SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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
[ ] 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):
[ ] No fee required.
[ ] 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
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Proposed maximum aggregate value of transaction:
Total fee paid:
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state how it was determined.
[ ]Fee paid previously with preliminary materials
[ ]Check box if any part of the fee is offset as provided by
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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:
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Filing Party:
Date Filed:<PAGE>
MAXIM SERIES FUND, INC.
8515 EAST ORCHARD ROAD
ENGLEWOOD, COLORADO 80111
February 6, 1997
Participants and Contract Owners of
FutureFunds Series Account and
Maxim Series Account
Dear Participants and Contract Owners:
Enclosed you will find proxy solicitation materials for a special
meeting of shareholders of
Maxim Series Fund, Inc. (the "Fund"). As you know, your variable
annuity contract, issued
by Great-West Life & Annuity Insurance Company ("GWL&A"), is funded
in part by
purchase of shares of the Fund. You have the right under the
contract to direct GWL&A
as to the voting of a proportionate number of Fund shares
consistent with the value of your
variable contract.
There are three proposals which you are being asked to consider.
Proposal 1.a. affects only
the Maxim INVESCO ADR Portfolio; Proposal 1.b. affects only the
Maxim INVESCO
Small-Cap Growth Portfolio; and, Proposal 1.c. affects only the
Maxim INVESCO Balanced
Portfolio. As explained in the enclosed proxy material, only those
Participants and Contract
Owners with an investment corresponding to these Portfolios may
vote on these matters.
We urge you to complete the enclosed proxy form and return it as
promptly as possible.
Sincerely,
/s/ Ruth B. Lurie
Ruth B. Lurie
Secretary
<PAGE>
PROXY
MAXIM SERIES FUND, INC.
PROXY for SPECIAL MEETING OF SHAREHOLDERS FEBRUARY 27,
1997
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
10:00 a.m. on February 27, 1997 and at any adjournment thereof, and
to represent and cast the votes
held on record by the undersigned on December 31, 199 6 , upon
the proposals below and as set forth
in the Notice of Special Meeting and Proxy Statement for such
meeting.
1.A.PROPOSAL TO APPROVE OR DISAPPROVE THE SUB-ADVISORY AGREEMENT
for the Maxim
INVESCO ADR Portfolio.
[ ] FOR [ ] AGAINST [ ]
ABSTAIN
(The Board of Directors recommends a vote FOR)
1.B. PROPOSAL TO APPROVE OR DISAPPROVE THE SUB-ADVISORY
AGREEMENT for the Maxim
INVESCO Small-Cap Growth Portfolio.
[ ] FOR [ ] AGAINST [ ]
ABSTAIN
(The Board of Directors recommends a vote FOR)
1.C. PROPOSAL TO APPROVE OR DISAPPROVE THE SUB-ADVISORY
AGREEMENT for the Maxim
INVESCO Balanced Portfolio.
[ ] FOR [ ] AGAINST [ ]
ABSTAIN
(The Board of Directors recommends a vote FOR)
2. In the Board of Directors' discretion, on such other
business which may properly
come before the meeting or any adjournment thereof.
[ ] FOR [ ] AGAINST [ ]
ABSTAIN
This Proxy will be voted as specified. IF NO SPECIFICATIONS ARE
MADE, THIS PROXY WILL BE
VOTED AS STATED IN THE PROXY STATEMENT. THIS PROXY IS SOLICITED ON
BEHALF OF THE
BOARD OF DIRECTORS.
Dated: , 1997
(Signature of
Shareholder)
This Proxy may be revoked by the Shareholder (Contractowner) at any
time prior to the Special Meeting.
Please sign and date your Proxy and return promptly in
the accompanying envelope.
<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
February 6, 1997
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 27, 1997
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 Maxim INVESCO Small-Cap Growth
Portfolio (the "Small-Cap Growth
Portfolio"), Maxim INVESCO Balanced Portfolio (the "Balanced
Portfolio"), and Maxim INVESCO ADR
Portfolio (the "ADR Portfolio") (collectively, the "Portfolios") of
the Fund, to be held at 8515 East Orchard
Road, Englewood, Colorado, on Thursday, February 27, 1997 at 10:00
a.m. Mountain Standard Time. It is
anticipated that the approximate mailing date of this Proxy
Statement will be February 6, 1997.
The primary purpose of the Meeting is to allow the Portfolio's
shareholders to consider new sub-advisory
agreements for the Portfolios. As explained in more detail below,
the existing sub-advisory agreements for
the Portfolios will terminate automatically, by operation of law,
upon the consummation of the proposed
merger (the "Merger") of AIM Management Group Inc. ("AIM") and a
direct, wholly-owned subsidiary of
INVESCO PLC ("INVESCO"). Shareholders are not being asked to
approve the Merger; rather, they are
being asked to continue the existing investment sub-advisory
relationships for the Portfolios under new
contracts which would take effect at the time of the Merger.
Other than their effective and expiration dates, the proposed new
sub-advisory agreement for each of the
Portfolios is identical in form and terms to the present
agreements.
The Board of Directors has fixed the close of business on December
31, 1996 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 & Annuity Insurance
Company ("GWL&A") 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 the Maxim Series Account,
FutureFunds Series Account and FutureFunds II Series Account of
GWL&A
to fund certain variable annuity contracts issued by GWL&A.
The
above-mentioned accounts of GWL&A
are hereinafter referred to as the "Series Accounts." In addition,
shares of the Portfolios are sold to the
FutureFunds Series Account II of GWL&A. FutureFunds Series Account
II is not registered with the
Securities and Exchange Commission and the vote of the owners of
contracts issued through FutureFunds
Series Account II is not being solicited. On the Record Date,
there were 5,696,363 shares of the ADR
Portfolio, 22,210,373 shares of the Small-Cap Growth Portfolio, and
15,360,820 shares of the Balanced
Portfolio, common stock $.10 par value per share outstanding.
The investment adviser to the Fund is GW Capital Management, Inc.
("GWCMI" or "Adviser"), 8515
East Orchard Road, Englewood, Colorado 80111. The sub-adviser to
the Portfolios is INVESCO Trust
Company ("ITC"), P.O. Box 173706, Denver, Colorado 80217.
Shares of the Portfolios are owned by the Series Accounts, on
behalf of Contractowners and by The
Great-West Life Assurance Company ("Great-West") who provided
initial capital to the Fund. In accordance
with GWL&A'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. In determining the
number of votes, fractional shares will be
recognized. Fund shares as to which no timely voting instructions
are received and Fund shares owned by
Great-West and by FutureFunds Series Account II will be voted by
GWL&A in proportion to the voting
instructions which are received from Contractowners. 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 GWL&A or its
agents or affiliates personally or by
telephone.
The following table indicates the Portfolios being solicited with
respect to the Proposals being presented
at the meeting:
Proposal
Summary
Eligible Votes
1.A. Approval of New Sub-
Advisory Agreement - ADR
Portfolio
A proposal to approve a new
Sub-Advisory Agreement for the
ADR Portfolio among the Fund,
GWCMI and ITC to replace the
existing agreement among the
Fund, GWCMI and ITC.
Contractowners having an
interest in an investment option
corresponding to the ADR
Portfolio.
1.B. Approval of New Sub-
Advisory Agreement - Small-Cap
Growth Portfolio
A proposal to approve a new
Sub-Advisory Agreement for the
Small-Cap Growth Portfolio
among the Fund, GWCMI and
ITC to replace the existing
agreement among the Fund,
GWCMI and ITC.
