by deleting in the same sentence the word
"taxes" after "franchise" and substituting the word "charges" after
"franchise".
3. Article VIII is amended by deleting, in the first sentence thereof,
the word "hereunder", and substituting there (after the word
"services"), the words "pursuant to Article I, A, a, b, c, and d," and
by adding the following sentence at the end of Article VIII: "In
connection with the rendering of all other services hereunder,
Adviser shall exercise ordinary care or skill in the performance of
its duties."
In witness whereof, the parties hereto have caused this amending
agreement to be executed in duplicate, in their names and on their behalf
by and through their duly authorized officers as of January 18, 1983.
MAXIM SERIES FUND, INC.
By /s/ G.R. Dinney
President
Witness:
/s/ D.C. Lennox
Secretary
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By: /s/ J. Crysdale
Senior Vice President,
Investments
Witness:
/s/ E.R. Allden /s/ R.K. Siddall
Associate Secretary Vice President and
Secretary
<PAGE>
Amendments to
INVESTMENT ADVISORY AGREEMENT
between
MAXIM SERIES FUND, INC.
and
THE GREAT-WEST LIFE ASSURANCE COMPANY
The following amendment is made to the Investment Advisory Agreement
dated April 1, 1982, as amended January 18, 1983, (hereinafter called
"the Agreement") and is hereby incorporated into and made a part of the
Agreement:
Article II, Section A, of the Agreement is amended by substituting the
following wording:
"As compensation for its services to the Fund, the
Adviser receives monthly compensation at the annual
rate of .25% of the average daily net assets for the
Money Market Portfolio, .40% of the average daily net
assets for the Bond Portfolio on the first $100 million of
assets in that portfolio and .25% thereafter, and .75% of
the average daily net assets for the Growth Portfolio on
the first $100 million of assets in that portfolio and .65%
thereafter. For future Portfolios the investment advisory
fee will be established by amending the Agreement as
required."
This amendment shall become effective following shareholder approval
as required under the Investment Company Act of 1940.
In witness whereof, the parties hereto have caused this amending
agreement to be executed in duplicate, in their name and on their behalf
by and through their duly authorized officers this 22nd day of August,
1984.
MAXIM SERIES FUND, INC.
Attest: /s/ D.C. Lennox By: /s/ G.R. Dinney
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By: /s/ M.G. Smith
Executive Vice President,
Investments
Attest: /s/ E.R. Allden By: /s/ R.K. Siddall
Associate Secretary Vice President and Secretary
Amendments to
INVESTMENT ADVISORY AGREEMENT
between
MAXIM SERIES FUND, INC.
and
THE GREAT-WEST LIFE ASSURANCE COMPANY
The following amendment is made to the Investment Advisory Agreement
dated April 1, 1982, as amended January 18, 1983, and as amended
August 22, 1984, (hereinafter called "the Agreement") and is hereby
incorporated into and made a part of the Agreement:
Article II, Section A (as previously amended on August 22, 1984) is
further amended by adding the following wording at the end of and as
part of the first sentence thereof:
"..., and .40% of the average daily net
assets for the Government Guaranteed
Portfolio on the first $100 Million of
assets in that portfolio and .25%
thereafter."
This amendment shall become effective following shareholder approval
as required under the Investment Company Act of 1940.
In witness whereof, the parties hereto have caused this amending
agreement to be executed in duplicate, in their names and on their behalf
by and through their duly authorized officers as of the 20th day of March,
1985.
MAXIM SERIES FUND, INC.
