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EXHIBIT 5(d)
INVESTMENT ADVISORY AGREEMENT
This Agreement made and entered into as of December 8, 1997, by and
between Asset Management Fund, Inc., a Maryland corporation (the "Fund") and
Shay Assets Management, Inc., a Florida corporation (the "Adviser").
W I T N E S S E T H:
WHEREAS, the Fund is an open-end diversified investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund desires to retain the Adviser to render investment
advisory services to the Fund, and the Adviser is willing to render such
services;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth the parties hereto agree as follows:
1. Advisory Services. The Fund hereby appoints Adviser to act as investment
adviser for the Fund and each series of the Fund listed on Schedule A as
attached hereto (a "Portfolio" or collectively, the "Portfolios"), and Adviser
accepts such appointment for the period and on the terms set forth in this
Agreement. The Fund, at its option, may also appoint the Adviser to act as
investment adviser to the Fund hereunder with respect to assets belonging to any
other Portfolio from time to time created by the Fund, but the Adviser shall not
be required to accept such appointment. Adviser shall furnish investment
research and advice to the Fund and shall manage the investment and reinvestment
of the assets of the Portfolios and their business affairs and matters
incidental thereto, all subject to the supervision of the Board of Directors of
the Fund, provisions of the Amended and Restated Articles of Incorporation, as
amended or supplemented, and By-laws of the Fund and any resolutions, rules or
regulations adopted by the Board of Directors of the Fund. Adviser shall for all
purposes herein provided be deemed to be an independent contractor and shall,
unless otherwise expressly provided herein or authorized by the Board of
Directors of the Fund from time to time, have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent for the Fund. The
Fund shall also be free to retain, at its own expense, other persons to provide
it with any services whatsoever including, but not limited to, statistical,
factual or technical information or advice. The services of Adviser herein
provided are not to be deemed exclusive and Adviser shall be free to render
similar services or other services to others.
2. Duties of Adviser. Subject to the general supervision of the Board of
Directors of the Fund, the Adviser shall, employing its discretion, manage the
investment operations of each Portfolio of the Fund and the composition of the
Portfolio of securities and investments (including cash) belonging to each
Portfolio of the Fund, including the purchase, retention and disposition thereof
and the execution of agreements relating thereto, in accordance with the Fund's
investment objective, policies and restrictions for such Portfolio as stated in
the Prospectus (as defined in section 3(f) of this Agreement) and subject to the
following understandings:
(a) The Adviser shall furnish a continuous investment program for each
Portfolio of the Fund and determine from time to time what investments or
securities will be purchased, retained or sold by the Fund with respect to
such Portfolio, and what portion of the assets belonging to such Portfolio
will be invested or held uninvested as cash.
(b) The Adviser shall use its best judgment in the performance of its
duties under this Agreement.
(c) The Adviser, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Amended and Restated
Articles of Incorporation, the By-Laws and Prospectus of the Fund and with
the instructions and directions of the Board of Directors of the Fund and
will conform to and comply with the requirements of the 1940 Act and all
other applicable Federal and state laws and regulations.
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(d) The Adviser shall determine the securities to be purchased or sold
by the Fund with respect to each Portfolio and, as agent for the Fund on
behalf of such Portfolio, will effect Portfolio transactions pursuant to
its determinations either directly with the issuer or with any broker
and/or dealer in such securities; in placing orders with brokers and/or
dealers the Adviser intends to seek the best price and execution for
purchases and sales; the Adviser shall also determine whether or not the
Fund shall enter into repurchase or reverse repurchase agreements with
respect to such Portfolio.
On occasions when the Adviser deems the purchase or sale of a security
to be in the best interest of a Portfolio of the Fund as well as another
Portfolio or other Portfolios and/or as well as other customers, the
Adviser may, to the extent permitted by applicable laws and regulations,
but shall not be obligated to, aggregate the securities to be sold or
purchased in order to obtain the best price and execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Adviser in a manner it
considers to be equitable and consistent with its fiduciary obligations to
the Fund with respect to each Portfolio and, if applicable, to such other
customers.