Contractowners having an
interest in an investment option
corresponding to the Small-Cap
Growth Portfolio.
1.C. Approval of New-Sub-
Advisory Agreement - Balanced
Portfolio
A proposal to approve a new
Subadvisory Agreement for the
Balanced Portfolio among the
Fund, GWCMI and ITC to
replace the existing agreement
among the Fund, GWCMI and
ITC.
Contractowners having an
interest in an investment option
corresponding to the Balanced
Portfolio.
If the enclosed form of proxy is duly executed and returned in time
to be voted at the Meeting, and not
subsequently revoked, all shares represented by the proxy will be
voted in accordance with the instructions
marked thereon. Approval of Proposals 1.A., 1.B., and 1.C.
requires the vote of a "majority of the outstanding
voting securities," within the meaning of the Investment Company
Act of 1940, as amended (the "1940 Act").
The term "majority of the outstanding voting securities" is defined
under the 1940 Act to mean: (a) 67%
or more of the outstanding shares present at a meeting of
shareholders, if the holders of more than 50% of
the outstanding shares are present or represented by proxy, or (b)
more than 50% of the outstanding shares,
whichever is less.
The Board may seek one or more adjournments of the Meeting to
solicit additional shareholders, if
necessary, to obtain a quorum for the Meeting, or to obtain the
required shareholder vote to approve
Proposals 1.A., 1.B. and 1.C. An adjournment would require the
affirmative vote of the holders of a majority
of the shares present at the Meeting (or an adjournment thereof) in
person or by proxy and entitled to vote.
If adjournment is proposed in order to obtain the required
shareholder vote on a particular proposal, the
persons named as proxies will vote in favor of adjournment those
shares which they are entitled to vote in
favor of such proposal and will vote against adjournment those
shares which they are required to vote against
such proposal. A shareholder vote may be taken on one or more of
the proposals discussed herein prior to
any such adjournment if sufficient votes have been received and it
is otherwise appropriate.
The Fund and the Portfolios will pay no expenses associated with
this proxy solicitation. Such expenses
will be paid by GWCMI. Management of the Fund knows of no other
business, other than that set forth in
Proposals 1.A., 1.B. and 1.C. 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.
<PAGE>
PROPOSAL 1
A.Approval of the Sub-Advisory Agreement among the Fund, the
Investment Adviser and INVESCO
Trust Company for the ADR Portfolio
B.Approval of the Proposed Sub-Advisory Agreement among the Fund,
the Investment Adviser and
INVESCO Trust Company for the Small-Cap Growth Portfolio
C.Approval of the Proposed Sub-Advisory Agreement among the Fund,
the Investment Adviser and
INVESCO Trust Company for the Balanced Portfolio
Background
On November 4, 1996, INVESCO and INVESCO Group Services, Inc.
("IGS") entered into an
agreement of merger (the "Merger Agreement") with AIM pursuant to
which IGS or another wholly-owned
U.S. subsidiary of INVESCO ("INVESCO Sub") will acquire all the
issued and outstanding shares of AIM
capital stock. ITC serves as a sub-adviser to the Fund with
respect to the Portfolios pursuant to the sub-
advisory agreements ("Current Sub-Advisory Agreements"). ITC is a
wholly-owned subsidiary of INVESCO
Funds Group, Inc. and is an indirect, wholly-owned subsidiary of
INVESCO. INVESCO is a publicly traded
holding company organized under the laws of England in 1935. The
ordinary shares of INVESCO, 25 pence
nominal value per share (the "Ordinary Shares"), are traded on the
London Stock Exchange. INVESCO's
subsidiaries provide investment advisory services throughout the
world. As of September 30, 1996, the total
assets advised by INVESCO and its subsidiaries were approximately
$91.1 billion. AIM is a holding company
that has been engaged in the financial services business since 1976
and, together with its affiliates, advises or
manages 38 investment company portfolios comprising the AIM Family
of Funds'. As of October 31, 1996,
the total assets of the registered investment company portfolios
advised or managed by AIM and its affiliates
were approximately $57 billion.
The Merger is being treated, for purposes of the Investment Company
Act of 1940 (the "1940 Act"), as
a change of control of INVESCO and its subsidiary and affiliated
firms, including ITC. Under the 1940 Act,
such a change of control constitutes an "assignment" (as defined in
the 1940 Act) of the sub-advisory
agreements pursuant to which ITC serves as a sub-adviser to the
Portfolios, and results in the automatic
termination of the Current Sub-Advisory Agreements, effective at
the time of the Merger. The Fund's Board
of Directors has approved and recommended that the shareholders of
each of the Portfolios approve a new
sub-advisory agreement with ITC which would be substantively
identical to the Current Sub-Advisory
Agreement (except for its effective and termination date), and
would take effect immediately after the
closing of the Merger. The result would be to permit ITC to
continue to perform sub-advisory services for
each of the Portfolios after the Merger, on the same terms as are
presently in effect.
GWCMI, a Colorado corporation, is the investment adviser to the
Fund pursuant to an existing
investment advisory agreement (the "Investment Advisory Agreement")
dated December 1, 1996, which will
remain in effect until April 22, 1997. While GWCMI is at all times
subject to the direction of the Board of
Directors of the Fund, the Investment Advisory Agreement provides
that GWCMI, subject to the review by
the Board of Directors, is responsible for the actual day-to-day
management of the Fund and its Portfolios.
GWCMI has contractually delegated responsibility for day-to-day
investment management to ITC with
respect to the Small-Cap Growth, ADR and Balanced Portfolios.
The arrangement between GWCMI and
ITC is described in the proposed new sub-advisory agreements (which
are substantively identical to the Current
Sub-Advisory Agreements with ITC), among ITC, GWCMI and the Fund.
GWCMI is a wholly-owned subsidiary of GWL&A, which is a
wholly-owned subsidiary of Great-West, a
Canadian stock life insurance company. Great-West is a 99.4% owned
subsidiary of Great-West Lifeco Inc.,
which in turn is an 86.4% owned subsidiary of Power Financial
Corporation, Montreal, Quebec. Power
Corporation of Canada, a holding and management company, has voting
control of Power Financial
Corporation of Canada. Mr. Paul Desmarais, and his associates, a
group of private holding companies which
he controls, have voting control of Power Corporation of Canada.
The Proposed Sub-Advisory Agreements
If shareholders of each of the Portfolios approve the Proposed
Sub-Advisory Agreements, the Proposed
Sub-Advisory Agreements will become effective immediately after the
closing of the Merger. This summary
of the Proposed Sub-Advisory Agreements is qualified in its
entirety by reference to the form of such
agreements attached to this Proxy Statement as Exhibits A.1., A.2.
and A.3., respectively.
Each of the Proposed Sub-Advisory Agreements will remain in effect,
unless earlier terminated, for an
initial term expiring two years from the Closing Date as defined
below. As previously discussed, the sole
purpose of entering into the Proposed Sub-Advisory Agreements is to
enable ITC to continue to serve as the
sub-adviser to the Portfolios after termination of each of the
Current Sub-Advisory Agreements by virtue of
the "assignment" of such agreements that could result from the
Merger. The material terms and provisions
of each of the Proposed Sub-Advisory Agreements, other than their
respective effective and termination dates,
are the same, in all substantive respects, as those of the
corresponding Current Sub-Advisory Agreements,
which are summarized below.
