<PAGE>
PROTECTIVE INVESTMENT COMPANY
2801 HIGHWAY 280 SOUTH
BIRMINGHAM, ALABAMA 35223
------------------------
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
APRIL 30, 1996
------------------------
To owners of variable annuity contracts issued by Protective Life Insurance
Company ("PLICO") entitled to give voting instructions in connection with
separate accounts of PLICO.
Notice is hereby given that a special meeting of the shareholders of
Protective Investment Company (the "Company"), including Special Meetings of
shareholders (the "Meetings") of each of the Company's investment portfolios
(each, a "Fund" and collectively the "Funds"), will be held on April 30, 1996 at
the Protective Life Corporation Building, 2nd floor, Training Room A, 2801
Highway 280 South, Birmingham, Alabama 35223, at 10:00 a.m.
The Meetings will be held for the following purposes:
1. To approve or disapprove an investment management agreement between the
Company, on behalf of each Fund, and Investment Distributors Advisory
Services, Inc. ("IDASI"), pursuant to which IDASI will serve as
investment manager with respect to each Fund. SHAREHOLDERS OF EACH FUND
VOTING SEPARATELY.
2a. To approve or disapprove investment advisory agreements between IDASI
and Goldman Sachs Asset Management ("GSAM"), an operating division of
Goldman, Sachs & Co., pursuant to which GSAM will serve as investment
adviser to each of Protective Money Market Fund, Protective Select Equity
Fund, Protective Capital Growth Fund, Protective Small Cap Equity Fund,
and Protective Growth and Income Fund. SHAREHOLDERS OF EACH OF THE
FOREGOING FUNDS VOTING SEPARATELY.
2b. To approve or disapprove investment advisory agreements between IDASI
and Goldman Sachs Asset Management International ("GSAMI"), an affiliate
of Goldman, Sachs & Co., pursuant to which GSAMI will serve as investment
adviser to each of Protective International Equity Fund and Protective
Global Income Fund. SHAREHOLDERS OF EACH OF THE FOREGOING FUNDS VOTING
SEPARATELY.
3. To elect five directors to the Company's Board of Directors.
SHAREHOLDERS OF ALL OF THE FUNDS VOTING TOGETHER.
4. To ratify or reject the selection of Coopers & Lybrand L.L.P. as the
Company's independent public accountant. SHAREHOLDERS OF ALL OF THE FUNDS
VOTING TOGETHER.
5. To transact such other business as may properly come before the Meetings
or any adjournment(s) thereof.
PLICO and a separate account of PLICO are the only shareholders of the
Company. However, PLICO hereby solicits and agrees to vote the shares of the
Company at the Meetings in accordance with timely instructions received from
owners of the variable annuity contracts ("variable contracts") having contract
values allocated to such separate account invested in such shares.
As a variable contract owner of record at the close of business on March 21,
1996, you have the right to instruct PLICO as to the manner in which shares of a
Fund attributable to your variable contract should be voted. To assist you in
giving your instructions, a Voting Instruction Form is enclosed that reflects
the number of shares of each of the above Funds of the Company for which you are
entitled to give voting instructions. In addition, a Proxy Statement is attached
to this Notice and describes the matters to be voted upon at the Meetings or any
adjournment(s) thereof.
<PAGE>
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETINGS, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED VOTING INSTRUCTION FORM AND RETURN IT
PROMPTLY IN THE ENCLOSED POSTAGE PREPAID ENVELOPE.
By Order of the Board of Directors
Lizabeth Reynolds Nichols
SECRETARY
Birmingham, Alabama
March 26, 1996
<PAGE>
PROTECTIVE INVESTMENT COMPANY
2801 HIGHWAY 280 SOUTH
BIRMINGHAM, ALABAMA 35223
------------------------
PROXY STATEMENT
MARCH 26, 1996
------------------------
This Proxy Statement is being furnished on behalf of the Board of Directors
of Protective Investment Company (the "Company"), by Protective Life Insurance
Company ("PLICO") to owners of variable annuity contracts issued by PLICO and
having contract values on the record date allocated to a separate account of
PLICO invested in shares of the Company.
This Proxy Statement is being furnished in connection with the solicitation
of voting instructions from owners of such variable annuity contracts ("variable
contracts") for use at special meetings (the "Meetings") of shareholders of
Protective Money Market Fund, Protective Select Equity Fund, Protective Capital
Growth Fund, Protective Small Cap Equity Fund, Protective International Equity
Fund, Protective Growth and Income Fund, and Protective Global Income Fund
(each, a "Fund"). The Meetings are to be held on April 30, 1996, at 10:00 a.m.,
Birmingham, Alabama time, at the offices of Protective Life Corporation in the
2nd Floor, Training Room A, 2801 Highway 280 South, Birmingham, Alabama for the
purposes set forth below and in the accompanying Notice of the Meetings. The
approximate mailing date of this Proxy Statement and Voting Instruction Form is
March 27, 1996.
The costs of the Meetings including the solicitation of voting instructions
will be paid by PLICO. In addition to the use of the mails, voting instructions
may be solicited, in person or by telephone, by officers of the Company and
regular employees and representatives of PLICO or its affiliates, who will not
be separately compensated therefor.
At the Meetings, the shareholders of Protective Money Market Fund,
Protective Select Equity Fund, Protective Capital Growth Fund, Protective Small
Cap Equity Fund, and Protective Growth and Income Fund, EACH VOTING SEPARATELY,
will be asked:
1. To approve or disapprove an investment management agreement between the
Company and Investment Distributors Advisory Services, Inc. ("IDASI"),
pursuant to which IDASI will serve as investment manager with respect to
their Fund; and
2. To approve or disapprove an investment advisory agreement between IDASI
and Goldman Sachs Asset Management ("GSAM"), an operating division of
Goldman, Sachs & Co., pursuant to which GSAM will serve as investment
adviser to their Fund.
At the Meetings, the shareholders of Protective International Equity Fund
and Protective Global Income Fund, EACH VOTING SEPARATELY, will be asked:
1. To approve or disapprove an investment management agreement between the
Company and Investment Distributors Advisory Services, Inc. ("IDASI"),
pursuant to which IDASI will serve as investment manager with respect to
their Fund; and
2. To approve or disapprove an investment advisory agreement between IDASI
and Goldman Sachs Asset Management International ("GSAMI"), an affiliate
of Goldman, Sachs & Co., pursuant to which GSAMI will serve as investment
adviser to their Fund.
At the Meetings, the shareholders of each of the Funds, VOTING TOGETHER,
will be asked:
3. To elect five directors to the Company's Board of Directors.
4. To ratify or reject the selection of Coopers & Lybrand L.L.P. as the
Company's independent public accountant.
5. To transact such other business as may properly come before the Meeting
or any adjournment(s) thereof.
<PAGE>
The following chart indicates which shareholders are entitled to vote on
each proposal:
VOTING GROUPS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PROPOSAL MONEY SELECT CAPITAL SMALL CAP GROWTH AND GLOBAL
- - --------------------------------- MARKET EQUITY GROWTH EQUITY INCOME INTERNATIONAL INCOME
FUND FUND FUND FUND FUND EQUITY FUND FUND
1. Approval of investment
management agreement with X X X X X X X
IDASI
2a. Approval of investment
advisory agreement with GSAM X X X X X
2b. Approval of investment
advisory agreement with X X
GSAMI
3. Election of Directors X X X X X X X
4. Ratification of selection of
the independent public X X X X X X X
accountant
</TABLE>
GENERAL VOTING INFORMATION
PLICO itself and a separate account of PLICO are the only shareholders of
the Funds. PLICO will vote the shares of the Funds at the Meetings in accordance
with the timely instructions received from persons entitled to give voting
instructions under variable contracts funded through such separate account.
PLICO will vote shares attributable to variable contracts as to which no
voting instructions are received in proportion (for, against or abstain) to
those for which instructions are received. PLICO also will vote shares not
attributable to variable contracts (I.E., representing seed money investments in
the Funds made by PLICO) in proportion to those for which instructions are
received from variable contract owners. If a Voting Instruction Form is received
that does not specify a choice, PLICO will consider its timely receipt as an
instruction to vote in favor of the proposal(s) to which it relates. In certain
circumstances, PLICO has the right to disregard voting instructions from certain
variable contract owners. PLICO does not believe that these circumstances exist
with respect to matters currently before shareholders. Variable contract owners
may revoke voting instructions given to PLICO at any time prior to the Meetings
by notifying the Secretary of the Company in writing.
The Company, a Maryland corporation organized in 1993, is registered with
the U.S. Securities and Exchange Commission (the "Commission") as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act").
Each share of the Company's outstanding common stock is entitled to one vote
for each dollar of net asset value represented by that share. Fractional votes
are counted.
2
<PAGE>
The Board of Directors of the Fund has fixed March 21, 1996 as the record
date for the determination of shareholders entitled to notice of and to vote at
the Meetings. As of March 21, 1996, there were outstanding the following numbers
of shares of each class of common stock of the Company, representing the
following number of votes to which each class is entitled:
<TABLE>
<CAPTION>
NET ASSET NUMBER OF
NUMBER OF VALUE PER VOTES ENTITLED
SHARES OUTSTANDING SHARE TO BE CAST
------------------ ----------- ----------------
<S> <C> <C> <C>
Protective Money Market Fund..................................... 5,587,147.440 $ 1.00 5,587,147.44
Protective Select Equity Fund.................................... 4,996,349.748 14.00111 69,954,442.42
Protective Capital Growth Fund................................... 1,425,657.518 11.25198 16,041,469.88
Protective Small Cap Equity Fund................................. 4,896,209.090 9.94709 48,703,032.48
Protective International Equity Fund............................. 6,078,189.391 11.60943 70,564,314.26
Protective Growth and Income Fund................................ 11,655,935.127 12.84065 149,669,783.39
Protective Global Income Fund.................................... 3,334,954.846 9.98723 33,306,961.09
</TABLE>
The following table sets forth, as of March 21, 1996, the beneficial
ownership of the Company's common stock by: (1) each person known by the Company
or PLICO to beneficially own shares of any class of such stock representing more
than 5% of the votes attributable to that class, (2) each director of the
Company, and (3) directors of the Company as a group. For this purpose, persons
who have the right to instruct PLICO as to shares of stock attributable to a
variable contract are considered beneficial owners of such shares of stock.
<TABLE>
<CAPTION>
NUMBER OF VOTES (AND PERCENT OF CLASS) ATTRIBUTABLE TO SHARES BENEFICIALLY OWNED
--------------------------------------------------------------------------------------------
MONEY MARKET SELECT EQUITY CAPITAL GROWTH SMALL CAP GLOBAL INCOME
NAME OF BENEFICIAL OWNER FUND FUND FUND EQUITY FUND FUND
- - -------------------------------- ---------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
PLICO........................... 547,473.36 1,468,046.53 1,133,701.71 1,021,613.47 3,483,589.45
(9.80%) (2.10%) (7.07%) (2.10%) (10.46%)
D. Warren Bailey................ 0 0 0 0 0
R. Stephen Briggs............... 0 13,265.88* 0 21,595.77* 0
Carolyn King.................... 0 5,929.26* 6,747.01* 1,065.83* 0
G. Ruffner Page, Jr............. 0 17,868.53* 0 6,915.16* 0
Cleophus Thomas, Jr............. 0 6,859.41* 0 0 0
All directors of the
Company as a group............. 0 43,923.08* 6,747.01* 29,576.76* 0
<CAPTION>
INTERNATIONAL GROWTH AND
NAME OF BENEFICIAL OWNER EQUITY FUND INCOME FUND
- - -------------------------------- ----------------- -----------------
<S> <C> <C>
PLICO........................... 3,615,316.12 1,366,818.34
(5.12%) (0.91%)
D. Warren Bailey................ 0 0
R. Stephen Briggs............... 11,740.67* 0
Carolyn King.................... 1,040.92* 4,804.87*
G. Ruffner Page, Jr............. 7,745.33* 8,501.80*
Cleophus Thomas, Jr............. 0 0
All directors of the
Company as a group............. 20,526.92* 13,306.67*
</TABLE>
- - ----------------------------------
*The percentage of votes attributable to shares beneficially owned does not
exceed one percent (1%).
All shares for which PLICO timely receives properly executed instructions,
which are not subsequently revoked prior to the Meetings, will be voted at the
Meetings in accordance with such instructions. Voting instructions to abstain on
the item to be voted upon will be applied on a PRO RATA basis to reduce the
votes eligible to be cast.
To the knowledge of the Company and PLICO, no person has the right to
instruct PLICO with respect to more than 5% of the votes attributable to shares
of any Fund.
Approval of the agreements in proposals 1 and 2 above requires, as to each
Fund, the affirmative vote of a majority of the votes entitled to be cast for
that Fund or 67% or more of the outstanding votes present (in person or by
proxy) at the Meeting for that Fund, if the holders of more than 50% of the
votes entitled to be cast for that Fund are present, whichever is less.
Election of each nominee as a director requires, as to the entire Company,
the affirmative vote of a plurality of the votes present (in person or by proxy)
at the Meetings, provided that at least one-third of the votes entitled to be
cast are present at the Meetings.
Ratification of the selection of Coopers & Lybrand L.L.P. requires, as to
the entire Company, the affirmative vote of a majority of the votes present (in
person or by proxy) at the Meetings, provided that at least one-third of the
votes entitled to be cast are present at the Meetings.
3
<PAGE>
ITEM 1: APPROVAL OR DISAPPROVAL OF INVESTMENT MANAGEMENT AGREEMENT BETWEEN
IDASI AND THE COMPANY
The shareholders of each Fund will be asked at the Meetings to approve an
investment management agreement (the "Management Agreement") between IDASI and
the Company with respect to their Fund. The Management Agreement was approved
for each Fund by the Board of Directors, including a majority of the Directors
who are not parties to the Management Agreement or interested persons of such
parties ("independent directors"), at a meeting held on March 20, 1996. The
Management Agreement is attached as Appendix A.
IDASI, which is located at 2801 Highway 280 South, Birmingham, Alabama
35223, has been investment manager for the Funds since March 1994, when the
Management Agreement first became effective. IDASI is a wholly-owned subsidiary
of Protective Life Corporation ("PLC"), an insurance holding company whose
common stock is traded on the New York Stock Exchange. PLC's principal operating
subsidiary is Protective Life Insurance Company ("PLICO") a stock life insurance
company which maintains its administrative offices in Birmingham, Alabama. PLICO
was incorporated in Alabama in 1907 and changed its state of domicile from
Alabama to Tennessee in 1992. PLICO's principal business is the writing of
individual and group life and health insurance contracts, annuity contracts, and
guaranteed investment contracts.
See Appendix C to this Proxy Statement for a complete list of the directors
and principal executive officers of IDASI.
Prior to March, 1994, IDASI had no previous experience in providing
management services for investment companies; however, its officers, all of whom
are officers of PLC or PLICO, have extensive experience in the development and
distribution of investment products, particularly, guaranteed investment
contracts. In addition, IDASI has retained GSAM and GSAMI entities that have
extensive experience managing the assets of investment companies, pension plans
and other clients, to manage the investment and reinvestment of the Funds'
assets.
IDASI and the Company first entered into a Management Agreement on March 3,
1994. Since that date, the Management Agreement has covered all of the Funds
other than Protective Capital Growth Fund. The Management Agreement was extended
to cover the Capital Growth Fund on May 3, 1995. The Management Agreement was
first approved by the Company's Board of Directors (including a majority of the
independent directors) for the Funds other than Protective Capital Growth Fund,
at a meeting held on February 8, 1994. The Management Agreement was approved by
the Company's Board of Directors (including a majority of the independent
directors) for the Capital Growth Fund at a meeting held on May 3, 1995. PLICO,
as the holder of seed money shares, approved the Management Agreement on March
2, 1994 for the Funds other than Protective Capital Growth Fund and on June 20,
1995 for the Capital Growth Fund.
Under the Management Agreement, IDASI assumes overall responsibility,
subject to the supervision of the Company's Board of Directors, for
administering all operations of the Company and for monitoring and evaluating
the management of the assets of each of the Funds by GSAM and GSAMI on an
ongoing basis. Under the Management Agreement, IDASI provides or arranges for
the provision of the overall business management and administrative services
necessary for the Company's operations and furnishes or procures any other
services and information necessary for the proper conduct of the Company's
business. IDASI also acts as liaison among, and supervisor of, the various
service providers to the Company, including the custodian, transfer agent, and
accounting services agent and to its own administration agent that performs
services for the Company on its behalf. IDASI is also responsible for overseeing
the Company's compliance with the requirements of applicable law and with each
Fund's investment objective(s), policies and restrictions, including oversight
of GSAMI and GSAMI.
For its services to the Company, IDASI receives a monthly management fee.
The fee is deducted daily from the assets of each of the Funds and paid to IDASI
monthly. The fee for each Fund is based on the average daily net assets of the
Fund at the following annual rates: Money Market Fund .60%, Select Equity Fund
.80%, Capital Growth Fund .80%, Small Cap Equity Fund .80%, International Equity
Fund 1.10%, Growth and Income Fund .80%, and Global Income Fund 1.10%. For the
fiscal year ended December 31, 1995, IDASI received management fees in
connection with each of the Funds as follows: Money Market Fund $28,954, Select
Equity Fund $282,954, Small Cap Equity $268,136, International Equity Fund
$448,460, Growth and Income Fund $661,953, Capital Growth Fund $24,876 and
Global Income Fund $262,733.
4
<PAGE>
The Management Agreement does not place limits on the operating expenses of
the Company or of any Fund. However, Protective Life Insurance Company ("PLICO")
has voluntarily undertaken to pay any such expenses (but not including brokerage
or other portfolio transaction expenses or expenses of litigation,
indemnification, taxes or other extraordinary expenses) to the extent that such
expenses, as accrued for each Fund, exceed the following percentages of that
Fund's estimated average daily net assets on an annualized basis: Money Market
Fund, .60%; Select Equity Fund, .80%; Capital Growth Fund, .80%; Small Cap
Equity Fund, .80%; International Equity Fund, 1.10%; Growth and Income Fund,
.80%; and Global Income Fund, 1.10%. PLICO may withdraw this undertaking to pay
expenses as to any or all of the Funds upon 120 days' notice to the Company.
The Management Agreement provides that IDASI may render similar services to
others so long as the services that it provides thereunder are not impaired
thereby. The Management Agreement also provides that IDASI shall not be liable
for any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the management of the Company, except
for (i) willful misfeasance, bad faith or gross negligence in the performance of
its duties or by reason of reckless disregard of its duties or obligations under
the Management Agreement, and (ii) to the extent specified in Section 36(b) of
the Act concerning loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation.
The Management Agreement as approved by the Board of Directors is now being
submitted for approval by the shareholders of each Fund. If approved by the
shareholders of a Fund, it will continue in effect for that Fund for a term
ending April 30, 1997, and will continue from year to year thereafter, subject
to approval annually by (a) the shareholders of the Fund or a majority of the
directors of the Company, and (b) the vote of a majority of the independent
directors, cast in person at a meeting called for the purpose of voting on such
approval. If the shareholders of a Fund fail to approve the Management Agreement
for that Fund, the Directors shall consider appropriate action with respect to
such non-approval of the Management Agreement.
DIRECTORS' RECOMMENDATION
In determining whether it was appropriate to approve the Management
Agreement for each Fund and to recommend its approval to that Fund's
shareholders, the Board of Directors, including the independent directors
considered various matters and materials provided by IDASI. The directors
considered information about, among other things, the following: (1) the
compensation to be received by IDASI from each Fund and the compensation that
other similar Funds pay to their investment managers; (2) the nature and quality
of the services required to be performed by IDASI to the Funds; (3) the
profitability of IDASI in managing each Fund; (4) the qualifications of the
personnel of IDASI; (5) the past performance of IDASI with regard to each Fund;
(6) the policies and practices of IDASI in assigning personnel resources to
provide the services; (7) any significant regulatory compliance issues which
might have affected IDASI; and (8) the past investment performance of each Fund
as compared with that of similar funds and related indices.
