MAXIM SERIES FUND, INC.
8515 EAST ORCHARD ROAD
ENGLEWOOD, COLORADO 80111
December
4, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Maxim Series Fund, Inc. (the "Fund")
File No. 811-3364
Definitive Proxy Statement
Ladies and Gentlemen:
Please find enclosed via EDGAR transmission pursuant to Rule
14a-6 under the Securities Exchange Act of 1934, a copy of the
definitive proxy statement, form of proxy and notice of meeting in
connection with the Fund's Special Meeting of Shareholders to be held
on December 28, 1995.
Also enclosed is a check in the amount of $125
representing the requisite filing fee.
Any questions with respect to this filing should be directed to the
undersigned at (303) 689-3817 or Thomas Mira at (202) 965-8158.
Sincerely,
Beverly
A. Byrne
Assistant
Secretary
cc: Evelyn Malone, Office of Insurance Products
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[x] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Maxim Series Fund, Inc.
(Name of Registrant as Specified in Its Charter)
Maxim Series Fund, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[x ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) or Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
Title of each class of securities to which transaction
applies:
Aggregate number of securities to which transaction
applies:
Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
Proposed maximum aggregate value of transaction:
Total fee paid: $125.00
* Set forth the amount on which the filing is calculated and state
how it was determined.
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
Amount previously paid:
Form, Schedule or Registration Statement No.:
Filing Party:
Date Filed: MAXIM SERIES FUND, INC.
Executive Offices: 8515 East Orchard Road
Englewood, Colorado 80111
Mailing Address: P.O. Box 1700
Denver, Colorado 80201
December 4, 1995
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
You are hereby notified that a special meeting ("the Meeting") of
Shareholders of the Corporate Bond, Small-Cap Aggressive Growth and
Foreign Equity Portfolios (collectively, the "Portfolios") of the Maxim
Series Fund, Inc. (the "Fund") will be held at 8515 E. Orchard Road,
Englewood, Colorado on Thursday, December 28, 1995 at 9:30 a.m. for
the following purposes:
1. To approve or disapprove a new sub-advisory agreement for
the Corporate Bond Portfolio to be effective upon the merger of
New England Mutual Life Insurance Company into Metropolitan
Life Insurance Company, which agreement would be
substantively identical to the sub-advisory agreement presently
in effect.
2. To approve or disapprove a new sub-advisory agreement for
the Small-Cap Aggressive Growth Portfolio to be effective upon
the merger of New England Mutual Life Insurance Company into
Metropolitan Life Insurance Company, which agreement would be
substantively identical to the sub-advisory agreement presently
in effect.
3. To approve or disapprove a new sub-advisory agreement for the
Foreign Equity Portfolio to be effective upon the acquisition of
Draycott Partners, Ltd. by Cursitor Holdings Ltd., U.K., which
agreement would be substantively identical to the sub-advisory
agreement presently in effect.
4. To approve or disapprove a new sub-advisory agreement for the
Foreign Equity Portfolio to be effective upon the acquisition of
Cursitor Holdings Ltd., U.K. by Alliance Capital Management, L.P.,
which agreement would be substantively identical to the sub-advisory
agreement presently in effect.
5. To consider and act upon any other matters which may properly
come before the Meeting or any adjournments.
The Board of Directors has fixed the close of business on
October 31, 1995 as the record date for the determination of
shareholders entitled to notice of and to vote at the Meeting or any
adjournment thereof. Owners of certain variable annuity contracts issued
by Great-West Life & Annuity Insurance Company and New England
Mutual Life Insurance Company are entitled to provide voting instructions
with respect to their proportionate interest in the Portfolios.
You are invited and encouraged to attend the Meeting. Shareholders
who do not expect to attend the Meeting in person are requested to
complete, date and sign the enclosed form of Proxy and return it
promptly in the envelope provided for that purpose. The enclosed Proxy
is being solicited by the Board of Directors of the Fund.
By Order of the Board of Directors
Ruth B. Lurie
Secretary
December 4, 1995
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWNED ON THE RECORD
DATE. PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE
ENCLOSED PROXY CARD. DATE, SIGN AND RETURN IT IN THE
ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR
CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. WE ASK YOUR COOPERATION IN MAILING YOUR PROXY
CARD PROMPTLY.
<PAGE>
PROXY STATEMENT
MAXIM SERIES FUND, INC.
Executive Offices: 8515 East Orchard Road
Englewood, Colorado 80111
Mailing Address: P.O. Box 1700
Denver, Colorado 80201
December 4, 1995
SPECIAL MEETING OF SHAREHOLDERS
Introduction
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Maxim Series Fund, Inc. (the
"Fund"), a Maryland corporation, to be voted at a Special Meeting (the
"Meeting") of Shareholders of the Corporate Bond, Small-Cap Aggressive
Growth and Foreign Equity Portfolios (the "Portfolios") of the Fund, to be
held at 8515 E. Orchard Road, Englewood, Colorado, on Thursday,
December 28, 1995 at 9:30 a.m. It is anticipated that the approximate
mailing date of this Proxy Statement will be December 4, 1995.
The Board of Directors has fixed the close of business on
October 31, 1995 as the record date for the determination of
shareholders entitled to notice of and to vote at the Meeting and at any
adjournment thereof (the "Record Date"). Owners of contracts
("Contractowners") issued through the Series Accounts (as that term is
defined below) by Great-West Life and Annuity Insurance Company
("GWL&A") and New England Mutual Life Insurance Company who have
allocated contract value to one or more of the Portfolios as of the Record
Date will be entitled to provide voting instructions with respect to their
proportionate interest (including fractional interests) in each Portfolio.
Shares of the Portfolios are sold to Maxim Series Account, Retirement
Plan Series Account, FutureFunds Series Account, and FutureFunds
Series Account II of GWL&A to fund certain variable annuity contracts
issued by GWL&A and to TNE Series (k) Account of New England Mutual
Life Insurance Company ("TNE") to fund certain variable annuity contracts
issued by TNE. The above-mentioned accounts of GWL&A and TNE are
hereinafter referred to as the "Series Accounts".
The investment adviser to the Fund is The Great-West Life Assurance
Company ("Great-West"), 8515 E. Orchard Road, Englewood, Colorado
80111. The sub-adviser to the Corporate Bond and Small-Cap
Aggressive Growth Portfolios is Loomis, Sayles & Company, LP
("Loomis"), One Financial Center, Boston, Massachusetts 02111. The
sub-adviser to the Foreign Equity Portfolio is Draycott Partners, Ltd.
("Draycott"), 8 City Road, London, England EC2Y 1HE.
Shares of the Portfolios are owned by the Series Accounts, on behalf
of Contractowners. In accordance with Great West's view of present
applicable law, shares of the Portfolios held in the Series Accounts will
be voted based on instructions received from Contractowners who have
allocated contract value to one or more Portfolios as of the Record Date.
The number of votes which a Contractowner has the right to cast will be
determined by applying his/her percentage interest in a Portfolio (held
through a Series Account) to the total number of votes attributable to
such Portfolio. Fund shares as to which no timely voting instructions are
received will be voted by GWL&A in proportion to the voting instructions
which are received. Voting instructions to abstain on any item will be
applied on a pro rata basis to reduce the votes eligible to be cast. A
proxy may be revoked at any time before it is voted by the furnishing of
a written revocation, properly executed, to the Fund's Secretary before
the Meeting or by attending the meeting. In addition to the solicitation
of proxies by mail, proxies may be solicited by officers and employees of
the Fund or Great-West or its agents or affiliates personally or by
telephone.
ProposalSummaryEligible Voters
1. Approval of new Sub-Advisory Agreement for Corporate Bond
PortfolioA proposal to approve the sub-advisory agreement with Loomis
to be effective upon the merger of TNE and Metropolitan Life Insurance
Company. Only Contractowners having an economic interest in the
Corporate Bond Portfolio as of the Record Date.
2. Approval of new Sub-Advisory Agreement for Small-Cap Aggressive
Growth Portfolio A proposal to approve the sub-advisory
agreement with Loomis to be effective upon the merger of TNE and
Metropolitan Life Insurance Company. Only Contractowners having an
economic interest in the Small-Cap Aggressive Growth Portfolio as of the
Record Date.
3. Approval of new Sub-Advisory Agreement for Foreign Equity Portfolio
A proposal to approve the sub-advisory agreement with Draycott to
be effective upon the acquisition of Draycott by Cursitor Holdings, Ltd.,
U.K. Only Contractowners having an economic interest in the Foreign
Equity Portfolio as of the Record Date.
4. Approval of new Sub-Advisory Agreement for Foreign Equity Portfolio
A proposal to approve the sub-advisory agreement with Draycott to
be effective upon the acquisition of Cursitor Holdings, Ltd., U.K. by
Alliance Capital Management L.P. Only Contractowners having an
economic interest in the Foreign Equity Portfolio as of the Record Date.
The Fund and the Portfolios will pay no expenses associated with
this proxy solicitation. Such expenses will be paid by New England
Investment Companies, L.P. Management of the Fund knows of no other
business, other than that set forth in Proposal Nos. 1 through 4, which
will be presented for consideration at the Meeting. If any other matter is
properly presented, it is the intention of the persons named in the
enclosed Proxy to vote in accordance with their best judgment.
PROPOSAL NOS. 1 and 2: APPROVAL OF SUB-ADVISORY
AGREEMENT FOR CORPORATE BOND PORTFOLIO AND
SMALL-CAP AGGRESSIVE GROWTH PORTFOLIO
Background
As of August 16, 1995, New England Mutual Life Insurance Company
("TNE") and Metropolitan Life Insurance Company ("MetLife") entered into
an agreement (the "Merger Agreement") providing for the merger (the
"Merger") of TNE into MetLife. The Merger is being treated, for purposes
of the Investment Company Act of 1940 (the "1940 Act"), as a change of
control of New England Investment Companies, L.P. ("NEIC") (which is
majority-owned by TNE) and its subsidiary and affiliated firms, including
Loomis Sayles & Company, L.P. ("Loomis"), which is wholly owned by
NEIC. Loomis presently serves as sub-adviser to the Corporate Bond
Portfolio and the Small-Cap Aggressive Growth Portfolio of the Maxim
Series Fund, Inc. (the "Fund"). Under the 1940 Act, such a change of
control constitutes an "assignment" (as defined in the 1940 Act) of the
sub-advisory agreement pursuant to which Loomis serves as a sub-
adviser to the Corporate Bond and Small-Cap Aggressive Growth
Portfolios, and results in the automatic termination of that agreement,
effective at the time of the Merger. The Fund's Board of Directors has
approved and recommended that the shareholders of the Corporate
Bond and Small-Cap Aggressive Growth Portfolios approve a new sub-
advisory agreement with Loomis which would be substantively identical
to the agreement presently in effect (except for its effective date), and
would take effect at the time of the Merger. The result would be to permit
Loomis to continue to perform sub-advisory services for the Corporate
Bond and Small-Cap Aggressive Growth Portfolios after the Merger, on
the same terms as are presently in effect.
The Great-West Life Assurance Company ("Great-West") is the
investment adviser to the Fund pursuant to an existing investment
advisory agreement (the "Investment Advisory Agreement") which will
remain in effect. Pursuant to the sub-advisory agreement presently in
effect between Loomis, Great-West and the Fund dated October 31,
1994, Loomis provides day-to-day portfolio management services to the
Corporate Bond and Small-Cap Aggressive Growth Portfolios.
Proposals
As explained above, the Merger of TNE into MetLife is being treated,
for purposes of the 1940 Act, as a change of control of NEIC and its
subsidiary and affiliated firms, including Loomis. Such a change in
control will result in the automatic termination, at the time of the Merger,
of the sub-advisory agreement with Loomis relating to the Corporate
Bond and Small-Cap Aggressive Growth Portfolios. Proposal Nos. 1 and
2 seek shareholder approval of the new sub-advisory agreement with
Loomis, to be effective at the time of the Merger. The proposed new
agreement would be substantively identical to the agreement presently
in effect (except for its effective date). The proposed new agreement will
not result in any change in the fee rates payable to Loomis and is not
expected to result in any change in the personnel of Loomis providing
services to either Portfolio. NEIC has indicated that Loomis will continue
to be independently managed, as has historically been the case. Thus,
the Merger is not expected to result in any changes in the investment
approaches or styles of Loomis. Accordingly, Proposal Nos. 1 and 2 are
simply intended to permit the existing sub-advisory arrangement with
Loomis to continue; the Proposals do not contemplate any change in the
such sub-advisory arrangement aside from the fact that the ultimate
control of Loomis will change. Like the existing sub-advisory agreement,
the new sub-advisory agreement would relate to both the Corporate
Bond and Small-Cap Aggressive Growth Portfolios; however, Proposal
Nos. 1 and 2 are not contingent upon one another. That is, if one
Portfolio approves the new agreement and the other does not, the
agreement will be entered into with respect to the Portfolio that approved
the agreement.
Description of Merger
As of August 16, 1995, TNE and MetLife entered into the Merger
Agreement. MetLife will be the surviving company following the Merger.
Both TNE and MetLife are mutual life insurance companies. The Merger
will result in the insurance policyholders of TNE becoming policyholders
of MetLife. The policyholders of TNE will not receive any other payment,
property or consideration in connection with the Merger. The Merger will
not be effected unless it is approved by the requisite vote of the
policyholders of both TNE and MetLife. The Merger also requires
approval by various government regulatory agencies. In addition,
consummation of the Merger is subject to the fulfillment of a number of
other obligations, although the parties may waive some or all of these
conditions. There is no assurance that the Merger will in fact be
consummated. In addition, because it is impossible to predict with
certainty when the necessary regulatory approvals will be obtained and
the other conditions to the Merger will be fulfilled, it is not known, as of
the date of this Proxy Statement, when the Merger will occur. The parties
currently expect, however, that the Merger will occur no earlier than the
first calendar quarter of 1996.
NEIC is organized as a limited partnership and acts as a
management and holding company for various investment advisory and
related firms. NEIC owns the entire limited partnership interest in Loomis.
NEIC's sole general partner, New England Investment Companies, Inc.
("NEIC Inc."), is a wholly-owned subsidiary of TNE. As a result, of the
Merger, NEIC Inc. would become a direct or indirect wholly-owned
subsidiary of MetLife. TNE also owns a majority of the outstanding
limited partnership interest in NEIC, and hence, in Loomis. The Merger
would result in MetLife becoming the owner (directly or through a wholly-
owned subsidiary) of TNE's limited partnership interest in NEIC and in
Loomis. The Merger Agreement provides that, following the
consummation of the Merger, MetLife shall have the right to designate a
majority of the board of directors of NEIC Inc.