The Current Sub-Advisory Agreements
The Current Sub-Advisory Agreements for the ADR Portfolio and the
Small-Cap Growth Portfolio are
dated November 1, 1994 and were amended as of December 1, 1996 to
reflect the substitution of GWCMI as
investment advisor, and were unanimously approved prior to such
date by a vote cast in person by a majority
of the Fund's Directors, including a majority of the Independent
Directors. The Current Sub-Advisory
Agreement for the Balanced Portfolio is dated August 2, 1996 and
was amended as of December 1, 1996 to
reflect the substitution of GWCMI as investment advisor, and was
unanimously approved prior to such date
by a vote cast in person by a majority of the Fund's Directors,
including a majority of the Independent
Directors. The continuation of the Current Sub-Advisory Agreement
for the ADR Portfolio and Small-Cap
Growth Portfolio until April 1, 1997, was approved by the
Directors, including a majority of the Independent
Directors, at a meeting of the Directors called for the purpose of
approving such Current Sub-Advisory
Agreement. The continuation of the Current Sub-Advisory Agreement
for the Balanced Portfolio until August
2, 1998 was approved by the Directors, including a majority of the
Independent Directors at a meeting called
for the purpose of approving such Agreement.
The Current Sub-Advisory Agreements may be continued from year to
year as to each Portfolio as long
as each such continuance is approved at least annually by the
Board, or by a vote of the holders of a majority
of the then-outstanding voting securities (as defined below under
"Vote Required") of the Portfolios. Any such
continuance also must be approved by a majority of the Independent
Directors of the Fund at a meeting called
for the purpose of voting on such continuance. Upon sixty (60)
days' written notice, the Current Sub-Advisory
Agreements may be terminated at any time without penalty by the
Board, or by a majority of the then-
outstanding voting securities of the applicable Portfolios or, with
respect to a particular Portfolio, by a
majority of the then-outstanding voting securities of that
Portfolio, or by ITC. As discussed earlier, the
Current Sub-Advisory Agreements terminate automatically in the
event of their "assignment" under the 1940
Act.
The Current Sub-Advisory Agreements provide that ITC shall maintain
a continuous investment program
for each of the Portfolios that is consistent with the Portfolios'
respective investment objectives and policies
as set forth in the Fund's registration statement (the
"Registration Statement") and prospectuses and
statements of additional information of each of the Portfolios (the
"Prospectus" and the "SAI") as in effect
from time to time under the 1940 Act and the Securities Act of
1933, as amended. In the performance of such
duties, ITC shall, among other things: (i) manage the investment
and reinvestment of the assets of the
Portfolios; (ii) determine what securities are to be purchased or
sold for the Portfolios and place, or arrange
for the placement of, all orders for such transactions; (iii)
furnish the Portfolios with investment analysis and
research, reviews of current economic conditions and trends and
considerations respecting long-range
investment policies; (iv) make recommendations as to the manner in
which rights pertaining to the Portfolios'
securities should be exercised; and (v) furnish requisite office
space, equipment and facilities as may reasonably
be requested by the Fund from time to time. Except to the extent
assumed by ITC under the Current Sub-
Advisory Agreements or required by law, expenses incurred in
connection with the operations and organization
of the Portfolios are borne by the Portfolios.
As full compensation for its sub-advisory services to the Fund, ITC
receives a monthly fee. The fee is
based upon a percentage of each Portfolio's average net assets,
determined daily. With respect to the ADR
Portfolio, the fee is calculated at the annual rate of 0.55% of the
first $50 million of the Portfolio's average
net assets; 0.50% of the next $50 million of the Portfolio's
average net assets; and 0.40% of the Portfolio's
average net assets over $100 million. With respect to each of the
Small-Cap Growth Portfolio and the
Balanced Portfolio, the fee is calculated at the annual rate of
0.55% of the first $25 million of the Portfolio's
average net assets; 0.50% of the next $50 million of the
Portfolio's average net assets; 0.40% of the next $25
million of the Portfolio's average net assets; and 0.35% of the
Portfolio's average net assets over $100 million.
In 1996, ITC was paid $122,084 aggregate compensation for its
sub-advisory services to the Portfolios. Under the Proposed
Sub-Advisory Agreements, the fee that ITC will receive for its sub-
advisory services to the Fund will be the same as that under the
Current Sub-Advisory Agreements.
For information concerning other funds with similar investment
objectives to the Portfolios for which ITC
acts as investment advisor, see Exhibit B to this Proxy Statement.
The Current Sub-Advisory Agreements provide that ITC shall not be
liable for any error of judgment,
mistake of law, any loss arising out of any investment, or for any
other act or omission in the performance of
its obligations under the Current Sub-Advisory Agreements not
involving willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations under such
Agreements.
With respect to each of the Current Sub-Advisory Agreements, the
sub-advisory fees are paid by GWCMI,
and not by the Portfolios or their shareholders.
Description of Merger
Pursuant to the Merger Agreement, IGS or another wholly-owned U.S.
subsidiary of INVESCO
("INVESCO Sub") will acquire all the issued and outstanding shares
of AIM capital stock for consideration
valued on November 4, 1996 at approximately $1.6 billion, plus the
amount of AIM net income from
September 1, 1996 through the date on which the Merger is
consummated (the "Closing Date"), minus
dividends paid during such period and subject to adjustments for
certain balance sheet items and transaction
expenses. The consideration will include 290 million new Ordinary
Shares (including Ordinary Shares issuable
in respect of vested and unvested AIM options) of INVESCO valued on
November 4, 1996 at approximately
$1.1 billion. The balance of the consideration will be paid in
cash. Upon consummation of the Merger, the
AIM shareholders will own approximately 45% of INVESCO's total
outstanding capital stock on a fully-diluted
basis. Thereafter, INVESCO will change its name to "AMVESCO PLC".
(ITC's name will not change.)
The Closing Date is presently expected to occur on or about
February 28, 1997, subject to the satisfaction
of conditions to closing that include, among other things: (a)
INVESCO having consummated one or more
financings and having received net proceeds of not less than $500
million; (b) the respective aggregate
annualized asset management fees of INVESCO and AIM (based on
assets under management, excluding the
effects of market movements), in respect of which consents to the
Merger have been obtained being equal to
or greater than 87.5% of all such fees; (c) INVESCO and AIM having
received certain consents from
regulators, lenders and/or other third parties; (d) AIM not having
received from the holder or holders of more
than 2% of the outstanding AIM shares notices that they intend to
exercise dissenters' rights; (e) a Voting
Agreement, Standstill Agreement, Transfer Restriction Agreements,
Transfer Administration Agreement,
Registration Rights Agreement, Indemnification Agreement and
employment agreements with approximately
thirty AIM employees having been executed and delivered; (f) AIM
having received an opinion from its U.S.
counsel that the Merger will be treated as a tax-free
reorganization; and (g) shareholder resolutions to appoint
to INVESCO's board of directors (the "INVESCO Board") six AIM
designees and a resolution of the
INVESCO Board to appoint the seventh AIM designee having been
passed and not revoked.
The Merger Agreement may be terminated at any time prior to the
Closing Date by written notice by AIM
or INVESCO to the other after June 1, 1997 or under other
circumstances set forth in the Merger Agreement.
In certain circumstances occurring on or before September 30, 1997,
a termination fee will be payable by the
party in respect of which such circumstances have occurred.