In their deliberations regarding approval of the Management Agreement, the
directors focussed most of their attention on the information in items (1) (2)
and (3). The directors evaluated the value of IDASI's services to the Company
overall and to each Fund and determined that IDASI's services were comparable to
those performed by other excellent investment managers in the mutual fund
industry. The directors also considered the fees that each Fund would pay to
IDASI under the Management Agreement and determined that such fees were within
the range that other mutual funds with similar investment objectives pay for
comparable services and that the shareholders of each Fund would receive good
value in the form of management services in return for such fees. With regard to
the value that IDASI provides to each Fund and the shareholders invested
therein, the directors carefully considered IDASI's past performance;
particularly the investment performance of each Fund as compared with that of
similar mutual funds and appropriate indices.
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE IN FAVOR OF THE APPROVAL
OF THE INVESTMENT MANAGEMENT AGREEMENT WITH IDASI.
ITEMS 2A AND 2B: APPROVAL OR DISAPPROVAL OF INVESTMENT ADVISORY AGREEMENTS
BETWEEN IDASI AND GSAM OR GSAMI
The shareholders of each Fund will be asked at the Meetings to approve a new
investment advisory agreement (a "New Investment Advisory Agreement") for their
Fund between IDASI, and
5
<PAGE>
GSAM or GSAMI. The New Investment Advisory Agreements were approved by the Board
of Directors, including a majority of the Directors who are not parties to the
Agreements or interested persons of such parties ("independent directors"), at a
meeting held on March 20, 1996. The New Investment Advisory Agreements are
attached as Appendix B.
If approved by the shareholders of a Fund, the New Investment Advisory
Agreements will continue in effect for an initial term ending April 30, 1997,
and will continue from year to year thereafter, subject to approval annually by
(a) the shareholders of the Fund or a majority of the directors of the Company,
and (b) the vote of a majority of the independent directors, cast in person at a
meeting called for the purpose of voting on such approval. If the shareholders
of a Fund fail to approve the New Investment Advisory Agreement for that Fund,
the Directors shall consider appropriate action with respect to such
non-approval of the New Investment Advisory Agreements.
INFORMATION ABOUT GSAM AND GSAMI
Goldman Sachs Asset Management, One New York Plaza, New York, New York
10004, a separate operating division of Goldman Sachs, acts as the investment
adviser of the Money Market Fund, Select Equity Fund, Capital Growth Fund, Small
Cap Equity Fund and Growth and Income Fund. Goldman Sachs Asset Management
International, 140 Fleet Street, London EC4A 2BJ England, an affiliate of
Goldman Sachs, acts as the investment adviser to the International Equity Fund
and the Global Income Fund. Both Goldman Sachs and GSAMI are registered with the
SEC as investment advisers. GSAM and GSAMI and their affiliates serve a wide
range of clients including private and public pension funds, endowments,
foundations, banks, thrifts, insurance companies, corporations and private
investors and family groups. As of January 31, 1996, the Advisers, together with
their affiliates, acted as investment adviser, administrator or distributor for
assets in excess of $51 billion.
Founded in 1869, Goldman Sachs is among the oldest and largest investment
banking firms in the United States. Goldman Sachs is a leader in developing
portfolio strategies and in many fields of investing and financing,
participating in financial markets worldwide and serving individuals,
institutions, corporations and governments. Goldman Sachs is among the principal
market sources for current and thorough information on companies, industrial
sectors, markets, economies and currencies, and trades and makes markets in a
wide range of equity and debt securities 24-hours a day. The firm is
headquartered in New York and has offices throughout the United States and in
Beijing, Frankfurt, George Town, London, Madrid, Milan, Montreal, Osaka, Paris,
Seoul, Shanghai, Singapore, Sydney, Taipei, Tokyo, Toronto, Vancouver and
Zurich. It has trading professionals through the United States, as well as in
London, Tokyo and Singapore.
GSAMI was organized in 1990. As a company with unlimited liability under the
laws of England, it is authorized to conduct investment advisory business in the
United Kingdom as a member of the Investment Management Regulatory Organisation
Limited, a U.K. self-regulatory organization.
In performing investment advisory services both GSAM and GSAMI while
remaining responsible for advising the Funds, may rely upon the asset management
division of its Singapore and Tokyo affiliates. Each is also able to draw upon
the research and expertise of its other affiliate offices for portfolio
decisions and management with respect to certain securities.
GSAM and GSAMI are able to draw on the substantial research and market
expertise of Goldman Sachs, whose investment research effort is one of the
largest in the industry. With an annual equity research budget approaching $120
million, Goldman Sachs' Investment Research Department covers approximately
1,700 companies, including approximately 1,000 U.S. corporations in 60
industries. The in-depth information and analyses generated by Goldman Sachs'
research analysts are available to GSAM and GSAMI. For more than a decade,
Goldman Sachs has been among the top-ranked firms in INSTITUTIONAL INVESTOR'S
annual "All-America Research Team" survey. In addition, many of Goldman Sachs'
economists, securities analysts, portfolio strategists and credit analysts have
consistently been highly ranked in respected industry surveys conducted in the
U.S. and abroad. Goldman Sachs is also among the leading investment firms using
quantitative analysis (now used by a growing number of investors) to structure
and evaluate portfolios.
In connection with the Funds' investments in foreign securities and related
transactions in foreign currencies, GSAMI has access to Goldman Sachs' economics
team, based in London, which is internationally recognized for its skill in
currency forecasting and international economics.
6
<PAGE>
The fixed-income research capabilities of Goldman Sachs available to GSAM
and GSAMI include the Goldman Sachs' Fixed-Income Research Department and the
Credit Department. The Fixed-Income Research Department monitors developments in
U.S. and foreign fixed-income markets, assesses the outlooks for various sectors
of the markets and provides relative value comparisons, as well as analyzes
trading opportunities within and across market sectors. The Fixed-Income
Research Department is at the forefront in developing and using computer-based
tools for analyzing fixed-income securities and markets, developing new
fixed-income products and structuring portfolio strategies for investment policy
and tactical asset allocation decisions. The Credit Department tracks specific
governments, regions and industries and from time to time may review the credit
quality of a Fund's investments.
In addition to fixed-income research and credit research, both GSAM and
GSAMI are supported by Goldman Sachs' economics research. The Economics Research
Department conducts economic, financial and currency markets research which
analyzes economic trends and interest and exchange rate movements worldwide. The
Economics Research Department tracks factors such as inflation and money supply
figures, balance of trade figures, economic growth, commodity prices, monetary
and fiscal policies, and political events that can influence interest rates and
currency trends.
The success of Goldman Sachs' international research team has brought wide
recognition to its members. The team has earned top rankings in the
INSTITUTIONAL INVESTOR annual "All British Research Team Survey" in the
following categories: Economics (U.K.) 1986-1993; Economics/International
1989-1993; and Currency Forecasting 1986-1993. In addition, the team has also
earned top rankings in the annual "Extel Financial Survey" of U.K. investment
managers in the following categories: U.K. Economy 1989-1995; International
Economies 1986, 1988-1995; International Government Bond Market 1993-1995; and
Currency Movements 1986-1993.
In allocating assets in a Fund's portfolio among currencies, GSAM and GSAMI
will have access to the Global Asset Allocation Model. The model is based on the
observation that the prices of all financial assets, including foreign
currencies, will adjust until investors globally are comfortable holding the
pool of outstanding assets. Using the model, GSAM and GSAMI will estimate the
total returns from each currency sector which are consistent with the average
investor holding a portfolio equal to the market capitalization of the financial
assets among those currency sectors. These estimated equilibrium returns are
then combined with Goldman Sachs' research professionals' expectations to
produce an optimal currency and asset allocation for the level of risk suitable
for a Fund's investment objective and criteria. In allocating a Fund's assets
among currencies GSAM and GSAMI will also have access to Goldman Sachs'
economics team, which is internationally recognized for its skill in currency
forecasting and international economics.
See Appendix D to this Proxy Statement for a complete list of the directors
and principal executive officers of GSAM and GSAMI and a table setting forth the
registered investment companies having similar objectives to the Funds for which
GSAM or GSAMI serves as a sub-adviser, including the fees payable to GSAM or
GSAMI.
CURRENT INVESTMENT ADVISORY AGREEMENTS
GSAM and GSAMI entered into investment advisory agreements, dated March 2,
1994 (May 3, 1995 for Capital Growth Fund), with IDASI in connection with each
Fund that each advises. Under the agreements, GSAM and GSAMI, subject to the
general supervision of the Company's Board of Directors, manages the investment
portfolio of each Fund. Under the investment advisory agreements, GSAM and GSAMI
are responsible for making investment decisions for the Funds and for placing
the purchase and sale orders for the portfolio transactions of each Fund. In
this capacity, GSAM and GSAMI obtain and evaluate appropriate economic,
statistical, timing, and financial information and formulate and implement
investment programs in furtherance of each Fund's investment objective(s).
7
<PAGE>
As compensation for its services to the Funds on behalf of IDASI, GSAM or
GSAMI receive a monthly fee from IDASI based on the average daily net assets of
each Fund at the annual rates shown in the table below.
The investment advisory agreements each provide that GSAM and GSAMI may
render similar services to others so long as the services that they provide
thereunder are not impaired thereby.
The investment advisory agreement for each Fund (other than Capital Growth
Fund) was approved by the directors of the Company, including a majority of the
independent directors, on February 8, 1994, and by the sole initial shareholder
of the Fund on March 2, 1994. The investment advisory agreement for Capital
Growth Fund was approved by the directors, including a majority of independent
directors, on May 3, 1995 and by the sole initial shareholder of the Fund on
June 20, 1995.
The investment advisory agreements will each terminate automatically if
assigned, and each is terminable at any time without penalty by the directors of
the Company or by vote of a majority of the votes attributable to outstanding
voting securities of the applicable Fund on 60 days' written notice to either
GSAM or GSAMI, as appropriate and by GSAM and GSAMI on 90 days' written notice
to IDASI and the Company.
NEW INVESTMENT ADVISORY AGREEMENTS
Except for the fees to be paid, the New Investment Advisory Agreements are
substantially identical to the current investment advisory agreements. The
monthly fee schedule in the New Investment Advisory Agreements differs from the
current monthly fee schedule in the current agreements in that the breakpoints
have been increased for all of the Funds. In addition, the percentage rate of
the monthly fee payable on the International Equity Fund and the Global Income
Fund has been increased from an effective annual rate of .20% to .25% of assets
in each of these Funds in excess of $200 million. The new Fee Schedule as
compared with the current Fee Schedule is as follows:
NEW INVESTMENT ADVISORY AGREEMENT FEE SCHEDULES
<TABLE>
<CAPTION>
$0-100 MILLION $100-200 MILLION $200+ MILLION
----------------- ------------------- -----------------
<S> <C> <C> <C>
Money Market............................................ .35% .25% .15%
International Equity.................................... .40% .30% .25%
Global Income........................................... .40% .30% .25%
Growth and Income....................................... .40% .30% .20%
Select Equity........................................... .40% .30% .20%
Small Cap Equity........................................ .40% .30% .20%
Capital Growth.......................................... .40% .30% .20%
</TABLE>
CURRENT INVESTMENT ADVISORY AGREEMENT FEE SCHEDULES
<TABLE>
<CAPTION>
$0-50 MILLION $50-150 MILLION $150-250 MILLION $250+ MILLION
----------------- ------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Money Market........................... .35% .25% .20% .15%
International Equity................... .40% .30% .25% .20%
Global Income.......................... .40% .30% .25% .20%
</TABLE>
<TABLE>
<CAPTION>
$0-50 MILLION $50-200 MILLION $200+ MILLION
----------------- ------------------- -------------------
<S> <C> <C> <C>
Growth and Income........................ .40% .30% .20%
Select Equity............................ .40% .30% .20%
Small Cap Equity......................... .40% .30% .20%
Capital Growth........................... .40% .30% .20%
</TABLE>
8
<PAGE>
For the fiscal year ended December 31, 1995, IDASI paid the following fees
to GSAM and GSAMI in connection with each of the Funds: Money Market Fund
$16,877, Select Equity Fund $140,992, Capital Growth Fund $12,438, Small Cap
Equity Fund $134,073, International Equity Fund $162,253, Growth and Income Fund
$297,818, and Global Income Fund $95,539.
Had these New Investment Advisory Agreements been in effect in 1995, the
fees payable by IDASI to GSAM and GSAMI would have been: Select Equity Fund
$141,510, International Equity Fund $163,076, and Growth and Income Fund
$322,783. This corresponds to an increase of approximately 8% in the aggregate
amounts payable by IDASI to GSAM for the Growth and Income Fund. The percentage
change for each other such Fund is DE MINIMIS.
AFFILIATE TRANSACTIONS
GSAM and GSAMI are responsible for decisions to buy and sell securities for
the Funds, the selection of brokers and dealers to effect the transactions and
the negotiation of brokerage commissions, if any. Purchases and sales of
securities on a securities exchange are effected through brokers who charge a
negotiated commission for their services. Orders may be directed to any broker
including, to the extent and in the manner permitted by applicable law, Goldman
Sachs.
In the over-the-counter market, securities are generally traded on a "net"
basis with dealers acting as principal for their own accounts without a stated
commission, although the price of a security usually includes a profit to the
dealer. In underwritten offerings, securities are purchased at a fixed price
which includes an amount of compensation to the underwriter, generally referred
to as the underwriter's concession or discount. On occasion, certain money
market instruments may be purchased directly from an issuer, in which case no
commissions or discounts are paid. Except to the extent that the Money Market
Fund purchases securities from Goldman Sachs consistent with the terms of an SEC
order permitting such sales, the Company will not deal with Goldman Sachs in any
transaction in which Goldman Sachs acts as principal.
In placing orders for portfolio securities of a Fund, GSAM and GSAMI are
required to give primary consideration to obtaining the most favorable price and
efficient execution. This means that GSAM and GSAMI will seek to execute each
transaction at a price and commission, if any, which provide the most favorable
total cost or proceeds reasonably attainable in the circumstances. While GSAM
and GSAMI generally seek reasonably competitive spreads or commissions, the
Funds will not necessarily be paying the lowest spread or commission available.
Within the framework of this policy, GSAM and GSAMI will consider research and
investment services provided by brokers or dealers who effect or are parties to
portfolio transactions of the Funds, GSAM and GSAMI and their affiliates, or
other clients of GSAM and GSAMI or their affiliates. Such research and
investment services are those which brokerage houses customarily provide to
institutional investors and include statistical and economic data and research
reports on particular companies and industries. Such services are used by GSAM
and GSAMI in connection with all of their investment activities, and some of
such services obtained in connection with the execution of transactions for the
Funds may be used in managing other investment accounts. Conversely, brokers
furnishing such services may be selected for the execution of transactions of
such other accounts, whose aggregate assets are far larger than those of the
Funds, and the services furnished by such brokers may be used by GSAM and GSAMI
in providing investment advisory services for the Funds.
On occasions when GSAM and GSAMI deem the purchase or sale of a security to
be in the best interest of a Fund as well as its other advisory clients
(including any other fund or other investment company or advisory account for
which GSAM and GSAMI or an affiliate acts as investment adviser), GSAM and
GSAMI, to the extent permitted by applicable laws and regulations, may aggregate
the securities to be sold or purchased for the Fund with those to be sold or
purchased for such other customers in order to obtain the best net price and
most favorable execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction, will be
made
9
<PAGE>
by GSAM and GSAMI in the manner they consider to be most equitable and
consistent with its fiduciary obligations to the Fund and such other customers.
In some instances, this procedure may adversely affect the price and size of the
position obtainable for a Fund.
Commission rates are established pursuant to negotiations with the broker
based on the quality and quantity of execution services provided by the broker
in the light of generally prevailing rates. The allocation of orders among
brokers and the commission rates paid are reviewed periodically by the board of
directors of the Company.
GSAM and GSAMI may use Goldman Sachs as a broker for the Funds. In order for
Goldman Sachs to effect any portfolio transactions for a Fund, the commissions,
fees or other remuneration received by Goldman Sachs must be reasonable and fair
compared to the commissions, fees or other remuneration paid to other brokers in
connection with comparable transactions involving similar securities being
purchased or sold on a securities exchange during a comparable period of time.
This standard permits Goldman Sachs to receive no more than the remuneration
which would be expected to be received by an unaffiliated broker in a
commensurate arm's-length transaction. Furthermore, the Board of Directors of
the Company, including a majority of the independent directors, have adopted
procedures which are reasonably designed to provide that any commissions, fees
or other remuneration paid to Goldman Sachs are consistent with the foregoing
standard. Brokerage transactions with Goldman Sachs are also subject to such
fiduciary standards as may be imposed upon Goldman Sachs by applicable law.
In addition, although Section 11(a) of the Securities Exchange Act of 1934
provides that member firms of a national securities exchange may not effect
transactions on such exchange for the account of an investment company of which
the member firm or its affiliate is the investment adviser, except pursuant to
the requirements of that Section. The Company's Board of Directors has adopted
procedures designed to insure compliance with the requirements of Section 11(a).
In this regard, Goldman Sachs will provide the Company at least annually with a
statement setting forth the total amount of all compensation retained by Goldman
Sachs in connection with effecting transactions for the accounts of each Fund.
The board of directors of the Company will review and approve all of each Fund's
portfolio transactions with Goldman Sachs and the compensation received by
Goldman Sachs in connection therewith.
For the fiscal period ending December 31, 1995, the Funds paid the following
amounts in brokerage commissions: Money Market Fund $0, Select Equity Fund
$61,560, Small Cap Equity Fund $99,151, International Equity Fund $180,874,
Growth and Income Fund $232,571, Global Income Fund $0 and Capital Growth Fund
$12,219.
For the fiscal period ending December 31, 1995, the Funds paid the following
amounts in brokerage commissions to Goldman Sachs: Money Market Fund $0, Select
Equity Fund $0, Small Cap Equity Fund $12,010, International Equity Fund $3,957,
Growth and Income Fund $26,236, Global Income Fund $0 and Capital Growth Fund
$1,833.
During the fiscal year ended December 31, 1995, the brokerage commissions
paid by the Funds to Goldman Sachs represented the following percentages of
aggregate brokerage commissions paid by each Fund: Money Market Fund 0%, Select
Equity Fund 0%, Capital Growth Fund 15%, Small Cap Equity Fund 12%,
International Equity Fund 2%, Growth and Income Fund 11%, and Global Income Fund
0%.
DIRECTORS' RECOMMENDATION
In determining whether it was appropriate to approve the New Investment
Advisory Agreements and to recommend approval to shareholders the Board of
Directors, including the independent directors considered among other things,
information about the following: (1) the compensation to be received by GSAM and
GSAMI from each Fund and the compensation that other similar mutual Funds pay to
their investment advisers or sub-advisers; (2) the nature and quality of the
services required to be performed by GSAM and GSAMI; (3) the post-investment
results achieved by GSAM or,
10
<PAGE>
GSAMI for each Fund; (4) the personnel and research capabilities of GSAM and
GSAMI, (5) GSAM's and GSAMI's methodology in managing portfolios comparable to
the Fund. (6) the profitability to GSAM or GSAMI in advising each Fund; and (7)
any significant regulatory or compliance issues which might have affected GSAM
or GSAMI.