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By: /s/ M.G. Smith
Executive Vice President,
Investments
Attest: /s/ E.R. Allden /s/ R.K. Siddall
Associate Secretary Vice President and Secretary
Amendments to
INVESTMENT ADVISORY AGREEMENT
between
MAXIM SERIES FUND, INC.
and
THE GREAT-WEST LIFE ASSURANCE COMPANY
The following amendment is made to the Investment Advisory Agreement
dated April 1, 1982, as amended January 18, 1983, August 22, 1984, and
March 20, 1985, (hereinafter called "the Agreement") and is hereby
incorporated into and made a part of the Agreement:
Article II, Section A (as previously amended on August 22, 1984 and
March 20, 1985) is further amended by adding the following wording at
the end of and as part of the amended first sentence thereof:
"..., and .25% of the average daily net
assets for the Zero-Coupon Treasury
Portfolios."
This amendment shall be presented for shareholder approval as required
under the Investment Company Act of 1940.
In witness whereof, the parties hereto have caused this amending
agreement to be executed in duplicate, in their names and on their behalf
by and through their duly authorized officers as of the 25th day of July,
1985.
MAXIM SERIES FUND, INC.
Attest: /s/ D.C. Lennox By: /s/ G.R. Dinney
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By: /s/ M.G. Smith
Executive Vice President,
Investments
Attest: /s/ E.R. Allden /s/ R.K. Siddall
Associate Secretary Vice President and Secretary
<PAGE>
Amendments to
INVESTMENT ADVISORY AGREEMENT
between
MAXIM SERIES FUND, INC.
and
THE GREAT-WEST LIFE ASSURANCE COMPANY
The following amendment is made to the Investment Advisory Agreement
dated April 1, 1982, as amended January 18, 1983, August 22, 1984,
March 20, 1985, and July 25, 1985 (hereinafter called "the Agreement")
and is hereby incorporated into and made a part of the Agreement:
Article II, Section A (as previously amended on August 22, 1984, March
20, 1985, and July 25, 1985) is further amended by deleting "... .75% of
the average daily net assets for the Growth Portfolio on the first $100
million of assets in that portfolio and .65% thereafter...", and substituting
the following wording as a part of the amended first sentence thereof:
"..., .50% of the average daily net assets
for the Growth Portfolio on the first $100
million of assets in that portfolio and
.40% thereafter, ..."
This amendment shall be effective as of October 1, 1985 and shall be
presented for shareholder approval as required under the Investment
Company Act of 1940.
In witness whereof, the parties hereto have caused this amending
agreement to be executed in duplicate, in their names and on their behalf
by and through their duly authorized officers as of the 16th day of
October, 1985.
MAXIM SERIES FUND, INC.
Attest: /s/ D.C. Lennox By: /s/ G.R. Dinney
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By: /s/ M.G. Smith
Executive Vice President,
Investments
Attest: /s/ E.R. Allden /s/ R.K. Siddall
Associate Secretary Vice President and Secretary
Amendments to
INVESTMENT ADVISORY AGREEMENT
between
MAXIM SERIES FUND, INC.
and
THE GREAT-WEST LIFE ASSURANCE COMPANY
The following amendment is made to the Investment Advisory Agreement
dated April 1, 1982, as amended January 18, 1983, August 22, 1984,
March 20, 1985, July 25, 1985, and October 16, 1985 (hereinafter called
"the Agreement") and is hereby incorporated into and made a part of the
Agreement:
Article II, Section A (as previously amended on August 22, 1984, March
20, 1985, July 25, 1985, and October 16, 1985) is further amended by
adding the following wording at the end of and as part of the amended
first sentence thereof:
"..., .50% of the average daily net assets
for the Total Return Portfolio on the first
$100 million of assets in that portfolio
and .40% thereafter."
Article II, Section A, as amended, is further amended by deleting the term
"Government Guaranteed Portfolio" and inserting in its place the term
"Government and High Quality Securities Portfolio".
IN WITNESS WHEREOF, the parties hereto have caused this amending
agreement to be executed in duplicate, in their names and on their behalf
by and through their duly authorized officers as of the 29th day of July,
1987.
MAXIM SERIES FUND, INC.