In connection with the Merger, the following agreements, each to be
effective upon the closing of the
Merger, have been or will be executed:
Voting Agreement. Certain AIM shareholders and their spouses, the
current directors of INVESCO and
proposed directors of INVESCO (expected to hold in the aggregate
approximately 25% of the Ordinary
Shares of INVESCO outstanding immediately following consummation of
the Merger) have agreed to vote
as directors and as shareholders to ensure that: (a) the INVESCO
Board will have fifteen members,
consisting of four executive directors and three non-executive
directors designated by INVESCO's current
senior management, four executive directors and three non-executive
directors designated by AIM's
current senior management and a Chairman; (b) the initial Chairman
will be Charles W. Brady
(INVESCO's current Chairman) and the initial Vice Chairman will be
Charles T. Bauer (AIM's current
Chairman); and (c) the parties will vote at any INVESCO shareholder
meetings on resolutions (other than
those in respect of the election of directors) supported by
two-thirds of the INVESCO Board in the same
proportion as votes are cast by unaffiliated shareholders. The
Voting Agreement will terminate on the
earlier of the fourth anniversary of the Closing Date or the date
on which a resolution proposed by an
INVESCO-designated board member is approved by the INVESCO Board
despite being voted against by
each AIM-designated board member present at such INVESCO Board
meeting.
Standstill Agreement and Transfer Restriction Agreements. Certain
AIM shareholders and their spouses and
certain significant shareholders of INVESCO have agreed, under
certain circumstances for a maximum
period of five years, not to engage in a number of specified
activities that might result in a change of the
ownership or control positions of INVESCO existing as of the
Closing Date. AIM shareholders and
INVESCO's current Chairman will be restricted in their ability to
transfer their shares of INVESCO for
a period of up to five years.
If the conditions to the Merger are not met or waived, or if the
Merger Agreement is terminated, the
Merger will not be consummated and the Current Sub-Advisory
Agreements will remain in effect. If the
Proposed Sub-Advisory Agreements are approved and the Merger is
thereafter consummated, the Proposed
Sub-Advisory Agreements will be executed and become effective on
the Closing Date. In the event the Merger
is consummated and the Proposed Sub-Advisory Agreements are not
approved by each of the Portfolios, the
Proposed Sub-Advisory Agreement will be approved as to those
Portfolios that voted in favor of the Proposed
Sub-Advisory Agreement and the Board will determine what action to
take as to any Portfolio that voted
against the Proposed Sub-Advisory Agreement.
Under the Merger Agreement, INVESCO and INVESCO Sub have agreed
that they will comply, and use
all reasonable efforts to cause compliance on behalf of their
affiliates, with the provisions of Section 15(f) of
the Investment Company Act of 1940, as amended (the "1940 Act").
Section 15(f) provides, in pertinent part,
that an investment adviser of an investment company and its
affiliates may receive any amount or benefit in
connection with a sale of securities of, or a sale of any other
interest in, such investment adviser that results
in an "assignment" of an investment advisory contract as long as
two conditions are met. First, no "unfair
burden" may be imposed on the investment company as a result of the
Merger. The term "unfair burden," as
defined in the 1940 Act, includes any arrangement during the
two-year period after the transaction whereby
the investment adviser (or predecessor or successor investment
adviser) or any interested person of any such
adviser receives or is entitled to receive any compensation
directly or indirectly from the investment company
or its security holders (other than fees for bona fide investment
advisory or other services) or from any person
in connection with the purchase or sale of securities or other
property to, from, or on behalf of the investment
company (other than fees for bona fide principal underwriting
services). No such compensation arrangements
are contemplated in connection with the Merger. The second
condition is that, for a period of three years
after the transaction occurs, at least 75% of the members of the
board of directors of the investment company
advised by such adviser are not "interested persons" (as defined in
the 1940 Act) of the new or the old
investment adviser.
INVESCO has advised the Fund that the Merger is not expected to
have a material effect on the
operations of the Fund, on the Portfolios or on their shareholders.
No material change in investment
philosophy, policies or strategies is currently envisioned. ITC
will, following the Merger, continue to be an
indirect wholly-owned subsidiary of INVESCO. The Merger Agreement
does not, by its terms, contemplate
any changes, other than changes in the ordinary course of business,
in the management or operation of ITC
relating to the Fund and the Portfolios, the personnel managing the
Portfolios, or other services provided to
or other business activities of the Fund. The Merger also is not
expected to result in material changes in the
business, corporate structure or composition of the senior
management or personnel of ITC. Based on the
foregoing, it is not anticipated that the Merger will cause a
reduction in the quality of services now being
provided to the Fund, or have any adverse effect on ITC's ability
to fulfill its respective obligations under the
Proposed Sub-Advisory Agreements or to operate its business in a
manner consistent with its current practices.
Each of the Current Sub-Advisory Agreements, as required by Section
15 of the 1940 Act, provides for
its automatic termination in the event of its assignment. Any
change in control of ITC is deemed to be an
assignment. Because INVESCO Ordinary Shares constituting more than
25% of the outstanding voting
securities of INVESCO will be issued to the shareholders of AIM, as
a result of the Merger there may be
deemed to be a change in control of INVESCO. Such a change in
control would cause an automatic
termination of the Current Sub-Advisory Agreements under the 1940
Act.
Accordingly, in anticipation of the consummation of the Merger and
in order to ensure continuity of sub-
advisory services to the Fund by the ITC with respect to the
Portfolios, a new sub-advisory agreement among
the Fund, GWCMI and ITC is proposed to be approved by shareholders
of each of the Portfolios.
The Board, including a majority of those Directors who are not
"interested persons" of the Fund as such
term is defined under the 1940 Act (the "Independent Directors"),
has approved the Proposed Sub-Advisory
Agreements.
<PAGE>
Evaluation of the Board of Directors
At a special meeting of the Board held on January 30, 1997, at
which a majority of the Independent
Directors were in attendance, the Directors evaluated the Proposed
Sub-Advisory Agreements. Prior to and
during the meeting the Directors requested and received all
information they deemed necessary to enable them
to determine whether each of the Proposed Sub-Advisory Agreements
is in the best interests of the Fund, the
Portfolios and their shareholders. In reviewing the materials
provided to them, the Directors noted that the
personnel of ITC will continue to be responsible for managing the
day-to-day affairs of the Adviser. In
evaluating the effects of the Merger, the Directors viewed as
significant the fact that the Sub-Adviser is
expected to continue to provide to the Fund, the Portfolios and
their shareholders, after the Merger, sub-
advisory services of the same nature and quality as before the
Merger. Specifically, the Board noted that the
fees and expenses payable under each of the Proposed Sub-Advisory
Agreements are identical to the fees and
expenses presently in effect under the corresponding Current
Agreements.
Based upon the Directors' review and the evaluations of the
materials they received, and in consideration
of all factors deemed relevant to them, the Directors determined
that the Proposed Sub-Advisory Agreements
are fair, reasonable and in the best interests of the Fund, the
Portfolios and their shareholders. Accordingly,
the Board, including all of the Independent Directors, unanimously
approved the Proposed Sub-Advisory
Agreements and voted to recommend that all of the Portfolios'
shareholders vote to approve the each of the
Proposed Sub-Advisory Agreements.
Information Concerning Sub-Adviser
ITC, 7800 East Union Avenue, Denver, Colorado 80237, a Colorado
trust company incorporated in 1969,
is a wholly-owned subsidiary of INVESCO Funds Group, Inc. ("IFG").
