EXHIBIT 99.B5-1
EXHIBIT (d)(1) -INVESTMENT ADVISORY AGREEMENT ON BEHALF OF THE PORTFOLIOS
OF THE WRL SERIES FUND, INC. WITH WRL INVESTMENT MANAGEMENT, INC.
WRL SERIES FUND, INC.
INVESTMENT ADVISORY AGREEMENT
This Agreement, entered into between WRL Series Fund, Inc., a Maryland
corporation (referred to herein as the "Fund"), and WRL Investment Management,
Inc., a Florida corporation (referred to herein as "WRL Management"), to provide
certain investment advisory services with respect to the series of shares of
common stock of the Fund.
The Fund is registered as an open-end investment company under the
Investment Company Act of 1940, as amended, (the "1940 Act") and consists of
more than one series of shares (the "Portfolios"). In managing its Portfolios,
the Fund wishes to have the benefit of the investment advisory services of WRL
Management and its assistance in performing certain management functions. WRL
Management desires to furnish such services to the Fund and to perform the
functions assigned to it under this Agreement for the considerations provided.
Schedule A lists the effective date and termination date of this Agreement for
each Portfolio of the Fund.
Accordingly, the parties have agreed as follows:
1. INVESTMENT ADVISORY SERVICES. In its capacity as investment adviser
to the Fund, WRL Management shall have the following responsibilities:
(a) to furnish continuous advice and recommendations to the Fund
as to the acquisition, holding or disposition of any or all of
the securities or other assets which the Portfolios may own or
contemplate acquiring from time to time;
(b) to cause its officers to attend meetings and furnish oral or
written reports, as the Fund may reasonably require, in order to
keep the Board of Directors and appropriate officers of the Fund
fully informed as to the conditions of each investment portfolio
of the Portfolios, the investment recommendations of WRL
Management, and the investment considerations which have given
rise to those recommendations;
(c) to supervise the purchase and sale of securities of the
Portfolios as directed by the appropriate officers of the Fund;
and
(d) to maintain all books and records required to be maintained
by the Investment Adviser pursuant to the 1940 Act and the rules
and regulations promulgated thereunder with respect to
transactions on behalf of the Fund. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, WRL Management
hereby agrees: (i) that all records that it maintains for the
Fund are the property of the Fund, (ii) to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any records
that it maintains for the Fund and that are required to be
maintained by Rule 31a-1 under the 1940 Act and (iii) agrees to
surrender promptly to the Fund any records that it maintains for
the Fund upon request by the Fund; provided, however, WRL
Management may retain copies of such records.
WRL Management shall pay all expenses incurred in connection with the
performance of its responsibilities under this Agreement. It is understood and
agreed that WRL Management may, and intends to, enter into Sub-Advisory
Agreements with duly registered investment advisers (the "Sub-Advisers") for
each Portfolio, under which each Sub-Adviser will, under the supervision of WRL
Management, furnish investment information and advice with respect to one or
more Portfolios to assist WRL Management in carrying out its responsibilities
under this Section 1. The compensation to be paid to each Sub-Adviser for such
services and the other terms and conditions under which the services shall be
rendered by the Sub-Adviser shall be set forth in the Sub-Advisory Agreement
between WRL Management and each Sub-Adviser; provided, however, that such
Agreement shall be approved by the Board of
Directors and by the holders of the outstanding voting securities of each
Portfolio in accordance with the requirements of Section 15 of the 1940 Act, and
shall otherwise be subject to, and contain such provisions as shall be required
by the 1940 Act.
2. OBLIGATIONS OF THE FUND. The Fund shall have the following
obligations under this Agreement:
(a) to keep WRL Management continuously and fully informed as to
the composition of each Portfolio's investment securities and
the nature of all of its assets and liabilities from time to
time;
(b) to furnish WRL Management with a certified copy of any
financial statement or report prepared for each Portfolio by
certified or independent public accountants, and with copies of
any financial statements or reports made to its shareholders or
to any governmental body or securities exchange;
(c) to furnish WRL Management with any further materials or
information which WRL Management may reasonably request to
enable it to perform its functions under this Agreement; and
(d) to compensate WRL Management for its services in accordance
with the provisions of Section 3 hereof.
3. COMPENSATION. For its services under this Agreement, WRL Management
is entitled to receive from each Portfolio a monthly fee, payable on the last
day of each month during which or part of which this Agreement is in effect, as
set forth on Schedule A attached to this Agreement, as it may be amended from
time to time in accordance with Section 11 below. For the month during which
this Agreement becomes effective and the month during which it terminates,
however, there shall be an appropriate pro-ration of the fee payable for such
month based on the number of calendar days of such month during which this
Agreement is effective.