Under the Merger Agreement, TNE and MetLife agree that they will
use their best efforts to satisfy the conditions of Section 15(f) of the 1940
Act. Section 15(f) provides that an investment adviser to a registered
investment company and affiliated persons of such investment adviser,
may receive any amount or benefit in connection with the sale of
securities of, or a sale of any other interest in, such investment adviser
which results in an assignment of an investment advisory contract with
such investment company, if:
(1) for a period of 3 years after the time of such action, at least 75%
of the board of such investment company are not interested
persons of such company's investment adviser or predecessor
investment adviser, and
(2) there is not imposed an unfair burden on such investment
company as a result of such transaction or any express or
implied terms, conditions, or understandings applicable thereto.
Satisfaction of condition (1) above is not expected to require any
changes in the current composition of the Fund's Board of Directors.
Information About Loomis
Loomis was organized in 1926 and is one of the oldest and largest
investment counsel firms in the country. Loomis is a limited partnership.
Its sole general partner, Loomis, Sayles & Company, Incorporated
("LSCI"), is a wholly-owned subsidiary of NEIC Holdings, Inc. which is a
wholly-owned subsidiary of NEIC. NEIC also owns the entire limited
partnership interest in Loomis. The principal executive officer of Loomis
is Robert Blanding, whose principal occupation is his position with
Loomis. The address of Loomis and LSCI is One Financial Center,
Boston, Massachusetts 02111. Mr. Blanding's address is 595 Fifth Street
West, Sonoma California 95476. An important feature of the Loomis
investment approach is its emphasis on investment research.
Recommendations and reports of Loomis' research department are
circulated throughout the Loomis organization and are available to the
individuals in the Loomis organization who have been assigned the
responsibility for making investment decisions for the Corporate Bond
and Small-Cap Aggressive Growth Portfolios. Loomis provides
investment advice to numerous other institutional and individual clients.
These clients include other registered investment companies and some
accounts of TNE and its affiliates.
Loomis acts as investment adviser or sub-adviser to the following
other mutual funds that have similar investment objectives to the
Corporate Bond and Small-Cap Aggressive Growth Portfolios, for
compensation at the annual fee rates of the corresponding average net
asset levels of those funds set forth in the table below. The table also
sets forth the net assets of those other funds at September 30, 1995.
Other Fund With
Annual
Portfolio Similar Objective(s)
Fee Rate Net Assets
Small-Cap Aggressive
New England Zenith Fund
.55% on first $25 million $21 million
Growth Portfolio Loomis Sayles
.50% on
next $75 million
Small-Cap Series
.45% on next
$100 million
.40% over $200
million
Loomis Sayles
1.00% on all
assets $103 million
Small-Cap Fund
Corporate Bond Loomis Sayles
.60% on
all assets $83 million
Portfolio
Information About MetLife
MetLife was incorporated under the laws of New York in 1866 and
since 1868 has been engaged in the life insurance business under its
present name. By the early 1900s, it had become the largest life
insurance company in the U.S. and is currently the second largest life
insurance company in the U.S. in terms of total assets. MetLife's assets
as of June 30, 1995 were over $130 billion, and its adjusted capital as of
that date exceed $8 billion. Subsidiaries of MetLife manage over $25
billion of assets for mutual funds, institutional and other investment
advisory clients.
Board of Directors' Recommendation
The Board of Directors unanimously recommends that the new sub-
advisory agreement with Loomis relating to the Small-Cap Aggressive
Growth and Corporate Bond Portfolios be approved, to be effective at the
time of the Merger. This new agreement will be substantively identical to
the agreement presently in effect (except for the effective date). In
coming to their recommendation, the Directors reviewed pertinent
information about Loomis, NEIC and MetLife. The Directors noted that
while the Merger is being treated as a change in control of Loomis for
purposes of the 1940 Act, the Merger is not expected to result in any
changes in the personnel, operations or financial condition of NEIC or
Loomis. NEIC has indicated that Loomis will continue to be
independently managed, as has historically been the case. Thus, the
Merger, is not expected to result in any changes in the investment
approaches or styles of Loomis. The Directors also considered Loomis'
policies with respect to placing portfolio transactions for the Corporate
Bond and Small-Cap Aggressive Growth Portfolios with broker-dealers
that provide brokerage and research services to Loomis.
The Directors accordingly concluded that it is appropriate and
desirable for the Corporate Bond and Small-Cap Aggressive Growth
Portfolios to continue, after the Merger, under the same sub-advisory
arrangement with Loomis as is in effect immediately before the Merger.
THE SUB-ADVISORY AGREEMENT WITH LOOMIS WILL TERMINATE
AT THE TIME OF THE MERGER AND LOOMIS CANNOT CONTINUE
TO SERVE AS SUB-ADVISER FOR A PORTFOLIO WHOSE
SHAREHOLDERS HAVE NOT APPROVED A NEW SUB-ADVISORY
AGREEMENT. IF EITHER OR BOTH PORTFOLIOS DO NOT APPROVE
THE NEW SUB-ADVISORY AGREEMENT, LOOMIS WILL CEASE
ACTING AS SUB-ADVISER FOR SUCH PORTFOLIO(S). IN SUCH
EVENT, THE BOARD OF DIRECTORS WILL CONSIDER SUCH
ALTERNATIVE ACTIONS AS ARE IN THE BEST INTEREST OF THE
FUND.
Vote Required
In order to approve Proposal Nos. 1 and 2, the affirmative vote of the
holders of a majority of the outstanding shares of the Corporate Bond
Portfolio and the Small-Cap Aggressive Growth Portfolio, respectively, is
required. Majority for this purpose means the lesser of (i) 67% of the
shares represented at a meeting at which more that 50% of the
outstanding shares are represented or (ii) more than 50% of the
outstanding shares.
PROPOSAL NOS. 3 and 4: APPROVAL OF SUB-ADVISORY
AGREEMENTS FOR FOREIGN EQUITY PORTFOLIO
Background
The proposed Merger of New England Mutual Life Insurance
Company ("TNE") into Metropolitan Life Insurance Company ("MetLife") is
discussed under Proposal Nos. 1 and 2 above. Separate and apart from
the proposed Merger, New England Investment Companies, L.P. ("NEIC"),
which owns 100% of the stock of Draycott Partners, Ltd. ("Draycott"), has
entered into an agreement to sell the stock of Draycott to Cursitor
Holdings Ltd. U.K. ("Cursitor Holdings"). This sale would constitute a
change in control of Draycott under the 1940 Act. Under the 1940 Act,
such a change in control constitutes an "assignment" (as defined in the
1940 Act) of the sub-advisory agreement pursuant to which Draycott
serves as a sub-adviser to the Foreign Equity Portfolio of the Fund, and
results in the automatic termination of that agreement, effective upon the
acquisition of Draycott by Cursitor Holdings (the "Cursitor Holdings
Acquisition"). The Cursitor Holdings Acquisition is expected to take place
prior to the proposed merger between TNE and MetLife.
Subsequent to the Cursitor Holdings Acquisition, Cursitor Holdings
itself is expected to be acquired by another firm, Alliance Capital
Management L.P. ("Alliance"). This acquisition of Cursitor Holdings would
constitute a second change in control of Draycott, which would again
terminate the sub-advisory agreement pursuant to which Draycott would
be serving (if Proposal No. 3 is approved) as sub-adviser to the Foreign
Equity Portfolio, effective upon the acquisition of Cursitor Holdings by
Alliance (the "Alliance Acquisition," collectively with the Cursitor Holdings
Acquisition, the "Acquisition Transactions").
Great-West is the investment adviser to the Fund pursuant to an
existing Investment Advisory Agreement which will remain in effect
(except for their effect date). Pursuant to a sub-advisory agreement
presently in effect between Draycott, Great-West and the Fund, dated
October 31, 1994, Draycott provides day-to-day portfolio management
services to the Foreign Equity Portfolio.
The Board of Directors of the Fund has approved and recommended
that the shareholders of the Foreign Equity Portfolio approve two new
sub-advisory agreements with Draycott. The first proposed agreement
would be substantively identical to the agreement presently in effect
(except for its effective date) and would be effective commencing on the
date of the Cursitor Holdings Acquisition and would terminate as of the
date of the Alliance Acquisition. The second proposed sub-advisory
agreement would also be substantively identical to the sub-advisory
agreement presently in effect (except for its effective date) and would be
effective commencing on the date of the Alliance Acquisition. The result
would be to permit Draycott to continue to perform sub-advisory services
for the Foreign Equity Portfolio after each Acquisition Transaction, on the
same terms as are presently in effect.
Proposals
As explained above, the Acquisition Transactions are each being
treated, for purposes of the 1940 Act, as a change in control of Draycott.
Such a change in control would thus result in the automatic termination,
at the time of each Acquisition Transaction, of the then existing sub-
advisory agreement with Draycott relating to the Foreign Equity Portfolio.
Proposal Nos. 3 and 4 seek shareholder approval of the proposed sub-
advisory agreements with Draycott, to be effective at the time of each
Acquisition Transaction. The proposed new agreements would be
substantively identical to the agreement presently in effect (except for
their effective date). The proposed new agreements will not result in any
change in the fee rates payable with respect to the management of the
Foreign Equity Portfolio and are not expected to result in any change in
the personnel of Draycott providing services to the Foreign Equity
Portfolio. Thus, neither Acquisition Transaction is expected to result in
any changes in the investment approaches or styles of Draycott.
Accordingly, these proposals are simply intended to permit the existing
sub-advisory arrangement with Draycott to continue; the Proposals do
not contemplate any change in the such sub-advisory arrangement aside
from the fact that the ultimate control of Draycott will change as of the
time of each Acquisition Transaction. Each Acquisition Transaction is
expected to be completed during the fourth quarter of 1995.
Information About Draycott
Draycott, formed in 1991, is and will continue to be a wholly-owned
subsidiary of NEIC until the Cursitor Holdings Acquisition is
consummated. Draycott provides investment management services to
mutual funds and to institutional clients, including separate accounts of
TNE. Draycott's address is 8 City Road, London, England EC2Y 1HE.
The names and principal occupations of Draycott's principal executive
officer and directors are as follows:
Name
Nicholas D.P. Carn
Peter S. Voss
Sherry Umberfield
Address
8 City Road,
London, England
EC2Y 1HE
399 Boylston Street
Boston, Massachusetts
02116
399 Boylston Street
Boston, Massachusetts
02116
Position with Draycott;
Principal Occupation
Chief Executive
Officer, President,
Chief Investment Officer
and Director
Director
Director
Draycott acts as investment adviser or sub-adviser to the following other
mutual funds that have similar investment objectives to the Foreign Equity
Portfolio, for compensation at the annual fee rates of the corresponding
average net asset levels of those funds set forth in the table below. The
table also sets forth the net assets of those other funds at October 31,
1995.
Annual
Other Funds With Similar Objective(s)
Fee
Rate Net Assets
New England International Equity Fund .80% of first $200
million $258 million
.75% on next $300 million
.70% above $500 million
Zenith Fund - Draycott International
.75% up to $10 million
$13 million
Equity Series
.60% on next $40 million
.45% above $50 million
<PAGE>
Information About Cursitor Holdings
Cursitor Holdings, together with Cursitor Holdings, L.P. constitute
an international investment management group formed in July 1990 by
the reorganization of a group of related companies with common
executive management and overlapping shareholders. Cursitor Holdings
is two-thirds owned by the group's executive management and one-third
by a wholly-owned subsidiary of the Government of Singapore Ministry
of Finance. The following members of the group's executive
management each own, directly or indirectly, 10% of more of the Cursitor
Holdings' outstanding voting securities, Eric G. Auboyneau, Hugh M.
Eaton, III, Charles J. Gave and John S. Riccardi.
The principal activity of the group (representing more than 90%
of revenues) is institutional investment management, which is carried on
by Cursitor-Eaton Asset Management Company, Cursitor Management
Limited, and Cursitor Cecogest SA. At present, the group manages
approximately $9.2 billion, primarily for U.S.-based pension funds,
foundations, and endowments. The major investment product is global
asset allocation focusing on cash, bonds and equities in major
economies. The principal place of business of Cursitor Holdings is 66
Buckingham Gate, London SW1E 6AU England.
As described below under "Acquisition of Cursitor Holdings by
Alliance," it is currently expected that, subsequent to the acquisition of
Draycott by Cursitor Holdings, Cursitor Holdings itself will be acquired by
Alliance.
Sale of Draycott to Cursitor Holdings
NEIC currently owns all the stock of Draycott. NEIC has agreed
to sell this stock to Cursitor Holdings for $477,000, plus any capital
advances to Draycott that NEIC may make after June 30, 1995 and prior
to the closing of the sale, and minus any dividends or distributions paid
by Draycott to NEIC during that period. Cursitor Holdings has also
agreed that, for the five-year period following the sale, Cursitor Holdings
will pay NEIC an amount equal to 30% of Draycott's advisory fee
revenues from Draycott's current mutual fund clients (net of fee waivers
and expense reimbursements and reduced by commissions payable to
a marketing affiliate of NEIC, and 20% of Draycott's advisory fee revenues
from certain other clients (subject to certain adjustments).
Section 15(f) of the 1940 Act provides that an investment adviser to
a registered investment company and affiliated persons of such
investment adviser, may receive any amount or benefit in connection with
the sale of securities of, or a sale of any other interest in, such
investment adviser which results in an assignment of an investment
advisory contract with such investment company, if
(1) for a period of 3 years after the time of such action, at least 75%
of the board of such investment company are not interested
persons of such company's investment adviser or predecessor
investment adviser, and
(2) there is not imposed an unfair burden on such investment
company as a result of such transaction or any express or
implied terms, conditions, or understandings applicable thereto.
NEIC, Cursitor Holdings and Draycott have all undertaken to use
their best efforts to ensure satisfaction of the conditions of Section 15(f).
It is not expected that satisfaction of condition (1) above will require any
changes in the current composition Fund's Board of Directors.
Acquisition of Cursitor Holdings by Alliance
On October 24, 1995, Alliance announced that it had reached an
agreement in principle to acquire the business of Cursitor Holdings and
Cursitor-Eaton Asset Management Company. The acquisition would
result in the formation of a new subsidiary of Alliance, called Cursitor
Alliance LLC. Alliance would own 93% of Cursitor Alliance LLC, and
Cursitor Alliance LLC would own all of the stock of Draycott. The
acquisition of Cursitor Holdings by Alliance is subject to the negotiation
and execution of definitive agreements by the parties, and to the
satisfaction of various other conditions. There is no assurance that the
acquisition will in fact be consummated.