GWCMI, as investment adviser, has
contracted with ITC for investment advisory and research services
on behalf of the ADR Portfolio, the Small-
Cap Growth Portfolio and the Balanced Portfolio. ITC has the
primary responsibility for providing portfolio
investment management services to the Portfolios. ITC also served
as adviser or sub-adviser to 47 investment
portfolios as of October 31, 1996, including 27 portfolios in the
INVESCO group. These 47 portfolios had
aggregate assets of approximately $12.5 billion as of October 31,
1996. In addition, ITC provides investment
management services to private clients, including employee benefit
plans that may be invested in a collective
trust sponsored by ITC.
The principal executive officer and directors of ITC and their
principal occupations are:
R. Dalton Sim, President, Chief Executive Officer and Director;
Frank M. Bishop, Director, also,
President and Chief Operating Officer of INVESCO, Inc.; Samuel T.
DeKinder, Director, also, Institutional
Marketing Manager of INVESCO North America; and Dan J. Hesser,
Director, also, President, Chief
Executive Officer and Director of IFG.
The address of each of the foregoing officers and directors is 7800
East Union Avenue, Denver, Colorado
80237, with the exception of Messrs. Bishop and DeKinder, which is
1315 Peachtree Street, N.E., Atlanta,
Georgia 30309.
Vote Required
As provided under the 1940 Act, approval of the Proposed
Sub-Advisory Agreements will require the
affirmative vote of a majority of the outstanding shares of each
Portfolio, voting separately as a class. Such
a majority is defined in the 1940 Act as the lesser of: (a) 67% or
more of the shares present at such meeting,
if the holders of more than 50% of the outstanding shares of each
Portfolio are present or represented by
proxy, or (b) more than 50% of the total outstanding shares of each
Portfolio.
THE DIRECTORS, INCLUDING A MAJORITY OF THE INDEPENDENT DIRECTORS,
RECOMMEND
THAT SHAREHOLDERS OF EACH OF THE PORTFOLIOS VOTE TO APPROVE THE
PROPOSED SUB-
ADVISORY AGREEMENTS AMONG THE FUND, GWCMI AND ITC FOR THEIR
RESPECTIVE
PORTFOLIOS.
ADDITIONAL INFORMATION
Portfolio Transactions and Brokerage
Some of the portfolio transactions with respect to the Small-Cap
Growth, ADR and Balanced Portfolios
are placed with broker-dealers who provide ITC with supplementary
investment and statistical information or
furnish market quotations to such Portfolios or other clients
advised by ITC, 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 ITC, as applicable. The services may also be used by ITC and
its affiliates, 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, ITC, with respect to the Portfolios
selects 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. ITC
uses its 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 Portfolios will
not pay a broker a commission at a higher rate than otherwise
available for the same transaction due to 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.
Beneficial Ownership
The number of shares of beneficial interest of each Portfolio
issued and outstanding as of the Record Date
(December 31, 1996) are as follows:
Shares Outstanding
Portfolio on Record Date
ADR Portfolio 5,696,363
Small-Cap Growth Portfolio 22,210,373
Balanced Portfolio 15,360,820
As of the Record Date, other than the Series Accounts [and
FutureFunds II] as set forth below, there
were no persons entitled to provide voting instructions with
respect to 5% or more of a Portfolio's
outstanding shares and the Directors and executive officers of the
Fund did not own any Portfolio 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 GWL&A; (2)
FutureFunds Series Account
("FutureFunds"), a separate account of GWL&A; (3) FutureFunds
Series Account II ("FutureFunds II");
or (4) Great-West who provided initial capital to the Fund. The
shares and percentage of each Portfolio held
by these entities is set forth below:
Portfolio<PAGE>
Maxim Account FutureFunds FutureFunds II Great-West<PAGE>
ADR<PAGE>
150,802<PAGE>
1,859,777<PAGE>
1,638,003<PAGE>
2,047,781<PAGE>
Small-Cap Growth<PAGE>
389,143<PAGE>
10,042,050<PAGE>
9,428,583<PAGE>
2,350,597<PAGE>
Balanced<PAGE>
0<PAGE>
0<PAGE>
12,845,400<PAGE>
2,515,420
SHAREHOLDER PROPOSALS
If a shareholder intends to present a proposal at the 1998 Annual
Meeting of Shareholders of the Fund
and desires to have the proposal included in the Fund's Proxy
Statement and Form of Proxy for that meeting,
the shareholder must deliver the proposal to the offices of the
Fund by December 1, 1997. Shareholder
proposals for the 1997 Annual Meeting of Shareholders were required
to be submitted to the Fund by
December 1, 1996. The expense of preparing, printing and mailing
of the enclosed Form of Proxy and
accompanying Notice and Proxy Statement will be borne by the Fund.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. IF YOU DO NOT
EXPECT TO
ATTEND THE MEETING, PLEASE SIGN YOUR PROXY CARD PROMPTLY AND RETURN
IT IN THE
ENCLOSED ENVELOPE TO AVOID UNNECESSARY EXPENSE AND DELAY. NO
POSTAGE IS
NECESSARY.
The fund will furnish, without charge, a copy of the 1995 Annual
Report and the June 30, 1996
semiannual report upon request of a Contractowner who has allocated
contract value to the Small-Cap
Growth, Balanced or ADR Portfolios of the Fund. Such requests
should be forwarded to Lori Schmidtke, 8515
East Orchard Road, Englewood, Colorado 80111; (800) 537-2033 ext.
4932.
By Order of the Board of Directors,
Ruth B. Lurie
Secretary
February 6, 1997<PAGE>
EXHIBIT A.1.
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (herein "the Agreement" or "this Agreement")
made
this day of , 1997 by and between G W Capital
Management, Inc., a Colorado
corporation registered as an investment adviser under the
Investment Advisers Act of 1940
("the Adviser"), INVESCO Trust Company, a Colorado trust company
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 Maxim
INVESCO ADR 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, a copy
of which is attached
hereto as Appendix A. This advisory agreement and all amendments
thereto are hereinafter
referred to as "the GW Agreement". In the GW 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 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 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 by this Agreement or otherwise, 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 specific investment opportunities for the Portfolio,
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 Portfolio, including making and
carrying out decisions
to acquire or dispose of permissible investments as set forth in
the Fund's
Registration Statement, 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 Portfolio;
(f)communicate as appropriate to the Adviser the purchases and
sales within
the Portfolio;
(g)arrange with the applicable broker or dealer at the time of the
purchase
or sale of investments or other assets of the Portfolio 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
Portfolio;
(i)maintain all required records, memoranda, instructions or
authorizations
relating to the acquisition or disposition of investments or other
assets of the
Portfolio;
(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 Portfolio
and which are incurred as a result of providing investment
management services to
the Portfolio;
(k) vote all shares held by the Portfolio.
In connection with the rendering of the services required to be
provided by the Sub-
adviser under this Agreement, the Sub-adviser may, to the extent it
deems appropriate and
subject to compliance with the requirements of applicable laws and
regulations, and upon
receipt of written approval of the Fund, make use of its affiliated
companies and their
employees; provided that the Sub-adviser shall supervise and remain
fully responsible for all
such services in accordance with and to the extent provided by this
Agreement.
It is understood that any information or recommendation supplied by
the Sub-adviser
in connection with the performance of its obligations hereunder is
to be regarded as
confidential and for use only by the Adviser in connection with the
Portfolio.
The Adviser will continue to provide all of the services described
in the GW Agreement
other than the services described above which have been delegated
to the Sub-adviser in this
Agreement.
If, in the judgment 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 after consultation
with the Adviser to obtain, and pay at its own expense, for such
information.