Attest: /s/ D.C. Lennox By: /s/ G.R. Dinney
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By: /s/ M.G. Smith
Executive Vice President,
Investments
Attest: /s/ E.R. Allden /s/ R.K. Siddall
Associate Secretary Vice President and Secretary
Amendments to
INVESTMENT ADVISORY AGREEMENT
between
MAXIM SERIES FUND, INC.
and
THE GREAT-WEST LIFE ASSURANCE COMPANY
The following amendment is made to the Investment Advisory Agreement
dated April 1, 1982, as amended January 18, 1983, August 22, 1984,
March 20, 1985, July 25, 1985, October 16, 1985, and July 29, 1987 (the
"Agreement") and is hereby incorporated into and made a part of the
Agreement:
Article II, Section A is amended to read:
As compensation for its service to the Fund, the Adviser
receives monthly compensation at the annual rate of
0.46% for the Money Market Portfolio; 0.60% for the Bond
Portfolio, the U.S. Government Securities Portfolio, the
Growth Portfolio and the Total Return Portfolio; and
0.50% of the Zero-Coupon 1995 Portfolio.
Article II, Section B is amended to read:
The Adviser shall be responsible for all expenses
incurred in performing the services set forth in this
Agreement and all other expenses. The Fund will pay
only extraordinary expenses, including the costs of
litigation.
This amendment shall be effective as of May 1, 1992, following
shareholder approval as required by the Investment Company Act of
1940.
In witness whereof, the parties hereto have caused this amending
agreement to be executed in duplicate, in their names and on their behalf
by and through their duly authorized officers as of the 1st day of May,
1992.
MAXIM SERIES FUND, INC.
Attest: /s/ R.B. Lurie By: /s/ Dennis Low
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
Attest: /s/ D.C. Lennox By: /s/ John T. Hughes
Senior Vice President, Senior Vice President, Chief
General Counsel and Investment Officer (U.S.
Secretary Operations)
Amendments to
INVESTMENT ADVISORY AGREEMENT
between
MAXIM SERIES FUND, INC.
and
THE GREAT-WEST LIFE ASSURANCE COMPANY
The following amendment is made to the Investment Advisory Agreement
dated April 1, 1982, as amended January 18, 1983, August 22, 1984,
March 20, 1985, July 25, 1985, October 16, 1985, July 29, 1987, and May
1, 1992 (the "Agreement") and is hereby incorporated into and made a
part of the Agreement:
Article II, Section A is amended to add the following wording at the end
of and as part of the amended first sentence thereof:
". . . , 0.60% for the Investment Grade Corporate Bond
Portfolio and 0.60% for the U.S. Government Mortgage
Securities Portfolio."
IN WITNESS WHEREOF, the parties hereto have caused this amending
agreement to be executed in duplicate, in their names and on their behalf
by and through their duly authorized officers as of the 1st day of
December, 1992.
MAXIM SERIES FUND, INC.
Attest: /s/ R.B. Lurie By: /s/ Dennis Low
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
Attest: /s/ D.C. Lennox By: /s/ John T. Hughes
Senior Vice President, Senior Vice President, Chief
General Counsel and Investment Officer (U.S.
Secretary Operations)
<PAGE>
Amendments to
Investment Advisory Agreement
between
Maxim Series Fund, Inc.
and
The Great-West Life Assurance Company
The following amendments are made to the Investment Advisory
Agreement dated April 1, 1982, as amended January 18, 1983, August
22, 1984, March 20, 1985, July 25, 1985, October 16, 1985, July 29, 1987,
May 1, 1992, and December 1, 1992 (the "Agreement"), and are hereby
incorporated into and made a part of the Agreement:
1. Article II, Section A is amended by deleting the existing language
and substituting the following:
As compensation for its services to the Fund, the Adviser
receives monthly compensation at the annual rate of 0.46% of
the average daily net assets of the Money Market Portfolio; 0.60%
of the average daily net assets of each of the Bond Portfolio, the
Investment Grade Bond Portfolio, the U.S. Government Securities
Portfolio, the Total Return Portfolio, the Stock Index Portfolio, the
U.S. Government Mortgage Securities Portfolio, the Small-Cap
Index Portfolio, the Growth Index Portfolio and the Value Index
Portfolio; 0.50% of the average daily net assets of the Zero-
Coupon Treasury Portfolio; 0.95% of the average daily net assets
of the Mid-Cap Portfolio; and 1.00% of the average daily net
assets of Small-Cap Value Portfolio and the International Equity
Portfolio.
2. Article II, Section B is amended by deleting the existing language
and substituting the following:
Except with respect to the Portfolios indicated below, the Adviser
shall be responsible for all expenses incurred in performing the
services set forth in this Agreement and all other expenses, and
the Fund shall pay only extraordinary expenses, including the
cost of litigation.
With respect to the Small-Cap Value Portfolio, the Mid-Cap
Portfolio, and the International Equity Portfolio:
(a) The Adviser shall be responsible for all of its expenses
incurred in performing the services set forth in Article I
hereunder. Such expenses include, but are not limited to, costs
incurred in providing investment advisory services; compensating
and furnishing office space for officers and employees of the
Adviser connected with investment and economic research,
trading, and investment management of the Fund; and paying all
fees of all directors of the Fund who are affiliated persons of the
Adviser or any of its subsidiaries.
(b) The Fund pays all other expenses incurred in its
operation and all of its general administrative expenses,
including, but not limited to, redemption expenses, expenses of
portfolio transactions, shareholder servicing costs, pricing costs
(including the daily calculation of net asset value), interest,
charges of the custodian and transfer agent, if any, cost of
auditing services, directors' fees, legal expenses, state franchise
and other taxes, expenses of registering the shares under
Federal and state securities laws, Securities and Exchange
Commission fees, advisory fees, insurance premiums, costs of
maintenance of corporate existence, investor services (including
allocable personnel and telephone expenses), cost of printing
proxies, stock certificates, costs of corporate meetings, and any
extraordinary expenses, including litigation costs. Accounting
services are provided for the Fund by the Adviser and the Fund
shall reimburse the Adviser for its costs in connection therewith.
3. Article II, Section C, is amended by deleting the existing
language and substituting the following:
Notwithstanding the second paragraph of Section B, above, with
respect to the following Portfolios of the Fund, the Adviser shall
pay Expenses which exceed an annual rate of: 1.35% of the
average daily net assets of the Small-Cap Value Portfolio; 1.10%
of the average daily net assets of the Mid-Cap Portfolio; and,
1.50% of the average daily net assets of the International Equity
Portfolio. For purposes of this Section C, "Expenses" with
respect to a Portfolio shall mean the sum of (a) the investment
advisory fee described in Section A, above, for such Portfolio,
and (b) expenses to be paid directly by the Fund, as described
in clause (b) of the second paragraph of Section B, above, with
respect to such Portfolio.
In witness whereof, the parties hereto have caused this amending
agreement to be executed in duplicate, in their names and on their behalf
by and through their duly authorized officers as of the 1st day of
December, 1993.
MAXIM SERIES FUND, INC.
ttest: /s/ Beverly A. Byrne By: /s/ A.D. MacLennan
President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
Attest: /s/ R.B. Lurie By: /s/ John T. Hughes
Senior Vice President, Chief
Investment Officer (U.S.