In their deliberations regarding approval of each New Investment Advisory
Agreement, the directors addressed most of their analysis to items (2) and (3)
above. The directors evaluated the value of the services that GSAM or GSAMI
provides to the appropriate Funds and determined that these were comparable to
the best such services provided other investment advisers or sub-advisers in the
mutual fund industry. In this regard the directors carefully considered GSAM's
and GSAMI's past performance for each Fund as compared with that of similar
mutual funds and appropriate indices. The directors also considered the fees to
be paid by IDASI to either GSAM and GSAMI under each New Investment Advisory
Agreement, and concluded that the change in such fees from those being paid
under the current investment advisory agreements would have no impact on the
Funds and their shareholders. The directors determined that the new fee
arrangements between IDASI and GSAM and GSAMI were reasonable and reflected the
fact that expenses incurred by GSAM and GSAMI were greater than those that the
parties originally anticipated when the current investment advisory agreements
were negotiated.
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE IN FAVOR OF THE APPROVAL
OF THE INVESTMENT ADVISORY AGREEMENTS WITH GSAM AND GSAMI.
ITEM 3. ELECTION OF DIRECTORS
The Company's current Board of Directors consists of five directors. The
nominees for election as directors are listed below along with their current
addresses and principal occupation for the past five years. All of the nominees
are currently serving as directors and have consented to being named as a
nominee in this Proxy Statement. Should any nominee become unable or unwilling
to serve, the persons appointed as proxies shall vote for the selection of such
other person or persons as the Board of Directors shall recommend. If elected,
all nominees will serve until their successors are elected and qualify.
During the fiscal year ended December 31, 1995, the Company's Board of
Directors held four meetings. The Board of Directors has an audit committee
consisting of Messrs. Bailey, Page and Thomas, which held two meetings during
the 1995 fiscal year. The audit committee reviews audits, audit procedures,
financial statements and other financial and operational matters of the Company.
The Board of Directors has an interim valuation committee consisting of Ms. King
and Messrs. Briggs and Page that did not meet during the 1995 fiscal year. Each
director attended at least 75% of the meetings of the Board of Directors and the
meetings held by the committee(s) of the Board on which such director served
during the 1995 fiscal year.
The directors and officers of the Company are listed below together with
their respective positions with the Company and a brief statement of their
principal occupations during the past five years.
OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH THE COMPANY, PRINCIPAL OCCUPATIONS AND OTHER AFFILIATIONS
- - -------------------------------------- --------------------------------------------------------------------------
<S> <C>
D. Warren Bailey Director since February 1994. Executive Vice President and Chief Operating
Parisian Officer, Parisian, Inc. (since June 1994). Executive Vice President and
750 Lakeshore Parkway Chief Financial Officer, Parisian, Inc. (February 1992-June 1994). Senior
Birmingham, Alabama 35211 Vice President and Chief Financial Officer, Parisian, Inc. (1986-February
1992).
R. Stephen Briggs* Director since February 1994. Executive Vice President, Protective Life
Corporation (since October, 1993).**
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH THE COMPANY, PRINCIPAL OCCUPATIONS AND OTHER AFFILIATIONS
- - -------------------------------------- --------------------------------------------------------------------------
<S> <C>
Carolyn King* Director and President since May 1995. Senior Vice President, Protective
Life Corporation (since March, 1995). Senior Vice President, Chief
Investment Officer, Provident Life & Accident Insurance Company (August
1994 - March 1995.) Various other positions with Provident Life &
Accident Insurance Company (1978 - August 1994).
G. Ruffner Page, Jr. Director since February 1994. Vice President, McWane, Inc. (since January,
McWane Cast Iron Pipe 1994), Senior Loan Officer of National Bank of Commerce of Birmingham
23 Inverness Center Parkway (1989 to January 1994).
Birmingham, Alabama 35243
Cleophus Thomas, Jr. Director since February 1994. Partner, Reid & Thomas.
Reid & Thomas
1000 Quintard Avenue
501 South Trust Bank Building
P. O. Box 2303
Anniston, Alabama 36202
Richard J. Bielen* Vice President and Compliance Officer since February 1994. Vice President,
Protective Life Corporation (since July 1991).**
John O'Sullivan* Treasurer. Vice President, Protective Life Insurance Company (since March,
1995). Vice President and Chief Actuary, Fidelity Investments Life
Insurance Company (July 1987-February 1995)
Lizabeth R. Nichols* Vice President, Secretary and Chief Compliance Officer since February
1994. Vice President and Senior Associate Counsel, Protective Life
Corporation, (since October, 1994)**
Jerry W. DeFoor* Vice President, and Chief Accounting Officer. Vice President and Chief
Accounting Officer, Protective Life Corporation
</TABLE>
- - ------------------------
*"Interested Person" of the Company for purposes of the Investment Company Act
of 1940, as amended. The address of Interested Persons of the Company is 2801
Highway 280 South, Birmingham, Alabama 35223.
**These are the most current titles and positions for these persons at PLC and
PLICO. Each has held various positions with PLC and PLICO over the past five
years.
DIRECTORS' COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
FROM THE
NAME OF DIRECTOR COMPANY
- - ------------------------------------------------------------------------------- -------------
<S> <C>
D. Warren Bailey............................................................... $ 8,000
R. Stephen Briggs.............................................................. 0
Carolyn King................................................................... 0
G. Ruffner Page, Jr............................................................ 8,000
Cleophus Thomas, Jr............................................................ 8,000
</TABLE>
Directors and officers of the Company do not receive any benefits from the
Company upon retirement nor does the Company accrue any expense for pension or
retirement benefits. The directors and officers of the Company do not currently
serve as directors or officers of any investment company that is an affiliated
person of the Company or that is managed by IDASI.
12
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR ALL THE
NOMINEES FOR ELECTION AS DIRECTORS.
ITEM 4. RATIFICATION OR REJECTION OF THE SELECTION OF COOPERS & LYBRAND L.L.P.
AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANT
The firm of Coopers & Lybrand L.L.P. has been selected as the independent
public accountant for the Company for the 1996 fiscal year. Coopers & Lybrand
L.L.P. has served as the Company's independent public accountant since its
inception in 1993. Neither Coopers & Lybrand L.L.P. nor any of its members has a
direct or indirect financial interest in the Company. Coopers & Lybrand L.L.P.
also serves as independent accountants to PLICO and its parent, PLC.
A representative of Coopers & Lybrand L.L.P. is expected to be present at
the Meetings to answer questions from investors. This representative will have
an opportunity to make a statement if he or she desires and to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE TO RATIFY THE
SELECTION OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANT FOR THE 1996 FISCAL YEAR.
REPORTS AVAILABLE
Copies of the Company's 1995 Annual Report will be furnished without charge
upon request by writing to the Company at 2801 Highway 280 South, Birmingham,
Alabama 35223 or by calling 1-(800) 627-0220.
SHAREHOLDER PROPOSALS
As a general matter, the Company does not hold annual meetings of
shareholders. Shareholders wishing to submit proposals for inclusion in a proxy
statement for a subsequent shareholder's meeting should sent their written
proposals to the Secretary of the Company, 2801 Highway 280 South, Birmingham,
Alabama 35223.
OTHER INFORMATION
Pursuant to a distribution agreement, Investment Distributors, Inc. ("IDI"),
acts without remuneration as the Company's distributor in the distribution of
the shares of each Fund. Like PLICO and IDASI, IDI is a wholly-owned subsidiary
of PLC and is located at 2801 Highway 280 South, Birmingham, Alabama 35223. IDI
has no obligation to sell any stated number of shares.
Pursuant to a custody agreement with the Company, State Street Bank and
Trust Company ("State Street") 1776 Heritage Drive, North Quincy, Massachusetts
02171, Mail Stop: A5N serves as custodian of the Funds' assets. Pursuant to the
custody agreement, State Street also performs certain accounting services for
the Company. These services include maintaining and keeping current the
Company's books, accounts, records, journals and other records of original entry
related to the Company's business, performing certain daily functions related
thereto, including calculating each Fund's daily net asset value. Pursuant to a
transfer agency and service agreement with the Company, State Street also acts
as transfer, redemption and dividend disbursement agent for the Company.
OTHER BUSINESS
Management knows of no business to be presented to the Meetings other than
the matters set forth in this Proxy Statement, but should any other matter
requiring the vote of shareholders arise, the proxies will vote thereon
according to their best judgment in the interest of the Company.
13
<PAGE>
APPENDIX A
A-1
<PAGE>
INVESTMENT MANAGEMENT AGREEMENT
THIS INVESTMENT MANAGEMENT AGREEMENT ("Agreement") made this 20th day of
March, 1996, by and between Protective Investment Company, a Maryland
corporation (hereinafter referred to as the "Company"), and Investment
Distributors Advisory Services, Inc. ("Investment Manager"), a Tennessee
corporation which is registered as an investment advisor under the Investment
Advisors Act of 1940 (the "Act").
WITNESSETH
WHEREAS, the Company intends to engage in business as a diversified,
open-end, management investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act") and has established six classes of
capital stock designated the: Money Market Series; the Select Equity Series, the
Small Capital Equity Series; the International Equity Series, Growth and Income
Series, the Global Income Series, and the Capital Growth Series.
WHEREAS, the Company has established separate investment portfolios
("Portfolios") corresponding to each class of stock, each such portfolio having
its own investment objective;
WHEREAS, the Investment Manager is engaged principally in rendering
management and investment advisory services and is registered as an investment
advisor under the Act; and
WHEREAS, the Company desires to retain the Investment Manager to render
management and investment advisory services to each Series of the Company in the
manner and on the terms hereinafter set forth; and
WHEREAS, the Investment Manager is willing to provide management and
investment advisor services to the Company on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Company and the Investment Manager hereby agree as
follows:
ARTICLE I
Duties of the Investment Manager
The Company hereby employs the Investment Manager to act as the manager and
investment advisor of each Series of the Company now established and of any
additional series the Company may create in the future, upon written notice
thereof to the Investment Manager, of each series established hereafter, and to
furnish (or in connection with management services arrange for affiliates to
furnish), the management and investment advisory services described below,
subject to the supervision of the Board of Directors of the Company ("Board"),
for the period and on the terms and conditions set forth in this Agreement. The
Investment Manager hereby accepts such employment and agrees during such period,
at its own expense, to render, or arrange for the rendering of, such services
and to assume the obligations herein set forth for the compensation provided for
herein. In connection therewith, the Investment Manager may retain a sub-advisor
to render such services and to assume the obligations herein set forth, subject
to the provisions of the Act and the 1940 Act.
The Investment Manager and its affiliates shall for all purposes herein be
deemed to be independent contractors and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Company in
any way or otherwise be deemed agents of the Company.
The Investment Manager shall, for purposes of this Agreement, have and
exercise full investment discretion and authority to act as agent for the
Company in buying, selling or otherwise disposing of or managing the Company's
investments, subject to supervision of the Board.
(a) GENERAL MANAGEMENT SERVICES. The Investment Manager shall perform (or
arrange for the performance) the management and administrative services
necessary for the operation of the Company, including processing shareholder
orders, administering shareholder accounts and handling
A-2
<PAGE>
shareholder relations. The Investment Manager shall provide the Company with
office space, equipment, facilities and such other services as the Investment
Manager, subject to review by the Board, shall from time to time determine to be
necessary or useful to perform its obligations under this Agreement. The
Investment Manager shall also, on behalf of the Company, conduct relations with
custodians, depositories, transfer agents, dividend disbursing agents, other
shareholder service agents, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any such other capacity
deemed to be necessary or desirable. The Investment Manager shall make reports
to the Board of its performance of its obligations hereunder and furnish advice
and recommendations with respect to such other aspects of the business and
affairs of the Company as it shall determine to be desirable. The Investment
Manager shall also be responsible for performance of various administrative
functions for the Company including: (a) computation of each Fund's net asset
value and daily income; (b) computation of each Fund's yields and total returns;
(c) schedule, plan agendas for and conduct directors and shareholders meetings;
(d) coordinate the efforts of the Company's counsel and auditors; (e) prepare
and distribute all required reports, proxy materials and other communications
with shareholders; (f) prepare and file tax returns, reports, registration
statements and other required documents with the Securities and Exchange
Commission ("SEC"), state blue sky authorities, the Internal Revenue Service and
other appropriate government agencies; (g) provide clerical, secretarial, and
bookkeeping services, office supplies, office space and related services
(including telephone and other utility services); (h) maintain corporate records
not otherwise maintained by the Company's custodian, transfer agent, accounting
services agent or investment managers, and (i) monitor state and federal law as
it may apply to the Company or the Funds.
(b) INVESTMENT MANAGEMENT SERVICES. The Investment Manager shall provide
the Company with such investment research, advice and supervision as the latter
may from time to time consider necessary for the proper supervision of the
assets of each Portfolio of the Company, shall furnish continuously an
investment program for each Portfolio, shall determine from time to time which
securities shall be purchased, sold or exchanged and what portions of each
Portfolio shall be held in the various securities or cash, and shall take such
steps as are necessary to implement an overall investment plan for each
Portfolio, including providing or obtaining such services as may be necessary in
managing, acquiring or disposing of investments. The Investment Manager's
services shall be subject always to the control and supervision of the Board,
the restrictions of the Articles of Incorporation and Bylaws of the Company, as
amended from time to time, the provisions of the 1940 Act, the statements
relating to the Portfolio's investment objectives, investment policies and
investment restrictions as same are set forth in the currently effective
registration statement of the Company under the Securities Act of 1933, as
amended, appropriate state insurance laws, and any applicable provisions of the
Internal Revenue Code of 1986 (the "Code"). The Company has furnished or will
furnish the Investment Manager with copies of the Company's registration
statement, articles of incorporation, and by-laws as currently in effect and
agrees during the continuance of this agreement to furnish the Investment
Manager with copies of any amendments or supplements thereto before or at the
time the amendments or supplements become effective. The Investment Manager will
be entitled to rely on all documents furnished by the Company.
In particular, the Investment Manager represents that in performing
investment advisory services for each Portfolio, the Investment Manager shall
make every effort to ensure that: (1) each Portfolio shall comply with Section
817(h) of the Code, and the regulations issued thereunder specifically
Regulation Section 1.817-5, relating to the diversification requirements for
variable annuity, endowment, and life insurance contracts, and any amendments or
other modifications to such Section or regulations; (2) each Portfolio
continuously qualifies as a regulated Investment Company under Subchapter M of
the Code or any successor provision; (3) any and all applicable state insurance
law restrictions on investments that operate to limit or restrict the
investments of a Portfolio may otherwise make are complied with as well as any
changes thereto. Except as instructed by the Board, the Investment Manager shall
also make decisions for the Company as to the manner in which voting rights,
rights to consent to corporate action and any other rights pertaining to the
Company's portfolio securities shall be exercised. Should the Board of the
Company at any time make any
A-3
<PAGE>
determination as to investment policy and notify the Investment Manager thereof,
the Investment Manager shall be bound by such determination for the period, if
any, specified in such notice or until similarly notified that such
determination has been revoked.
The Investment Manager shall take, on behalf of each Portfolio all actions
which it deems necessary to implement the investment policies of Portfolio, and
in particular to place all orders for the purchase or sale of portfolio
investments for the Company's account of each Portfolio with brokers or dealers
selected by it, and to that end, the Investment Manager is authorized as the
agent of the Company to give instructions to the custodian of the Company as to
deliveries of securities and payments of cash for the account of the Company. In
connection with the selection of brokers or dealers and the placing of purchase
and sale orders with respect to assets of the Portfolio, the Investment Manager
is directed at all times to seek to obtain best execution and price within the
policy guidelines determined by the Board of the Company and set forth in the
current registration statement. Subject to this requirement and the provisions
of the Act, the Securities Exchange Act of 1934, as amended, and other
applicable provisions of law, the Investment Manager may select brokers or
dealers with which it or the Company is affiliated as well as brokers or dealers
which sell insurance policies of Protective Life Insurance Company or its
affiliates.
In addition to seeking the best price and execution, the Investment Manager
may also take into consideration research and statistical information and wire
and other quotation services provided by brokers and dealers to the Investment
Manager. Investment Manager is also authorized to effect individual securities
transactions at commission rates in excess of the minimum commission rates
available, if the Investment Manager determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or Investment Manager's overall responsibilities
with respect to each Portfolio of the Company. The policies with respect to
brokerage allocation, determined from time to time by the Board are those
disclosed in the currently effective registration statement. The execution of
such transactions shall not be deemed to represent an unlawful act or breach of
any duty created by this Agreement or otherwise. The Investment Manager will
periodically evaluate the statistical data, research and other investment
services provided to it by brokers and dealers. Such services may be used by the
Investment Manager in connection with the performance of its obligations under
this Agreement or in connection with other advisory or investment operations
including using such information in managing its own accounts.
In addition, in carrying out its obligations to manage the investment and
reinvestment of the assets of each Portfolio, the Investment Manager shall:
(a) perform research and obtain and evaluate pertinent economic,
statistical, and financial data relevant to the investment policies of
each Portfolio as set forth in the registration statement for the
Company, as amended from time to time;
(b) consult with the Board and furnish to the Board recommendations with
respect to an overall investment strategy for each Portfolio for
approval, modification, or rejection by the Board;
(c) seek out and implement specific investment opportunities, consistent
with any investment strategies approved by the Board;
(d) take such steps as are necessary to implement any overall investment
strategies approved by the Board for each Portfolio, including making and
carrying out day-to-day decisions to acquire or dispose of permissible
investments, management of investments and any other property of the
Portfolio, and providing or obtaining such services as may be necessary
in managing, acquiring or disposing of investments;
(e) regularly report to the Board with respect to the implementation of any
approved overall investment strategy and any other activities in
connection with management of the assets of
A-4
<PAGE>
each Portfolio including furnishing, within 30 days after the end of each
calendar quarter, a statement of all purchases and sales during the
quarter and a schedule of investments and other assets of each Portfolio
as of the end of the quarter.
(f) maintain all required accounts, records, memoranda, instructions or
authorizations relating to the acquisition or disposition of investments
for each Portfolio and the Company;
(g) assist the Company officers in determining each business day the net
asset value of the shares of each Portfolio of the Company in accordance
with applicable law; and
(h) enter into any advisory or sub-advisory contract with another affiliated
or unaffiliated entity pursuant to which such entity will carry out some
or all of the Manager's responsibilities (as specified in such advisory
or subadvisory contract) listed above.
ARTICLE II
Allocation of Charges and Expenses
(a) THE INVESTMENT MANAGER. The Investment Manager assumes the expense of
and shall pay for maintaining the staff and personnel necessary to perform its
obligations under this Agreement, and shall at its own expense provide the
office space, equipment and facilities which it is obligated to provide
hereunder, and shall pay all compensation of officers of the Company and all
directors of the Company who are affiliated persons of the Investment Manager.
(b) THE COMPANY. The Company assumes and shall pay or cause to be paid all
other expenses of the Company, including, without limitation, the following:
taxes, expenses for legal and auditing services, costs of printing proxy
materials, stock certificates, shareholder reports and prospectuses (except to
the extent such prospectuses are used in connection with the sale and
distribution of the Company's securities), custody and transfer agency fee,
expenses of redemption of shares, Securities and Exchange Commission fees,
expenses of registering the shares under federal and state securities laws, fees
and actual out-of-pocket expenses of directors who are not affiliated persons of
the Company, accounting and pricing costs (including the daily calculation of
the net asset value), insurance, interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and other expenses properly payable by
the Company.
ARTICLE III
Compensation of the Investment Manager
For the services rendered, the facilities furnished and expenses assumed by
the Investment Manager, the Company shall pay to the Investment Manager at the
end of each calendar month a fee calculated as a percentage of the average daily
net assets each Portfolio during that month at the following annual rates:
MONEY MARKET: .60%
SELECT EQUITY: .80%
SMALL CAPITAL EQUITY: .80%
INTERNATIONAL EQUITY: 1.10%
GROWTH AND INCOME: .80%
GLOBAL INCOME: 1.10%
CAPITAL GROWTH: .80%
Investment Manager's fee shall be accrued daily at 1/365th of the applicable
annual rate set forth above. For the purpose of accruing compensation, the net
assets of each Portfolio shall be determined
A-5
<PAGE>
in the manner and on the dates set forth in the current prospectus of the
Company and, on days on which the net assets are not so determined, the net
asset computation to be used shall be as determined on the next day on which the
net assets shall have been determined.