4. EXPENSES PAID BY EACH PORTFOLIO. Nothing in this Agreement shall be
construed to impose upon WRL Management the obligation to incur, pay, or
reimburse a Portfolio for any expenses. A Portfolio shall pay all of its
expenses including, but not limited to:
(a) all costs and expenses, including legal and accounting fees,
incurred in connection with the formation and organization of a
Portfolio, including the preparation (and filing, when
necessary) of the Portfolio's contracts, plans and documents;
conducting meetings of organizers, directors and shareholders,
and all other matters relating to the formation and organization
of a Portfolio and the preparation for offering its shares. The
organization of a Portfolio for all of the foregoing purposes
will be considered completed upon effectiveness of the
post-effective amendment to the Fund's registration statement to
register the Portfolio under the Securities Act of 1933.
(b) all costs and expenses, including legal and accounting fees,
filing fees and printing costs, in connection with the
preparation and filing of the post-effective amendment to the
Fund's registration statement to register the Portfolio under
the Securities Act of 1933 and the 1940 Act (including all
amendments thereto prior to the effectiveness of the
registration statement under the Securities Act of 1933);
(c) investment advisory fees;
(d) any compensation, fees, or reimbursements which the Fund
pays to its Directors who are not interested persons (as that
phrase is defined in Section 2(a)(19) of the ▇▇▇▇ ▇▇▇) of the
Fund or WRL Management;
(e) compensation of the Fund's custodian, administrator,
registar and dividend disbursing agent;
(f) legal, accounting and printing expenses;
(g) other administrative, clerical, recordkeeping and
bookkeeping expenses;
(h) pricing costs, including the daily calculation of net asset
value;
(i) auditing;
(j) insurance premiums, including Fidelity Bond Coverage, Error
& Ommissions Coverage and Directors and Officers Coverage, in
accordance with the provisions of the 1940 Act and the rules
thereunder;
(k) services for shareholders, including allocable telephone and
personnel expenses;
(l) brokerage commissions and all other expenses in connection
with execution of portfolio transactions, including interest:
(m) all federal, state and local taxes (including stamp, excise,
income and franchise taxes) and the preparation and filing of
all returns and reports in connection therewith;
(n) costs of certificates and the expenses of delivering such
certificates to the purchasers of shares relating thereto;
(o) expenses of local representation in Maryland;
(p) fees and/or expenses payable pursuant to any plan of
distribution adopted with respect to the Fund in accordance with
Section 12(b) of the 1940 Act and Rule 12b-1 thereunder;
(q) expenses of shareholders' meetings and of preparing,
printing and distributing notices, proxy statements and reports
to shareholders;
(r) expenses of preparing and filing reports with federal and
state regulatory authorities;
(s) all costs and expenses, including fees and disbursements, of
counsel and auditors, filing and renewal fees and printing costs
in connection with the filing of any required amendments,
supplements or renewals of registration statement,
qualifications or prospectuses under the Securities Act of 1933
and the securities laws of any states or territories subsequent
to the effectiveness of the initial registration statement under
the Securities Act of 1933;
(t) all costs involved in preparing and printing prospectuses of
the Fund;
(u) extraordinary expenses; and
(v) all other expenses properly payable by the Fund or the
Portfolios.
5. TREATMENT OF INVESTMENT ADVICE. With respect to the Portfolios, the
Fund shall treat the investment advice and recommendations of WRL Management as
being advisory only, and shall retain full control over its own investment
policies. However, the Directors of the Fund may delegate to the appropriate
officers of the Fund, or to a committee of Directors, the power to authorize
purchases, sales or other actions affecting the Portfolios in the interim
between meetings of the Directors, provided such action is consistent with the
established investment policy of the Directors and is reported to the Directors
at their next meeting.