Alliance, a New York Stock Exchange listed company with principal
offices at 1345 Avenue of the Americas, New York, New York 10105, is
a leading international investment manager supervising client accounts
with assets as of September 30, 1995 totaling over $143 billion. Alliance
Capital Management Corporation ("ACMC"), with offices at the same
address, is the sole general partner of, and the owner of a 1% general
partnership interest in, Alliance. ACMC is an indirect wholly-owned
subsidiary of The Equitable Life Assurance Society of the United States
("Equitable"), one of the largest life insurance companies in the United
States and a wholly-owned subsidiary of The Equitable Companies
Incorporated ("ECI"), a holding company controlled by AXA, a French
insurance holding company. As of September 30, 1995, Equitable,
ACMC, Inc. and Equitable Capital Management Corporation ("ECMC")
owned in the aggregate approximately 59% of the issued and
outstanding units representing assignments of beneficial ownership of
limited partnership interests in Alliance ("Units"). ACMC, Inc. and ECMC
are wholly-owned subsidiaries of Equitable. As of September 30, 1995,
approximately 33% and 8% of the Units were owned by the public and
employees of Alliance and its subsidiaries, respectively.
AXA is the holding company for an international group of insurance
and related financial services companies. AXA's insurance operations
are comprised of activities in life insurance, property and casualty
insurance and reinsurance. The insurance operations are diverse
geographically with activities in France, the United States, the United
Kingdom, Canada and other countries, principally in Europe. AXA is also
engaged in asset management, investment banking and brokerage, real
estate and other financial services activities in the United States and
Europe. Based on information provided by AXA, as of January 1, 1995,
42.3% of the issued shares (representing 54.7% of the voting power) of
AXA were owned by Midi Participations, a French corporation that is a
holding company. The voting shares of Midi Participations are in turn
owned 60% by Finaxa, a French corporation that is a holding company,
and 40% by subsidiaries of Assicurazioni Generali S.p.A., an Italian
corporation ("Generali") (one of which, Belgica Insurance Holding S.A., a
Belgian corporation, owned 34.1%). As of January 1, 1995, 62.1% of the
issued shares (representing 75.7% of the voting power) of Finaxa were
owned by five French mutual insurance companies ("Mutuelles AXA")
(one of which, AXA Assurance I.A.R.D. Mutuelle, owned 31.8% of the
issued shares) (representing 39.0% of the voting power), and 26.5% of
the issued shares (representing 16.6% of the voting power), of Finaxa
were owned by Banque Paribas, a French bank ("Paribas"). Including the
shares owned by Midi Pariticipations, as of January 1, 1995, the
Mutuelles AXA directly or indirectly owned 51.3% of the issued shares
(representing 65.8% of the voting power) of AXA. In addition, certain
subsidiaries of AXA own 0.4% of the shares of AXA which are not entitled
to be voted. Acting as a group, the Mutuelles AXA control AXA, Midi
Participations and Finaxa.
The address of Equitable, ECI and ECMC is 787 Seventh Avenue,
New York New York 10019. The addresses of the Mutuelles AXA are as
follows: The address of each of AXA Assurances I.A.R.D. Mutuelle and
AXA Assurances Vie Mutuelle is La Grande Arche, Parol Nord, Paris La
Defense, France; the address of each of Alpha Assurances Vie Mutuelle
and Alpha Assurances I.A.R.D. Mutuelle is Tour Franklin 100-101 Terrasse
Boildieu, Paris La Defense, France; and the address of Uni Europe
Assurance Mutuelle is 24 Rue Drouot, Paris, France.
While a definitive agreement relating to the acquisition of Cursitor
Holdings by Alliance has not been reached, it is anticipated that such
agreement will provide that Cursitor Holdings and Alliance will undertake
to use their best efforts to ensure satisfaction of the conditions of Section
15(f) of the 1940 Act.
Board of Directors' Recommendation
The Board of Directors unanimously recommends that the proposed
sub-advisory agreements with Draycott be approved, the first to be
effective upon the consummation of the Cursitor Holdings Acquisition and
the second upon the consummation of the Alliance Acquisition. These
sub-advisory agreements would each be substantively identical to the
one presently in effect (except for their effective date). In reaching this
recommendation, the Directors considered whether it was desirable for
the Foreign Equity Portfolio to continue to receive day-to-day investment
advisory services from Draycott following each proposed Acquisition
Transaction. The Directors considered extensive information concerning
Draycott's investment approach, personnel, performance record and
regulatory compliance experience as well as relevant information with
respect to Cursitor Holdings and Alliance. The Directors were informed
by Draycott, Cursitor Holdings and Alliance that neither Acquisition
Transaction is expected to result in any changes in Draycott's policies
with respect to placing portfolio transactions for the Foreign Equity
Portfolio with broker-dealers that provide Draycott with brokerage and
research services.
After considering the foregoing factors, the Directors voted
unanimously to recommend that shareholders of the Foreign Equity
Portfolio approve Proposal No. 3 (effective upon consummation of the
Cursitor Holdings Acquisition) and Proposal No. 4 (effective upon
consummation of the Alliance Acquisition).
THE SUB-ADVISORY AGREEMENT WITH DRAYCOTT WILL
TERMINATE AT THE TIME OF EACH ACQUISITION TRANSACTION.
IF EITHER OR BOTH PROPOSALS ARE NOT APPROVED, THE
BOARD OF DIRECTORS WILL CONSIDER SUCH ALTERNATIVE
ACTIONS AS ARE IN THE BEST INTEREST OF THE FUND WITH
RESPECT TO ANY PERIOD DURING WHICH DRAYCOTT CEASES TO
SERVE AS SUB-ADVISER TO THE FOREIGN EQUITY PORTFOLIO.
Vote Required
In order to approve Proposal Nos. 3 and 4, the affirmative vote of the
holders of a majority of the outstanding shares of the Foreign Equity
Portfolio is required with respect to each such Proposal. Majority for
this purpose means the lesser of (i) 67% of the shares represented at a
meeting at which more that 50% of the outstanding shares are
represented or (ii) more than 50% of the outstanding shares.
ADDITIONAL INFORMATION
The Investment Advisory Agreement
The Investment Advisory Agreement, between the Fund and Great-West
was initially approved by the shareholders of the Fund at the Annual
Meeting of Shareholders held on March 21, 1983. A further amendment
to the Investment Advisory Agreement dated August 20, 1984 was
approved by the shareholders of the Fund at a Special Meeting of
Shareholders on September 9, 1984. Additional amendments were made
March 20, 1985; July 25, 1985; October 1, 1985; July 29, 1987; May 1,
1992; December 1, 1992; December 1, 1993; October 31, 1994 and July
31, 1995. The Investment Advisory Agreement was most recently
reapproved by the Fund's Board of Directors, including a majority of the
Directors who are not parties to such agreements or "interested persons"
(as defined in the 1940 Act) of any such party, at a meeting held on April
11, 1995. The Investment Advisory Agreement may continue in effect
through April 11, 1996. The Investment Advisory Agreement
automatically continues in effect for successive annual periods so long
as such continuance is approved at least annually by (a) the Fund's
Board of Directors or (b) the vote of a "majority" (as defined in the 1940
Act) of the Fund's outstanding voting securities, provided that, in either
event, the continuance is approved by at least a majority of the Fund's
Directors who are not parties to the Agreement or "interested persons" of
any such party by votes cast in person at a meeting called for the
purpose of voting on such approval. The Investment Advisory Agreement
will terminate automatically if it is assigned and may be terminated at any
time, without penalty, on 60 days written notice at the option of the Fund
or Great-West. Please see Appendix A for a copy of the Investment
Advisory Agreement (including all amendments thereto).
The Investment Adviser
Great-West was incorporated by an Act of the Parliament of Canada in
1891 and commenced business in 1892. It is licensed as a life insurance
company in all provinces of Canada and in 49 states of the United
States, plus the District of Columbia. The U.S. Headquarters of the
Great-West is 8515 East Orchard Road, Englewood, Colorado 80111.
Great-West presently also acts as the investment adviser for Great-West
Variable Annuity Account A, a registered open-end management
investment company, with assets of approximately $6,940,380 as of June
30, 1995, which issues variable annuity contracts on behalf of GWL&A.
Great West's compensation for serving as investment adviser to Variable
Annuity Account A is at the annual rate of .4656% of the net asset value
of the Account. Great-West also manages other non-registered separate
accounts of Great-West and GWL&A. GWL&A is a wholly-owned
subsidiary of Great-West, which in turn is a subsidiary of Great-West
Lifeco Inc. Great-West Lifeco Inc. is a subsidiary of Power Financial
Corporation of Canada, Montreal, Quebec. 171263 Canada Inc. owns
68.7% of the outstanding common stock of Power Financial Corporation.
Power Corporation of Canada, Montreal, Quebec owns 100% of the
outstanding common stock of 171263 Canada Inc. Power Corporation
of Canada is controlled by a Canadian investor, Paul Desmarais, and his
associates.
The following table sets forth the name, address, title and principal
occupation of the principal executive officer and each director of Great-
West.
Following is a list of officers and directors of the Fund who are also
officers of Great-West:
Name and Position Principal Occupation
with the Fund During the Last 5 Years
Dennis Low Executive Vice-President, Financial
Services, of Great-West (since 1991); Director and President
Executive Vice-President, Financial Services of GWL&A (since 1991);
Senior Vice-President, Individual, U.S. of Great-West (1987-1990)
James D. Motz Senior Vice-President, Employee Benefits,
Great-West(since 1991); Senior
Director Vice-President, Employee Benefits of
GWL&A (since 1992); Vice-President,
Group, U.S., of Great-West (1983-1990)
Glen R. Derback Vice-President, Financial Control
Treasurer of Great-West (since 1984)
Ruth B. Lurie Vice-President and Counsel (U.S.) of
Great-West (since 1988)
Secretary
Mark J. Pavlik Manager, Financial Control of Great-West
(since July 1991); Associate Controller Manager,
Financial
Accounting and
Control of
Great-West
(1989-1993)
Beverly A. Byrne Assistant Counsel of Great-West (since
1993); Attorney with Great-West Assistant Secretary
(1988-
1993)
Bruce A. Burrey Assistant Vice-President, Financial
Management of Great-West (since June Assistant Controller
1995); Assistant Vice-President, Accounting Services of Great-West
(since 1984)
Terms of Investment Advisory Agreement
While Great-West is at all times subject to the direction of the Board of
Directors of the Fund, the Investment Advisory Agreement provides that
Great-West, subject to the review by the Board of Directors, is
responsible for the actual day-to-day management of the Fund and its
Portfolios.
Great-West has contractually delegated responsibility for day-to-day
investment management to Loomis with respect to the Corporate Bond
and Small-Cap Aggressive Growth Portfolios. The arrangement between
Great-West and Loomis is described in the proposed new sub-advisory
agreement (which is substantively identical to the existing sub-advisory
agreement with Loomis, except for their effective date) between Loomis,
Great-West and the Fund. Please see below for a discussion of Loomis
and the proposed new sub-advisory agreement with Loomis (the "Loomis
Sub-Advisory Agreement"). Please see Appendix B for a copy of the
proposed Loomis Sub-Advisory Agreement.
Great-West has contractually delegated responsibility for day-to-day
investment management with respect to the Foreign Equity Portfolio to
Draycott. The arrangement between Great-West and Draycott is
described in the proposed new sub-advisory agreements (which are
substantively identical to the existing sub-advisory agreement with Loomis
except for the effective date) between Draycott, Great-West and the Fund.
Please see below for a discussion of Draycott and the proposed new
sub-advisory agreements with Draycott (the "Draycott Sub-Advisory
Agreements". Please see Appendices C and D for a copy of the
proposed Draycott Sub-Advisory Agreements.
The Sub-Advisory Agreements
Loomis, Sayles & Company, LP
The proposed Loomis Sub-Advisory Agreement was approved at a
meeting on November 20, 1995 by the Fund's Board of Directors,
including at least a majority of the Directors who are not parties to such
Agreement or "interested persons" (as defined in the 1940 Act) of any
such party. The proposed Loomis Sub-Advisory Agreement, if approved
by shareholders, will continue in effect for two years after such approval
and for successive annual periods thereafter so long as such
continuance is approved at least annually by (a) the Fund's Board of
Directors or (b) the vote of a majority of the outstanding voting securities
of the Corporate Bond and Small-Cap Aggressive Growth Portfolios, as
applicable, provided that, in either event, the continuance is approved by
at least a majority of the Fund's Directors who are not parties to the
Loomis Sub-Advisory Agreement or "interested persons" of any such
party. The proposed Loomis Sub-Advisory Agreement provides that it will
terminate automatically if it is assigned and may be terminated at any
time, without penalty, on 60 days written notice at the option of Loomis
or the Fund.
Like the existing sub-advisory agreement with Loomis, the proposed
Loomis Sub-Advisory Agreement provides, in substance, that Loomis will
provide day-to-day portfolio management services to the Corporate Bond
and Small-Cap Aggressive Growth Portfolios of the Fund. Subject to
review by Great-West and the Board of Directors of the Fund, Loomis is
responsible for the actual investment and reinvestment of the Corporate
Bond and Small-Cap Aggressive Growth Portfolios' respective assets.
Loomis will bear all expenses associated with the performance of its
services under the proposed Loomis Sub-Advisory Agreement such as
compensating personnel and furnishing office space for its officers and
employees connected with the investment and economic research,
trading, and the investment management of the Corporate Bond and
Small-Cap Aggressive Growth Portfolios.
Great-West is solely responsible for compensating Loomis, which
receives monthly compensation from Great-West for managing the
Corporate Bond and Small-Cap Aggressive Growth Portfolios' respective
assets at the annual rate of .25% on all assets in the Corporate Bond
Portfolio, and, with respect to the Small-Cap Aggressive Growth Portfolio,
.04167% on the first $10 million in assets, .0375% on the next $15 million
in assets, .03333% on the next $75 million in assets, and .025% on
assets over $100 million. For the fiscal year ended December 31, 1994,
Loomis received aggregate compensation of $6,424 with respect to the
Corporate Bond Portfolio, and $9,791 with respect to the Small-Cap
Aggressive Growth Portfolio. As of June 30, 1995, Loomis received
aggregate compensation of $33,046 with respect to the Corporate Bond
Portfolio, and $48,842 with respect to the Small-Cap Aggressive Growth
Portfolio. The proposed Loomis Sub-Advisory Agreement, like the
existing sub-advisory agreement with Loomis, provides that Loomis is not
liable for any act or omission in the course of or in connection with
rendering services to the Corporate Bond or Small-Cap Aggressive
Growth Portfolios in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties.