In the event of termination of this Agreement, all compensation due through
the date of termination will be calculated on a pro-rated basis through the date
of termination and paid within fifteen business days of the date of termination.
During any period when the determination of net asset value is suspended,
the net asset value of a Portfolio as of the last business day prior to such
suspension shall for this purpose be deemed to be the net asset value at the
close of each succeeding business day until it is again determined.
ARTICLE IV
Limitation of Liability of the Investment Manager
The Investment Manager shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in the management of the Company, except for (i) willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties hereunder, and (ii) to the
extent specified in section 36(b) of the 1940 Act concerning loss resulting from
a breach of fiduciary duty with respect to the receipt of corporation. As used
in this Article IV, the term 'Investment Manager" shall include any affiliates
of the Investment Manager performing services for the Company contemplated
hereby and directors, officers and employees of the Investment Manager and such
affiliates.
ARTICLE V
Activities of the Investment Manager
The services of the Investment Manager to the Company are not deemed to be
exclusive, and the Investment Manager is free to render services to others, so
long as the Investment Manager's services under this Agreement are not impaired.
It is understood that directors, officers, employees and shareholders of the
Company are or may become interested persons of the Investment Manager, as
directors, officers, employees and shareholders or otherwise, and that
directors, officers, employees and shareholders of the Investment Manager are or
may become similarly interested persons of the Company, and that the Investment
Manager may become interested in the Company as a shareholder or otherwise.
It is agreed that the Investment Manager may use any supplemental investment
research obtained for the benefit of the Company in providing investment advice
to its other investment advisory accounts. The Investment Manager or its
affiliates may use such information in managing their own accounts. Conversely,
such supplemental information obtained by the placement of business for the
Investment Manager or other entities advised by the Investment Manager will be
considered by and may be useful to the Investment Manager in carrying out its
obligations to the Company.
Securities held by the Company may also be held by separate investment
accounts or other mutual funds for which the Investment Manager may act as an
investment advisor or by the Investment Manager or its affiliates. Because of
different investment objectives or other factors, a particular security may be
bought by the Investment Manager 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 Company or other entities for which the Investment Manager or
its affiliates act as investment advisor or for their advisory clients arise for
consideration at or about the same time, the Company agrees that the Investment
Manager 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 Investment
Manager during the same period may increase the demand for securities being
purchased or the supply of securities being sold, the Company recognizes that
there may be an adverse effect on price.
A-6
<PAGE>
It is agreed that, on occasions when the Investment Manager deems the
purchase or sale of a security to be in the best interest of the Company as well
as other accounts or companies, it may, to the extent permitted by applicable
laws or regulations, but will not be obligated to, aggregate the securities to
be sold or purchased for other accounts or companies in order to obtain
favorable execution and lower brokerage commissions or prices. In that event,
allocation of the securities purchased or sold, as well as the expenses incurred
in the transaction, will be made by the Investment Manager in the manner it
considers to be most equitable and consistent with its fiduciary obligations to
the Company and to such other accounts or companies. The Company recognizes that
in some cases this procedure may adversely affect the size of the position
obtainable for a Portfolio.
ARTICLE VI
Books and Records
The Investment Manager hereby undertakes and agrees to maintain, in the form
and for the period by Rule 31a-2 and Rule 2a-7 under the Investment Company Act
of 1940, all records relating to the Company's investments that are required to
be maintained by the Company pursuant to the requirements of Rule 31a-1 and Rule
2a-7 of that Act.
The Investment Manager agrees that all books and records which it maintains
for the Company are the property of the Company and further agrees to surrender
promptly to the Company any such books, records or information upon the
Company's request. All such books and records shall be made available, within
five business days of a written request, to the Company's accountants or
auditors during regular business hours at the Investment Manager's offices. The
Company or its authorized representative shall have the right to copy any
records in the possession of the Investment Manager which pertain to the
Company. Such books, records, information or reports shall be made available to
properly constituted governmental authorities consistent with state and federal
law and/or regulations. In the event of the termination of this Agreement, all
such books, records or other information shall be returned to the Company free
from any claim or assertion of rights by the Investment Manager.
The Investment Manager further agrees that it will not disclose or use any
records or information obtained pursuant to this Agreement in any manner
whatsoever except as authorized in this Agreement and that it will keep
confidential any information obtained pursuant to this Agreement and disclose
such information only if the Company has authorized such disclosure, or if such
disclosure is required by Federal or state regulatory authorities.
ARTICLE VII
Duration and Termination of this Agreement
This Agreement shall not become effective unless and until it is approved by
the Company's Board, including a majority of directors who are not parties to
this Agreement or interested persons of any such party to this Agreement. This
Agreement shall come into full force and effect on the date which it is so
approved, provided that it shall not became effective as to any subsequently
created Series or Portfolio until it has been approved by the Board specifically
for such Series or Portfolio. As to each Series or Portfolio of the Company, the
Agreement shall continue in effect until the date of the first annual or special
meeting of shareholders of the Series subsequent to its creation, but not later
than one year after the effective date of the Securities Act of 1933
Registration Statement for the class or Series of shares representing interests
in that Portfolio and shall thereafter continue in effect from year to year so
long as such continuance is specifically approved for each Portfolio at least
annually by (i) the Board of the Company, or by the vote of a majority of the
outstanding votes attributable to the shares of a class or Series; and (ii) a
majority of those directors 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.
A-7
<PAGE>
This Agreement may be terminated at any time as to any Series or Portfolios
or to all Series or Portfolios, without the payment of any penalty, by the Board
of the Company, or by vote of a majority of the outstanding votes attributable
to the shares of a class or Series, or by the Investment Manager, on sixty days
written notice to the other party. If this Agreement is terminated only with
respect to one or more, but less than all, of the Series or Portfolios, or if a
different advisor is appointed with respect to a new Series or Portfolios, the
Agreement shall remain in effect with respect to the remaining Series or
Portfolios. This Agreement shall automatically terminate in the event of its
assignment.
ARTICLE VIII
Amendments of this Agreement
This Agreement may be amended as to each Portfolio by the parties only if
such amendment is specifically approved by (i) the vote of a majority of
outstanding votes attributable to the shares of a class or Series, and (ii) a
majority of those directors 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.
ARTICLE IX
Definitions of Certain Terms
The term "assignment", "affiliated person" and "interested person", when
used in this Agreement, shall have the respective meanings specified in the
Investment Company Act of 1940. The term "majority of the outstanding votes
attributable to shares of a class or Series means the lesser of (a) 67% or more
of the votes attributable to shares of the Fund presented at a meeting if the
holders of more than 50% of such votes are present or represented by proxy or
(b) more than 50% of the votes attributable to shares of the Fund."
ARTICLE X
Governing Law
This Agreement shall be construed in accordance with laws of the State of
Maryland, and applicable provisions of the Act and the 1940 Act.
ARTICLE XI
Severability
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
PROTECTIVE INVESTMENT COMPANY
By: __________________________________
Its: _________________________________
WITNESS:
- - ---------------------------------------
A-8
<PAGE>
INVESTMENT DISTRIBUTORS ADVISORY
SERVICES, INC.
By: __________________________________
Its: _________________________________
WITNESS:
- - ---------------------------------------
A-9
<PAGE>
APPENDIX B
B-1
<PAGE>
ADVISORY AGREEMENT
BETWEEN INVESTMENT DISTRIBUTORS ADVISORY SERVICES, INC.
AND
GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
It is hereby agreed by and between INVESTMENT DISTRIBUTORS ADVISORY
SERVICES, INC. (the "Manager") and GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
("Advisor") as follows:
1.
DUTIES OF ADVISOR. Manager hereby engages the services of Advisor in
furtherance of its Investment Management Agreement with Protective Investment
Company (the "Company") dated as of March 20, 1996, on behalf of Protective
Global Income Fund (the "Fund"). Pursuant to this Advisory Agreement and subject
to the oversight and review of Manager, Advisor will manage the investment and
reinvestment of the assets of the Fund. In this regard, Advisor will determine
in its discretion the securities to be purchased or sold, will provide Manager
with records concerning its activities which Manager or the Company is required
to maintain, and will render regular reports to Manager and to Officers and
Directors of the Company concerning its discharge of the foregoing
responsibilities. Advisor shall discharge the foregoing responsibilities subject
to the control of the Officers and the Directors of the Company and in
compliance with such policies as the Directors of the Company may from time to
time establish, and in compliance with the objectives, policies, and limitations
for the Fund set forth in the Fund's current prospectus and statement of
additional information, and applicable laws and regulations. Manager agrees to
inform Advisor of any and all applicable state insurance law restrictions on
investments that operate to limit or restrict the investments the Fund may
otherwise make, and to inform Advisor promptly of any changes in such
requirements. Advisor accepts such employment and agrees, at its own expense, to
render the services set forth herein and to provide the office space,
furnishings, equipment and personnel required by it to perform such services on
the terms and for the compensation provided in this Agreement.
2.
FUND TRANSACTIONS. Advisor is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities and is
directed to use its best efforts to obtain the best price and execution. Subject
to policies established from time to time by the Directors of the Company,
Advisor may also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if Advisor
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or
Advisor's overall responsibilities with respect to the Fund, other portfolios of
the Fund and other clients of Advisor. The policies of the Company with respect
to brokerage allocation, determined from time to time by the Company's Board of
Directors, are those disclosed in the Company's currently effective registration
statement at any time. The execution of such transactions shall not be deemed to
represent an unlawful act or breach of any duty created by this Agreement or
otherwise. Advisor will promptly communicate to Manager and to the Officers and
the Directors of the Company such information relating to portfolio transactions
as they may reasonably request.
It is agreed that Advisor may use any supplemental investment research
obtained for the benefit of the Fund in providing investment advice to its other
investment advisory accounts. The Advisor or its subsidiaries may use such
information in managing their own accounts. Conversely, such supplemental
information obtained by the placement of business for the Advisor or other
entities advised by the Advisor will be considered by and may be useful to the
Advisor in carrying out its obligations to the Fund.
B-2
<PAGE>
3.
COMPENSATION OF ADVISOR. As its compensation hereunder, the Manager shall
pay to Advisor promptly after the end of each month, a fee calculated as a
percentage of the average daily net assets of the Fund during that month at the
following annual rates: .40% of the first $100 million, .30% of the next $100
million, and .25% of the net assets in excess of $200 million.
Advisor's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Fund shall be that determined in the manner and on the dates set forth in
the current prospectus of the Fund and, on days on which the net assets are not
so determined, the net asset computation to be used shall be as determined on
the next day on which the net assets shall have been determined.
In the event of termination of this Agreement, all compensation due through
the date of termination will be calculated on a pro-rated basis through the date
of termination and paid within fifteen business days of the date of termination.
4.
REPORTS. Manager and Advisor agree to furnish to each other, if applicable,
current prospectuses, statements of additional information, proxy statements,
reports of shareholders, certified copies of their financial statements, and
such other information with regard to their affairs and that of the Fund as each
may reasonably request.
5.
STATUS OF ADVISOR. The services of Advisor to Manager and the Fund are not
to be deemed exclusive, and Advisor shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby. Advisor
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
6.
CERTAIN RECORDS. Advisor hereby undertakes and agrees to maintain, in the
form and for the period required by Rule 31a-2 under the Investment Company Act
of 1940, all records relating to the Fund's investments that are required to be
maintained by the Fund pursuant to the requirements of Rule 31a-1 of that Act.
Any records required to be maintained and preserved pursuant to the provisions
of Rule 31a-1 and Rule 31a-2 promulgated under the Investment Company Act of
1940 which are prepared or maintained by Advisor on behalf of the Fund are the
property of the Fund and will be surrendered promptly to the Fund or Manager on
request.
Advisor agrees that all accounts, books and other records maintained and
preserved by it as required hereby shall be subject at any time, and from time
to time, to such reasonable periodic, special and other examinations by the
Securities and Exchange Commission, the Fund's auditors, the Fund or any
representative of the Fund, the Manager, or any governmental agency or other
instrumentality having regulatory authority over the Fund.
7.
REFERENCE TO ADVISOR. Neither the Fund nor Manager or any affiliate or
agent thereof shall make reference to or use the name of Advisor or any of its
affiliates in any advertising or promotional materials without the prior
approval of Advisor, which approval shall not be unreasonably withheld.
B-3
<PAGE>
8.
LIABILITY OF MANAGER AND ADVISOR. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
("disabling conduct") hereunder on the part of Advisor (and its officers,
directors, agents, partners, employees, controlling persons, shareholders and
any other person or entity affiliated with Advisor ("associated persons"),
Advisor and its associated persons shall not be subject to liability to the
Manager or to any other person for any act or omission in the course of, or
connected with, rendering services hereunder (including, without limitation, as
a result of failure by Manager, by any other affiliate of Protective Life
Insurance Company ("PLIC"), or by PLIC, to comply with this Agreement and/or any
applicable insurance laws and regulations or, as a result of any error of
judgment or mistake of law or for any loss suffered by Manager or any other
person in connection with the matters to which this Agreement relates), except
to the extent specified in Section 36(b) of the Investment Company Act of 1940
concerning loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services.
Manager hereby indemnifies, defends and protects Advisor and holds Advisor
and its associated persons harmless from and against any and all claims,
demands, actions, losses, damages, liabilities, costs, charges, counsel fees and
expenses of any nature ("Losses") arising out of any breach by Manager of any
representation or agreement contained in this Advisory Agreement (including any
failure by Manager to apprise Advisor of any changes in any applicable state
insurance laws and regulations). Advisor hereby indemnifies, defends and
protects Manager and holds the Manager and its associated persons harmless, from
and against any Losses arising out of the Advisor's disabling conduct.
9.
DURATION AND TERMINATION. This Agreement shall continue in full force and
effect with respect to the Fund until the earlier of (a) two years from the
execution date of Agreement, or (b) the first meeting of the shareholders of the
Fund after the date hereof. If approved at such meeting by the affirmative vote
of a majority of the outstanding voting securities (as defined in the Investment
Company Act of 1940), of the Fund with respect to such Fund, voting separately
from any other series of the Company, this Agreement shall continue in full
force and effect with respect to the Fund from year to year thereafter so long
as such continuance is specifically approved at least annually (i) by the vote
of a majority of those Directors of the Company 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, and (ii) by the Directors of
the Company or by vote of a majority of the outstanding voting securities of the
Fund voting separately from any other Fund, provided, however, that if the
shareholders fail to approve the Agreement as provided herein, Advisor may
continue to serve hereunder in the manner and to the extent permitted by the
Investment Company Act of 1940 and rules thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved at least annually"
shall be construed in a manner consistent with the Investment Company Act of
1940 and the rules and regulations thereunder.
This Agreement may be terminated at any time, without the payment of any
penalty by vote of a majority of the Directors of the Company or by a vote of a
majority of the outstanding voting securities of the Fund on not less than 30
days nor more than 60 days written notice to Advisor or by Advisor at any time
without the payment of any penalty, on 90 days written notice to Manager and the
Company. This Agreement shall automatically terminate in the event of its
assignment (as defined in the Investment Company Act of 1940). Any notice under
this Agreement shall be given in writing, addressed and delivered, or mailed
postage prepaid, to the other party at any office of such party.
As used in this Section 9, the terms "assignment," "interested persons," and
a "vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the Investment Company Act of 1940 and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
B-4
<PAGE>
This Agreement will also terminate in the event that the Investment
Management Agreement by and between the Company on behalf of the Fund and
Manager referred to in Section 1 is terminated.
10.
SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
AMENDMENTS. This Agreement may not be amended, altered, modified in any way
except by an addendum in writing duly executed by the proper officials of the
parties hereto.
GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Tennessee, and the applicable provisions of the Investment
Company Act of 1940. To the extent that the applicable laws of the State of
Tennessee, or any provisions herein, conflict with the applicable provisions of
the Investment Company Act of 1940, the latter shall control.
IN WITNESS WHEREOF, the parties have caused their respective duly authorized
officers to execute this Agreement as of March 20, 1996.
INVESTMENT DISTRIBUTORS
ADVISORY SERVICES, INC.
By:
-----------------------------------
Authorized Officer
GOLDMAN SACHS ASSET
MANAGEMENT INTERNATIONAL
By:
-----------------------------------
Authorized Officer
B-5
<PAGE>
ADVISORY AGREEMENT
BETWEEN INVESTMENT DISTRIBUTORS ADVISORY SERVICES, INC.
AND
GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
It is hereby agreed by and between INVESTMENT DISTRIBUTORS ADVISORY
SERVICES, INC. (the "Manager") and GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL,
("Advisor") as follows:
1.
DUTIES OF ADVISOR. Manager hereby engages the services of Advisor in
furtherance of its Investment Management Agreement with Protective Investment
Company (the "Company") dated as of March 20, 1996, on behalf of Protective
International Equity Fund (the "Fund"). Pursuant to this Advisory Agreement and
subject to the oversight and review of Manager, Advisor will manage the
investment and reinvestment of the assets of the Fund. In this regard, Advisor
will determine in its discretion the securities to be purchased or sold, will
provide Manager with records concerning its activities which Manager or the
Company is required to maintain, and will render regular reports to Manager and
to Officers and Directors of the Company concerning its discharge of the
foregoing responsibilities. Advisor shall discharge the foregoing
responsibilities subject to the control of the Officers and the Directors of the
Company and in compliance with such policies as the Directors of the Company may
from time to time establish, and in compliance with the objectives, policies,
and limitations for the Fund set forth in the Fund's current prospectus and
statement of additional information, and applicable laws and regulations.
Manager agrees to inform Advisor of any and all applicable state insurance law
restrictions on investments that operate to limit or restrict the investments
the Fund may otherwise make, and to inform Advisor promptly of any changes in
such requirements. Advisor accepts such employment and agrees, at its own
expense, to render the services set forth herein and to provide the office
space, furnishings, equipment and personnel required by it to perform such
services on the terms and for the compensation provided in this Agreement.
2.
FUND TRANSACTIONS. Advisor is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities and is
directed to use its best efforts to obtain the best price and execution. Subject
to policies established from time to time by the Directors of the Company,
Advisor may also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if Advisor
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or
Advisor's overall responsibilities with respect to the Fund, other portfolios of
the Fund and other clients of Advisor. The policies of the Company with respect
to brokerage allocation, determined from time to time by the Company's Board of
Directors, are those disclosed in the Company's currently effective registration
statement at any time. The execution of such transactions shall not be deemed to
represent an unlawful act or breach of any duty created by this Agreement or
otherwise. Advisor will promptly communicate to Manager and to the Officers and
the Directors of the Company such information relating to portfolio transactions
as they may reasonably request.
It is agreed that Advisor may use any supplemental investment research
obtained for the benefit of the Fund in providing investment advice to its other
investment advisory accounts. The Advisor or its subsidiaries may use such
information in managing their own accounts. Conversely, such supplemental
information obtained by the placement of business for the Advisor or other
entities advised by the Advisor will be considered by and may be useful to the
Advisor in carrying out its obligations to the Fund.
B-6
<PAGE>
3.
COMPENSATION OF ADVISOR. As its compensation hereunder, the Manager shall
pay to Advisor promptly after the end of each month, a fee calculated as a
percentage of the average daily net assets of the Fund during that month at the
following annual rates: .40% of the first $100 million, .30% of the next $100
million, and .25% of the net assets in excess of $200 million.
