Exhibit d
FORM OF INVESTMENT ADVISORY AGREEMENT
THE PREMIUM PORTFOLIOS
GOVERNMENT INCOME PORTFOLIO
INVESTMENT ADVISORY AGREEMENT, dated as of __________________, by and
between The Premium Portfolios, a New York trust (the "Trust"), and Citi Fund
Management LLC, a Delaware corporation ("CFM" or the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end investment company
registered under the Investment Company Act of 1940 (collectively with the
rules and regulations promulgated thereunder, the "1940 Act"), and
WHEREAS, the Trust wishes to engage the Adviser to provide certain
investment advisory services for the series of the Trust designated as
Government Income Portfolio (the "Portfolio"), and the Adviser is willing to
provide such investment advisory services for the Portfolio on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of the Adviser. The Adviser shall provide the Portfolio with
such investment advice and supervision as the Trust may from time to time
consider necessary for the proper supervision of the Portfolio's investment
assets. CFM shall act as the Adviser for the Portfolio and as such shall
furnish continuously an investment program and shall determine from time to
time what securities shall be purchased, sold or exchanged and what portion of
the assets of the Portfolio shall be held uninvested, subject always to the
restrictions of the Trust's Declaration of Trust, dated September 13, 1993, and
Bylaws, as each may be amended from time to time (respectively, the
"Declaration" and the "By-Laws"), to the provisions of the 1940 Act, and to the
then-current Registration Statement of the Trust with respect to the Portfolio.
The Adviser shall also make recommendations as to the manner in which voting
rights, rights to consent to corporate action and any other rights pertaining
to the Portfolio's securities shall be exercised. Should the Board of Trustees
of the Trust at any time, however, make any definite determination as to
investment policy applicable to the Portfolio and notify the Adviser thereof in
writing, the Adviser 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determination has been revoked.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 Adviser shall take, on behalf of the
Portfolio, all actions which it deems necessary to implement the investment
policies determined as provided above, and in particular to place all orders
for the purchase or sale of securities for the Portfolio's account with the
brokers or dealers selected by it, and to that end the Adviser is authorized as
the agent of the Trust to give instructions to the custodian of the Portfolio
as to deliveries of securities and payments of cash for the account of the
Portfolio. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser is directed to seek for the Portfolio in
its best judgment, prompt execution in an effective manner at the most
favorable price. Subject to this requirement of seeking the most favorable
price, securities may be bought from or sold to broker-dealers who have
furnished statistical, research and other information or services to the
Adviser or the Portfolio, subject to any applicable laws, rules and
regulations. In making purchases or sales of securities or other property for
the account of the Portfolio, the Adviser may deal with itself or with the
Trustees of the Trust or the Trust's exclusive placing agent, to the extent
such actions are permitted by the 1940 Act.
2. Allocation of Charges and Expenses. The Adviser shall furnish at its
own expense all necessary services, facilities and personnel in connection with
its responsibilities under Section 1 above. It is understood that the Trust
will pay from the assets of the Portfolio all of its own expenses allocable to
the Portfolio including, without limitation, compensation of Trustees not
"affiliated" with the Adviser; governmental fees; interest charges; taxes;
membership dues in the Investment Company Institute allocable to the Trust;
fees and expenses of independent auditors, of legal counsel and of any transfer
agent, administrator, distributor, shareholder servicing agent, registrar or
dividend disbursing agent of the Trust; expenses of issuing and redeeming
interests and servicing investor accounts; expenses of preparing, printing and
mailing, notices, proxy statements and reports to governmental officers and
commissions and to investors in the Portfolio; expenses connected with the
execution, recording and settlement of security transactions; insurance
premiums; fees and expenses of the custodian for all services to the Portfolio,
including safekeeping of funds and securities and maintaining required books
and accounts; expenses of calculating the net asset value of the Portfolio; and
expenses of meetings of the Portfolio's investors.
3. Compensation of the Adviser. For the services to be rendered, the Trust
shall pay to the Adviser from the assets of the Portfolio an investment
advisory fee computed and paid monthly at an annual rate equal to 0.35% of the
Portfolio's average daily net assets for the Portfolio's then-current fiscal
year. If CFM serves as Adviser for less than the whole of any period specified
in this Section 3, the compensation to CFM, as Adviser, shall be prorated.
4. Covenants of the Adviser. The Adviser agrees that it will not deal with
itself, or with the Trustees of the Trust or the Trust's principal underwriter
or distributor, as principals in making purchases or sales of securities or
other property for the account of the Portfolio, except as permitted by the
1940 Act, will not take a long or short position in shares of the Portfolio
except as permitted by the Declaration, and will comply with all other
provisions of the Declaration and By-Laws and the then-current Registration
Statement applicable to the Portfolio relative to the Adviser and its Directors
and officers.
5. Limitation of Liability of the Adviser. The Adviser 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 execution of securities
transactions for the Portfolio, except for 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. As used in this Section 5,
the term "Adviser" shall include Directors, officers and employees of the
Adviser as well as CFM itself.
6. Activities of the Adviser. The services of the Adviser to the Portfolio
are not to be deemed to be exclusive, CFM being free to render investment
advisory and/or other services to others. It is understood that Trustees,
officers, and investors of the Trust are or may be or may become interested in
the Adviser, as Directors, officers, employees, or otherwise and that
Directors, officers and employees of the Adviser are or may become similarly
interested in the Trust and that the Adviser may be or may become interested in
the Trust as an investor or otherwise.
7. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written and shall
govern the relations between the parties hereto thereafter, and shall remain in
force for an initial two-year period and thereafter indefinitely, provided that
its continuance is "specifically approved at least annually" (a) by the vote of
a majority of the Trustees of the Trust who are not "interested persons" of the
Trust or of the Adviser at a meeting specifically called for the purpose of
voting on such approval, and (b) by the Board of Trustees of the Trust or by
"vote of a majority of the outstanding voting securities" of the Portfolio.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Portfolio, or by the Adviser, in each case on not more than
60 days' nor less than 30 days' written notice to the other party. This
Agreement shall automatically terminate in the event of its "assignment".
This Agreement may be amended only if such amendment is approved by the
"vote of a majority of the outstanding voting securities" of the Portfolio.
The terms "specifically approved at least annually", "vote of a majority
of the outstanding voting securities", "assignment", "affiliated person", and
"interested persons", when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
Each party acknowledges and agrees that all obligations of the Trust under
this Agreement are binding only with respect to the Portfolio; that any
liability of the Trust under this Agreement with respect to the Portfolio, or
in connection with the transactions contemplated herein with respect to the
Portfolio, shall be discharged only out of the assets of the Portfolio; and
that no other series of the Trust shall be liable with respect to this
Agreement or in connection with the transactions contemplated herein.
The undersigned Trustee or officer of the Trust has executed this
Agreement not individually, but as Trustee or officer under the Trust's
Declaration of Trust, dated September 13, 1993, as amended, and the obligations
of this Agreement are not binding upon any of the Trustees or officers of the
Trust individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
THE PREMIUM PORTFOLIOS CITI FUND MANAGEMENT LLC
By:_____________________ By:___________________________
Title: Title:
