Exhibit 5
INVESTMENT ADVISORY AGREEMENT
THE PREMIUM PORTFOLIOS
EMERGING ASIAN MARKETS EQUITY PORTFOLIO
INVESTMENT ADVISORY AGREEMENT, dated as of May 5, 1995, by and between
The Premium Portfolios, a New York trust (the "Trust"), and CITIBANK, N.A., a
national banking association ("Citibank" 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 Emerging
Asian Markets Equity 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. Citibank 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
By-laws, 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notified that such determination has been revoked.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 1.00% of the Portfolio's average daily net assets for the
Portfolio's then-current fiscal year. If Citibank serves as Adviser
for less than the whole of any period specified in this Section 3, the
compensation to Citibank, 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 Citibank itself.
6. Activities of the Adviser. The services of the Adviser to the
Portfolio are not to be deemed to be exclusive, Citibank 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 until May 5, 1997, on which date
it will terminate unless its continuance after May 5, 1997 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.
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.
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.
THE PREMIUM PORTFOLIOS CITIBANK, N.A.
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxxx
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Title: President Title: Vice President
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