Advisor's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Fund shall be that determined in the manner and on the dates set forth in
the current prospectus of the Fund and, on days on which the net assets are not
so determined, the net asset computation to be used shall be as determined on
the next day on which the net assets shall have been determined.
In the event of termination of this Agreement, all compensation due through
the date of termination will be calculated on a pro-rated basis through the date
of termination and paid within fifteen business days of the date of termination.
4.
REPORTS. Manager and Advisor agree to furnish each other, if applicable,
current prospectuses, statements of additional information, proxy statements,
reports of shareholders, certified copies of their financial statements, and
such other information with regard to their affairs and that of the Fund as each
may reasonably request.
5.
STATUS OF ADVISOR. The services of Advisor to Manager and the Fund are not
to be deemed exclusive, and Advisor shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby. Advisor
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
6.
CERTAIN RECORDS. Advisor hereby undertakes and agrees to maintain, in the
form and for the period required by Rule 31a-2 under the investment Company Act
of 1940, all records relating to the Fund's investments that are required to be
maintained by the Fund pursuant to the requirements of Rule 31a-1 of that Act.
Any records required to be maintained and preserved pursuant to the provisions
of Rule 31a-1 and Rule 31a-2 promulgated under the Investment Company Act of
1940 which are prepared or maintained by Advisor on behalf of the Fund are the
property of the Fund and will be surrendered promptly to the Fund or Manager on
request.
Advisor agrees that all accounts, books and other records maintained and
preserved by it as required hereby shall be subject at any time, and from time
to time, to such reasonable periodic, special and other examinations by the
Securities and Exchange Commission, the Fund's auditors, the Fund or any
representative of the Fund, the Manager, or any governmental agency or other
instrumentality having regulatory authority over the Fund.
7.
REFERENCE TO ADVISOR. Neither the Fund nor Manager or any affiliate or
agent thereof shall make reference to or use the name of Advisor or any of its
affiliates in any advertising or promotional materials without the prior
approval of Advisor, which approval shall not be unreasonably withheld.
B-7
<PAGE>
8.
LIABILITY OF MANAGER AND ADVISOR. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
("disabling conduct") hereunder on the part of Advisor (and its officers,
directors, agents, partners, employees, controlling persons, shareholders and
any other person or entity affiliated with Advisor ("associated persons"),
Advisor and its associated persons shall not be subject to liability to the
Manager or to any other person for any act or omission in the course of, or
connected with, rendering services hereunder (including, without limitation, as
a result of failure by Manager, by any other affiliate of Protective Life
Insurance Company ("PLIC"), or by PLIC, to comply with this Agreement and/or any
applicable insurance laws and regulations or, as a result of any error of
judgement or mistake of law or for any loss suffered by Manager or any other
person in connection with the matters to which this Agreement relates), except
to the extent specified in Section 36(b) of the Investment Company Act of 1940
concerning loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services.
Manager hereby indemnifies, defends and protects Advisor and holds Advisor
and its associated persons harmless from and against any and all claims,
demands, actions, losses, damages, liabilities, costs, charges, counsel fees and
expenses of any nature ("Losses") arising out of any breach by Manager of any
representation or agreement contained in this Advisory Agreement (including any
failure by Manager to apprise Advisor of any changes in any applicable state
insurance laws and regulations). Advisor hereby indemnifies, defends and
protects Manager and holds the Manager and its associated persons harmless, from
and against any Losses arising out of the Advisor's disabling conduct.
9.
DURATION AND TERMINATION. This Agreement shall continue in full force and
effect with respect to the Fund until the earlier of (a) two years from the
execution date of Agreement, or (b) the first meeting of the shareholders of the
Fund after the date hereof. If approved at such meeting by the affirmative vote
of a majority of the outstanding voting securities (as defined in the Investment
Company Act of 1940), of the Fund with respect to such Fund, voting separately
from any other series of the Company, this Agreement shall continue in full
force and effect with respect to the Fund from year to year thereafter so long
as such continuance is specifically approved at least annually (i) by the vote
of a majority of those Directors of the Company 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, and (ii) by the Directors of
the Company or by vote of a majority of the outstanding voting securities of the
Fund voting separately from any other Fund, provided, however, that if the
shareholders fail to approve the Agreement as provided herein, Advisor may
continue to serve hereunder in the manner and to the extent permitted by the
Investment Company Act of 1940 and rules thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved at least annually"
shall be construed in a manner consistent with the Investment Company Act of
1940 and the rules and regulations thereunder.
This Agreement may be terminated at any time, without the payment of any
penalty by vote of a majority of the Directors of the Company or by a vote of a
majority of the outstanding voting securities of the Fund on not less than 30
days nor more than 60 days written notice to Advisor or by Advisor at any time
without the payment of any penalty, on 90 days written notice to Manager and the
Company. This Agreement shall automatically terminate in the event of its
assignment (as defined in the Investment Company Act of 1940). Any notice under
this Agreement shall be given in writing, addressed and delivered, or mailed
postage prepaid, to the other party at any office of such party.
As used in this Section 9, the terms "assignment," "interested persons," and
a "vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the Investment Company Act of 1940 and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
B-8
<PAGE>
This Agreement will also terminate in the event that the Investment
Management Agreement by and between the Company on behalf of the Fund and
Manager referred to in Section 1 is terminated.
10.
SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
AMENDMENTS. This Agreement may not be amended, altered, modified in any way
except by an addendum in writing duly executed by the proper officials of the
parties hereto.
GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Tennessee, and the applicable provisions of the Investment
Company Act of 1940. To the extent that the applicable laws of the State of
Tennessee, or any provisions herein, conflict with the applicable provisions of
the Investment Company Act of 1940, the latter shall control.
IN WITNESS WHEREOF, the parties have caused their respective duly authorized
officers to execute this Agreement as of March 20, 1996.
INVESTMENT DISTRIBUTORS
ADVISORY SERVICES, INC.
By:
-----------------------------------
Authorized Officer
GOLDMAN SACHS ASSET
MANAGEMENT INTERNATIONAL
By:
-----------------------------------
Authorized Officer
B-9
<PAGE>
ADVISORY AGREEMENT
BETWEEN INVESTMENT DISTRIBUTORS ADVISORY SERVICES, INC.
AND
GOLDMAN SACHS ASSET MANAGEMENT
A SEPARATE OPERATING DIVISION OF
GOLDMAN, SACHS & CO.
It is hereby agreed by and between INVESTMENT DISTRIBUTORS ADVISORY
SERVICES, INC. (the "Manager") and GOLDMAN SACHS ASSET MANAGEMENT, a separate
operating division of GOLDMAN SACHS & CO. ("Advisor") as follows:
1.
DUTIES OF ADVISOR. Manager hereby engages the services of Advisor in
furtherance of its Investment Management Agreement with Protective Investment
Company (the "Company") dated as of March 20, 1996, on behalf of Protective
Growth and Income Fund (the "Fund"). Pursuant to this Advisory Agreement and
subject to the oversight and review of Manager, Advisor will manage the
investment and reinvestment of the assets of the Fund. In this regard, Advisor
will determine in its discretion the securities to be purchased or sold, will
provide Manager with records concerning its activities which Manager or the
Company is required to maintain, and will render regular reports to Manager and
to Officers and Directors of the Company concerning its discharge of the
foregoing responsibilities. Advisor shall discharge the foregoing
responsibilities subject to the control of the Officers and the Directors of the
Company and in compliance with such policies as the Directors of the Company may
from time to time establish, and in compliance with the objectives, policies,
and limitations for the Fund set forth in the Fund's current prospectus and
statement of additional information, and applicable laws and regulations.
Manager agrees to inform Advisor of any and all applicable state insurance law
restrictions on investments that operate to limit or restrict the investments
the Fund may otherwise make, and to inform Advisor promptly of any changes in
such requirements. Advisor accepts such employment and agrees, at its own
expense, to render the services set forth herein and to provide the office
space, furnishings, equipment and personnel required by it to perform such
services on the terms and for the compensation provided in this Agreement.
2.
FUND TRANSACTIONS. Advisor is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities and is
directed to use its best efforts to obtain the best price and execution. Subject
to policies established from time to time by the Directors of the Company,
Advisor may also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if Advisor
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or
Advisor's overall responsibilities with respect to the Fund, other portfolios of
the Fund and other clients of Advisor. The policies of the Company with respect
to brokerage allocation, determined from time to time by the Company's Board of
Directors, are those disclosed in the Company's currently effective registration
statement at any time. The execution of such transactions shall not be deemed to
represent an unlawful act or breach of any duty created by this Agreement or
otherwise. Advisor will promptly communicate to Manager and to the Officers and
the Directors of the Company such information relating to portfolio transactions
as they may reasonably request.
It is agreed that Advisor may use any supplemental investment research
obtained for the benefit of the Fund in providing investment advice to its other
investment advisory accounts. The Advisor or
B-10
<PAGE>
its subsidiaries may use such information in managing their own accounts.
Conversely, such supplemental information obtained by the placement of business
for the Advisor or other entities advised by the Advisor will be considered by
and may be useful to the Advisor in carrying out its obligations to the Fund.
3.
COMPENSATION OF ADVISOR. As its compensation hereunder, the Manager shall
pay to Advisor promptly after the end of each month, a fee calculated as a
percentage of the average daily net assets of the Fund during that month at the
following annual rates: .40% of the first $100 million, .30% of the next $100
million, and .20% of the net assets in excess of $200 million.
Advisor's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Fund shall be that determined in the manner and on the dates set forth in
the current prospectus of the Fund and, on days on which the net assets are not
so determined, the net asset computation to be used shall be as determined on
the next day on which the net assets shall have been determined.
In the event of termination of this Agreement, all compensation due through
the date of termination will be calculated on a pro-rated basis through the date
of termination and paid within fifteen business days of the date of termination.
4.
REPORTS. Manager and Advisor agree to furnish each other, if applicable,
current prospectuses, statements of additional information, proxy statements,
reports of shareholders, certified copies of their financial statements, and
such other information with regard to their affairs and that of the Fund as each
may reasonably request.
5.
STATUS OF ADVISOR. The services of Advisor to Manager and the Fund are not
to be deemed exclusive, and Advisor shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby. Advisor
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
6.
CERTAIN RECORDS. Advisor hereby undertakes and agrees to maintain, in the
form and for the period required by Rule 31a-2 under the Investment Company Act
of 1940, all records relating to the Fund's investments that are required to be
maintained by the Fund pursuant to the requirements of Rule 31a-1 of that Act.
Any records required to be maintained and preserved pursuant to the provisions
of Rule 31a-1 and Rule 31a-2 promulgated under the Investment Company Act of
1940 which are prepared or maintained by Advisor on behalf of the Fund are the
property of the Fund and will be surrendered promptly to the Fund or Manager on
request.
Advisor agrees that all accounts, books and other records maintained and
preserved by it as required hereby shall be subject at any time, and from time
to time, to such reasonable periodic, special and other examinations by the
Securities and Exchange Commission, the Fund's auditors, the Fund or any
representative of the Fund, the Manager, or any governmental agency or other
instrumentality having regulatory authority over the Fund.
B-11
<PAGE>
7.
REFERENCE TO ADVISOR. Neither the Fund nor Manager or any affiliate or
agent thereof shall make reference to or use the name of Advisor or any of its
affiliates in any advertising or promotional materials without the prior
approval of Advisor, which approval shall not be unreasonably withheld.
8.
LIABILITY OF MANAGER AND ADVISOR. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
("disabling conduct") hereunder on the part of Advisor (and its officers,
directors, agents, partners, employees, controlling persons, shareholders and
any other person or entity affiliated with Advisor ("associated persons"),
Advisor and its associated persons shall not be subject to liability to the
Manager or to any other person for any act or omission in the course of, or
connected with, rendering services hereunder (including, without limitation, as
a result of failure by Manager, by any other affiliate of Protective Life
Insurance Company ("PLIC"), or by PLIC, to comply with this Agreement and/or any
applicable insurance laws and regulations or, as a result of any error of
judgement or mistake of law or for any loss suffered by Manager or any other
person in connection with the matters to which this Agreement relates), except
to the extent specified in Section 36(b) of the Investment Company Act of 1940
concerning loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services.
Manager hereby indemnifies, defends and protects Advisor and holds Advisor
and its associated persons harmless from and against any and all claims,
demands, actions, losses, damages, liabilities, costs, charges, counsel fees and
expenses of any nature ("Losses") arising out of any breach by Manager of any
representation or agreement contained in this Advisory Agreement (including any
failure by Manager to apprise Advisor of any changes in any applicable state
insurance laws and regulations). Advisor hereby indemnifies, defends and
protects Manager and holds the Manager and its associated persons harmless, from
and against any Losses arising out of the Advisor's disabling conduct.
9.
DURATION AND TERMINATION. This Agreement shall continue in full force and
effect with respect to the Fund until the earlier of (a) two years from the
execution date of Agreement, or (b) the first meeting of the shareholders of the
Fund after the date hereof. If approved at such meeting by the affirmative vote
of a majority of the outstanding voting securities (as defined in the Investment
Company Act of 1940), of the Fund with respect to such Fund, voting separately
from any other series of the Company, this Agreement shall continue in full
force and effect with respect to the Fund from year to year thereafter so long
as such continuance is specifically approved at least annually (i) by the vote
of a majority of those Directors of the Company 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, and (ii) by the Directors of
the Company or by vote of a majority of the outstanding voting securities of the
Fund voting separately from any other Fund, provided, however, that if the
shareholders fail to approve the Agreement as provided herein, Advisor may
continue to serve hereunder in the manner and to the extent permitted by the
Investment Company Act of 1940 and rules thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved at least annually"
shall be construed in a manner consistent with the Investment Company Act of
1940 and the rules and regulations thereunder.
This Agreement may be terminated at any time, without the payment of any
penalty by vote of a majority of the Directors of the Company or by a vote of a
majority of the outstanding voting securities of the Fund on not less than 30
days nor more than 60 days written notice to Advisor or by Advisor at any time
without the payment of any penalty, on 90 days written notice to Manager and the
Company.
B-12
<PAGE>
This Agreement shall automatically terminate in the event of its assignment (as
defined in the Investment Company Act of 1940). Any notice under this Agreement
shall be given in writing, addressed and delivered, or mailed postage prepaid,
to the other party at any office of such party.
As used in this Section 9, the terms "assignment," "interested persons," and
a "vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the Investment Company Act of 1940 and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
This Agreement will also terminate in the event that the Investment
Management Agreement by and between the Company on behalf of the Fund and
Manager referred to in Section 1 is terminated.
10.
SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
AMENDMENTS. This Agreement may not be amended, altered, modified in any way
except by an addendum in writing duly executed by the proper officials of the
parties hereto.
GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Tennessee, and the applicable provisions of the Investment
Company Act of 1940. To the extent that the applicable laws of the State of
Tennessee, or any provisions herein, conflict with the applicable provisions of
the Investment Company Act of 1940, the latter shall control.
IN WITNESS WHEREOF, the parties have caused their respective duly authorized
officers to execute this Agreement as of March 20, 1996.
INVESTMENT DISTRIBUTORS
ADVISORY SERVICES, INC.
By:
-----------------------------------
Authorized Officer
GOLDMAN SACHS ASSET MANAGEMENT,
a separate operating division of
GOLDMAN, SACHS & CO.
By: GOLDMAN, SACHS & CO.
By:
-----------------------------------
Authorized Officer
B-13
<PAGE>
ADVISORY AGREEMENT
BETWEEN INVESTMENT DISTRIBUTORS ADVISORY SERVICES, INC.
AND
GOLDMAN SACHS ASSET MANAGEMENT,
A SEPARATE OPERATING DIVISION OF
GOLDMAN, SACHS & CO.
It is hereby agreed by and between INVESTMENT DISTRIBUTORS ADVISORY
SERVICES, INC. (the "Manager") and GOLDMAN SACHS ASSET MANAGEMENT, a separate
operating division of GOLDMAN, SACHS & CO. ("Adviser") as follows:
1.
DUTIES OF ADVISER. Manager hereby engages the services of Adviser in
furtherance of its Investment Management Agreement with Protective Investment
Company (the "Company") dated as of March 20, 1996, on behalf of Protective
Capital Growth Fund (the "Fund"). Pursuant to this Advisory Agreement and
subject to the oversight and review of Manager, Advisor will manage the
investment and reinvestment of the assets of the Fund. In this regard, Advisor
will determine in its discretion the securities to be purchased or sold, will
provide Manager with records concerning its activities which Manager or the
Company is required to maintain, and will render regular reports to Manager and
to Officers and Directors of the Company concerning its discharge of the
foregoing responsibilities. Advisor shall discharge the foregoing
responsibilities subject to the control of the Officers and the Directors of the
Company and in compliance with such policies as the Directors of the Company may
from time to time establish, and in compliance with the objectives, policies,
and limitations for the Fund set forth in the Fund's current prospectus and
statement of additional information, and applicable laws and regulations.
Manager agrees to inform Advisor of any and all applicable state insurance law
restrictions on investments that operate to limit or restrict the investments
the Fund may otherwise make, and to inform Advisor promptly of any changes in
such requirements. Advisor accepts such employment and agrees, at its own
expense, to render the services set forth herein and to provide the office
space, furnishings, equipment and personnel required by it to perform such
services on the terms and for the compensation provided in this Agreement.
2.
FUND TRANSACTIONS. Advisor is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities and is
directed to use its best efforts to obtain the best price and execution. Subject
to policies established from time to time by the Directors of the Company,
Advisor may also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if Advisor
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or
Advisor's overall responsibilities with respect to the Fund, other portfolios of
the Fund and other clients of Advisor. The policies of the Company with respect
to brokerage allocation, determined from time to time by the Company's Board of
Directors, are those disclosed in the Company's currently effective registration
statement at any time. The execution of such transactions shall not be deemed to
represent an unlawful act or breach of any duty created by this Agreement or
otherwise. Advisor will promptly communicate to Manager and to the Officers and
the Directors of the Company such information relating to portfolio transactions
as they may reasonably request.
It is agreed that Advisor may use any supplemental investment research
obtained for the benefit of the Fund in providing investment advice to its other
investment advisory accounts. The Advisor or its subsidiaries may use such
information in managing their own accounts. Conversely, such supplemental
information obtained by the placement of business for the Advisor or other
entities advised by the Advisor will be considered by and may be useful to the
Advisor in carrying out its obligations to the Fund.
B-14
<PAGE>
3.
COMPENSATION OF ADVISOR. As its compensation hereunder, the Manager shall
pay to Advisor promptly after the end of each month, a fee calculated as a
percentage of the average daily net assets of the Fund during that month at the
following annual rates: .40% of the first $100 million, .30% of the next $100
million, and .20% of the net assets in excess of the $200 million.
Advisor's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Fund shall be that determined in the manner and on the dates set forth in
the current prospectus of the Fund and, on days on which the net assets are not
so determined, the net asset computation to be used shall be as determined on
the next day on which the net assets shall have been determined.
In the event of termination of this Agreement, all compensation due through
the date of termination will be calculated on a pro-rated basis through the date
of termination and paid within fifteen business days of the date of termination.
4.
REPORTS. Manager and Advisor agree to furnish to each other, if applicable,
current prospectuses, statements of additional information, proxy statements,
reports of shareholders, certified copies of their financial statements, and
such other information with regard to their affairs and that of the Fund as each
may reasonably request.
5.
STATUS OF ADVISOR. The services of Advisor to Manager and the Fund are not
to be deemed exclusive, and Advisor shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby. Advisor
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
6.
CERTAIN RECORDS. Advisor hereby undertakes and agrees to maintain, in the
form and for the period required by Rule 31a-2 under the Investment Company Act
of 1940, all records relating to the Fund's investments that are required to be
maintained by the Fund pursuant to the requirements of Rule 31a-1 of that Act.