Please refer to Appendix B for the complete text of the proposed
Loomis Sub-Advisory Agreement.
Draycott Partners, Ltd.
The proposed Draycott Sub-Advisory Agreements were approved at
a meeting on November 20, 1995 by the Fund's Board of Directors,
including at least a majority of the Directors who are not parties to such
proposed Agreements or "interested persons" (as defined in the 1940
Act) of any such party. Each proposed Draycott Sub-Advisory
Agreement, if approved by shareholders, will continue in effect for two
years after such approval and for successive annual periods thereafter
so long as such continuance is approved at least annually by (a) the
Fund's Board of Directors or (b) the vote of a majority of the outstanding
voting securities of the Foreign Equity Portfolio, provided that, in either
event, the continuance is approved by at least a majority of the Fund's
Directors who are parties to an Agreement or "interested persons" of any
such party. The proposed Draycott Sub-Advisory Agreements each
provide that it will terminate automatically if it is assigned and may be
terminated at any time, without penalty, on 60 days written notice at the
option of Draycott or the Fund.
Like the present sub-advisory agreement with Draycott, the proposed
Draycott Sub-Advisory Agreements provide, in substance, that Draycott
will provide day-to-day investment management services to the Foreign
Equity Portfolio of the Fund. Subject to review by Great-West and the
Board of Directors of the Fund, Draycott is responsible for the actual
investment and reinvestment of the Foreign Equity Portfolio's assets.
Draycott will bears all expenses associated with the performance of its
services under the proposed Draycott Sub-Advisory Agreements such as
compensating personnel and furnishing office space for its officers and
employees connected with the investment and economic research,
trading, and investment management of the Foreign Equity Portfolio.
Great-West is solely response for compensating Draycott, which
receives monthly compensation from Great-West for managing the
Foreign Equity Portfolio's assets according to the following annual rates:
.05% on the first $10 million in assets, .04167% on the next $40 million in
assets and .02917% on assets over $50 million. For the fiscal year ended
December 31, 1994, Draycott received aggregate compensation of
$34,890 with respect to the Foreign Equity Portfolio. As of June 30, 1995,
Draycott received aggregate compensation of $72,685 with respect to the
Foreign Equity Portfolio. Like the present sub-advisory agreement with
Draycott, the proposed Draycott Sub-Advisory Agreements also provides
that Draycott is not liable for any act or omission in the course of or in
connection with rendering services to the Foreign Equity Portfolio in the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations or duties.
Please refer to Appendices C and D for the complete text of the
proposed Draycott Sub-Advisory Agreements, the first (Appendix C) to be
effective upon consummation of the Cursitor Holdings Acquisition and the
second (Appendix D) to be effective upon consummation of the Alliance
Acquisition. Both Agreements are substantively identical to one another
and to the existing sub-advisory agreement with Draycott (except for the
effective date).
Portfolio Transactions and Brokerage
Some of the portfolio transactions with respect to the Small-Cap
Aggressive Growth and Foreign Equity Portfolios are placed with broker-
dealers who provide Loomis and Draycott, as applicable, with
supplementary investment and statistical information or furnish market
quotations to such Portfolios or other clients advised by Loomis or
Draycott, as applicable. Although it is not possible to assign an exact
dollar value to those services, they may, to the extent used, tend to
reduce expenses of Loomis and Draycott, as applicable. The services
may also be used by Loomis and Draycott, in connection with their other
advisory accounts and in some cases may not be used with respect to
the Portfolios.
In placing orders for the purchase and sale of portfolio securities,
Loomis, with respect to the Small-Cap Aggressive Growth Portfolio, and
Draycott, with respect to the Foreign Equity Portfolio, each select only
brokers which it believes are financially responsible, will provide efficient
and effective services in executing, clearing and settling an order and will
charge commission rate which, when combined with the quality for the
foregoing services, will produce best price and execution for the
transaction. This does not necessarily mean that the lowest available
brokerage commission will be paid. However, the commissions are
believed to be competitive with generally prevailing rates. Loomis and
Draycott each use their best efforts to obtain information as to the
general level of commission rates being charged by the brokerage
community from time to time and evaluate the overall reasonableness of
brokerage commissions paid on transactions by reference to such data.
In making such evaluation, all factors affecting liquidity and execution of
the order, as well as the amount of capital commitment by the broker in
connection with the order, are taken into account. The Small-Cap
Aggressive Growth and Foreign Equity Portfolios will not pay a broker a
commission at a higher rate than otherwise available for the same
transaction in recognition of the value of research services provided by
the broker or of any other services provided by the broker which do not
contribute to the best price and execution of the transaction.
Other Matters
The number of shares of beneficial interest of each Portfolio issued
and outstanding as of the Record Date (October 31, 1995) are as follows:
Shares Outstanding
Portfolio on Record Date
Corporate Bond 33,796,403
Small-Cap Aggressive Growth 20,979,799
Foreign Equity 64,375,946
As of the Record Date, there were no persons entitled to provide
voting instructions with respect to 5% or more of a Portfolio's outstanding
shares.
As of the Record Date, all of the shares of each Portfolio were
owned of record by either: (1) Maxim Series Account ("Maxim Account"),
a separate account of Great-West Life and Annuity Insurance Company
("GWL&A"); (2) Retirement Plan Series Account ("Retirement Plan"), a
separate account of GWL&A; (3) FutureFunds Series Account
("FutureFunds"), a separate account of GWL&A; (4) FutureFunds Series
Account II ("FutureFunds II"), a separate account of GWL&A; and (5) TNE
Series (k) Account ("TNE Account"), a separate account of New England
Mutual Life Insurance Company ("TNE"). The shares and percentage of
each Portfolio held by these entities is set forth below:
PortfolioMaxim AccountRetirement Plan
FutureFundsFutureFunds IITNE Account
Corporate Bond
4,820 -- <1%
125,259 -- 1%
1,454,071 -- 4%
27,521,229 -- 81%
4,691,023 -- 14%
Small-Cap Aggressive Growth
N/A
90,833 -- 1%
N/A
18,335,713 -- 87%
2,553,253 -- 12%
Foreign Equity N/A 53,256 -- 1%N/A56,701,281
- -- 88%7,621,408 -- 11%
Shareholder Proposals
Although the Meeting is called to transact any other business that
may properly come before it, the only business that management intends
to present or knows that others will present are Proposal Nos. 1 through
4 mentioned in the Notice of Special Meeting. However, you are being
asked on the enclosed proxy to authorize the persons named therein to
vote in accordance with their judgment with respect to any additional
matters which properly come before the Meeting, and on all matters
incidental to the conduct of the Meeting.
Shareholder proposals to be presented at any future meeting of
shareholders of the Fund must be received by the Fund a reasonable
time before the Fund's solicitation of proxies for that meeting in order for
such proposals to be considered for inclusion in the proxy materials
relating to that meeting.
The Fund will furnish, without charge, a copy of 1994 annual report
and the June 30, 1995 semi-annual report upon the request of
Contractowners who have allocated contract value to the Corporate
Bond, Small-Cap Aggressive Growth or Foreign Equity Portfolios of
the Fund. Such requests should be forwarded to Ms. Teddy
Beckman, 8515 E. Orchard Road, Englewood, CO 80111; (800) 537-
2033, ext. 4538.
BY ORDER OF
THE BOARD OF DIRECTORS
Ruth B. Lurie
Secretary
December 4, 1995
APPENDIX A
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.
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:
President
Witness:
Secretary
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By:
Senior Vice President,
Investments
Witness:
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 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 regularly 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:
President
Witness:
Secretary THE GREAT-WEST LIFE
ASSURANCE COMPANY
By:
Senior Vice President,
Investments
Witness:
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,
(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: By:
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By:
Executive Vice President,
Investments
Attest: By:
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.
Attest: By:
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By:
Executive Vice President,
Investments
Attest:
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, 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: By:
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By:
Executive Vice President,
Investments
Attest:
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, 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: By:
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By:
Executive Vice President,
Investments
Attest:
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 1, 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.
By:
President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
By:
Executive Vice President,
Investments
By:
Senior 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 1, 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: By:
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
Attest: By:
Senior Vice President, General
Senior Vice President,
Chief Counsel and Secretary 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 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 1, 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: By:
Secretary President
THE GREAT-WEST LIFE
ASSURANCE COMPANY
Attest: By:
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 1, 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.
2. 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.
Attest: By:
President
THE GREAT-WEST LIFE ASSURANCE
COMPANY
Attest: By:
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 1, 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.
2. 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: By:
President
THE GREAT-WEST LIFE ASSURANCE
COMPANY
Attest: By:
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 1, 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>
APPENDIX B
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (herein "the Agreement" or "this
Agreement") made this ___________ day of _________, 199___ by and
between 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"), Loomis Sayles &
Company, LP, a Delaware limited partnership registered as an Investment
Adviser under the Investment Advisers Act of 1940 ("the Sub-adviser"),
and Maxim Series Fund, Inc., a Maryland corporation ("the Fund"), this
Agreement embodying the arrangement whereby the Sub-adviser will act
as an investment adviser to the Corporate Bond Portfolio and Small Cap
Aggressive Growth Portfolio of the Fund ("the Portfolios"), in conjunction
with the Adviser, as follows:
ARTICLE I
Preamble
The Fund entered into an Investment Advisory Agreement with
the Adviser, which agreement is dated April 1, 1982, and as thereafter
amended. Such advisory agreement and all amendments thereto are
hereinafter referred to as "the GWL Agreement". In the GWL Agreement,
the Adviser agreed to act as adviser to and manager of the Fund. In that
capacity it agreed to manage the investment and reinvestment of the
assets of any portfolio of the Fund in existence or created in the future
and to administer the Fund's affairs. The Adviser wishes to obtain
assistance with respect to its aforesaid advisory and management role
with respect to the Portfolios only, to the extent described herein, and the
Fund by this Agreement agrees to such arrangement.
ARTICLE II
Duties of the Sub-adviser
The Adviser hereby employs the Sub-adviser to act with the
Adviser as investment advisers to and managers of the Portfolios, 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 the Portfolios
and to administer its affairs, for the period and on the terms and
conditions set forth in this Agreement. The Sub-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 Sub-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 Sub-Advisory Services. In carrying out its
obligations to assist in managing the investment and reinvestment of the
assets of the Portfolios, the Sub-adviser shall, when appropriate and
consistent with the limitations set forth in Section B hereof:
(a) perform research and obtain and
evaluate pertinent economic, statistical, and financial
data relevant to the investment policies of the Portfolios;
(b) consult with the Adviser and with the
Board and furnish to the Adviser and the Board
recommendations with respect to an overall investment
plan for the Portfolio for approval, modification, or
rejection by the Board;
(c) seek out, present, and recommend
specific investment opportunities for the Portfolios,
consistent with an overall investment plan approved by
the Adviser and the Board;
(d) take such steps as are necessary to
implement any overall investment plan approved by the
Board for the Portfolios, including making and carrying
out decisions to acquire or dispose of permissible
investments, management of investments and any other
property of the Portfolio, and providing or obtaining such
services as may be necessary in managing, acquiring or
disposing of investments, consulting as appropriate with
the Adviser;
(e) regularly report to the Adviser and 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 Portfolios;
(f) communicate on trade date to the
Adviser the purchases and sales within the Portfolios;
(g) arrange with the applicable broker or
dealer at the time of the purchase or sale of investments
or other assets of the Portfolios for the appropriate
delivery of the investment or other asset;
(h) report monthly in writing to the Adviser
and report at least annually in person to the Board with
respect to the implementation of the approved
investment plan and any other activities in connection
with management of the assets of the Portfolios;
(i) maintain all required records,
memoranda, instructions or authorizations relating to the
acquisition or disposition of investments or other assets
of the Portfolios;
(j) arrange with the Investment Operations
Department of the Adviser an administrative process
which permits the Adviser to appropriately reflect in its
daily determination of unit values, the expenses that will
be borne directly by the Portfolios and which are
incurred as a result of providing investment management
services to the Portfolios.
The Adviser will continue to provide all of the services described
in the GWL Agreement other than the services described above which
have been delegated to the Sub-adviser in this Agreement.
If, in the judgement of the Sub-adviser, the Portfolios would be
benefitted by supplemental investment research from other persons or
entities, outside the context of brokerage transactions referred to in
Article IV hereof, the Sub-adviser is authorized to obtain and pay at its
own expense 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
expenses of the Sub-adviser may not be necessarily reduced as a result
of the receipt of such supplemental information. The Sub-adviser and the
Adviser shall regularly report to the Board when the Sub-adviser has
secured or, where time permits, the Sub-adviser intends to secure said
supplemental investment research. It is understood and agreed that the
Board retains the right to limit the scope of or disapprove of said
research.
B. Limitations on Advisory Services. The Sub-adviser shall
perform the services under this Agreement subject to the review of the
Adviser and the Board and in a manner consistent with the investment
objectives, policies, and restrictions of the Portfolios and/or 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 Fund has furnished or will furnish the Sub-adviser with
copies of the Fund's Registration Statement, Prospectus, Articles of
Incorporation, and Bylaws as currently in effect and agrees during the
continuance of this Agreement to furnish the Sub-adviser with copies of
any amendments or supplements thereto before or at the time the
amendments or supplements become effective. The Sub-adviser will be
entitled to rely on all documents furnished by the Fund.
ARTICLE III
Compensation of the Sub-adviser
A. Investment Advisory Fee. The Adviser, and not the Fund,
will pay on the last day of each month as monthly compensation to the
Sub-adviser for the services rendered by the Sub-adviser with respect to
the Portfolios, as described in Article II of this Agreement, a percentage
of the assets of the Portfolios (the "NAV Fee") according to the following
schedule:
Corporate Bond Portfolio Small-Cap Aggressive Growth
Portfolio
NAV Fee Average Daily Net Assets
NAV Fee
0.25% on all monies First $10 million
.04167%
Next $15 million
.03750%
Next $75 million
.03333%
Over $100 million
.02500%
This calculation will be based on the average daily net assets of the
Portfolio during such month.
B. Allocation of Expenses. The Sub-adviser shall be
responsible for all expenses incurred in performing the services set forth
in Article II hereof. These expenses include only the costs incurred in
providing sub-advisory services pursuant to this Agreement (such as
compensating and furnishing office space for officers and employees of
the Sub-adviser connected with investment and economic research,
trading, and investment management of the Portfolios).
As described in the GWL Agreement, the Fund and/or the
Adviser pays all other expenses incurred in the operation of the Portfolios
and all of its general administrative expenses.
ARTICLE IV
Portfolio Transactions and Brokerage
The Sub-adviser agrees to determine the securities to be
purchased or sold by the Portfolios, subject to the provisions of Article II
regarding co-ordination with and supervision by the Adviser and the
Fund's Board of Directors, and to place orders pursuant to its
determinations, either directly with the issuer, with any broker dealer or
underwriter selected by the Sub-adviser, subject to the following
limitations.
The Sub-adviser is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities for the
Portfolios and will use its best efforts to obtain the most favorable net
results and execution of the Portfolios' orders, taking into account all
appropriate factors, including price, dealer spread or commission, if any,
size of the transaction, and difficulty of the transaction.
The Sub-adviser is specifically authorized to allocate brokerage
and principal business to firms that provide such services or facilities and
to cause the Fund to pay a member of a securities exchange or any
other securities broker or dealer an amount of commission for effecting
a securities transaction in excess of the amount of commission another
member of an exchange, broker or dealer would have charged for
effecting that transaction, if the Sub-adviser determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services (as such services are defined in Section
28(e) of the Securities Exchange Act of 1934) provided by such member,
broker or dealer, viewed in terms of either that particular transaction or
the Sub-adviser's over-all responsibilities with respect to the accounts as
to which it exercises investment discretion (as that term is defined in
Section 3(a)(35) of the Securities Exchange Act of 1934). The Sub-
adviser shall regularly report to the Adviser and the Board with respect
to the brokerage commissions incurred by the Portfolio for the purchases
and sales of its portfolio securities. The Adviser and the Board will review
the amount of such brokerage commissions and consult with the Sub-
adviser in that regard.
Subject to the above requirements and compliance with the
provisions of the Investment Company Act of 1940, the Securities and
Exchange Act of 1934, other applicable provisions of law, and the terms
of any exemption(s) therefrom, nothing shall prohibit the Sub-adviser from
selecting brokers or dealers with which it or the Fund are affiliated.
ARTICLE V
Activities of the Sub-adviser
The services of the Sub-adviser to the Fund under this
Agreement are not to be deemed exclusive and the Sub-adviser will be
free to render similar services or other services to others so long as the
Sub-adviser fulfills its rights and obligations under this Agreement. It is
understood that directors, officers, employees and shareholders of the
Fund are or may become interested in the Sub-adviser, as directors,
officers, employees or shareholders or otherwise, and that directors,
officers, employees or shareholders of the Sub-adviser are or may
become similarly interested in the Fund, and that the Sub-adviser is or
may become interested in the Fund as shareholder or otherwise.
It is agreed that the Sub-adviser may use any supplemental
investment research obtained for the benefit of the Portfolios in providing
investment advice to its other investment advisory accounts. The Sub-
adviser or its affiliates may use such information in managing their own
accounts. Conversely, such supplemental information obtained by the
Sub-adviser for the benefit of the Sub-adviser or other entities advised by
the Sub-adviser will be considered by and may be useful to the Sub-
adviser in carrying out its obligations to the Fund.
Securities held by the Portfolios may also be held by separate
accounts or other mutual funds for which the Sub-adviser or its affiliates
act as an adviser or by the Sub-adviser or its affiliates. Because of
different investment objectives or other factors, a particular security may
be bought by the Sub-adviser or its affiliates or for one or more clients
when one or more clients are selling the same security. If purchases or
sales of securities for the Portfolios or other entities for which the Sub-
adviser or its affiliates act as investment 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 Sub-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 of price.
It is agreed that, on occasions when the Sub-adviser deems the
purchase or sale of a security to be in the best interests of the Portfolio
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 so 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 Sub-adviser in the manner it considers to be most equitable and
consistent with its fiduciary obligations to the Portfolios 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 the
Portfolios.
ARTICLE VI
Effectiveness of the Agreement
The Agreement shall not become effective (and the Sub-adviser
shall not serve or act as hereunder) unless and until it is approved by the
Board of Directors of the Fund including a majority of directors who are
not parties to this Agreement or interested persons of any such party to
this Agreement, and by a majority of the shareholders of each of the
Corporate Bond and Small-Cap Aggressive Growth Portfolios, and this
Agreement shall come into full force and effect on the date it is so
approved. If so approved, the Sub-adviser will act as sub-adviser under
the terms of the Agreement upon the consummation of the acquisition of
The New England Mutual Life Insurance Company by Metropolitan Life
Insurance Company.
ARTICLE VII
Term of the Agreement
The Agreement shall remain in effect until two years from the date
first above-written and shall continue so long as such continuance is
annually approved thereafter (a) by the vote of a majority of the Board of
Directors of the Fund, or by vote of a majority of the outstanding shares
of the Portfolios, 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 Sub-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 Sub-adviser
without sixty days' prior written notice;
(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 Portfolios, on sixty days' written notice to
the Sub-adviser;
(c) shall not be amended without specific approval
of such amendment by (i) the Board, including 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 (ii) a
majority of the outstanding shares of the
Portfolios; and
(d) shall automatically terminate upon assignment
by either party.
ARTICLE VIII
Record Keeping
The Sub-adviser agrees that all accounts and records which it
maintains for the Portfolios 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 Sub-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 Sub-adviser also
agrees that it will maintain all records and accounts regarding the
investment activities of the Fund in a confidential manner; provided,
however, that the Sub-adviser may make such records and accounts
available to its legal counsel and independent auditors. 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 Sub-adviser's offices upon reasonable prior written
notice. In addition, the Sub-adviser will provide any materials, reasonably
related to the investment sub-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 IX
Liability of the Sub-adviser
In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties on the part of the Sub-
adviser or its officers, directors, employees, controlling persons,
shareholders, and any other person or entity affiliated with the Sub-
adviser, neither the Sub-adviser nor any of its officers, directors,
employees, controlling persons, shareholders or any other person or
entity affiliated with the Sub-adviser shall be subject to liability to the
Fund or to any shareholder or the Adviser for any act or omission in the
course of, or connected with, rendering services pursuant to this
Agreement, 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. The Sub-adviser shall not be
liable for the acts and omissions of any independent contractor used by
it nor for those of any bank, trust company, broker or other person with
whom or into whose hands any monies, shares of the Fund, or securities
and investments may be deposited or come, pursuant to the provisions
of this Agreement.
ARTICLE X
Indemnification
The Sub-adviser agrees and undertakes to hold the Adviser
harmless and to indemnify and protect the Adviser from and against any
and all lawsuits or other claims brought against the Adviser as a result
of the activities (or omissions by the Sub-adviser to carry out its
obligations hereunder) of the Sub-adviser under this Agreement,
including the activities (or such omissions) of the Sub-adviser's officers
and directors, agents, employees, controlling persons, shareholders, and
any other person or entity affiliated with the Sub-adviser or retained by
it to perform or assist in the performance of its obligations under this
Agreement.
The Adviser agrees and undertakes to hold the Sub-adviser
harmless and to indemnify and protect the Sub-adviser from and against
any and all lawsuits or other claims brought against the Sub-adviser as
a result of the activities of the Adviser under this Agreement and the GWL
Agreement (or omissions by the Adviser to carry out its obligations
hereunder or thereunder), including the activities (or such omissions) of
the Adviser's 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 of the GWL Agreement.
ARTICLE XI
Agreements, Representations and Indemnification
Related to Disclosure Documents
A. The Sub-adviser will cooperate with the Fund and the
Adviser in connection with the registration or qualification of units of the
Portfolios for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Fund may request and will cooperate with the
preparation of the Disclosure Documents (as defined in Article XI.C.
below). The Fund and the Adviser will provide the Sub-adviser with
copies of all Disclosure Documents prior to distribution to investors or
submission to governmental bodies or self-regulatory organizations and
will incorporate its reasonable comments relating to the description of, or
services to be provided by, the Sub-adviser or its affiliates, or relating to
the description of the investment objectives and policies of the Portfolios.
B. The Fund and the Adviser, jointly and severally, represent
and warrant to the Sub-adviser that the Disclosure Documents will fully
comply with the provisions of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the Investment Company
Act of 1940, as amended, and other applicable laws, and the Disclosure
Documents at all such times will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, except that
this representation and warranty does not apply to statements or
omissions in the Disclosure Documents made in reliance upon
information furnished to the Fund or the Adviser in writing by the Sub-
adviser which the Fund had informed the Sub-adviser was to be used, or
which the Sub-adviser had acknowledged was to be used, in the
particular Disclosure Document. The Fund and the Adviser will notify the
Sub-adviser promptly of the happening of any event which in the
judgment of the Fund or the Adviser makes any statement made in the
Disclosure Documents untrue in any material respect or requires the
making of any changes in the Disclosure Documents in order to make the
statements therein, in the light of circumstances under which they were
made, not misleading in any material respect, except that the Fund and
the Adviser need not make such notification with respect to information
in the Disclosure Documents based upon information furnished in writing
to the Fund or the Adviser by the Sub-adviser which the Fund had
informed the Sub-adviser was to be used, or which the Sub-adviser had
acknowledged was to be used, in the particular Disclosure Document.
The Sub-adviser represents and warrants to the Fund and the
Adviser that the information furnished in writing by it which the Fund has
informed it is to be used, or which the Sub-adviser has acknowledged is
to be used, in a particular Disclosure Document will fully comply with the
provisions of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the Investment Company Act of
1940, as amended, and other applicable laws, and that such information
at all such times will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Sub-adviser will
promptly notify the Fund and the Adviser of the happening of any event
which in the judgment of the Fund or the Advisor makes any statement
made in the Disclosure Documents untrue in any material respect or
requires the making of any changes in the Disclosure Documents in
order to make the statements therein, in the light of circumstances under
which they were made, not misleading in any material respect, except
that the Fund or the Advisor need make such notification with respect to
information in the Disclosure Documents based upon information
furnished in writing to the Fund or the Adviser by the Sub-adviser which
the Fund had informed the Sub-adviser was to be used, or which the
Sub-adviser had acknowledged was to be used, in the particular
Disclosure Statement.
C. Notwithstanding Article X to the contrary, the Fund and the
Adviser, jointly and severally, agree to hold harmless the Sub-adviser, its
directors and officers (each such person a "Sub-adviser Indemnified
Party"), and each person, if any, who controls the Sub-adviser within the
meaning of either Section 15 of the Securities Act of 1933, as amended,
or Section 20 of the Securities Exchange Act of 1934, as amended, from
and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Fund's Registration Statement or Prospectus, or any
amendment or supplement thereto, or in any preliminary prospectus, any
other communication with investors or any other submissions to
governmental bodies or self-regulatory agencies filed or distributed prior
to, on or subsequent to the date first above-written (such documents
being herein referred to as "Disclosure Documents") or arising out of or
based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any such untrue
statement or omission or allegation thereof based upon information
furnished in writing to the Fund or the Adviser by the Sub-adviser which
the Fund had informed the Sub-adviser was to be used, or which the
Sub-adviser had acknowledged was to be used, in the particular
Disclosure Document.
If any action or proceeding (including any governmental
investigation) shall be brought or asserted against the Sub-adviser
Indemnified Party in respect of which indemnity may be sought from the
Fund and the Adviser, the Sub-adviser Indemnified Party shall promptly
notify the Fund and the Adviser in writing, and the Fund and the Adviser
shall assume the defense thereof, including the employment of counsel
satisfactory to the Sub-adviser and the payment of all expenses. The
Sub-adviser Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but
the fees and expenses of such counsel shall be the expense of the Sub-
adviser Indemnified Party unless (a) the Fund or the Adviser has agreed
to pay such fees and expenses or (b) the Fund or the Adviser shall have
failed to assume the defense of such action or proceeding and to employ
counsel satisfactory to the Sub-adviser in any such action or proceeding
or (c) the named parties to any such action or proceeding (including any
impleaded parties) include both the Sub-adviser Indemnified Party and
the Fund or the Sub-adviser Indemnified Party shall have been advised
by counsel that there may be one or more legal defenses available to any
of them which are different from or additional to those available to the
Fund or the Adviser (in which case, if the Sub-adviser Indemnified Party
notifies the Fund and the Adviser in writing that it elects to employ
separate counsel at the expense of the Fund and the Adviser, the Fund
and the Adviser shall not have the right to assume the defense of such
action or proceeding on behalf of the Sub-adviser Indemnified Party), it
being understood, however, that the Fund and the Adviser shall not, in
connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for the Sub-adviser Indemnified
Party, which firm shall be designated in writing by the Sub-adviser.
Neither the Fund nor the Adviser shall be liable for any settlement of any
such action or proceeding effected without their written consent, but if
settled with their written consent, or if there be a final judgment for the
plaintiff in any such action or proceeding, the Fund and the Adviser
agree to indemnify and hold harmless the Sub-adviser Indemnified Party
from and against any loss or liability by reason of such settlement or
judgment.
Notwithstanding Article X to the contrary, the Sub-adviser agrees
to indemnify and hold harmless the Fund and the Adviser, their directors
and officers, and each person, if any, who controls the Fund or the
Adviser within the meaning of either Section 15 of the Securities Act of
1933, as amended, or Section 20 of the Securities Exchange Act of 1934,
as amended, to the same extent as the foregoing indemnity from the
Fund and the Adviser to the Sub-adviser, but only with respect to
information furnished in writing by it which the Fund had informed the
Sub-adviser was to be used, or which the Sub-adviser had acknowledged
was to be used, in the particular Disclosure Document. In case any
action or proceeding shall be brought against the Fund or the Adviser,
their directors or officers, or any such controlling persons, in respect of
which indemnity may be sought against the Sub-adviser, the Sub-adviser
shall have the rights and duties given to the Fund and the Adviser, and
the Fund or the Adviser, their directors or officers, or such controlling
persons shall have the rights and duties given to the Sub-adviser, by the
preceding paragraph.
D. The agreements, representations and indemnification
contained in this Article XI shall remain operative and in full force and
effect regardless of (a) any investigation made by or on behalf of the
Sub-adviser Indemnified Party or by or on behalf of the Fund or the
Adviser, its directors and officers, or any person controlling the Fund or
the Adviser or (b) any termination of this Agreement.
ARTICLE XII
Governing Law
This Agreement is subject to the provisions of the Investment
Company Act of 1940, 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 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.
ARTICLE XIII
Counterparts
This Agreement may be executed in any number of counterparts,
and by separate parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be signed by their respective officials duly authorized, as of the day
and year first above written.
Witness: THE GREAT-WEST LIFE ASSURANCE
COMPANY
___________________ By: _________________________
Witness: LOOMIS SAYLES & COMPANY LP
___________________ By: ______________________________
Witness: MAXIM SERIES FUND, INC.
____________________ By: _______________________________
APPENDIX C
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (herein "the Agreement" or "this
Agreement") made this ___________ day of _________, 199___ by and
between The Great-West Life Assurance Company, a Canadian stock life
insurance company registered as an investment adviser (the "Adviser")
under the Investment Advisers Act of 1940, Draycott Partners, Ltd. (the
"Sub-adviser"), a Massachusetts company, registered as an Investment
Adviser under the Investment Advisers Act of 1940, and Maxim Series
Fund, Inc. (the "Fund"), a Maryland corporation, this Agreement
embodying the arrangement whereby the Sub-adviser will act as an
investment adviser to the Foreign Equity Portfolio of the Fund ("the
Portfolio"), in conjunction with the Adviser, as follows:
ARTICLE I
Preamble
The Fund entered into an Investment Advisory Agreement with
the Adviser, which agreement is dated April 1, 1982, and as thereafter
amended. Such Investment Advisory Agreement and all amendments
thereto are hereinafter referred to as "the GWL Agreement". In the GWL
Agreement, the Adviser agreed to act as adviser to and manager of the
Fund. In that capacity it agreed to manage the investment and
reinvestment of the assets of any portfolio of the Fund in existence or
created in the future and to administer the Fund's affairs. The Adviser
wishes to obtain assistance with respect to its aforesaid advisory and
management role with respect to the Portfolio only, to the extent
described herein, and the Fund by this Agreement agrees to such
arrangement.
ARTICLE II
Duties of the Sub-adviser
The Adviser hereby employs the Sub-adviser to act with the
Adviser as investment advisers to and managers of the Portfolio, 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 the Portfolio,
for the period and on the terms and conditions set forth in this
Agreement. The Sub-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 Sub-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 Sub-Advisory Services. In carrying out its
obligations to assist in managing the investment and reinvestment of the
assets of the Portfolio, the Sub-adviser shall, when appropriate and
consistent with the limitations set forth in Section B hereof:
(a) perform research and obtain and
evaluate pertinent economic, statistical, and financial
data relevant to the investment policies of the Portfolio;
(b) consult with the Adviser and with the
Board and furnish to the Adviser and the Board
recommendations with respect to an overall investment
plan for the Portfolio for approval, modification, or
rejection by the Board;
(c) seek out, present, and recommend
specific investment opportunities for the Portfolio,
consistent with an overall investment plan approved by
the Adviser and the Board;
(d) report to the Adviser and report at least
annually in person to the Board with respect to the
implementation of the approved investment plan and any
other activities in connection with management of the
assets of the Portfolio;
The Adviser will continue to provide all of the services described
in the GWL Agreement other than the services described above which
have been delegated to the Sub-adviser in this Agreement.
If, in the judgement of the Sub-adviser, the Portfolio would be
benefitted by supplemental investment research from other persons or
entities, outside the context of brokerage transactions referred to in
Article IV hereof, the Sub-adviser is authorized to obtain and pay at its
own expense 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
expenses of the Sub-adviser may not be necessarily reduced as a result
of the receipt of such supplemental information. The Sub-adviser and the
Adviser shall regularly report to the Board when the Sub-adviser has
secured or, where time permits, the Sub-adviser intends to secure said
supplemental investment research. It is understood and agreed that the
Board retains the right to limit the scope of or disapprove of said
research.
B. Limitations on Advisory Services. The Sub-adviser shall
perform the services under this Agreement subject to the review of the
Adviser and the Board and in a manner consistent with the investment
objectives, policies, and restrictions of the Portfolio and/or 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 Fund has furnished or will furnish the Sub-adviser
with copies of the Fund's Registration Statement, Prospectus, Articles of
Incorporation, and Bylaws as currently in effect and agrees during the
continuance of this Agreement to furnish the Sub-adviser with copies of
any amendments or supplements thereto before or at the time the
amendments or supplements become effective. The Sub-adviser will be
entitled to rely on all documents furnished by the Fund.
C. Administrative Procedures. In providing the services
described herein, the Adviser and the Sub-adviser have established
administrative procedures describing the respective duties of each party.
ARTICLE III
Compensation of the Sub-adviser
A. Investment Advisory Fee. The Adviser, and not the Fund,
will pay on the last day of each month as monthly compensation to the
Sub-adviser for the services rendered by the Sub-adviser with respect to
the Portfolio, as described in Article II of this Agreement, a percentage of
the assets of the Portfolio (the "NAV Fee") according to the following
schedule:
Average Daily
Net Assets NAV Fee
First $10 million .05000%
Next $40 million .04167%
Excess of $50 million .02917%
This calculation will be based on the average daily net assets of the
Portfolio during such month.
B. Allocation of Expenses. The Sub-adviser shall be
responsible for all expenses incurred in performing the services set forth
in Article II hereof. These expenses include only the costs incurred in
providing sub-advisory services pursuant to this Agreement (such as
compensating and furnishing office space for officers and employees of
the Sub-adviser connected with investment and economic research,
trading, and investment management of the Portfolio).
As described in the GWL Agreement, the Fund and/or the
Adviser pays all other expenses incurred in the operation of the Portfolio
and all of its general administrative expenses.
ARTICLE IV
Portfolio Transactions and Brokerage
The Sub-adviser agrees to determine the securities to be
purchased or sold by the Portfolio, subject to the provisions of Article II
regarding co-ordination with and supervision by the Adviser and the
Fund's Board of Directors, and to place orders pursuant to its
determinations, either directly with the issuer, with any broker dealer or
underwriter selected by the Sub-adviser, subject to the following
limitations.
The Sub-adviser is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities for the
Portfolio and will use its best efforts to obtain the most favorable net
results and execution of the Portfolio'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.
The Sub-adviser is specifically authorized to allocate brokerage
and principal business to firms that provide such services or facilities and
to cause the Fund to pay a member of a securities exchange or any
other securities broker or dealer an amount of commission for effecting
a securities transaction in excess of the amount of commission another
member of an exchange, broker or dealer would have charged for
effecting that transaction, if the Sub-adviser determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services (as such services are defined in Section
28(e) of the Securities Exchange Act of 1934) provided by such member,
broker or dealer, viewed in terms of either that particular transaction or
the Sub-adviser's over-all responsibilities with respect to the accounts as
to which it exercises investment discretion (as that term is defined in
Section 3(a)(35) of the Securities Exchange Act of 1934). The Sub-
adviser shall regularly report to the Adviser and the Board with respect
to the brokerage commissions incurred by the Portfolio for the purchases
and sales of its portfolio securities. The Adviser and the Board will review
the amount of such brokerage commissions and consult with the Sub-
adviser in that regard.
Subject to the above requirements and compliance with the
provisions of the Investment Company Act of 1940, the Securities and
Exchange Act of 1934, other applicable provisions of law, and the terms
of any exemption(s) therefrom, nothing shall prohibit the Sub-adviser from
selecting brokers or dealers with which it or the Fund are affiliated.
ARTICLE V
Activities of the Sub-adviser
The services of the Sub-adviser to the Fund under this
Agreement are not to be deemed exclusive and the Sub-adviser will be
free to render similar or other services to others so long as the Sub-
adviser fulfills its rights and obligations under this Agreement. It is
understood that directors, officers, employees and shareholders of the
Fund are or may become interested in the Sub-adviser, as directors,
officers, employees or shareholders or otherwise, and that directors,
officers, employees or shareholders of the Sub-adviser are or may
become similarly interested in the Fund, and that the Sub-adviser is or
may become interested in the Fund as shareholder or otherwise.
It is agreed that the Sub-adviser may use any supplemental
investment research obtained for the benefit of the Portfolio in providing
investment advice to its other investment advisory accounts. The Sub-
adviser or its affiliates may use such information in managing their own
accounts. Conversely, such supplemental information obtained by the
Sub-adviser for the benefit of the Sub-adviser or other entities advised by
the Sub-adviser will be considered by and may be useful to the Sub-
adviser in carrying out its obligations to the Fund.
Securities held by the Portfolio may also be held by separate
accounts or other mutual funds for which the Sub-adviser or its affiliates
act as an adviser or by the Sub-adviser or its affiliates. Because of
different investment objectives or other factors, a particular security may
be bought by the Sub-adviser or its affiliates or for one or more clients
when one or more clients are selling the same security. If purchases or
sales of securities for the Portfolio or other entities for which the Sub-
adviser or its affiliates act as investment 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 Sub-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 of price.
It is agreed that, on occasions when the Sub-adviser deems the
purchase or sale of a security to be in the best interests of the Portfolio
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 so 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 Sub-adviser in the manner it considers to be most equitable and
consistent with its fiduciary obligations to the Portfolio 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 the
Portfolio.
ARTICLE VI
Effectiveness of the Agreement
The Agreement shall not become effective (and the Sub-adviser
shall not serve or act hereunder) unless and until it is approved by the
Board of Directors of the Fund including a majority of directors who are
not parties to this Agreement or interested persons of any such party to
this Agreement, and by a majority of the shareholders of the Foreign
Equity Portfolio and this Agreement shall come into full force and effect
on the date it is so approved. If so approved, the Sub-Adviser will act as
sub-adviser under the terms of the Agreement upon consummation of the
acquisition of the Sub-Adviser by Cursitor Holdings Ltd. U.K.
ARTICLE VII
Term of the Agreement
The Agreement shall remain in effect until two years from the date
first above-written and shall continue so long as such continuance is
annually approved thereafter (a) by the vote of a majority of the Board of
Directors of the Fund, or by vote of a majority of the outstanding shares
of the 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 Sub-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 Sub-adviser
without sixty days' prior written notice;
(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 Portfolio, on sixty days' written notice to
the Sub-adviser;
(c) shall not be amended without specific approval
of such amendment by (i) the Board, including 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 (ii) a
majority of the outstanding shares of the
Portfolio; and
(d) shall automatically terminate upon assignment
by either party.
ARTICLE VIII
Record Keeping
The Sub-adviser agrees that all accounts and records which it
maintains for the Portfolio 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 Sub-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 Sub-adviser also agrees
that it will maintain all records and accounts regarding the investment
activities of the Fund in a confidential manner; provided, however, that
the Sub-adviser may make such records and accounts available to its
legal counsel and independent auditors. 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
Sub-adviser's offices upon reasonable prior written notice. In addition,
the Sub-adviser will provide any materials, reasonably related to the
investment sub-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 IX
Liability of the Sub-adviser
In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties on the part of the Sub-
adviser or its officers, directors, employees, controlling persons,
shareholders, and any other person or entity affiliated with the Sub-
adviser, neither the Sub-adviser nor any of its officers, directors,
employees, controlling persons, shareholders or any other person or
entity affiliated with the Sub-adviser shall be subject to liability to the
Fund or to any shareholder or the Adviser for any act or omission in the
course of, or connected with, rendering services pursuant to this
Agreement, 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. The Sub-adviser shall not be
liable for the acts and omissions of any independent contractor used by
it nor for those of any bank, trust company, broker or other person with
whom or into whose hands any monies, shares of the Fund, or securities
and investments may be deposited or come, pursuant to the provisions
of this Agreement.
ARTICLE X
Indemnification
The Sub-adviser agrees and undertakes to hold the Adviser
harmless and to indemnify and protect the Adviser from and against any
and all lawsuits or other claims brought against the Adviser as a result
of the activities (or omissions by the Sub-adviser to carry out its
obligations hereunder)of the Sub-adviser under this Agreement, including
the activities (or such omissions) of the Sub-adviser's officers and
directors, agents, employees, controlling persons, shareholders, and any
other person or entity affiliated with the Sub-adviser or retained by it to
perform or assist in the performance of its obligations under this
Agreement.
The Adviser agrees and undertakes to hold the Sub-adviser
harmless and to indemnify and protect the Sub-adviser from and against
any and all lawsuits or other claims brought against the Sub-adviser as
a result of the activities of the Adviser under this Agreement and the GWL
Agreement (or omissions by the Adviser to carry out its obligations
hereunder or thereunder), including the activities (or such omissions of
the Adviser's 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 of the GWL Agreement.
ARTICLE XI
Agreements, Representations and Indemnification
Related to Disclosure Documents
A. The Sub-adviser will cooperate with the Fund and the
Adviser in connection with the registration or qualification of units of the
Portfolio for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Fund may request and will cooperate with the
preparation of the Disclosure Documents (as defined in Article XI.C.
below). The Fund and the Adviser will provide the Sub-adviser with
copies of all Disclosure Documents prior to distribution to investors or
submission to governmental bodies or self-regulatory organizations and
will incorporate its reasonable comments relating to the description of, or
services to be provided by, the Sub-adviser or its affiliates, or relating to
the description of the investment objectives and policies of the Portfolio.
B. The Fund and the Adviser, jointly and severally, represent
and warrant to the Sub-adviser that the Disclosure Documents will fully
comply with the provisions of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the Investment Company
Act of 1940, as amended, and other applicable laws, and the Disclosure
Documents at all such times will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, except that
this representation and warranty does not apply to statements or
omissions in the Disclosure Documents made in reliance upon
information furnished to the Fund or the Adviser in writing by the Sub-
adviser which the Fund had informed the Sub-adviser was to be used, or
which the Sub-adviser had acknowledged was to be used, in the
particular Disclosure Document. The Fund and the Adviser will notify the
Sub-adviser promptly of the happening of any event which in the
judgment of the Fund or the Adviser makes any statement made in the
Disclosure Documents untrue in any material respect or requires the
making of any changes in the Disclosure Documents in order to make the
statements therein, in the light of circumstances under which they were
made, not misleading in any material respect, except that the Fund and
the Adviser need not make such notification with respect to information
in the Disclosure Documents based upon information furnished in writing
to the Fund or the Adviser by the Sub-adviser which the Fund had
informed the Sub-adviser was to be used, or which the Sub-adviser had
acknowledged was to be used, in the particular Disclosure Document.
The Sub-adviser represents and warrants to the Fund and the
Adviser that the information furnished in writing by it which the Fund has
informed it is to be used, or which the Sub-adviser has acknowledged is
to be used, in a particular Disclosure Document will fully comply with the
provisions of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the Investment Company Act of
1940, as amended, and other applicable laws, and that such information
at all such times will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Sub-adviser will notify
the Fund and the Adviser promptly of the happening of any event which
in the judgment of the Sub-adviser makes any statement made in the
Disclosure Documents untrue in any material respect or requires the
making of any changes in the Disclosure Documents in order to make the
statements therein, in the light of circumstances under which they were
made, not misleading in any material respect, except that the Sub-adviser
need make such notification only with respect to information in the
Disclosure Documents based upon information furnished in writing to the
Fund or the Adviser by the Sub-adviser which the Fund had informed the
Sub-adviser was to be used, or which the Sub-adviser had acknowledged
was to be used, in the particular Disclosure Statement.
C. Notwithstanding Article X to the contrary, the Fund and the
Adviser, jointly and severally, agree to hold harmless the Sub-adviser, its
directors and officers (each such person a "Sub-adviser Indemnified
Party"), and each person, if any, who controls the Sub-adviser within the
meaning of either Section 15 of the Securities Act of 1933, as amended,
or Section 20 of the Securities Exchange Act of 1934, as amended, from
and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Fund's Registration Statement or Prospectus, or any
amendment or supplement thereto, or in any preliminary prospectus, any
other communication with investors or any other submissions to
governmental bodies or self-regulatory agencies filed or distributed prior
to, on or subsequent to the date first above-written (such documents
being herein referred to as "Disclosure Documents") or arising out of or
based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any such untrue
statement or omission or allegation thereof based upon information
furnished in writing to the Fund or the Adviser by the Sub-adviser which
the Fund had informed the Sub-adviser was to be used, or which the
Sub-adviser had acknowledged was to be used, in the particular
Disclosure Document.
If any action or proceeding (including any governmental
investigation) shall be brought or asserted against the Sub-adviser
Indemnified Party in respect of which indemnity may be sought from the
Fund and the Adviser, the Sub-adviser Indemnified Party shall promptly
notify the Fund and the Adviser in writing, and the Fund and the Adviser
shall assume the defense thereof, including the employment of counsel
satisfactory to the Sub-adviser and the payment of all expenses. The
Sub-adviser Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but
the fees and expenses of such counsel shall be the expense of the Sub-
adviser Indemnified Party unless (a) the Fund or the Adviser has agreed
to pay such fees and expenses or (b) the Fund or the Adviser shall have
failed to assume the defense of such action or proceeding and to employ
counsel satisfactory to the Sub-adviser in any such action or proceeding
or (c) the named parties to any such action or proceeding (including any
impleaded parties) include both the Sub-adviser Indemnified Party and
the Fund or the Sub-adviser Indemnified Party shall have been advised
by counsel that there may be one or more legal defenses available to any
of them which are different from or additional to those available to the
Fund or the Adviser (in which case, if the Sub-adviser Indemnified Party
notifies the Fund and the Adviser in writing that it elects to employ
separate counsel at the expense of the Fund and the Adviser, the Fund
and the Adviser shall not have the right to assume the defense of such
action or proceeding on behalf of the Sub-adviser Indemnified Party), it
being understood, however, that the Fund and the Adviser shall not, in
connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for the Sub-adviser Indemnified
Party, which firm shall be designated in writing by the Sub-adviser.
Neither the Fund nor the Adviser shall be liable for any settlement of any
such action or proceeding effected without their written consent, but if
settled with their written consent, or if there be a final judgment for the
plaintiff in any such action or proceeding, the Fund and the Adviser
agree to indemnify and hold harmless the Sub-adviser Indemnified Party
from and against any loss or liability by reason of such settlement or
judgment.
Notwithstanding Article X to the contrary, the Sub-adviser agrees
to indemnify and hold harmless the Fund and the Adviser, their directors
and officers, and each person, if any, who controls the Fund or the
Adviser within the meaning of either Section 15 of the Securities Act of
1933, as amended, or Section 20 of the Securities Exchange Act of 1934,
as amended, to the same extent as the foregoing indemnity from the
Fund and the Adviser to the Sub-adviser, but only with respect to
information furnished in writing by it which the Fund had informed the
Sub-adviser was to be used, or which the Sub-adviser had acknowledged
was to be used, in the particular Disclosure Document. In case any
action or proceeding shall be brought against the Fund or the Adviser,
their directors or officers, or any such controlling persons, in respect of
which indemnity may be sought against the Sub-adviser, the Sub-adviser
shall have the rights and duties given to the Fund and the Adviser, and
the Fund or the Adviser, their directors or officers, or such controlling
persons shall have the rights and duties given to the Sub-adviser, by the
preceding paragraph.
D. The agreements, representations and indemnification
contained in this Article XI shall remain operative and in full force and
effect regardless of (a) any investigation made by or on behalf of the
Sub-adviser Indemnified Party or by or on behalf of the Fund or the
Adviser, its directors and officers, or any person controlling the Fund or
the Adviser or (b) any termination of this Agreement.
ARTICLE XII
Governing Law
This Agreement is subject to the provisions of the Investment
Company Act of 1940, 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 Portfolio, 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.
ARTICLE XIII
Counterparts
This Agreement may be executed in any number of counterparts,
and by separate parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be signed by their respective officials duly authorized, as of the day
and year first above written.
Witness: THE GREAT-WEST LIFE ASSURANCE
COMPANY
___________________ By: ______________________________
Witness: DRAYCOTT PARTNERS, LTD.
___________________ By: _______________________________
Witness: MAXIM SERIES FUND, INC.
____________________ By: _______________________________
<PAGE>
APPENDIX D
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (herein "the Agreement" or "this
Agreement") made this ___________ day of _________, 199___ by and
between The Great-West Life Assurance Company, a Canadian stock life
insurance company registered as an investment adviser (the "Adviser")
under the Investment Advisers Act of 1940, Draycott Partners, Ltd. (the
"Sub-adviser"), a Massachusetts company, registered as an Investment
Adviser under the Investment Advisers Act of 1940, and Maxim Series
Fund, Inc. (the "Fund"), a Maryland corporation, this Agreement
embodying the arrangement whereby the Sub-adviser will act as an
investment adviser to the Foreign Equity Portfolio of the Fund ("the
Portfolio"), in conjunction with the Adviser, as follows:
ARTICLE I
Preamble
The Fund entered into an Investment Advisory Agreement with
the Adviser, which agreement is dated April 1, 1982, and as thereafter
amended. Such Investment Advisory Agreement and all amendments
thereto are hereinafter referred to as "the GWL Agreement". In the GWL
Agreement, the Adviser agreed to act as adviser to and manager of the
Fund. In that capacity it agreed to manage the investment and
reinvestment of the assets of any portfolio of the Fund in existence or
created in the future and to administer the Fund's affairs. The Adviser
wishes to obtain assistance with respect to its aforesaid advisory and
management role with respect to the Portfolio only, to the extent
described herein, and the Fund by this Agreement agrees to such
arrangement.
ARTICLE II
Duties of the Sub-adviser
The Adviser hereby employs the Sub-adviser to act with the
Adviser as investment advisers to and managers of the Portfolio, 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 the Portfolio,
for the period and on the terms and conditions set forth in this
Agreement. The Sub-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 Sub-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 Sub-Advisory Services. In carrying out its
obligations to assist in managing the investment and reinvestment of the
assets of the Portfolio, the Sub-adviser shall, when appropriate and
consistent with the limitations set forth in Section B hereof:
(a) perform research and obtain and
evaluate pertinent economic, statistical, and financial
data relevant to the investment policies of the Portfolio;
(b) consult with the Adviser and with the
Board and furnish to the Adviser and the Board
recommendations with respect to an overall investment
plan for the Portfolio for approval, modification, or
rejection by the Board;
(c) seek out, present, and recommend
specific investment opportunities for the Portfolio,
consistent with an overall investment plan approved by
the Adviser and the Board;
(d) report to the Adviser and report at least
annually in person to the Board with respect to the
implementation of the approved investment plan and any
other activities in connection with management of the
assets of the Portfolio;
The Adviser will continue to provide all of the services described
in the GWL Agreement other than the services described above which
have been delegated to the Sub-adviser in this Agreement.
If, in the judgement of the Sub-adviser, the Portfolio would be
benefitted by supplemental investment research from other persons or
entities, outside the context of brokerage transactions referred to in
Article IV hereof, the Sub-adviser is authorized to obtain and pay at its
own expense 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
expenses of the Sub-adviser may not be necessarily reduced as a result
of the receipt of such supplemental information. The Sub-adviser and the
Adviser shall regularly report to the Board when the Sub-adviser has
secured or, where time permits, the Sub-adviser intends to secure said
supplemental investment research. It is understood and agreed that the
Board retains the right to limit the scope of or disapprove of said
research.
B. Limitations on Advisory Services. The Sub-adviser shall
perform the services under this Agreement subject to the review of the
Adviser and the Board and in a manner consistent with the investment
objectives, policies, and restrictions of the Portfolio and/or 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 Fund has furnished or will furnish the Sub-adviser
with copies of the Fund's Registration Statement, Prospectus, Articles of
Incorporation, and Bylaws as currently in effect and agrees during the
continuance of this Agreement to furnish the Sub-adviser with copies of
any amendments or supplements thereto before or at the time the
amendments or supplements become effective. The Sub-adviser will be
entitled to rely on all documents furnished by the Fund.
C. Administrative Procedures. In providing the services
described herein, the Adviser and the Sub-adviser have established
administrative procedures describing the respective duties of each party.
ARTICLE III
Compensation of the Sub-adviser
A. Investment Advisory Fee. The Adviser, and not the Fund,
will pay on the last day of each month as monthly compensation to the
Sub-adviser for the services rendered by the Sub-adviser with respect to
the Portfolio, as described in Article II of this Agreement, a percentage of
the assets of the Portfolio (the "NAV Fee") according to the following
schedule:
Average Daily
Net Assets NAV Fee
First $10 million .05000%
Next $40 million .04167%
Excess of $50 million .02917%
This calculation will be based on the average daily net assets of the
Portfolio during such month.
B. Allocation of Expenses. The Sub-adviser shall be
responsible for all expenses incurred in performing the services set forth
in Article II hereof. These expenses include only the costs incurred in
providing sub-advisory services pursuant to this Agreement (such as
compensating and furnishing office space for officers and employees of
the Sub-adviser connected with investment and economic research,
trading, and investment management of the Portfolio).
As described in the GWL Agreement, the Fund and/or the
Adviser pays all other expenses incurred in the operation of the Portfolio
and all of its general administrative expenses.
ARTICLE IV
Portfolio Transactions and Brokerage
The Sub-adviser agrees to determine the securities to be
purchased or sold by the Portfolio, subject to the provisions of Article II
regarding co-ordination with and supervision by the Adviser and the
Fund's Board of Directors, and to place orders pursuant to its
determinations, either directly with the issuer, with any broker dealer or
underwriter selected by the Sub-adviser, subject to the following
limitations.
The Sub-adviser is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities for the
Portfolio and will use its best efforts to obtain the most favorable net
results and execution of the Portfolio'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.
The Sub-adviser is specifically authorized to allocate brokerage
and principal business to firms that provide such services or facilities and
to cause the Fund to pay a member of a securities exchange or any
other securities broker or dealer an amount of commission for effecting
a securities transaction in excess of the amount of commission another
member of an exchange, broker or dealer would have charged for
effecting that transaction, if the Sub-adviser determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services (as such services are defined in Section
28(e) of the Securities Exchange Act of 1934) provided by such member,
broker or dealer, viewed in terms of either that particular transaction or
the Sub-adviser's over-all responsibilities with respect to the accounts as
to which it exercises investment discretion (as that term is defined in
Section 3(a)(35) of the Securities Exchange Act of 1934). The Sub-
adviser shall regularly report to the Adviser and the Board with respect
to the brokerage commissions incurred by the Portfolio for the purchases
and sales of its portfolio securities. The Adviser and the Board will review
the amount of such brokerage commissions and consult with the Sub-
adviser in that regard.
Subject to the above requirements and compliance with the
provisions of the Investment Company Act of 1940, the Securities and
Exchange Act of 1934, other applicable provisions of law, and the terms
of any exemption(s) therefrom, nothing shall prohibit the Sub-adviser from
selecting brokers or dealers with which it or the Fund are affiliated.
ARTICLE V
Activities of the Sub-adviser
The services of the Sub-adviser to the Fund under this
Agreement are not to be deemed exclusive and the Sub-adviser will be
free to render similar or other services to others so long as the Sub-
adviser fulfills its rights and obligations under this Agreement. It is
understood that directors, officers, employees and shareholders of the
Fund are or may become interested in the Sub-adviser, as directors,
officers, employees or shareholders or otherwise, and that directors,
officers, employees or shareholders of the Sub-adviser are or may
become similarly interested in the Fund, and that the Sub-adviser is or
may become interested in the Fund as shareholder or otherwise.
It is agreed that the Sub-adviser may use any supplemental
investment research obtained for the benefit of the Portfolio in providing
investment advice to its other investment advisory accounts. The Sub-
adviser or its affiliates may use such information in managing their own
accounts. Conversely, such supplemental information obtained by the
Sub-adviser for the benefit of the Sub-adviser or other entities advised by
the Sub-adviser will be considered by and may be useful to the Sub-
adviser in carrying out its obligations to the Fund.
Securities held by the Portfolio may also be held by separate
accounts or other mutual funds for which the Sub-adviser or its affiliates
act as an adviser or by the Sub-adviser or its affiliates. Because of
different investment objectives or other factors, a particular security may
be bought by the Sub-adviser or its affiliates or for one or more clients
when one or more clients are selling the same security. If purchases or
sales of securities for the Portfolio or other entities for which the Sub-
adviser or its affiliates act as investment 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 Sub-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 of price.
It is agreed that, on occasions when the Sub-adviser deems the
purchase or sale of a security to be in the best interests of the Portfolio
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 so 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 Sub-adviser in the manner it considers to be most equitable and
consistent with its fiduciary obligations to the Portfolio 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 the
Portfolio.
ARTICLE VI
Effectiveness of the Agreement
The Agreement shall not become effective (and the Sub-adviser
shall not serve or act as investment adviser under the Agreement) unless
and until it is approved by the Board of Directors of the Fund including
a majority of directors who are not parties to this Agreement or interested
persons of any such party to this Agreement, and by a majority of the
shareholders of the Foreign Equity Portfolio and this Agreement shall
come into full force and effect on the date it is so approved. If so
approved, the Sub-Adviser will act as sub-adviser under the terms of the
Agreement upon consummation of the acquisition of Cursitor Holdings
Ltd. U.K. by Alliance Capital Management L.P.