Operations)
Amendments to
Investment Advisory Agreement
between
Maxim Series Fund, Inc.
and
The Great-West Life Assurance Company
The following amendments are made to the Investment Advisory
Agreement dated April 1, 1982, as amended January 18, 1983, August
22, 1984, March 20, 1985, July 25, 1985, October 16, 1985, July 29, 1987,
May 1, 1992, December 1, 1992 and December 1, 1993 (the
"Agreement"), and are hereby incorporated into and made a part of the
Agreement:
1. Article II, Section A is amended by deleting the existing language
and substituting the following:
As compensation for its services to the Fund, the Adviser
receives monthly compensation at the annual rate of 0.46% of
the average daily net assets of the Money Market Portfolio; 0.50%
of the average daily net assets of the Zero-Coupon Treasury
Portfolio; 0.53% of the average daily net assets of the Maxim
Vista Growth & Income Portfolio; 0.60% of the average daily net
assets of each of the Bond Portfolio, the Investment Grade Bond
Portfolio, the U.S. Government Securities Portfolio, the Total
Return Portfolio, the Stock Index Portfolio, the U.S. Governmental
Mortgage Securities Portfolio, the Small-Cap Index Portfolio, the
Growth Index Portfolio and the Value Index Portfolio; 0.80% of the
average daily net assets of the Maxim T. Rowe Price
Equity/Income Portfolio; 0.90% of the average daily net assets of
the Corporate Bond Portfolio; 0.95% of the average daily net
assets of each of the Mid-Cap Portfolio and the Maxim INVESCO
Small-Cap Growth Portfolio; and 1.00% of the average daily net
assets of each of the Small-Cap Value Portfolio, the Maxim
INVESCO ADR Portfolio, the Foreign Equity Portfolio, the Small-
Cap Aggressive Growth Portfolio and the International Equity
Portfolio.
2. Article II, Section B is amended by deleting the existing language
and substituting the following:
Except with respect to the Portfolios indicated below, the Adviser
shall be responsible for all expenses incurred in performing the
services set forth in this Agreement and all other expenses, and
the Fund shall pay only extraordinary expenses, including the
cost of litigation.
With respect to the Small-Cap Value, the Mid-Cap, Small-Cap
Aggressive Growth, Foreign Equity, Maxim T. Rowe Price
Equity/Income, Maxim INVESCO Small-Cap Growth, Maxim
INVESCO ADR and the International Equity Portfolios:
(a) The Adviser shall be responsible for all of its expenses
incurred in performing the services set forth in Article I
hereunder. Such expenses include, but are not limited
to, costs incurred in providing investment advisory
services; compensating and furnishing office space for
officers and employees of the Adviser connected with
investment and economic research, trading, and
investment management of the Fund; and paying all fees
of all directors of the Fund who are affiliated persons of
the Adviser or any of its subsidiaries.
(b) The Fund pays all other expenses incurred in its
operation and all of its general administrative expenses,
including, but not limited to, redemption expenses,
expenses of portfolio transactions, shareholder servicing
costs, pricing costs (including the daily calculation of net
asset value), interest, charges of the custodian and
transfer agent, if any, cost of auditing services, directors'
fees, legal expenses, state franchise and other taxes,
expenses of registering the shares under Federal and
state securities laws, Securities and Exchange
Commission fees, advisory fees, insurance premiums,
costs of maintenance of corporate existence, investor
services (including allocable personnel and telephone
expenses), cost of printing proxies, stock certificates,
costs of corporate meetings, and any extraordinary
expenses, including litigation costs. Accounting services
are provided for the Fund by the Adviser and the Fund
shall reimburse the Adviser for its costs in connection
therewith.
3. Article II, Section C, is amended by deleting the existing
language and substituting the following:
Notwithstanding the second paragraph of Section B, above, with
respect to the following Portfolios of the Fund, the Adviser shall
pay Expenses which exceed an annual rate of: 1.35% of the
average daily net assets of the Small-Cap Value Portfolio; 1.10%
of the average daily net assets of the Mid-Cap and Maxim
INVESCO Small-Cap Growth Portfolios; 1.30% of the average
daily net assets of the Small-Cap Aggressive Growth Portfolio;
0.95% of the Maxim T. Rowe Price Equity/Income Portfolio; 1.50%
of the Maxim INVESCO ADR, Foreign Equity and International
Equity Portfolios. For purposes of this Section C, "Expenses"
with respect to a Portfolio shall mean the sum of (a) the
investment advisory fee described in Section A, above, for such
Portfolio, and (b) expenses to be paid directly by the Fund, as
described in clause (b) of the second paragraph of Section B,
above, with respect to such Portfolio.