Any records required to be maintained and preserved pursuant to the provisions
of Rule 31a-1 and Rule 31a-2 promulgated under the Investment Company Act of
1940 which are prepared or maintained by Advisor on behalf of the Fund are the
property of the Fund and will be surrendered promptly to the Fund or Manager on
request.
Advisor agrees that all accounts, books and other records maintained and
preserved by it as required hereby shall be subject at any time, and from time
to time, to such reasonable periodic, special and other examinations by the
Securities and Exchange Commission, the Fund's auditors, the Fund or any
representative of the Fund, the Manager, or any governmental agency or other
instrumentality having regulatory authority over the Fund.
7.
REFERENCE TO ADVISOR. Neither the Fund nor Manager or any affiliate or
agent thereof shall make reference to or use the name of Advisor or any of its
affiliates in any advertising or promotional materials without the prior
approval of Advisor, which approval shall not be unreasonably withheld.
B-15
<PAGE>
8.
LIABILITY OF MANAGER AND ADVISOR. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
("disabling conduct") hereunder on the part of Advisor (and its officers,
directors, agents, partners, employees, controlling persons, shareholders and
any other person or entity) affiliated with Advisor ("associated persons"),
Advisor and its associated persons shall not be subject to liability to the
Manager or to any other person for any act or omission in the course of, or
connected with, rendering services hereunder (including, without limitation, as
a result of failure by Manager, by any other affiliate of Protective Life
Insurance Company ("PLIC"), or by PLIC, to comply with this Agreement and/or any
applicable insurance laws and regulations or, as a result of any error of
judgment or mistake of law or for any loss suffered by Manager or any other
person in connection with the matters to which this Agreement relates), except
to the extent specified in Section 36(b) of the Investment Company Act of 1940
concerning loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services.
Manager hereby indemnifies, defends and protects Advisor and holds Advisor
and its associated persons harmless from and against any and all claims,
demands, actions, losses, damages, liabilities, costs, charges, counsel fees and
expenses of any nature ("Losses") arising out of any breach by Manager of any
representation or agreement contained in this Advisory Agreement (including any
failure by Manager to apprise Advisor of any changes in any applicable state
insurance laws and regulations). Advisor hereby indemnifies, defends and
protects Manager and holds the Manager and its associated persons harmless, from
and against any Losses arising out of the Advisor's disabling conduct.
9.
DURATION AND TERMINATION. This Agreement shall continue in full force and
effect with respect to the Fund until the earlier of (a) two years from the
execution date of Agreement, or (b) the first meeting of the shareholders of the
Fund after the date hereof. If approved at such meeting by the affirmative vote
of a majority of the outstanding voting securities (as defined in the Investment
Company Act of 1940), of the Fund with respect to such Fund, voting separately
from any other series of the Company, this Agreement shall continue in full
force and effect with respect to the Fund from year to year thereafter so long
as such continuance is specifically approved at least annually (i) by the vote
of a majority of those Directors of the Company 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, and (ii) by the Directors of
the Company or by vote of a majority of the outstanding voting securities of the
Fund voting separately from any other Fund, provided, however, that if the
shareholders fail to approve the Agreement as provided herein, Advisor may
continue to serve hereunder in the manner and to the extent permitted by the
Investment Company Act of 1940 and rules thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved at least annually"
shall be construed in a manner consistent with the Investment Company Act of
1940 and the rules and regulations thereunder.
This Agreement may be terminated at any time, without the payment of any
penalty by vote of a majority of the Directors of the Company or by a vote of a
majority of the outstanding voting securities of the Fund on not less than 30
days nor more than 60 days written notice to Advisor or by Advisor at any time
without the payment of any penalty, on 90 days written notice to Manager and the
Company. This Agreement shall automatically terminate in the event of its
assignment (as defined in the Investment Company Act of 1940). Any notice under
this Agreement shall be given in writing, addressed and delivered, or mailed
postage prepaid, to the other party at any office of such party.
As used in this Section 9, the terms "assignment," "interested persons," and
a "vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the Investment Company Act of 1940 and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
B-16
<PAGE>
This Agreement will also terminate in the event that the Investment
Management Agreement by and between the Company on behalf of the Fund and
Manager referred to in Section 1 is terminated.
10.
SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
AMENDMENTS. This Agreement may not be amended, altered, modified in any way
except by an addendum in writing duly executed by the proper officials of the
parties hereto.
GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Tennessee, and the applicable provisions of the Investment
Company Act of 1940. To the extent that the applicable laws of the State of
Tennessee, or any provisions herein, conflict with the applicable provisions of
the Investment Company Act of 1940, the letter shall control.
IN WITNESS WHEREOF, the parties have caused their respective duly authorized
officers to execute this Agreement as of March 20, 1996.
INVESTMENT DISTRIBUTORS
ADVISORY SERVICES, INC.
By:
-----------------------------------
Authorized Officer
GOLDMAN SACHS ASSET MANAGEMENT,
a separate operating division of
GOLDMAN, SACHS & CO.
By: GOLDMAN, SACHS & CO.
By:
-----------------------------------
Authorized Officer
B-17
<PAGE>
ADVISORY AGREEMENT
BETWEEN INVESTMENT DISTRIBUTORS ADVISORY SERVICES, INC.
AND
GOLDMAN SACHS ASSET MANAGEMENT,
A SEPARATE OPERATING DIVISION OF
GOLDMAN, SACHS & CO.
It is hereby agreed by and between INVESTMENT DISTRIBUTORS ADVISORY
SERVICES, INC. (the "Manager") and GOLDMAN SACHS ASSET MANAGEMENT, a separate
operating division of GOLDMAN, SACHS & CO. ("Advisor") as follows:
1.
DUTIES OF ADVISOR. Manager hereby engages the services of Advisor in
furtherance of its Investment Management Agreement with Protective Investment
Company (the "Company") dated as of March 20, 1996, on behalf of Protective
Select Equity Fund (the "Fund"). Pursuant to this Advisory Agreement and subject
to the oversight and review of Manager, Advisor will manage the investment and
reinvestment of the assets of the Fund. In this regard, Advisor will determine
in its discretion the securities to be purchased or sold, will provide Manager
with records concerning its activities which Manager or the Company is required
to maintain, and will render regular reports to Manager and to Officers and
Directors of the Company concerning its discharge of the foregoing
responsibilities. Advisor shall discharge the foregoing responsibilities subject
to the control of the Officers and the Directors of the Company and in
compliance with such policies as the Directors of the Company may from time to
time establish, and in compliance with the objectives, policies, and limitations
for the Fund set forth in the Fund's current prospectus and statement of
additional information, and applicable laws and regulations. Manager agrees to
inform Advisor of any and all applicable state insurance law restrictions on
investments that operate to limit or restrict the investments the Fund may
otherwise make, and to inform Advisor promptly of any changes in such
requirements. Advisor accepts such employment and agrees, at its own expense, to
render the services set forth herein and to provide the office space,
furnishings, equipment and personnel required by it to perform such services on
the terms and for the compensation provided in this Agreement.
2.
FUND TRANSACTIONS. Advisor is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities and is
directed to use its best efforts to obtain the best price and execution. Subject
to policies established from time to time by the Directors of the Company,
Advisor may also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if Advisor
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or
Advisor's overall responsibilities with respect to the Fund, other portfolios of
the Fund and other clients of Advisor. The policies of the Company with respect
to brokerage allocation, determined from time to time by the Company's Board of
Directors, are those disclosed in the Company's currently effective registration
statement at any time. The execution of such transactions shall not be deemed to
represent an unlawful act or breach of any duty created by this Agreement or
otherwise. Advisor will promptly communicate to Manager and to the Officers and
the Directors of the Company such information relating to portfolio transactions
as they may reasonably request.
It is agreed that Advisor may use any supplemental investment research
obtained for the benefit of the Fund in providing investment advice to its other
investment advisory accounts. The Advisor or its subsidiaries may use such
information in managing their own accounts. Conversely, such supplemental
information obtained by the placement of business for the Advisor or other
entities advised by the Advisor will be considered by and may be useful to the
Advisor in carrying out its obligations to the Fund.
B-18
<PAGE>
3.
COMPENSATION OF ADVISOR. As its compensation hereunder, the Manager shall
pay to Advisor promptly after the end of each month, a fee calculated as a
percentage of the average daily net assets of the Fund during that month at the
following annual rates: .40% of the first $100 million, .30% of the next $100
million, and .20% of the net assets in excess of the $200 million.
Advisor's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Fund shall be that determined in the manner and on the dates set forth in
the current prospectus of the Fund and, on days on which the net assets are not
so determined, the net asset computation to be used shall be as determined on
the next day on which the net assets shall have been determined.
In the event of termination of this Agreement, all compensation due through
the date of termination will be calculated on a pro-rated basis through the date
of termination and paid within fifteen business days of the date of termination.
4.
REPORTS. Manager and Advisor agree to furnish to each other, if applicable,
current prospectuses, statements of additional information, proxy statements,
reports of shareholders, certified copies of their financial statements, and
such other information with regard to their affairs and that of the Fund as each
may reasonably request.
5.
STATUS OF ADVISOR. The services of Advisor to Manager and the Fund are not
to be deemed exclusive, and Advisor shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby. Advisor
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
6.
CERTAIN RECORDS. Advisor hereby undertakes and agrees to maintain, in the
form and for the period required by Rule 31a-2 under the Investment Company Act
of 1940, all records relating to the Fund's investments that are required to be
maintained by the Fund pursuant to the requirements of Rule 31a-1 of that Act.
Any records required to be maintained and preserved pursuant to the provisions
of Rule 31a-1 and Rule 31a-2 promulgated under the Investment Company Act of
1940 which are prepared or maintained by Advisor on behalf of the Fund are the
property of the Fund and will be surrendered promptly to the Fund or Manager on
request.
Advisor agrees that all accounts, books and other records maintained and
preserved by it as required hereby shall be subject at any time, and from time
to time, to such reasonable periodic, special and other examinations by the
Securities and Exchange Commission, the Fund's auditors, the Fund or any
representative of the Fund, the Manager, or any governmental agency or other
instrumentality having regulatory authority over the Fund.
7.
REFERENCE TO ADVISOR. Neither the Fund nor Manager or any affiliate or
agent thereof shall make reference to or use the name of Advisor or any of its
affiliates in any advertising or promotional materials without the prior
approval of Advisor, which approval shall not be unreasonably withheld.
B-19
<PAGE>
8.
LIABILITY OF MANAGER AND ADVISOR. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
("disabling conduct") hereunder on the part of Advisor (and its officers,
directors, agents, partners, employees, controlling persons, shareholders and
any other person or entity) affiliated with Advisor ("associated persons"),
Advisor and its associated persons shall not be subject to liability to the
Manager or to any other person for any act or omission in the course of, or
connected with, rendering services hereunder (including, without limitation, as
a result of failure by Manager, by any other affiliate of Protective Life
Insurance Company ("PLIC"), or by PLIC, to comply with this Agreement and/or any
applicable insurance laws and regulations or, as a result of any error of
judgment or mistake of law or for any loss suffered by Manager or any other
person in connection with the matters to which this Agreement relates), except
to the extent specified in Section 36(b) of the Investment Company Act of 1940
concerning loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services.
Manager hereby indemnifies, defends and protects Advisor and holds Advisor
and its associated persons harmless from and against any and all claims,
demands, actions, losses, damages, liabilities, costs, charges, counsel fees and
expenses of any nature ("Losses") arising out of any breach by Manager of any
representation or agreement contained in this Advisory Agreement (including any
failure by Manager to apprise Advisor of any changes in any applicable state
insurance laws and regulations). Advisor hereby indemnifies, defends and
protects Manager and holds the Manager and its associated persons harmless, from
and against any Losses arising out of the Advisor's disabling conduct.
9.
DURATION AND TERMINATION. This Agreement shall continue in full force and
effect with respect to the Fund until the earlier of (a) two years from the
execution date of Agreement, or (b) the first meeting of the shareholders of the
Fund after the date hereof. If approved at such meeting by the affirmative vote
of a majority of the outstanding voting securities (as defined in the Investment
Company Act of 1940), of the Fund with respect to such Fund, voting separately
from any other series of the Company, this Agreement shall continue in full
force and effect with respect to the Fund from year to year thereafter so long
as such continuance is specifically approved at least annually (i) by the vote
of a majority of those Directors of the Company 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, and (ii) by the Directors of
the Company or by vote of a majority of the outstanding voting securities of the
Fund voting separately from any other Fund, provided, however, that if the
shareholders fail to approve the Agreement as provided herein, Advisor may
continue to serve hereunder in the manner and to the extent permitted by the
Investment Company Act of 1940 and rules thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved at least annually"
shall be construed in a manner consistent with the Investment Company Act of
1940 and the rules and regulations thereunder.
This Agreement may be terminated at any time, without the payment of any
penalty by vote of a majority of the Directors of the Company or by a vote of a
majority of the outstanding voting securities of the Fund on not less than 30
days nor more than 60 days written notice to Advisor or by Advisor at any time
without the payment of any penalty, on 90 days written notice to Manager and the
Company. This Agreement shall automatically terminate in the event of its
assignment (as defined in the Investment Company Act of 1940). Any notice under
this Agreement shall be given in writing, addressed and delivered, or mailed
postage prepaid, to the other party at any office of such party.
As used in this Section 9, the terms "assignment," "interested persons," and
a "vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the Investment Company Act of 1940 and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
B-20
<PAGE>
This Agreement will also terminate in the event that the Investment
Management Agreement by and between the Company on behalf of the Fund and
Manager referred to in Section 1 is terminated.
10.
SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
AMENDMENTS. This Agreement may not be amended, altered, modified in any way
except by an addendum in writing duly executed by the proper officials of the
parties hereto.
GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Tennessee, and the applicable provisions of the Investment
Company Act of 1940. To the extent that the applicable laws of the State of
Tennessee, or any provisions herein, conflict with the applicable provisions of
the Investment Company Act of 1940, the letter shall control.
IN WITNESS WHEREOF, the parties have caused their respective duly authorized
officers to execute this Agreement as of March 20, 1996.
INVESTMENT DISTRIBUTORS
ADVISORY SERVICES, INC.
By:
-----------------------------------
Authorized Officer
GOLDMAN SACHS ASSET MANAGEMENT,
a separate operating division of
GOLDMAN, SACHS & CO.
By: GOLDMAN, SACHS & CO.
By:
-----------------------------------
Authorized Officer
B-21
<PAGE>
ADVISORY AGREEMENT
BETWEEN INVESTMENT DISTRIBUTORS ADVISORY SERVICES, INC.
AND
GOLDMAN SACHS ASSET MANAGEMENT,
A SEPARATE OPERATING DIVISION OF
GOLDMAN, SACHS & CO.
It is hereby agreed by and between INVESTMENT DISTRIBUTORS ADVISORY
SERVICES, INC. (the "Manager") and GOLDMAN SACHS ASSET MANAGEMENT, a separate
operating division of GOLDMAN, SACHS & CO. ("Advisor") as follows:
1.
DUTIES OF ADVISOR. Manager hereby engages the services of Advisor in
furtherance of its Investment Management Agreement with Protective Investment
Company (the "Company") dated as of March 20, 1996, on behalf of Protective
Small Cap Equity Fund (the "Fund"). Pursuant to this Advisory Agreement and
subject to the oversight and review of Manager, Advisor will manage the
investment and reinvestment of the assets of the Fund. In this regard, Advisor
will determine in its discretion the securities to be purchased or sold, will
provide Manager with records concerning its activities which Manager or the
Company is required to maintain, and will render regular reports to Manager and
to Officers and Directors of the Company concerning its discharge of the
foregoing responsibilities. Advisor shall discharge the foregoing
responsibilities subject to the control of the Officers and the Directors of the
Company and in compliance with such policies as the Directors of the Company may
from time to time establish, and in compliance with the objectives, policies,
and limitations for the Fund set forth in the Fund's current prospectus and
statement of additional information, and applicable laws and regulations.
Manager agrees to inform Advisor of any and all applicable state insurance law
restrictions on investments that operate to limit or restrict the investments
the Fund may otherwise make, and to inform Advisor promptly of any changes in
such requirements. Advisor accepts such employment and agrees, at its own
expense, to render the services set forth herein and to provide the office
space, furnishings, equipment and personnel required by it to perform such
services on the terms and for the compensation provided in this Agreement.
2.
FUND TRANSACTIONS. Advisor is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities and is
directed to use its best efforts to obtain the best price and execution. Subject
to policies established from time to time by the Directors of the Company,
Advisor may also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if Advisor
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or
Advisor's overall responsibilities with respect to the Fund, other portfolios of
the Fund and other clients of Advisor. The policies of the Company with respect
to brokerage allocation, determined from time to time by the Company's Board of
Directors, are those disclosed in the Company's currently effective registration
statement at any time. The execution of such transactions shall not be deemed to
represent an unlawful act or breach of any duty created by this Agreement or
otherwise. Advisor will promptly communicate to Manager and to the Officers and
the Directors of the Company such information relating to portfolio transactions
as they may reasonably request.
It is agreed that Advisor may use any supplemental investment research
obtained for the benefit of the Fund in providing investment advice to its other
investment advisory accounts. The Advisor or its subsidiaries may use such
information in managing their own accounts. Conversely, such supplemental
information obtained by the placement of business for the Advisor or other
entities advised by the Advisor will be considered by and may be useful to the
Advisor in carrying out its obligations to the Fund.
B-22
<PAGE>
3.
COMPENSATION OF ADVISOR. As its compensation hereunder, the Manager shall
pay to Advisor promptly after the end of each month, a fee calculated as a
percentage of the average daily net assets of the Fund during that month at the
following annual rates: .40% of the first $100 million, .30% of the next $100
million, and .20% of the net assets in excess of the $200 million.
Advisor's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Fund shall be that determined in the manner and on the dates set forth in
the current prospectus of the Fund and, on days on which the net assets are not
so determined, the net asset computation to be used shall be as determined on
the next day on which the net assets shall have been determined.
In the event of termination of this Agreement, all compensation due through
the date of termination will be calculated on a pro-rated basis through the date
of termination and paid within fifteen business days of the date of termination.
4.
REPORTS. Manager and Advisor agree to furnish to each other, if applicable,
current prospectuses, statements of additional information, proxy statements,
reports of shareholders, certified copies of their financial statements, and
such other information with regard to their affairs and that of the Fund as each
may reasonably request.
5.
STATUS OF ADVISOR. The services of Advisor to Manager and the Fund are not
to be deemed exclusive, and Advisor shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby. Advisor
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
6.
CERTAIN RECORDS. Advisor hereby undertakes and agrees to maintain, in the
form and for the period required by Rule 31a-2 under the Investment Company Act
of 1940, all records relating to the Fund's investments that are required to be
maintained by the Fund pursuant to the requirements of Rule 31a-1 of that Act.
Any records required to be maintained and preserved pursuant to the provisions
of Rule 31a-1 and Rule 31a-2 promulgated under the Investment Company Act of
1940 which are prepared or maintained by Advisor on behalf of the Fund are the
property of the Fund and will be surrendered promptly to the Fund or Manager on
request.
Advisor agrees that all accounts, books and other records maintained and
preserved by it as required hereby shall be subject at any time, and from time
to time, to such reasonable periodic, special and other examinations by the
Securities and Exchange Commission, the Fund's auditors, the Fund or any
representative of the Fund, the Manager, or any governmental agency or other
instrumentality having regulatory authority over the Fund.
7.
REFERENCE TO ADVISOR. Neither the Fund nor Manager or any affiliate or
agent thereof shall make reference to or use the name of Advisor or any of its
affiliates in any advertising or promotional materials without the prior
approval of Advisor, which approval shall not be unreasonably withheld.
B-23
<PAGE>
8.