6. BROKERAGE COMMISSIONS. For purposes of this Agreement, brokerage
commissions paid by each Portfolio upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Portfolio and shall
be paid by the Portfolio. WRL Management is authorized and directed to place
each Portfolio's securities transactions, or to delegate to the Sub-Adviser of
that Portfolio the authority and direction to place the Portfolio's securities
transactions,
only with brokers and dealers who render satisfactory service in the execution
of orders at the most favorable price and at reasonable commission rates (best
price and execution); provided, however, that WRL Management or the Sub-Adviser,
may pay a broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if WRL Management or the
Sub-Adviser determines in good faith that such amount of commission was
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 the overall responsibilities of WRL Management or the
Sub-Adviser. WRL Management and the Sub-Adviser are also authorized to consider
sales of individual and group life insurance policies and/or variable annuity
contract issued by Western Reserve Life Assurance Co. of Ohio by a broker-dealer
as a factor in selecting broker-dealers to execute the Portfolio's securities
transactions, provided that in placing portfolio business with such
broker-dealers, WRL Management and the Sub-Adviser shall seek the best execution
of each transaction and all such brokerage placement shall be consistent with
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc. Notwithstanding the foregoing, the Fund shall retain the right to direct
the placement of all securities transactions of the Portfolios, and the
Directors may establish policies or guidelines to be followed by WRL Management
and the Sub-Advisers in placing securities transactions for each Portfolio
pursuant to the foregoing provisions. WRL Management shall report on the
placement of portfolio transactions each quarter to the Directors of the Fund.
7. LIMITATION ON EXPENSES OF THE PORTFOLIOS. If the insurance or
securities laws, regulations or policies of any state in which shares of the
Portfolios are qualified for sale limit the operation and management expenses
(collectively referred to as "Normal Operating Expenses" and as described
below), WRL Management will pay on behalf of the Portfolios the amount by which
such expenses exceed the lowest of such state limitations (the "Expense
Limitation"). Normal Operating Expenses include, but are not limited to, the
fees of the Portfolios' investment adviser, the compensation of its custodian,
registrar, auditors and legal counsel, printing expenses, expenses incurred in
complying with all laws applicable to the sale of shares of the Portfolios and
any compensation, fees, or reimbursement which the Portfolios pay to Directors
of the Fund who are not interested persons (as that phrase is defined in Section
2(a)(19) of the ▇▇▇▇ ▇▇▇) of WRL Management, but excluding all interest and all
federal, state and local taxes (such as stamp, excise, income, franchise and
similar taxes). If Normal Operating Expenses exceed in any year the Expense
Limitation of the Fund, WRL Management shall pay for those excess expenses on
behalf of the Portfolios in the year in which they are incurred. Expenses of the
Portfolios shall be calculated and accrued monthly. If at the end of any month
the accrued expenses of the Portfolios exceed a pro rata portion of the
above-described Expense Limitation, based upon the average daily net asset value
of the Portfolios from the beginning of the fiscal year through the end of the
month for which calculation is made, the amount of such excess shall be paid by
WRL Management on behalf of the Portfolios and such excess amounts shall
continue to be paid until the end of a month when such accrued expenses are less
than the pro rata portion of such Expense Limitation. Any necessary final
adjusting payments, whether from WRL Management to the Portfolios or from the
Portfolios to WRL Management, shall be made as soon as reasonably practicable
after the end of the fiscal year.
8. TERMINATION. This Agreement may be terminated at any time, without
penalty, by the Directors of the Fund or by the shareholders of each Portfolio
acting by vote of at least a majority of its outstanding voting securities (as
that phrase is defined in Section 2(a)(42) of the ▇▇▇▇ ▇▇▇) provided in either
case that 60 days' written notice of termination be given to WRL Management at
its principal place of business. This Agreement may be terminated by WRL
Management at any time by giving 60 days' written notice of termination to the
Fund, addressed to its principal place of business.
9. ASSIGNMENT. This Agreement shall terminate automatically in the event
of any assignment (as the term is defined in Section 2(a)(4) of the ▇▇▇▇ ▇▇▇) of
this Agreement.
10. TERM. This Agreement shall continue in effect, unless sooner
terminated in accordance with its terms, as provided for each Portfolio on
Schedule A, and shall continue in effect from year to year thereafter provided
such continuance is specifically approved at least annually by the vote of a
majority of the Directors of the Fund who are not parties hereto or interested
persons (as that term is defined in Section 2(a)(19) of the ▇▇▇▇ ▇▇▇) of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Directors of the Fund
or the affirmative vote of a majority of the outstanding voting securities of
each Portfolio (as that phrase is defined in Section 2(a)(42) of the 1940 Act).
11. AMENDMENTS. This Agreement may be amended only with the approval of
the affirmative vote of a majority of the outstanding voting securities of each
Portfolio (as that phrase is defined in Section 2(a)(42) of the ▇▇▇▇ ▇▇▇) and
the approval by the vote of a majority of Directors of the Fund who are not
parties hereto or interested persons (as that phrase is defined in Section
2(a)(19) of the 1940 Act of 1940) of any such party, cast in person at a meeting
called for the purpose of voting on the approval of such amendment, unless
otherwise permitted in accordance with the 1940 Act.