IN WITNESS WHEREOF, the parties hereto have caused this
amending agreement to be executed in duplicate, in their names and on
their behalf by and through their duly authorized officers as of the 31st
day of October, 1994.
MAXIM SERIES FUND, INC.
Attest: /s/ Beverly A. Byrne By: /s/ Dennis Low
President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
Attest: /s/ Beverly A. Byrne By: /s/ John T. Hughes
Senior Vice President, Chief
Investment Officer (U.S.
Operations)
<PAGE>
Amendments to
Investment Advisory Agreement
between
Maxim Series Fund, Inc.
and
The Great-West Life Assurance Company
The following amendments are made to the Investment Advisory
Agreement dated April 1, 1982, as amended January 18, 1983, August
22, 1984, March 20, 1985, July 25, 1985, October 16, 1985, July 29, 1987,
May 1, 1992, December 1, 1992, December 1, 1993 and October 31,
1994 (the "Agreement"), and are hereby incorporated into and made a
part of the Agreement:
Article II, Section A is amended by deleting the existing language
and substituting the following:
As compensation for its services to the Fund, the Adviser
receives monthly compensation at the annual rate of 0.46% of
the average daily net assets of the Money Market Portfolio; 0.50%
of the average daily net assets of the Zero-Coupon Treasury
Portfolio; 0.53% of the average daily net assets of the Maxim
Vista Growth & Income Portfolio; 0.60% of the average daily net
assets of each of the Bond Portfolio, the Investment Grade Bond
Portfolio, the U.S. Government Securities Portfolio, the Total
Return Portfolio, the Stock Index Portfolio, the U.S. Governmental
Mortgage Securities Portfolio, the Small-Cap Index Portfolio, the
Growth Index Portfolio, the Value Index Portfolio and the Short-
Term Maturity Bond Portfolio; 0.80% of the average daily net
assets of the Maxim T. Rowe Price Equity/Income Portfolio; 0.90%
of the average daily net assets of the Corporate Bond Portfolio;
0.95% of the average daily net assets of each of the Mid-Cap
Portfolio and the Maxim INVESCO Small-Cap Growth Portfolio;
and 1.00% of the average daily net assets of each of the Small-
Cap Value Portfolio, the Maxim INVESCO ADR Portfolio, the
Foreign Equity Portfolio, the Small-Cap Aggressive Growth
Portfolio and the International Equity Portfolio.
IN WITNESS WHEREOF, the parties hereto have caused this
amending agreement to be executed in duplicate, in their names and on
their behalf by and through their duly authorized officers as of the 31st
day of July, 1995.
MAXIM SERIES FUND, INC.
Attest: By:
President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
Attest: By:
Senior Vice President, Chief
Investment Officer (U.S.
Operations)
<PAGE>
(11)(a)
CONSENT OF JORDEN BURT & BERENSON<PAGE>
July 31, 1995
Maxim Series Fund, Inc.
8515 East Orchard Road
Englewood, Colorado 80111
Ladies and Gentlemen:
We hereby consent to the use of our name under the
caption "Legal Counsel" for the Fund in the Prospectus
contained in Post-Effective Amendment No. 42 to the
Registration Statement on Form N-1A (File No. 2-75503) filed
by Maxim Series Fund, Inc. with the Securities and Exchange
Commission under the Securities Act of 1933 and the
Investment Company Act of 1940.