LIABILITY OF MANAGER AND ADVISOR. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
("disabling conduct") hereunder on the part of Advisor (and its officers,
directors, agents, partners, employees, controlling persons, shareholders and
any other person or entity affiliated with Advisor ("associated persons"),
Advisor and its associated persons shall not be subject to liability to the
Manager or to any other person for any act or omission in the course of, or
connected with, rendering services hereunder (including, without limitation, as
a result of failure by Manager, by any other affiliate of Protective Life
Insurance Company ("PLIC"), or by PLIC, to comply with this Agreement and/or any
applicable insurance laws and regulations or, as a result of any error of
judgment or mistake of law or for any loss suffered by Manager or any other
person in connection with the matters to which this Agreement relates), except
to the extent specified in Section 36(b) of the Investment Company Act of 1940
concerning loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services.
Manager hereby indemnifies, defends and protects Advisor and holds Advisor
and its associated persons harmless from and against any and all claims,
demands, actions, losses, damages, liabilities, costs, changes, counsel fees and
expenses of any nature ("Losses") arising out of any breach by Manager of any
representation or agreement contained in this Advisory Agreement, (including any
failure by Manager to apprise Advisor of any changes in any applicable state
insurance laws and regulations). Advisor hereby indemnifies, defends and
protects Manager and holds the Manager and its associated persons harmless, from
and against any Losses arising out of the Advisor's disabling conduct.
9.
DURATION AND TERMINATION. This Agreement shall continue in full force and
effect with respect to the Fund until the earlier of (a) two years from the
execution date of Agreement, or (b) the first meeting of the shareholders of the
Fund after the date hereof. If approved at such meeting by the affirmative vote
of a majority of the outstanding voting securities (as defined in the Investment
Company Act of 1940), of the Fund with respect to such Fund, voting separately
from any other series of the Company, this Agreement shall continue in full
force and effect with respect to the Fund from year to year thereafter so long
as such continuance is specifically approved at least annually (i) by the vote
of a majority of those Directors of the Company 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, and (ii) by the Directors of
the Company or by vote of a majority of the outstanding voting securities of the
Fund voting separately from any other Fund, provided, however, that if the
shareholders fail to approve the Agreement as provided herein, Advisor may
continue to serve hereunder in the manner and to the extent permitted by the
Investment Company Act of 1940 and rules thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved at least annually"
shall be construed in a manner consistent with the Investment Company Act of
1940 and the rules and regulations thereunder.
This Agreement may be terminated at any time, without the payment of any
penalty by vote of a majority of the Directors of the Company or by a vote of a
majority of the outstanding voting securities of the Fund on not less than 30
days nor more than 60 days written notice to Advisor or by Advisor at any time
without the payment of any penalty, on 90 days written notice to Manager and the
Company. This Agreement shall automatically terminate in the event of its
assignment (as defined in the Investment Company Act of 1940). Any notice under
this Agreement shall be given in writing, addressed and delivered, or mailed
postage prepaid, to the other party at any office of such party.
As used in this Section 9, the terms "assignment," "interested persons," and
a "vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the Investment Company Act of 1940 and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
B-24
<PAGE>
This Agreement will also terminate in the event that the Investment
Management Agreement by and between the Company on behalf of the Fund and
Manager referred to in Section 1 is terminated.
10.
SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
AMENDMENTS. This Agreement may not be amended, altered, modified in any way
except by an addendum in writing duly executed by the proper officials of the
parties hereto.
GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Tennessee, and the applicable provisions of the Investment
Company Act of 1940. To the extent that the applicable laws of the State of
Tennessee, or any provisions herein, conflict with the applicable provisions of
the Investment Company Act of 1940, the letter shall control.
IN WITNESS WHEREOF, the parties have caused their respective duly authorized
officers to execute this Agreement as of March 20, 1996.
INVESTMENT DISTRIBUTORS ADVISORY SERVICES, INC.
By:
-----------------------------------------
Authorized Officer
GOLDMAN SACHS ASSET MANAGEMENT,
a separate operating division of
GOLDMAN, SACHS & CO.
By: GOLDMAN, SACHS & CO.
By:
-----------------------------------------
Authorized Officer
B-25
<PAGE>
ADVISORY AGREEMENT
BETWEEN INVESTMENT DISTRIBUTORS ADVISORY SERVICES, INC.
AND
GOLDMAN SACHS ASSET MANAGEMENT,
A SEPARATE OPERATING DIVISION OF
GOLDMAN, SACHS & CO.
It is hereby agreed by and between INVESTMENT DISTRIBUTORS ADVISORY
SERVICES, INC. (the "Manager") and GOLDMAN SACHS ASSET MANAGEMENT, a separate
operating division of GOLDMAN, SACHS & CO. ("Advisor") as follows:
1.
DUTIES OF ADVISOR. Manager hereby engages the services of Advisor in
furtherance of its Investment Management Agreement with Protective Investment
Company (the "Company") dated as of March 20, 1996, on behalf of Protective
Money Market Fund (the "Fund"). Pursuant to this Advisory Agreement and subject
to the oversight and review of Manager, Advisor will manage the investment and
reinvestment of the assets of the Fund. In this regard, Advisor will determine
in its discretion the securities to be purchased or sold, will provide Manager
with records concerning its activities which Manager or the Company is required
to maintain, and will render regular reports to Manager and to Officers and
Directors of the Company concerning its discharge of the foregoing
responsibilities. Advisor shall discharge the foregoing responsibilities subject
to the control of the Officers and the Directors of the Company and in
compliance with such policies as the Directors of the Company may from time to
time establish, and in compliance with the objectives, policies, and limitations
for the Fund set forth in the Fund's current prospectus and statement of
additional information, and applicable laws and regulations. Manager agrees to
inform Advisor of any and all applicable state insurance law restrictions on
investments that operate to limit or restrict the investments the Fund may
otherwise make, and to inform Advisor promptly of any changes in such
requirements. Advisor accepts such employment and agrees, at its own expense, to
render the services set forth herein and to provide the office space,
furnishings, equipment and personnel required by it to perform such services on
the terms and for the compensation provided in this Agreement.
2.
FUND TRANSACTIONS. Advisor is authorized to select the brokers or dealers
that will execute the purchases and sales of portfolio securities and is
directed to use its best efforts to obtain the best price and execution. Subject
to policies established from time to time by the Directors of the Company,
Advisor may also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if Advisor
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or
Advisor's overall responsibilities with respect to the Fund, other portfolios of
the Fund and other clients of Advisor. The policies of the Company with respect
to brokerage allocation, determined from time to time by the Company's Board of
Directors, are those disclosed in the Company's currently effective registration
statement at any time. The execution of such transactions shall not be deemed to
represent an unlawful act or breach of any duty created by this Agreement or
otherwise. Advisor will promptly communicate to Manager and to the Officers and
the Directors of the Company such information relating to portfolio transactions
as they may reasonably request.
It is agreed that Advisor may use any supplemental investment research
obtained for the benefit of the Fund in providing investment advice to its other
investment advisory accounts. The Advisor or
B-26
<PAGE>
its subsidiaries may use such information in managing their own accounts.
Conversely, such supplemental information obtained by the placement of business
for the Advisor or other entities advised by the Advisor will be considered by
and may be useful to the Advisor in carrying out its obligations to the Fund.
3.
COMPENSATION OF ADVISOR. As its compensation hereunder, the Manager shall
pay to Advisor promptly after the end of each month, a fee calculated as a
percentage of the average daily net assets of the Fund during that month at the
following annual rates: .35% of the first $100 million, .25% of the next $100
million, and .15% of the net assets in excess of $200 million.
Advisor's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Fund shall be that determined in the manner and on the dates set forth in
the current prospectus of the Fund and, on days on which the net assets are not
so determined, the net asset computation to be used shall be as determined on
the next day on which the net assets shall have been determined.
In the event of termination of this Agreement, all compensation due through
the date of termination will be calculated on a pro-rated basis through the date
of termination and paid within fifteen business days of the date of termination.
4.
REPORTS. Manager and Advisor agree to furnish to each other, if applicable,
current prospectuses, statements of additional information, proxy statements,
reports of shareholders, certified copies of their financial statements, and
such other information with regard to their affairs and that of the Fund as each
may reasonably request.
5.
STATUS OF ADVISOR. The services of Advisor to Manager and the Fund are not
to be deemed exclusive, and Advisor shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby. Advisor
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
6.
CERTAIN RECORDS. Advisor hereby undertakes and agrees to maintain, in the
form and for the period required by Rule 31a-2 under the Investment Company Act
of 1940, all records relating to the Fund's investments that are required to be
maintained by the Fund pursuant to the requirements of Rule 31a-1 of that Act.
Any records required to be maintained and preserved pursuant to the provisions
of Rule 31a-1 and Rule 31a-2 promulgated under the Investment Company Act of
1940 which are prepared or maintained by Advisor on behalf of the Fund are the
property of the Fund and will be surrendered promptly to the Fund or Manager on
request.
Advisor agrees that all accounts, books and other records maintained and
preserved by it as required hereby shall be subject at any time, and from time
to time, to such reasonable periodic, special and other examinations by the
Securities and Exchange Commission, the Fund's auditors, the Fund or any
representative of the Fund, the Manager, or any governmental agency or other
instrumentality having regulatory authority over the Fund.
B-27
<PAGE>
7.
REFERENCE TO ADVISOR. Neither the Fund nor Manager or any affiliate or
agent thereof shall make reference to or use the name of Advisor or any of its
affiliates in any advertising or promotional materials without the prior
approval of Advisor, which approval shall not be unreasonably withheld.
8.
LIABILITY OF MANAGER AND ADVISOR. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
("disabling conduct") hereunder on the part of Advisor (and its officers,
directors, agents, partners, employees, controlling persons, shareholders and
any other person or entity affiliated with Advisor ("associated persons"),
Advisor and its associated persons shall not be subject to liability to the
Manager or to any other person for any act or omission in the course of, or
connected with, rendering services hereunder (including, without limitation, as
a result of failure by Manager, by any other affiliate of Protective Life
Insurance Company ("PLIC"), or by PLIC, to comply with this Agreement and/or any
applicable insurance laws and regulations or, as a result of any error of
judgment or mistake of law or for any loss suffered by Manager or any other
person in connection with the matters to which this Agreement relates), except
to the extent specified in Section 36(b) of the Investment Company Act of 1940
concerning loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services.
Manager hereby indemnifies, defends and protects Advisor and holds Advisor
and its associated persons harmless from and against any and all claims,
demands, actions, losses, damages, liabilities, costs, charges, counsel fees and
expenses of any nature ("Losses") arising out of any breach by Manager of any
representation or agreement contained in this Advisory Agreement, (including any
failure by Manager to apprise Advisor of any changes in any applicable state
insurance laws and regulations). Advisor hereby indemnifies, defends and
protects Manager and holds the Manager and its associated persons harmless, from
and against any Losses arising out of the Advisor's disabling conduct.
9.
DURATION AND TERMINATION. This Agreement shall continue in full force and
effect with respect to the Fund until the earlier of (a) two years from the
execution date of Agreement, or (b) the first meeting of the shareholders of the
Fund after the date hereof. If approved at such meeting by the affirmative vote
of a majority of the outstanding voting securities (as defined in the Investment
Company Act of 1940), of the Fund with respect to such Fund, voting separately
from any other series of the Company, this Agreement shall continue in full
force and effect with respect to the Fund from year to year thereafter so long
as such continuance is specifically approved at least annually (i) by the vote
of a majority of those Directors of the Company 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, and (ii) by the Directors of
the Company or by vote of a majority of the outstanding voting securities of the
Fund voting separately from any other Fund, provided, however, that if the
shareholders fail to approve the Agreement as provided herein, Advisor may
continue to serve hereunder in the manner and to the extent permitted by the
Investment Company Act of 1940 and rules thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved at least annually"
shall be construed in a manner consistent with the Investment Company Act of
1940 and the rules and regulations thereunder.
This Agreement may be terminated at any time, without the payment of any
penalty by vote of a majority of the Directors of the Company or by a vote of a
majority of the outstanding voting securities of the Fund on not less than 30
days nor more than 60 days written notice to Advisor or by Advisor at any time
without the payment of any penalty, on 90 days written notice to Manager and the
Company.
B-28
<PAGE>
This Agreement shall automatically terminate in the event of its assignment (as
defined in the Investment Company Act of 1940). Any notice under this Agreement
shall be given in writing, addressed and delivered, or mailed postage prepaid,
to the other party at any office of such party.
As used in this Section 9, the terms "assignment," "interested persons," and
a "vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the Investment Company Act of 1940 and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
This Agreement will also terminate in the event that the Investment
Management Agreement by and between the Company on behalf of the Fund and
Manager referred to in Section 1 is terminated.
10.
SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
AMENDMENTS. This Agreement may not be amended, altered, modified in any way
except by an addendum in writing duly executed by the proper officials of the
parties hereto.
GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Tennessee, and the applicable provisions of the Investment
Company Act of 1940. To the extent that the applicable laws of the State of
Tennessee, or any provisions herein, conflict with the applicable provisions of
the Investment Company Act of 1940, the letter shall control.
IN WITNESS WHEREOF, the parties have caused their respective duly authorized
officers to execute this Agreement as of March 20, 1996.
INVESTMENT DISTRIBUTORS ADVISORY SERVICES, INC.
By:
-----------------------------------------
Authorized Officer
GOLDMAN SACHS ASSET MANAGEMENT,
a separate operating division of
GOLDMAN, SACHS & CO.
By: GOLDMAN, SACHS & CO.
By:
-----------------------------------------
Authorized Officer
B-29
<PAGE>
APPENDIX C
The directors and principal executive officers of IDASI and their principal
occupations are as shown below. The business address of each such person is 2801
Highway 280 South, Birmingham, Alabama 35223.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH IDASI AND PRINCIPAL OCCUPATION
- - -------------------------- --------------------------------------------------------------------------------------
<S> <C>
John K. Wright Secretary, Director. Secretary, Director ProEquities, Inc., 2801 Highway 280 South,
Birmingham, Alabama 35223. Vice President and Senior Associate Counsel, Protective
Life Corporation, 2802 Highway 280 South, Birmingham, Alabama 35223
Lizabeth R. Nichols Vice President, Chief Compliance Officer, Director. Assistant Secretary, Chief
Compliance Officer, Director, ProEquities, Inc., 2801 Highway 280 South, Birmingham,
Alabama 35223. Vice President and Senior Associate Counsel, Protective Life
Corporation, 2802 Highway 280 South, Birmingham, Alabama 35223
R. Stephen Briggs President, Director. Director ProEquities, Inc., 2801 Highway 280 South, Birmingham,
Alabama 35223. Executive Vice President, Protective Life Corporation, 2802 Highway 280
South, Birmingham, Alabama 35223
Richard Bielen Director. Vice President, Investments. Protective Life Corporation, 2802 Highway 280
South, Birmingham, Alabama 35223
</TABLE>
C-1
<PAGE>
APPENDIX D
The directors and principal executive officers of GSAM and/or GSAMI and
their principal occupations are as shown below.
GSAM is a separate operating division of Goldman, Sachs & Co., a New York
limited partnership. The following general partners of Goldman Sachs & Co. are
responsible for GSAM:
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH GSAM AND PRINCIPAL OCCUPATION
- - -------------------------- --------------------------------------------------------------------------------------
<S> <C>
David B. Ford Goldman Sachs & Co. (Asset Management Division), One New York Plaza, New York, NY
10004; Co-Head November 1995 to Present, Chairman and Chief Executive Officer November
1994 to November 1995, Co-Chairman and Co-Chief Executive Officer February 1994 to
November 1994, Goldman, Sachs & Co., 85 Broad Street, New York, NY 10004 - General
Partner 1986 to Present
John P. McNulty Goldman, Sachs & Co. (Asset Management Division), One New York Plaza, New York, NY
10004, Co-Head November 1995 to Present, The Goldman Sachs Group, L.P., 85 Broad
Street, New York NY 10004 - Limited Partner 1994 to November 1995, Goldman Sachs &
Co., 85 Broad Street, New York, NY 10004 - General Partner November 1995 to Present -
General Partner 1990 to 1994
Sharmin Mossavar-Rahmani Goldman, Sachs & Co. (Asset Management Division), One New York Plaza, New York, NY
10004 - General Partner 1993 to Present - Chief Investment Officer - Fixed Income 1993
to Present - Vice President March 1993 to November 1993, Fidelity Management Trust
Company 82 Devonshire Street, Boston, MA 02109 - Chief Investment Officer - Fixed
Income 1987 to 1993
</TABLE>
GSAMI is an affiliate of Goldman, Sachs & Co. The following general partners
are responsible for GSAMI:
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH GSAMI AND PRINCIPAL OCCUPATION
- - -------------------------- --------------------------------------------------------------------------------------
<S> <C>
David B. Ford Goldman Sachs Asset Management International, 140 Fleet Street, London, EC4A 2BJ,
England - Managing Director & Chief Executive Officer November 1995 to Present -
Director December 1994 to Present, Goldman Sachs & Co. (Asset Management Division),
One New York Plaza, New York NY 10004 - Co-Head November 1995 to Present - Chairman
and Chief Executive Officer November 1994 to November 1995 - Co-Chairman and Co-Chief
Executive Officer February 1994 to November 1994, Goldman Sachs & Co., 85 Broad
Street, New York, NY 10004 - General Partner 1986 to Present - Vice President, Fixed
Income Division 1975
John P. McNulty Goldman Sachs Asset Management International, 140 Fleet Street, London, EC4A 2BJ,
England - Director January 1996 to Present, Goldman, Sachs & Co., (Asset Management
Division), One New York Plaza, New York, NY 10004 - Co-Head November 1995 to Present,
The Goldman Sachs Group, L.P., 85 Broad Street, New York, NY 10004 - Limited Partner
1994 to November 1995, Goldman, Sachs & Co., 85 Broad Street, New York, NY 10004 -
General Partner November 1995 to Present - General Partner 1990 to 1994
</TABLE>
D-1
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH GSAMI AND PRINCIPAL OCCUPATION
- - -------------------------- --------------------------------------------------------------------------------------
<S> <C>
David W. Blood Goldman Sachs Asset Management International, 140 Fleet Street, London, EC4A 2BJ,
England - Director November 1995 to Present, Goldman Sachs International Peterborough
Court, 133 Fleet Street, London, EC4A 2BB, England - Managing Director (2/95) 1993 to
Present, Goldman, Sachs & Co., 85 Broad Street, New York, NY 10004 - General Partner
(11/94) 1985 to Present
Gregory K. Palm Goldman Sachs Asset Management International, 140 Fleet Street, London, EC4A 2BJ,
England - Director 1994 to Present, Goldman Sachs International, Peterborough Court,
133 Fleet Street, London, EC4A 2BB, England - Co-General Counsel 1992 to Present,
Goldman Sachs & Co., 85 Broad Street, New York, NY 10004 - General Partner 1992 to
Present, Sullivan & Cromwell, 165 Broad Street, New York, NY 10004 - Partner 1976 to
1992
</TABLE>
GSAM and/or GSAMI receive fees for investment sub-advisory services provided
to the following portfolios of other registered investment companies having a
similar investment objective to each of the Funds.