12. PRIOR AGREEMENTS. This Agreement constitutes the entire agreement
between the parties hereto and supersedes in its entirety any and all previous
agreements between the parties relative to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ATTEST: WRL SERIES FUND, INC.
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ -----------------------------------
Assistant Vice President Chairman of the Board and President
and Assistant Secretary
ATTEST: WRL INVESTMENT MANAGEMENT, INC.
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------ -----------------------------------
Assistant Vice President President
and Assistant Secretary
Schedule A
SCHEDULE EFFECTIVE: May 1, 1999
PERCENTAGE OF MONTHLY EFFECTIVE DATE/
PORTFOLIO AVERAGE DAILY NET ASSETS TERMINATION DATE
--------- ------------------------ ----------------
January 1, 1997/
WRL Janus Growth 0.80% April 30, 2000
(formerly Growth Portfolio)
January 1, 1998/
WRL AEGON Bond 0.45% April 30, 2000
(formerly Bond Portfolio)
January 1, 1997/
WRL Janus Global 0.80% April 30, 2000
(formerly Global Portfolio)
January 1, 1997/
WRL ▇.▇. ▇▇▇▇▇▇ Money Market 0.40% April 30, 2000
(formerly Money Market Portfolio)
January 1, 1997/
WRL WKAM Emerging Growth 0.80% April 30, 2000
(formerly Emerging Growth Portfolio)
January 1, 1997/
WRL LKCM Strategic Total Return 0.80% April 30, 2000
(formerly Strategic Total Return
Portfolio (Equity-Income))
January 1, 1997/
WRL AEGON Balanced 0.80% April 30, 2000
(formerly Balanced Portfolio)
January ▇, ▇▇▇▇/
▇▇▇ ▇▇▇▇▇ Aggressive Growth 0.80% April 30, 2000
(formerly Aggressive Growth Portfolio)
January 1, 1997/
WRL Federated Growth & Income 0.75% April 30, 2000
(formerly Growth & Income Portfolio
(Utility))
January 1, 1997/
WRL ▇▇▇▇ Asset Allocation 0.80% April 30, 2000
(formerly Tactical Asset Allocation)
January 1, 1997/
WRL NWQ Value Equity 0.80% April 30, 2000
(formerly Value Equity Portfolio)
January 1, 1997/
WRL C.A.S.E. Growth 0.80% April 30, 2000
(formerly C.A.S.E. Growth Portfolio)
January 1, 1997/
WRL GE/Scottish Equitable 1.00% April 30, 2000
International Equity
(formerly International Equity
Portfolio)
January 1, 1997/
WRL GE U.S. Equity 0.80% April 30, 2000
(formerly U.S. Equity Portfolio)
January 1, ▇▇▇▇/
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Value 0.80% April 30, 2000
(formerly Third Avenue Value Portfolio)
WRL ▇.▇. ▇▇▇▇▇▇ Real Estate Securities 0.80% May 1, 1998/
(formerly Real Estate April 30, 2000
Securities Portfolio)
WRL Salomon All Cap 0.90% of the first $100 million of May 1, 1999/
average daily net assets; 0.80% of April 30, 2001
assets over $100 million
WRL ▇▇▇▇▇▇▇ ▇▇▇▇▇ Growth 0.90% of the first $100 million of May 1, 1999/
average daily net assets; 0.80% of April 30, 2001
assets over $100 million
WRL ▇▇▇▇▇▇▇ Sachs Small Cap 0.90% of the portfolio's average May 1, 1999/
daily net assets April 30, 2001
WRL ▇. ▇▇▇▇ Price Dividend Growth 0.90% of the first $100 million of May 1, 1999/
average daily net assets; 0.80% of April 30, 2001
assets over $100 million
WRL ▇. ▇▇▇▇ Price Small Cap 0.75% of the portfolio's average May 1, 1999/
daily net assets April 30, 2001
0.90% of the first $100 million of
WRL Pilgrim ▇▇▇▇▇▇ Mid Cap Growth average daily net assets; 0.80% of May 1, 1999/
assets over $100 million April 30, 2001
0.90% of the first $100 million of
WRL Dreyfus Mid Cap average daily net assets; 0.80% of May 1, 1999/
assets over $100 million April 30, 2001