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 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 Portfolio, as described in Article
II of this Agreement, based
on an annual percentage of the assets of the Portfolio (the "NAV
Fee") as set forth below:
Annual Fee Assets
.55% first $50 million
.50% next $50 million
.40% over $100 million
Payment to the Sub-adviser will be made monthly by the Adviser
based on the average daily
net assets of the Portfolio during each month, calculated as set
forth in the then current
Registration Statement of the Fund. If this Agreement is
terminated, the payment shall be
prorated to the effective date of termination.
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 GW 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 that
specializes in the securities for which the order is made, or with
any other broker or dealer
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' 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 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 or for their advisory clients arise for
consideration at or about the same
time, the Fund agrees that the Sub-advisor 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 on 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.
ARTICLE VI
Effectiveness of the Agreement
The Agreement shall not become effective (and the Sub-adviser shall
not serve or act
as investment adviser) unless and until it is approved by (i) 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; (ii) the shareholders
of the Portfolio in
accordance with the 1940 Act, and (iii) the Merger of AIM
Management Group Inc. and
INVESCO PLC pursuant to the Merger Agreement of November 4, 1996 is
consummated,
and this Agreement shall come into full force and effect on the
date on which all of these
conditions are met.
ARTICLE VII
Term of the Agreement; Amendment
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)may be amended only by a written instrument signed by the Fund,
the
Adviser and the Sub-adviser; provided that no material amendment of
this Agreement shall be effective 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
Recordkeeping
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. 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; provided, however, that the
Sub-adviser shall be
permitted to keep such records or copies thereof for such periods
of time as are necessary
to comply with the rules and regulations of the Securities and
Exchange Commission or
other applicable provisions of state or federal law. 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 or self-regulatory
organization 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.
The federal securities laws impose liabilities under certain
circumstances on persons who act
in good faith and, therefore, nothing herein shall in any way
constitute a waiver or limitation
of any rights which the Fund or any shareholder of the Fund may
have under any federal
securities laws. 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
Subject to Article IX, 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 of the Sub-adviser under
this Agreement, including the activities 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; provided, however, that in no event is
Sub-adviser's indemnity in
favor of Adviser deemed to protect Adviser against any liability to
which the Adviser would
otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the
performance of its duties or by reason of its reckless disregard of
its obligations or duties
under this Agreement or the GW 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 GW Agreement, 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 or the GW Agreement; provided, however, that in no
event is Adviser's
indemnity in favor of Sub-adviser deemed to protect Sub-adviser
against any liability to
which the Sub-adviser would otherwise be subject by reason of
willful misfeasance, bad faith,
or gross negligence in the performance of its duties or by reason
of its reckless disregard of
its obligations or duties under this 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
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 as required
by 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. 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 only 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 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. It is understood that neither the
Fund nor the Adviser may
settle on behalf of the Sub-adviser without the consent of the
Sub-adviser.
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 shall be construed in accordance with the laws of
the State of
Colorado and the applicable 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. To the extent
that the applicable laws of
the State of Colorado conflict with applicable provisions of the
Investment Company Act of
1940, as amended, or the rules and regulations thereunder, such
Act, rules and regulations
shall control.
ARTICLE XIII
Severability
If any provision of this Agreement shall be held or made invalid by
a court decision,
statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
ARTICLE XIV
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.
ARTICLE XV
Sales Literature
The Adviser will not use the Sub-adviser's name in Fund sales
literature without prior
review and approval by the Sub-adviser, which will not be
unreasonably withheld or delayed.
ARTICLE XVI
Notices
Any notice under this Agreement shall be in writing and shall be
deemed given (a)
upon person delivery, (b) on the first business day after receipted
delivery to a courier
service that guarantees next business day delivery, under
circumstances in which such
guaranty is applicable or (c) on the earlier of delivery or three
business days after mailing
by United States certified mail, postage and fees prepaid, to the
appropriate party at the
address set forth below, or to such other address as the party so
notifies the others in
writing.
<PAGE>
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: G W CAPITAL MANAGEMENT, INC. COMPANY
By:
Address: 8515 East Orchard Road
Englewood, CO 80111
Attn: General Counsel
Witness: INVESCO TRUST COMPANY
By:
Address: 7800 East Union Ave.,
Suite 800
Denver, CO 80237
Attn: General Counsel
Witness: MAXIM SERIES FUND, INC.
By:
Address: 8515 East Orchard Road
Englewood, CO 80111
Attn: Secretary
<PAGE>
EXHIBIT A.2.
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (herein "the Agreement" or "this Agreement")
made this day of , 1997 by and between G W Capital
Management, Inc., a
Colorado corporation, registered as an investment adviser under
the Investment Advisers
Act of 1940 ("the Adviser"), INVESCO Trust Company, a Colorado
trust company 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 Maxim
INVESCO Small-Cap Growth 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, a copy
of which is attached
hereto as Appendix A. This advisory agreement and all amendments
thereto are hereinafter
referred to as "the GW Agreement". In the GW 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 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 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 by this Agreement or otherwise, 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 specific investment opportunities for the
Portfolio,
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 Portfolio, including
making
and carrying out decisions to acquire or dispose of permissible
investments as
set forth in the Fund's Registration Statement, 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
Portfolio;
(f) communicate as appropriate to the Adviser the purchases
and
sales within the Portfolio;
(g) arrange with the applicable broker or dealer at the time
of the
purchase or sale of investments or other assets of the Portfolio
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 Portfolio;
(i) maintain all required records, memoranda, instructions or
authorizations relating to the acquisition or disposition of
investments or other
assets of the Portfolio;
(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 Portfolio and which are incurred as a result of
providing
investment management services to the Portfolio;
(k) vote all shares held by the Portfolio.
In connection with the rendering of the services required to be
provided by the Sub-
adviser under this Agreement, the Sub-adviser may, to the extent it
deems appropriate and
subject to compliance with the requirements of applicable laws and
regulations, and upon
receipt of written approval of the Fund, make use of its affiliated
companies and their
employees; provided that the Sub-adviser shall supervise and remain
fully responsible for all
such services in accordance with and to the extent provided by this
Agreement.
It is understood that any information or recommendation supplied by
the Sub-adviser
in connection with the performance of its obligations hereunder is
to be regarded as
confidential and for use only by the Adviser in connection with the
Portfolio.
The Adviser will continue to provide all of the services described
in the GW
Agreement other than the services described above which have been
delegated to the Sub-
adviser in this Agreement.
If, in the judgment 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 after
consultation with the Adviser to obtain, and pay at its own
expense, for such information.
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 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 Portfolio, as described in
Article II of this Agreement,
based on an annual percentage of the assets of the Portfolio (the
"NAV Fee") as set forth
below:
Annual Fee Assets
.50% first $25 million
.45% next $50 million
.40% next $25 million
.35% over $100 million
Payment to the Sub-adviser will be made monthly by the Adviser
based on the average daily
net assets of the Portfolio during each month, calculated as set
forth in the then current
Registration Statement of the Fund. If this Agreement is
terminated, the payment shall be
prorated to the effective date of termination.
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 GW 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.
<PAGE>
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 that
specializes in the securities for which the order is made, or with
any other broker or dealer
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' 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 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 or for their advisory clients arise for
consideration at or about the same
time, the Fund agrees that the Sub-advisor 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 on 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.
ARTICLE VI
Effectiveness of the Agreement
The Agreement shall not become effective (and the Sub-adviser shall
not serve or act
as investment adviser) unless and until it is approved by (i) 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; (ii) the shareholders
of the Portfolio in
accordance with the 1940 Act, and (iii) the Merger of AIM
Management Group Inc. and
INVESCO PLC pursuant to the Merger Agreement of November 4, 1996 is
consummated
and this Agreement shall come into full force and effect on the
date on which all of these
conditions are met.
ARTICLE VII
Term of the Agreement; Amendment
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)may be amended only by a written instrument signed by the Fund,
the
Adviser and the Sub-adviser; provided that no material amendment of
this Agreement shall be effective 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
Recordkeeping
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. 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; provided, however, that the
Sub-adviser shall be
permitted to keep such records or copies thereof for such periods
of time as are necessary
to comply with the rules and regulations of the Securities and
Exchange Commission or
other applicable provisions of state or federal law. 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 or self-regulatory
organization 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.
The federal securities laws impose liabilities under certain
circumstances on persons who act
in good faith and, therefore, nothing herein shall in any way
constitute a waiver or limitation
of any rights which the Fund or any shareholder of the Fund may
have under any federal
securities laws. 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
Subject to Article IX, 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 of the Sub-adviser under
this Agreement, including the activities 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; provided, however, that in no event is
Sub-adviser's indemnity in
favor of Adviser deemed to protect Adviser against any liability to
which the Adviser would
otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the
performance of its duties or by reason of its reckless disregard of
its obligations or duties
under this Agreement or the GW 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 GW Agreement, 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 or the GW Agreement; provided, however, that in no
event is Adviser's
indemnity in favor of Sub-adviser deemed to protect Sub-adviser
against any liability to
which the Sub-adviser would otherwise be subject by reason of
willful misfeasance, bad faith,
or gross negligence in the performance of its duties or by reason
of its reckless disregard of
its obligations or duties under this 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
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 as required
by 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. 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 only 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 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. It is understood that neither the
Fund nor the Adviser may
settle on behalf of the Sub-adviser without the consent of the
Sub-adviser.
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 shall be construed in accordance with the laws of
the State of
Colorado and the applicable 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. To the extent
that the applicable laws of
the State of Colorado conflict with applicable provisions of the
Investment Company Act of
1940, as amended, or the rules and regulations thereunder, such
Act, rules and regulations
shall control.
ARTICLE XIII
Severability
If any provision of this Agreement shall be held or made invalid by
a court decision,
statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
ARTICLE XIV
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.
ARTICLE XV
Sales Literature
The Adviser will not use the Sub-adviser's name in Fund sales
literature without prior
review and approval by the Sub-adviser, which will not be
unreasonably withheld or delayed.
ARTICLE XVI
Notices
Any notice under this Agreement shall be in writing and shall be
deemed given (a)
upon person delivery, (b) on the first business day after receipted
delivery to a courier
service that guarantees next business day delivery, under
circumstances in which such
guaranty is applicable or (c) on the earlier of delivery or three
business days after mailing
by United States certified mail, postage and fees prepaid, to the
appropriate party at the
address set forth below, or to such other address as the party so
notifies the others in
writing.
<PAGE>
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: G W CAPITAL MANAGEMENT, INC.
By:
Address: 8515 East Orchard Road
Englewood, CO 80111
Attn: General Counsel
Witness: INVESCO TRUST COMPANY
By:
Address: 7800 East Union Ave.,
Suite 800
Denver, CO 80237
Attn: General Counsel
Witness: MAXIM SERIES FUND, INC.
By:
Address: 8515 East Orchard Road
Englewood, CO 80111
Attn: Secretary
<PAGE>
EXHIBIT A.3.
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (herein "the Agreement" or "this Agreement")
made this day of , 1997 by and between G W Capital
Management, Inc., a
Colorado corporation, registered as an investment adviser under
the Investment Advisers
Act of 1940 ("the Adviser"), INVESCO Trust Company, a Colorado
trust company 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 Maxim
INVESCO Balanced 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, a copy
of which is attached
hereto as Appendix A. This advisory agreement and all amendments
thereto are hereinafter
referred to as "the GW Agreement". In the GW 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 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 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 by this Agreement or otherwise, 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 specific investment opportunities for the
Portfolio,
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 Portfolio, including
making
and carrying out decisions to acquire or dispose of permissible
investments as
set forth in the Fund's Registration Statement, 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
Portfolio;
(f) communicate as appropriate to the Adviser the purchases
and
sales within the Portfolio;
(g) arrange with the applicable broker or dealer at the time
of the
purchase or sale of investments or other assets of the Portfolio
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 Portfolio;
(i) maintain all required records, memoranda, instructions or
authorizations relating to the acquisition or disposition of
investments or other
assets of the Portfolio;
(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 Portfolio and which are incurred as a result of
providing
investment management services to the Portfolio;
(k) vote all shares held by the Portfolio.
In connection with the rendering of the services required to be
provided by the Sub-
adviser under this Agreement, the Sub-adviser may, to the extent it
deems appropriate and
subject to compliance with the requirements of applicable laws and
regulations, and upon
receipt of written approval of the Fund, make use of its affiliated
companies and their
employees; provided that the Sub-adviser shall supervise and remain
fully responsible for all
such services in accordance with and to the extent provided by this
Agreement.
It is understood that any information or recommendation supplied by
the Sub-adviser
in connection with the performance of its obligations hereunder is
to be regarded as
confidential and for use only by the Adviser in connection with the
Portfolio.
The Adviser will continue to provide all of the services described
in the GW
Agreement other than the services described above which have been
delegated to the Sub-
adviser in this Agreement.
If, in the judgment 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 after
consultation with the Adviser to obtain, and pay at its own
expense, for such information.
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 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 Portfolio, as described in
Article II of this Agreement,
based on an annual percentage of the assets of the Portfolio (the
"NAV Fee") as set forth
below:
Annual Fee Assets
.50% first $25 million
.45% next $50 million
.40% next $25 million
.35% over $100 million
Payment to the Sub-adviser will be made monthly by the Adviser
based on the average daily
net assets of the Portfolio during each month, calculated as set
forth in the then current
Registration Statement of the Fund. If this Agreement is
terminated, the payment shall be
prorated to the effective date of termination.
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 GW 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 that
specializes in the securities for which the order is made, or with
any other broker or dealer
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' 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 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 or for their advisory clients arise for
consideration at or about the same
time, the Fund agrees that the Sub-advisor 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 on 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.
ARTICLE VI
Effectiveness of the Agreement
The Agreement shall not become effective (and the Sub-adviser shall
not serve or act
as investment adviser) unless and until it is approved by (i) 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; (ii) the shareholders
of the Portfolio in
accordance with the 1940 Act, and (iii) the Merger of AIM
Management Group Inc. and
INVESCO PLC pursuant to the Merger Agreement of November 4, 1996 is
consummated
and this Agreement shall come into full force and effect on the
date on which all of these
conditions are met.
ARTICLE VII
Term of the Agreement; Amendment
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)may be amended only by a written instrument signed by the Fund,
the
Adviser and the Sub-adviser; provided that no material amendment of
this Agreement shall be effective 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
Recordkeeping
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. 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; provided, however, that the
Sub-adviser shall be
permitted to keep such records or copies thereof for such periods
of time as are necessary
to comply with the rules and regulations of the Securities and
Exchange Commission or
other applicable provisions of state or federal law. 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 or self-regulatory
organization 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.