<TABLE>
<CAPTION>
PORTFOLIO OF OTHER
REGISTERED INVESTMENT COMPANY AVERAGE NET ASSETS ANNUAL RATE OF
FUND (NET ASSETS AS OF 12/31/95) OF PORTFOLIO COMPENSATION
- - --------------------------------- --------------------------------- --------------------------- --------------
<S> <C> <C> <C>
Money Market..................... N/A
Select Equity.................... N/A
Capital Growth................... Value Equity Trust portfolio First $50 million 0.40%
of NASL Series Trust $50-200 million 0.30%
($393.2 million) Over $200 million 0.20%
Value Equity Fund portfolio First $50 million 0.325%
of North American Funds $50-200 million 0.275%
($131.7 million) $200-500 million 0.225%
Over $500 million 0.150%
Small Cap Equity................. N/A
Growth and Income................ N/A
International Equity............. N/A
Global Income.................... Global Bond Portfolio of First $50 million 0.40%
SunAmerica Series Trust $50-150 million 0.30%
($60.8 million) $150-250 million 0.25%
Over $250 million 0.20%
</TABLE>
D-2
<PAGE>
VOTING INSTRUCTION FORM
PROTECTIVE INVESTMENT COMPANY
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
PROTECTIVE INVESTMENT COMPANY FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE
PROTECTIVE INVESTMENT COMPANY
I hereby instruct Protective Life Insurance Company ("Protective Life") to
vote the shares of the Money Market Fund (the "Fund") of the Protective
Investment Company (the "Company") as to which I am entitled to give
instructions as shown, at a Special Meeting of the Shareholders of the Fund
("the Meeting") to be held at 10:00 a.m. on April 30, 1996, in Training Room A,
the second floor of the Protective Life Corporation Building, 2801 Highway 280
South, Birmingham, Alabama 35223 and any adjournments thereof as follows:
(1) To approve the Investment Management Agreement between Investment
Distributors Advisory Services, Inc. ("IDASI"), and the Company:
/ / For / / Against / / Abstain
(2) To approve the investment advisory agreement between IDASI and Goldman
Sachs Asset Management ("GSAM");
/ / For / / Against / / Abstain
(3) To elect the nominees for directors to the Company's Board of
Directors.
/ / For all nominees listed below (except as marked to the contrary)
/ / Withhold authority to vote for all nominees listed below:
(Instructions: To withhold authority to vote for any individual nominee(s),
strike a line through the names of such nominee(s) in the list below.)
Carolyn King, R. Stephen Briggs, D. Warren Bailey,
G. Ruffner Page, Jr., Cleophus Thomas, Jr.
______________________________________________________________
(4) To ratify the selection of Coopers & Lybrand L.L.P. as the Company's
independent public accountant.
/ / For / / Against / / Abstain
(5) In the discretion of Protective Life, to transact such other business
as may properly come before the Meeting or any adjournment thereof.
THE BOARD OF DIRECTORS OF THE COMPANY
RECOMMENDS A VOTE FOR ALL PROPOSALS.
<PAGE>
PLEASE SIGN AND DATE THIS FORM AND RETURN PROMPTLY.
I hereby revoke any and all voting instructions with respect to such shares
previously given by me. I acknowledge receipt of the Proxy Statement dated March
26, 1996. THIS INSTRUCTION WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, THIS INSTRUCTION WILL BE VOTED "FOR" EACH PROPOSAL.
This instruction may be revoked at any time prior to the Meeting by
notifying the Secretary of Protective Life in writing at 2801 Highway 280 South,
Birmingham, Alabama 35223.
- - ------------------------------------- -------------------------------------
Variable Contract Owner Signature Date
PLEASE SIGN, DATE AND RETURN THIS FORM PROMPTLY. Your signature should be
exactly as name or names appear on this Voting Instruction Form. If the
individual signing the form is a fiduciary (E.G., attorney, executor, trustee,
guardian, etc.) the individual's signature must be followed by his/her full
title.
<PAGE>
VOTING INSTRUCTION FORM
PROTECTIVE INVESTMENT COMPANY
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
PROTECTIVE INVESTMENT COMPANY FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE
PROTECTIVE INVESTMENT COMPANY
I hereby instruct Protective Life Insurance Company ("Protective Life") to
vote the shares of the Select Equity Fund (the "Fund") of the Protective
Investment Company (the "Company") as to which I am entitled to give
instructions as shown, at a Special Meeting of the Shareholders of the Fund
("the Meeting") to be held at 10:00 a.m. on April 30, 1996, in Training Room A,
the second floor of the Protective Life Corporation Building, 2801 Highway 280
South, Birmingham, Alabama 35223 and any adjournments thereof as follows:
(1) To approve the Investment Management Agreement between Investment
Distributors Advisory Services, Inc. ("IDASI"), and the Company:
/ / For / / Against / / Abstain
(2) To approve the investment advisory agreement between IDASI and Goldman
Sachs Asset Management ("GSAM");
/ / For / / Against / / Abstain
(3) To elect the nominees for directors to the Company's Board of
Directors.
/ / For all nominees listed below (except as marked to the contrary)
/ / Withhold authority to vote for all nominees listed below:
(Instructions: To withhold authority to vote for any individual nominee(s),
strike a line through the names of such nominee(s) in the list below.)
Carolyn King, R. Stephen Briggs, D. Warren Bailey,
G. Ruffner Page, Jr., Cleophus Thomas, Jr.
______________________________________________________________
(4) To ratify the selection of Coopers & Lybrand L.L.P. as the Company's
independent public accountant.
/ / For / / Against / / Abstain
(5) In the discretion of Protective Life, to transact such other business
as may properly come before the Meeting or any adjournment thereof.
THE BOARD OF DIRECTORS OF THE COMPANY
RECOMMENDS A VOTE FOR ALL PROPOSALS.
<PAGE>
PLEASE SIGN AND DATE THIS FORM AND RETURN PROMPTLY.
I hereby revoke any and all voting instructions with respect to such shares
previously given by me. I acknowledge receipt of the Proxy Statement dated March
26, 1996. THIS INSTRUCTION WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, THIS INSTRUCTION WILL BE VOTED "FOR" EACH PROPOSAL.
This instruction may be revoked at any time prior to the Meeting by
notifying the Secretary of Protective Life in writing at 2801 Highway 280 South,
Birmingham, Alabama 35223.
- - ------------------------------------- -------------------------------------
Variable Contract Owner Signature Date
PLEASE SIGN, DATE AND RETURN THIS FORM PROMPTLY. Your signature should be
exactly as name or names appear on this Voting Instruction Form. If the
individual signing the form is a fiduciary (E.G., attorney, executor, trustee,
guardian, etc.) the individual's signature must be followed by his/her full
title.
<PAGE>
VOTING INSTRUCTION FORM
PROTECTIVE INVESTMENT COMPANY
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
PROTECTIVE INVESTMENT COMPANY FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE
PROTECTIVE INVESTMENT COMPANY
I hereby instruct Protective Life Insurance Company ("Protective Life") to
vote the shares of the Capital Growth Fund (the "Fund") of the Protective
Investment Company (the "Company") as to which I am entitled to give
instructions as shown, at a Special Meeting of the Shareholders of the Fund
("the Meeting") to be held at 10:00 a.m. on April 30, 1996, in Training Room A,
the second floor of the Protective Life Corporation Building, 2801 Highway 280
South, Birmingham, Alabama 35223 and any adjournments thereof as follows:
(1) To approve the Investment Management Agreement between Investment
Distributors Advisory Services, Inc. ("IDASI"), and the Company:
/ / For / / Against / / Abstain
(2) To approve the investment advisory agreement between IDASI and Goldman
Sachs Asset Management ("GSAM");
/ / For / / Against / / Abstain
(3) To elect the nominees for directors to the Company's Board of
Directors.
/ / For all nominees listed below (except as marked to the contrary)
/ / Withhold authority to vote for all nominees listed below:
(Instructions: To withhold authority to vote for any individual nominee(s),
strike a line through the names of such nominee(s) in the list below.)
Carolyn King, R. Stephen Briggs, D. Warren Bailey,
G. Ruffner Page, Jr., Cleophus Thomas, Jr.
______________________________________________________________
(4) To ratify the selection of Coopers & Lybrand L.L.P. as the Company's
independent public accountant.
/ / For / / Against / / Abstain
(5) In the discretion of Protective Life, to transact such other business
as may properly come before the Meeting or any adjournment thereof.
THE BOARD OF DIRECTORS OF THE COMPANY
RECOMMENDS A VOTE FOR ALL PROPOSALS.
<PAGE>
PLEASE SIGN AND DATE THIS FORM AND RETURN PROMPTLY.
I hereby revoke any and all voting instructions with respect to such shares
previously given by me. I acknowledge receipt of the Proxy Statement dated March
26, 1996. THIS INSTRUCTION WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, THIS INSTRUCTION WILL BE VOTED "FOR" EACH PROPOSAL.
This instruction may be revoked at any time prior to the Meeting by
notifying the Secretary of Protective Life in writing at 2801 Highway 280 South,
Birmingham, Alabama 35223.
- - ------------------------------------- -------------------------------------
Variable Contract Owner Signature Date
PLEASE SIGN, DATE AND RETURN THIS FORM PROMPTLY. Your signature should be
exactly as name or names appear on this Voting Instruction Form. If the
individual signing the form is a fiduciary (E.G., attorney, executor, trustee,
guardian, etc.) the individual's signature must be followed by his/her full
title.
<PAGE>
VOTING INSTRUCTION FORM
PROTECTIVE INVESTMENT COMPANY
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
PROTECTIVE INVESTMENT COMPANY FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE
PROTECTIVE INVESTMENT COMPANY
I hereby instruct Protective Life Insurance Company ("Protective Life") to
vote the shares of the Small Cap Equity Fund (the "Fund") of the Protective
Investment Company (the "Company") as to which I am entitled to give
instructions as shown, at a Special Meeting of the Shareholders of the Fund
("the Meeting") to be held at 10:00 a.m. on April 30, 1996, in Training Room A,
the second floor of the Protective Life Corporation Building, 2801 Highway 280
South, Birmingham, Alabama 35223 and any adjournments thereof as follows:
(1) To approve the Investment Management Agreement between Investment
Distributors Advisory Services, Inc. ("IDASI"), and the Company:
/ / For / / Against / / Abstain
(2) To approve the investment advisory agreement between IDASI and Goldman
Sachs Asset Management ("GSAM");
/ / For / / Against / / Abstain
(3) To elect the nominees for directors to the Company's Board of
Directors.
/ / For all nominees listed below (except as marked to the contrary)
/ / Withhold authority to vote for all nominees listed below:
(Instructions: To withhold authority to vote for any individual nominee(s),
strike a line through the names of such nominee(s) in the list below.)
Carolyn King, R. Stephen Briggs, D. Warren Bailey,
G. Ruffner Page, Jr., Cleophus Thomas, Jr.
______________________________________________________________
(4) To ratify the selection of Coopers & Lybrand L.L.P. as the Company's
independent public accountant.
/ / For / / Against / / Abstain
(5) In the discretion of Protective Life, to transact such other business
as may properly come before the Meeting or any adjournment thereof.
THE BOARD OF DIRECTORS OF THE COMPANY
RECOMMENDS A VOTE FOR ALL PROPOSALS.
<PAGE>
PLEASE SIGN AND DATE THIS FORM AND RETURN PROMPTLY.
I hereby revoke any and all voting instructions with respect to such shares
previously given by me. I acknowledge receipt of the Proxy Statement dated March
26, 1996. THIS INSTRUCTION WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, THIS INSTRUCTION WILL BE VOTED "FOR" EACH PROPOSAL.
This instruction may be revoked at any time prior to the Meeting by
notifying the Secretary of Protective Life in writing at 2801 Highway 280 South,
Birmingham, Alabama 35223.
- - ------------------------------------- -------------------------------------
Variable Contract Owner Signature Date
PLEASE SIGN, DATE AND RETURN THIS FORM PROMPTLY. Your signature should be
exactly as name or names appear on this Voting Instruction Form. If the
individual signing the form is a fiduciary (E.G., attorney, executor, trustee,
guardian, etc.) the individual's signature must be followed by his/her full
title.
<PAGE>
VOTING INSTRUCTION FORM
PROTECTIVE INVESTMENT COMPANY
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
PROTECTIVE INVESTMENT COMPANY FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE
PROTECTIVE INVESTMENT COMPANY
I hereby instruct Protective Life Insurance Company ("Protective Life") to
vote the shares of the Growth and Income Fund (the "Fund") of the Protective
Investment Company (the "Company") as to which I am entitled to give
instructions as shown, at a Special Meeting of the Shareholders of the Fund
("the Meeting") to be held at 10:00 a.m. on April 30, 1996, in Training Room A,
the second floor of the Protective Life Corporation Building, 2801 Highway 280
South, Birmingham, Alabama 35223 and any adjournments thereof as follows:
(1) To approve the Investment Management Agreement between Investment
Distributors Advisory Services, Inc. ("IDASI"), and the Company:
/ / For / / Against / / Abstain
(2) To approve the investment advisory agreement between IDASI and Goldman
Sachs Asset Management ("GSAM");
/ / For / / Against / / Abstain
(3) To elect the nominees for directors to the Company's Board of
Directors.
/ / For all nominees listed below (except as marked to the contrary)
/ / Withhold authority to vote for all nominees listed below:
(Instructions: To withhold authority to vote for any individual nominee(s),
strike a line through the names of such nominee(s) in the list below.)
Carolyn King, R. Stephen Briggs, D. Warren Bailey,
G. Ruffner Page, Jr., Cleophus Thomas, Jr.
______________________________________________________________
(4) To ratify the selection of Coopers & Lybrand L.L.P. as the Company's
independent public accountant.
/ / For / / Against / / Abstain
(5) In the discretion of Protective Life, to transact such other business
as may properly come before the Meeting or any adjournment thereof.
THE BOARD OF DIRECTORS OF THE COMPANY
RECOMMENDS A VOTE FOR ALL PROPOSALS.
<PAGE>
PLEASE SIGN AND DATE THIS FORM AND RETURN PROMPTLY.
I hereby revoke any and all voting instructions with respect to such shares
previously given by me. I acknowledge receipt of the Proxy Statement dated March
26, 1996. THIS INSTRUCTION WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, THIS INSTRUCTION WILL BE VOTED "FOR" EACH PROPOSAL.
This instruction may be revoked at any time prior to the Meeting by
notifying the Secretary of Protective Life in writing at 2801 Highway 280 South,
Birmingham, Alabama 35223.
- - ------------------------------------- -------------------------------------
Variable Contract Owner Signature Date
PLEASE SIGN, DATE AND RETURN THIS FORM PROMPTLY. Your signature should be
exactly as name or names appear on this Voting Instruction Form. If the
individual signing the form is a fiduciary (E.G., attorney, executor, trustee,
guardian, etc.) the individual's signature must be followed by his/her full
title.
<PAGE>
VOTING INSTRUCTION FORM
PROTECTIVE INVESTMENT COMPANY
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
PROTECTIVE INVESTMENT COMPANY FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE
PROTECTIVE INVESTMENT COMPANY
I hereby instruct Protective Life Insurance Company ("Protective Life") to
vote the shares of the International Equity Fund (the "Fund") of the Protective
Investment Company (the "Company") as to which I am entitled to give
instructions as shown, at a Special Meeting of the Shareholders of the Fund
("the Meeting") to be held at 10:00 a.m. on April 30, 1996, in Training Room A,
the second floor of the Protective Life Corporation Building, 2801 Highway 280
South, Birmingham, Alabama 35223 and any adjournments thereof as follows:
(1) To approve the Investment Management Agreement between Investment
Distributors Advisory Services, Inc. ("IDASI"), and the Company:
/ / For / / Against / / Abstain
(2) To approve the investment advisory agreement between IDASI and Goldman
Sachs Asset Management International ("GSAMI");
/ / For / / Against / / Abstain
(3) To elect the nominees for directors to the Company's Board of
Directors.
/ / For all nominees listed below (except as marked to the contrary)
/ / Withhold authority to vote for all nominees listed below:
(Instructions: To withhold authority to vote for any individual nominee(s),
strike a line through the names of such nominee(s) in the list below.)
Carolyn King, R. Stephen Briggs, D. Warren Bailey,
G. Ruffner Page, Jr., Cleophus Thomas, Jr.
______________________________________________________________
(4) To ratify the selection of Coopers & Lybrand L.L.P. as the Company's
independent public accountant.
/ / For / / Against / / Abstain
(5) In the discretion of Protective Life, to transact such other business
as may properly come before the Meeting or any adjournment thereof.
THE BOARD OF DIRECTORS OF THE COMPANY
RECOMMENDS A VOTE FOR ALL PROPOSALS.
<PAGE>
PLEASE SIGN AND DATE THIS FORM AND RETURN PROMPTLY.
I hereby revoke any and all voting instructions with respect to such shares
previously given by me. I acknowledge receipt of the Proxy Statement dated March
26, 1996. THIS INSTRUCTION WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, THIS INSTRUCTION WILL BE VOTED "FOR" EACH PROPOSAL.
This instruction may be revoked at any time prior to the Meeting by
notifying the Secretary of Protective Life in writing at 2801 Highway 280 South,
Birmingham, Alabama 35223.
- - ------------------------------------- -------------------------------------
Variable Contract Owner Signature Date
PLEASE SIGN, DATE AND RETURN THIS FORM PROMPTLY. Your signature should be
exactly as name or names appear on this Voting Instruction Form. If the
individual signing the form is a fiduciary (E.G., attorney, executor, trustee,
guardian, etc.) the individual's signature must be followed by his/her full
title.
<PAGE>
VOTING INSTRUCTION FORM
PROTECTIVE INVESTMENT COMPANY
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
PROTECTIVE INVESTMENT COMPANY FOR A SPECIAL MEETING OF SHAREHOLDERS OF THE
PROTECTIVE INVESTMENT COMPANY
I hereby instruct Protective Life Insurance Company ("Protective Life") to
vote the shares of the Global Income Fund (the "Fund") of the Protective
Investment Company (the "Company") as to which I am entitled to give
instructions as shown, at a Special Meeting of the Shareholders of the Fund
("the Meeting") to be held at 10:00 a.m. on April 30, 1996, in Training Room A,
the second floor of the Protective Life Corporation Building, 2801 Highway 280
South, Birmingham, Alabama 35223 and any adjournments thereof as follows:
(1) To approve the Investment Management Agreement between Investment
Distributors Advisory Services, Inc. ("IDASI"), and the Company:
/ / For / / Against / / Abstain
(2) To approve the investment advisory agreement between IDASI and Goldman
Sachs Asset Management International ("GSAMI");
/ / For / / Against / / Abstain
(3) To elect the nominees for directors to the Company's Board of
Directors.
/ / For all nominees listed below (except as marked to the contrary)
/ / Withhold authority to vote for all nominees listed below:
(Instructions: To withhold authority to vote for any individual nominee(s),
strike a line through the names of such nominee(s) in the list below.)
Carolyn King, R. Stephen Briggs, D. Warren Bailey,
G. Ruffner Page, Jr., Cleophus Thomas, Jr.
______________________________________________________________
(4) To ratify the selection of Coopers & Lybrand L.L.P. as the Company's
independent public accountant.
/ / For / / Against / / Abstain
(5) In the discretion of Protective Life, to transact such other business
as may properly come before the Meeting or any adjournment thereof.
THE BOARD OF DIRECTORS OF THE COMPANY
RECOMMENDS A VOTE FOR ALL PROPOSALS.
<PAGE>
PLEASE SIGN AND DATE THIS FORM AND RETURN PROMPTLY.
I hereby revoke any and all voting instructions with respect to such shares
previously given by me. I acknowledge receipt of the Proxy Statement dated March
26, 1996. THIS INSTRUCTION WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, THIS INSTRUCTION WILL BE VOTED "FOR" EACH PROPOSAL.
This instruction may be revoked at any time prior to the Meeting by
notifying the Secretary of Protective Life in writing at 2801 Highway 280 South,
Birmingham, Alabama 35223.
- - ------------------------------------- -------------------------------------
Variable Contract Owner Signature Date
PLEASE SIGN, DATE AND RETURN THIS FORM PROMPTLY. Your signature should be
exactly as name or names appear on this Voting Instruction Form. If the
individual signing the form is a fiduciary (E.G., attorney, executor, trustee,
guardian, etc.) the individual's signature must be followed by his/her full
title.