ARTICLE VII
Term of the Agreement
The Agreement shall remain in effect until two years from the date
first above-written and shall continue so long as such continuance is
annually approved thereafter (a) by the vote of a majority of the Board of
Directors of the Fund, or by vote of a majority of the outstanding shares
of the 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 Sub-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 Sub-adviser
without sixty days' prior written notice;
(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 Portfolio, on sixty days' written notice to
the Sub-adviser;
(c) shall not be amended without specific approval
of such amendment by (i) the Board, including 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 (ii) a
majority of the outstanding shares of the
Portfolio; and
(d) shall automatically terminate upon assignment
by either party.
ARTICLE VIII
Record Keeping
The Sub-adviser agrees that all accounts and records which it
maintains for the Portfolio 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 Sub-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 Sub-adviser also agrees
that it will maintain all records and accounts regarding the investment
activities of the Fund in a confidential manner; provided, however, that
the Sub-adviser may make such records and accounts available to its
legal counsel and independent auditors. 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
Sub-adviser's offices upon reasonable prior written notice. In addition,
the Sub-adviser will provide any materials, reasonably related to the
investment sub-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 IX
Liability of the Sub-adviser
In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties on the part of the Sub-
adviser or its officers, directors, employees, controlling persons,
shareholders, and any other person or entity affiliated with the Sub-
adviser, neither the Sub-adviser nor any of its officers, directors,
employees, controlling persons, shareholders or any other person or
entity affiliated with the Sub-adviser shall be subject to liability to the
Fund or to any shareholder or the Adviser for any act or omission in the
course of, or connected with, rendering services pursuant to this
Agreement, 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. The Sub-adviser shall not be
liable for the acts and omissions of any independent contractor used by
it nor for those of any bank, trust company, broker or other person with
whom or into whose hands any monies, shares of the Fund, or securities
and investments may be deposited or come, pursuant to the provisions
of this Agreement.
ARTICLE X
Indemnification
The Sub-adviser agrees and undertakes to hold the Adviser
harmless and to indemnify and protect the Adviser from and against any
and all lawsuits or other claims brought against the Adviser as a result
of the activities (or omissions by the Sub-adviser to carry out its
obligations hereunder)of the Sub-adviser under this Agreement, including
the activities (or such omissions) of the Sub-adviser's officers and
directors, agents, employees, controlling persons, shareholders, and any
other person or entity affiliated with the Sub-adviser or retained by it to
perform or assist in the performance of its obligations under this
Agreement.
The Adviser agrees and undertakes to hold the Sub-adviser
harmless and to indemnify and protect the Sub-adviser from and against
any and all lawsuits or other claims brought against the Sub-adviser as
a result of the activities of the Adviser under this Agreement and the GWL
Agreement (or omissions by the Adviser to carry out its obligations
hereunder or thereunder, including the activities of the Adviser's 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 of the GWL Agreement.
ARTICLE XI
Agreements, Representations and Indemnification
Related to Disclosure Documents
A. The Sub-adviser will cooperate with the Fund and the
Adviser in connection with the registration or qualification of units of the
Portfolio for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Fund may request and will cooperate with the
preparation of the Disclosure Documents (as defined in Article XI.C.
below). The Fund and the Adviser will provide the Sub-adviser with
copies of all Disclosure Documents prior to distribution to investors or
submission to governmental bodies or self-regulatory organizations and
will incorporate its reasonable comments relating to the description of, or
services to be provided by, the Sub-adviser or its affiliates, or relating to
the description of the investment objectives and policies of the Portfolio.
B. The Fund and the Adviser, jointly and severally, represent
and warrant to the Sub-adviser that the Disclosure Documents will fully
comply with the provisions of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the Investment Company
Act of 1940, as amended, and other applicable laws, and the Disclosure
Documents at all such times will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, except that
this representation and warranty does not apply to statements or
omissions in the Disclosure Documents made in reliance upon
information furnished to the Fund or the Adviser in writing by the Sub-
adviser which the Fund had informed the Sub-adviser was to be used, or
which the Sub-adviser had acknowledged was to be used, in the
particular Disclosure Document. The Fund and the Adviser will notify the
Sub-adviser promptly of the happening of any event which in the
judgment of the Fund or the Adviser makes any statement made in the
Disclosure Documents untrue in any material respect or requires the
making of any changes in the Disclosure Documents in order to make the
statements therein, in the light of circumstances under which they were
made, not misleading in any material respect, except that the Fund and
the Adviser need not make such notification with respect to information
in the Disclosure Documents based upon information furnished in writing
to the Fund or the Adviser by the Sub-adviser which the Fund had
informed the Sub-adviser was to be used, or which the Sub-adviser had
acknowledged was to be used, in the particular Disclosure Document.
The Sub-adviser represents and warrants to the Fund and the
Adviser that the information furnished in writing by it which the Fund has
informed it is to be used, or which the Sub-adviser has acknowledged is
to be used, in a particular Disclosure Document will fully comply with the
provisions of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the Investment Company Act of
1940, as amended, and other applicable laws, and that such information
at all such times will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Sub-adviser will notify
the Fund and the Adviser promptly of the happening of any event which
in the judgment of the Sub-adviser makes any statement made in the
Disclosure Documents untrue in any material respect or requires the
making of any changes in the Disclosure Documents in order to make the
statements therein, in the light of circumstances under which they were
made, not misleading in any material respect, except that the Sub-adviser
need make such notification only with respect to information in the
Disclosure Documents based upon information furnished in writing to the
Fund or the Adviser by the Sub-adviser which the Fund had informed the
Sub-adviser was to be used, or which the Sub-adviser had acknowledged
was to be used, in the particular Disclosure Statement.
C. Notwithstanding Article X to the contrary, the Fund and the
Adviser, jointly and severally, agree to hold harmless the Sub-adviser, its
directors and officers (each such person a "Sub-adviser Indemnified
Party"), and each person, if any, who controls the Sub-adviser within the
meaning of either Section 15 of the Securities Act of 1933, as amended,
or Section 20 of the Securities Exchange Act of 1934, as amended, from
and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Fund's Registration Statement or Prospectus, or any
amendment or supplement thereto, or in any preliminary prospectus, any
other communication with investors or any other submissions to
governmental bodies or self-regulatory agencies filed or distributed prior
to, on or subsequent to the date first above-written (such documents
being herein referred to as "Disclosure Documents") or arising out of or
based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any such untrue
statement or omission or allegation thereof based upon information
furnished in writing to the Fund or the Adviser by the Sub-adviser which
the Fund had informed the Sub-adviser was to be used, or which the
Sub-adviser had acknowledged was to be used, in the particular
Disclosure Document.
If any action or proceeding (including any governmental
investigation) shall be brought or asserted against the Sub-adviser
Indemnified Party in respect of which indemnity may be sought from the
Fund and the Adviser, the Sub-adviser Indemnified Party shall promptly
notify the Fund and the Adviser in writing, and the Fund and the Adviser
shall assume the defense thereof, including the employment of counsel
satisfactory to the Sub-adviser and the payment of all expenses. The
Sub-adviser Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but
the fees and expenses of such counsel shall be the expense of the Sub-
adviser Indemnified Party unless (a) the Fund or the Adviser has agreed
to pay such fees and expenses or (b) the Fund or the Adviser shall have
failed to assume the defense of such action or proceeding and to employ
counsel satisfactory to the Sub-adviser in any such action or proceeding
or (c) the named parties to any such action or proceeding (including any
impleaded parties) include both the Sub-adviser Indemnified Party and
the Fund or the Sub-adviser Indemnified Party shall have been advised
by counsel that there may be one or more legal defenses available to any
of them which are different from or additional to those available to the
Fund or the Adviser (in which case, if the Sub-adviser Indemnified Party
notifies the Fund and the Adviser in writing that it elects to employ
separate counsel at the expense of the Fund and the Adviser, the Fund
and the Adviser shall not have the right to assume the defense of such
action or proceeding on behalf of the Sub-adviser Indemnified Party), it
being understood, however, that the Fund and the Adviser shall not, in
connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for the Sub-adviser Indemnified
Party, which firm shall be designated in writing by the Sub-adviser.
Neither the Fund nor the Adviser shall be liable for any settlement of any
such action or proceeding effected without their written consent, but if
settled with their written consent, or if there be a final judgment for the
plaintiff in any such action or proceeding, the Fund and the Adviser
agree to indemnify and hold harmless the Sub-adviser Indemnified Party
from and against any loss or liability by reason of such settlement or
judgment.
Notwithstanding Article X to the contrary, the Sub-adviser agrees
to indemnify and hold harmless the Fund and the Adviser, their directors
and officers, and each person, if any, who controls the Fund or the
Adviser within the meaning of either Section 15 of the Securities Act of
1933, as amended, or Section 20 of the Securities Exchange Act of 1934,
as amended, to the same extent as the foregoing indemnity from the
Fund and the Adviser to the Sub-adviser, but only with respect to
information furnished in writing by it which the Fund had informed the
Sub-adviser was to be used, or which the Sub-adviser had acknowledged
was to be used, in the particular Disclosure Document. In case any
action or proceeding shall be brought against the Fund or the Adviser,
their directors or officers, or any such controlling persons, in respect of
which indemnity may be sought against the Sub-adviser, the Sub-adviser
shall have the rights and duties given to the Fund and the Adviser, and
the Fund or the Adviser, their directors or officers, or such controlling
persons shall have the rights and duties given to the Sub-adviser, by the
preceding paragraph.
D. The agreements, representations and indemnification
contained in this Article XI shall remain operative and in full force and
effect regardless of (a) any investigation made by or on behalf of the
Sub-adviser Indemnified Party or by or on behalf of the Fund or the
Adviser, its directors and officers, or any person controlling the Fund or
the Adviser or (b) any termination of this Agreement.
ARTICLE XII
Governing Law
This Agreement is subject to the provisions of the Investment
Company Act of 1940, 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 Portfolio, 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.
ARTICLE XIII
Counterparts
This Agreement may be executed in any number of counterparts,
and by separate parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be signed by their respective officials duly authorized, as of the day
and year first above written.
Witness: THE GREAT-WEST LIFE ASSURANCE
COMPANY
___________________ By: _______________________________
Witness: DRAYCOTT PARTNERS, LTD.
___________________ By: ________________________________
Witness: MAXIM SERIES FUND, INC.
____________________ By: _______________________________
<PAGE>
MAXIM SERIES FUND, INC.
8515 EAST ORCHARD ROAD
ENGLEWOOD, COLORADO 80111
December 4, 1995
Dear Participants and Contract Owners:
Enclosed you will find proxy solicitation materials for
Maxim Series Fund, Inc. (the "Fund"). As you know, your
variable annuity contract includes investment options which are
funded by purchase of shares of the Fund. Pursuant to the
contract, you have the right to direct the voting of a
proportionate number of Fund shares consistent with the value
of your variable contract.
There are four proposals submitted for consideration.
Only Participants and Contract Owners with contract value
allocated to the Corporate Bond Portfolio may vote with respect
to Proposal 1. Only Participants and Contract Owners with
contract value allocated to the Small-Cap Aggressive Portfolio
may vote with respect to Proposal 2. Only Participants and
Contract Owners with contract value allocated to the Foreign
Equity Portfolio may vote with respect to Proposals 3 and 4.
Each proposal is explained in detail in the enclosed proxy
materials.
We urge you to complete the proxy form which is
enclosed and return it as promptly as possible.
Sincerely,
Ruth B. Lurie,
Secretary
PROXY
MAXIM SERIES FUND, INC.
PROXY for SPECIAL METING OF SHAREHOLDERS DECEMBER 28, 1995
The undersigned hereby appoints R.B. Lurie, B.A. Byrne or G.R. Derback,
or any of them, with full power of substitution to each, to be the attorneys
and proxies of the undersigned at the Special Meeting of Shareholders
of Maxim Series Fund, Inc. to be held at 8515 E. Orchard Rd.,
Englewood, Colorado, at 9:30 a.m. on December 28, 1995 and at any
adjournment thereof, and to represent and cast the votes held on record
by the undersigned on October 31, 1995, upon the proposals below and
as set forth in the Notice of Special Meeting and Proxy Statement for
such meeting.
1) PROPOSAL TO APPROVE OR DISAPPROVE THE SUB-
ADVISORY AGREEMENT for the Corporate Bond Portfolio.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(The Board of Directors recommends a vote FOR)
ONLY CONTRACT HOLDERS HAVING A VOTING INTEREST IN
THE CORRESPONDING INVESTMENT DIVISION OF THE
CORPORATE BOND PORTFOLIO ARE ENTITLED TO VOTE
ON PROPOSAL 1.
2) PROPOSAL TO APPROVE OR DISAPPROVE THE SUB-
ADVISORY AGREEMENT for the Small-Cap Aggressive Growth
Portfolio.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(The Board of Directors recommends a vote FOR)
ONLY CONTRACT HOLDERS HAVING A VOTING INTEREST IN
THE CORRESPONDING INVESTMENT DIVISION OF THE
SMALL-CAP AGGRESSIVE GROWTH PORTFOLIO ARE
ENTITLED TO VOTE ON PROPOSAL 2.
3) PROPOSAL TO APPROVE OR DISAPPROVE THE SUB-
ADVISORY AGREEMENT for the Foreign Equity Portfolio.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(The Board of Directors recommends a vote FOR)
ONLY CONTRACT HOLDERS HAVING A VOTING INTEREST IN
THE CORRESPONDING INVESTMENT DIVISION OF THE
FOREIGN EQUITY PORTFOLIO ARE ENTITLED TO VOTE ON
PROPOSAL 3.
4) PROPOSAL TO APPROVE OR DISAPPROVE THE SUB-
ADVISORY AGREEMENT for the Foreign Equity Portfolio.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(The Board of Directors recommends a vote FOR)
ONLY CONTRACT HOLDERS HAVING A VOTING INTEREST IN
THE CORRESPONDING INVESTMENT DIVISION OF THE
FOREIGN EQUITY PORTFOLIO ARE ENTITLED TO VOTE ON
PROPOSAL 4.
5) In the Board of Directors' discretion, on such other business
which may properly come before the meeting or any adjournment
thereof.
This Proxy will be voted as specified. IF NO SPECIFICATIONS ARE
MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
BOARD OF DIRECTORS' RECOMMENDATIONS. THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Dated: , 1995
(Signature of Shareholder)
This Proxy may be revoked by the Shareholder (Contract Holder) at any
time prior to the Special Meeting.
Please sign and date your Proxy and return promptly in the
accompanying envelope.