The federal securities laws impose liabilities under certain
circumstances on persons who act
in good faith and, therefore, nothing herein shall in any way
constitute a waiver or limitation
of any rights which the Fund or any shareholder of the Fund may
have under any federal
securities laws. 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
Subject to Article IX, 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 of the Sub-adviser under
this Agreement, including the activities 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; provided, however, that in no event is
Sub-adviser's indemnity in
favor of Adviser deemed to protect Adviser against any liability to
which the Adviser would
otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the
performance of its duties or by reason of its reckless disregard of
its obligations or duties
under this Agreement or the GW 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 GW Agreement, 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 or the GW Agreement; provided, however, that in no
event is Adviser's
indemnity in favor of Sub-adviser deemed to protect Sub-adviser
against any liability to
which the Sub-adviser would otherwise be subject by reason of
willful misfeasance, bad faith,
or gross negligence in the performance of its duties or by reason
of its reckless disregard of
its obligations or duties under this 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
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 as required
by 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. 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 only 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 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. It is understood that neither the
Fund nor the Adviser may
settle on behalf of the Sub-adviser without the consent of the
Sub-adviser.
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 shall be construed in accordance with the laws of
the State of
Colorado and the applicable 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. To the extent
that the applicable laws of
the State of Colorado conflict with applicable provisions of the
Investment Company Act of
1940, as amended, or the rules and regulations thereunder, such
Act, rules and regulations
shall control.
ARTICLE XIII
Severability
If any provision of this Agreement shall be held or made invalid by
a court decision,
statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
ARTICLE XIV
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.
ARTICLE XV
Sales Literature
The Adviser will not use the Sub-adviser's name in Fund sales
literature without prior
review and approval by the Sub-adviser, which will not be
unreasonably withheld or delayed.
ARTICLE XVI
Notices
Any notice under this Agreement shall be in writing and shall be
deemed given (a)
upon person delivery, (b) on the first business day after receipted
delivery to a courier
service that guarantees next business day delivery, under
circumstances in which such
guaranty is applicable or (c) on the earlier of delivery or three
business days after mailing
by United States certified mail, postage and fees prepaid, to the
appropriate party at the
address set forth below, or to such other address as the party so
notifies the others in
writing.
<PAGE>
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: G W CAPITAL MANAGEMENT, INC.
By:
Address: 8515 East Orchard Road
Englewood, CO 80111
Attn: General Counsel
Witness: INVESCO TRUST COMPANY
By:
Address: 7800 East Union Ave.,
Suite 800
Denver, CO 80237
Attn: General Counsel
Witness: MAXIM SERIES FUND, INC.
By:
Address: 8515 East Orchard Road
Englewood, CO 80111
Attn: Secretary
<PAGE>
EXHIBIT B
Funds Advised by the Sub-Adviser or an Affiliated Entity of
Sub-Adviser with Similar
Investment Objectives and Strategies to those of the Fund:
Balanced Funds
Balanced
Funds
1940 Act
Objective
Adviser
Sub-Adviser
Advisory Fee
Rate (based on
average net
assets)
Sub-Advisory
Fee Rate (based
on average net
assets)
Net Assets (at
October 31,
1996)
Balanced
Fund*
Capital
Appreciation
and Income
INVESCO
Funds Group,
Inc.
INVESCO
Trust
Company
.60% of the first
$350 million;
.55% of the next
$350 million;
.50% over
$700 million
.30% of the first
$350 million;
.275% of the next
$350 million;
.25% over
$700 million
$130,629,237
Multi-Asset
Allocation
Fund*
Capital
Appreciation
and Income
INVESCO
Funds Group,
Inc.
INVESCO
Management &
Research,
Inc.
.75% of the first
$500 million;
.65% of the next
$500 million;
.50% over
$1 billion
.375% of the first
$500 million;
.325% of the next
$500 million;
.25% over
$1 billion
$12,702,769
Total Return
Fund
Capital
Appreciation
and Income
INVESCO
Funds Group,
Inc.
INVESCO
Capital
Management,
Inc.
.75% of the first
$500 million;
.65% of the next
$500 million;
.50% over
$1 billion
.20% of the first
$500 million;
.17% of the next
$500 million;
.13% over
$1 billion
$1,129,593,849
MultiFlex
Portfolio
Capital
Appreciation
and Income
INVESCO
Services, Inc.
INVESCO
Management &
Research,
Inc.
1%
.35% of the first
$500 million;
.25% over
$500 million
$243,766,866
Flex Portfolio*
Capital
Appreciation
and Income
INVESCO
Services, Inc.
INVESCO
Capital
Management,
Inc.
.75%
.20%
$473,695,882
VIF-Total
Return
Portfolio*
Capital
Appreciation
and Income
INVESCO
Funds Group,
Inc.
INVESCO
Capital
Management,
Inc.
.75% of the first
$500 million;
.65% of the next
$500 million;
.55% over
$1 billion
.375% of the first
$500 million;
.325% of the next
$500 million;
.275% over
$1 billion
$12,525,451
* Indicates whether fee has been waived or absorbed during the
Fund's past fiscal year.
EXHIBIT B
Funds Advised by the Sub-Adviser or an Affiliated Entity of
Sub-Adviser with Similar
Investment Objectives and Strategies to those of the Fund:
Growth & Value Funds
Growth &
Value
Funds
1940 Act
Objective
Adviser
Sub-Adviser
Advisory Fee
Rate (based on
average net
assets)
Sub-Advisory
Fee Rate
(based on
average net
assets)
Net Assets (at
October 31,
1996)
Value Equity
Fund
Capital
Appreciation
and Income
INVESCO
Funds Group,
Inc.
INVESCO
Capital
Management,
Inc.
.75% of the first
$500 million;
.65% of the next
$500 million;
.50% over
$1 billion
.20% of the first
$500 million;
.17% of the next
$500 million;
.13% over
$1 billion
$221,736,052
Growth Fund
Long-Term
Capital
Growth;
Current
Income
Secondary
INVESCO
Funds Group,
Inc.
INVESCO
Trust
Company
.60% of the first
$350 million;
.55% of the next
$350 million;
.50% over
$700 million
.25% of the first
$200 million;
.20% over
$200 million
$650,140,716
Dynamics
Fund
Capital
Appreciation
INVESCO
Funds Group,
Inc.
INVESCO
Trust
Company
.60% of the first
$350 million;
.55% of the next
$350 million;
.50% over
$700 million
.25% of the first
$200 million;
.20% over
$200 million
$836,458,920
Emerging
Growth Fund
Long-Term
Capital
Growth
INVESCO
Funds Group,
Inc.
INVESCO
Trust
Company
.75% of the first
$350 million;
.65% of the next
$350 million;
.55% over
$700 million
.25% of the first
$200 million;
.20% over
$200 million
$275,668,167
Small
Company
Fund*
Long-Term
Capital
Growth
INVESCO
Funds Group,
Inc.
INVESCO
Management
& Research,
Inc.
.75%
.375%
$47,292,558
Equity
Portfolio
Capital
Appreciation
and Income
INVESCO
Services, Inc.
INVESCO
Management
& Research,
Inc.
.75%
.20%
$134,188,186
John Hancock
Variable Series
Trust - Small
Cap Value
Fund
Aggressive
Growth
John Hancock
Mutual
Life
Insurance
Company
INVESCO
Management
& Research,
Inc.
.80% of the first
$100 million;
.75% of the next
$100 million;
.65% over
$200 million
.55% of the first
$100 million;
.50% of the next
$100 million;
.40% over
$200 million
$9,621,404
* Indicates whether fee has been waived or absorbed during the
Fund's past fiscal year.