Very truly yours,
/s/ Jorden Burt & Berenson
JORDEN BURT & BERENSON
<PAGE>
(11)(b)
CONSENT OF DELOITTE & TOUCHE LLP
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to us under the caption
"Independent Auditors" appearing in the Prospectus which is
included in Post-Effective Amendment No. 42 to Registration
Statement 2-75503 of Maxim Series Fund, Inc.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Denver, Colorado
July 31, 1995
SIGNATURES
As required by the Securities Act of 1933
and the Investment Company Act of 1940, the
Registrant certifies that it meets all the
requirements of this Registration Statement
pursuant to Rule 485(b) and has duly caused
Post-Effective Amendment No. 42 to the
Registration Statement to be signed on its
behalf, in the City of Englewood, State of
Colorado, on the 27th day of July, 1995.
MAXIM SERIES FUND, INC.
(Registrant)
By: /s/ D. Low
President (D. Low)
Pursuant to the requirements of the
Securities Act of 1933, this Post-Effective
Amendment No. 42 to the Registration Statement
has been signed below by the following persons
in the capacities and on the dates indicated.
Signature and Title Date
/s/ D. Low 7/27/95
President (D. Low)
/s/ D. Low 7/27/95
Director (D. Low)
Director (R. Jennings)
Director (R.P. Koeppe)
Director (J.D. Motz)
S-1
SIGNATURES
As required by the Securities Act of 1933
and the Investment Company Act of 1940, the
Registrant certifies that it meets all the
requirements of this Registration Statement
pursuant to Rule 485(b) and has duly caused
Post-Effective Amendment No. 42 to the
Registration Statement to be signed on its
behalf, in the City of Englewood, State of
Colorado, on the day of July, 1995.
MAXIM SERIES FUND, INC.
(Registrant)
By:
President (D. Low)
Pursuant to the requirements of the
Securities Act of 1933, this Post-Effective
Amendment No. 42 to the Registration Statement
has been signed below by the following persons
in the capacities and on the dates indicated.
Signature and Title Date
President (D. Low)
Director (D. Low)
/s/ R. Jennings* 7/28/95
Director (R. Jennings)
/s/ R.P. Koeppe* 7/28/95
Director (R.P. Koeppe)
Director (J.D. Motz)
S-1
SIGNATURES
As required by the Securities Act of 1933
and the Investment Company Act of 1940, the
Registrant certifies that it meets all the
requirements of this Registration Statement
pursuant to Rule 485(b) and has duly caused
Post-Effective Amendment No. 42 to the
Registration Statement to be signed on its
behalf, in the City of Englewood, State of
Colorado, on the day of July, 1995.
MAXIM SERIES FUND, INC.
(Registrant)
By:
President (D. Low)
Pursuant to the requirements of the
Securities Act of 1933, this Post-Effective
Amendment No. 42 to the Registration Statement
has been signed below by the following persons
in the capacities and on the dates indicated.
Signature and Title Date
President (D. Low)
Director (D. Low)
Director (R. Jennings)
Director (R.P. Koeppe)
/s/ J.D. Motz 7/31/95
Director (J.D. Motz)
S-1
Signature and Title Date
/s/ S. Zisman* 7/28/95
Director (S. Zisman)
Treasurer (G.R. Derback)
Principal Financial Officer
(G.R. Derback)
Principal Accounting Officer
(G.R. Derback)
*By:/s/ R.B. Lurie
R.B. Lurie
Attorney-in-fact pursuant to Powers of
Attorney filed under Post-Effective Amendment
No. 19 to this Registration Statement.
S-2Signature and Title
Director (S. Zisman)
/s/ G.R. Derback 7/27/95
Treasurer (G.R. Derback)
/s/ G.R. Derback 7/27/95
Principal Financial Officer
(G.R. Derback)
/s/ G.R. Derback 7/27/95
Principal Accounting Officer
(G.R. Derback)
*By:
R.B. Lurie
Attorney-in-fact pursuant to Powers of
Attorney filed under Post-Effective Amendment
No. 19 to this Registration Statement.
S-2