(e) The Adviser shall maintain books and records with respect to the
securities transactions of each Portfolio of the Fund and shall render to
the Fund's Board of Directors such periodic and special reports as the
Board of Directors may reasonably request.
(f) The Adviser shall provide the Fund's custodian with respect to each
Portfolio on each Business Day (as defined in the Prospectus) with
information relating to all transactions concerning the assets belonging to
such Portfolio, except redemptions of and any subscriptions for Fund shares
of such Portfolios.
3. Delivery of Documents. The Fund delivered copies of each of the
following documents to the Adviser and will promptly notify it of and deliver to
it all future amendments and supplements, if any:
(a) Articles of Incorporation of the Fund, filed with the Department of
Assessments and Taxation of the State of Maryland, as presently in effect
and as amended or restated from time to time, being herein called the
"Articles of Incorporation."
(b) By-Laws of the Fund (such By-Laws, as presently in effect and as
amended from time to time, being herein called the "By-Laws").
(c) Certified resolutions of the Board of Directors of the Fund
authorizing the appointment of the Adviser and approving the form of this
Agreement.
(d) Registration Statement under the 1940 Act and the Securities Act of
1933, as amended, on Form N-1A (No. 2-78808) (the "Registration Statement")
as filed with the Securities and Exchange Commission (the "Commission") on
August 12, 1982 relating to the Fund, and all amendments thereto.
(e) Notification of Registration of the Fund under the 1940 Act on
Form N-8A as filed with the Commission on August 12, 1982.
(f) Current prospectus or prospectuses of the Fund with respect to the
Portfolios (such prospectus or prospectuses as presently in effect and as
amended or supplemented from time to time, being herein called the
"Prospectus").
4. Employees of Adviser. The Adviser shall authorize and permit any of its
directors, officers and employees who may be elected as directors or officers of
the Fund to serve in capacities in which they are elected.
5. Books and Records. The Adviser shall keep the Fund's books and records
required to be maintained by it pursuant to section 2(e) of this Agreement. The
Adviser agrees that all records which it maintains for the Fund are the property
of the Fund and it will promptly surrender any of such records to the Fund upon
the Fund's request. The Adviser further agrees to preserve for the period
prescribed by Rule 31a-2 of the Commission under the 1940 Act
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any such records as are required to be maintained by the Adviser with respect
to the Fund by Rule 31a-1 of the Commission under the 1940 Act.
6. Expenses. During the term of this Agreement the Adviser will pay all
expenses (including without limitation the compensation of all its directors,
officers and employees serving as directors or officers of the Fund pursuant to
section 4 of this Agreement) incurred by it in connection with its activities
under this Agreement other than the cost of securities and investments purchased
for the Fund (including taxes ad brokerage commissions, if any).
7. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Fund shall pay the Adviser a fee, computed daily
and payable monthly, at the annual rate as set forth in the attached fee
schedule ("Schedule B") based upon the average net assets of each Portfolio.
Such fee as is attributable to each Portfolio shall be a separate (and not joint
or joint and several) obligation of each such Portfolio. The Fund shall reduce
the advisory fee to be paid to the Adviser by the amount of any advisory fees
paid to other investment companies relating to the Portfolios' investment in
such investment companies' securities.
8. Limitation on Expenses.
(a) In the event the daily ratio of Expenses (as defined in section
8(b) below) to daily net assets with respect to a certain Portfolio on any day
exceeds 0.75 of 1% (such excess hereinafter called the "Excess Expense" of such
Portfolio), the compensation due to the Adviser under Schedule B for that day
shall be reduced, but not below zero, by an amount equal to the Excess Expense
of such Portfolio. The Portfolios to which this section 8(a) does not apply are
so noted on Exhibit B.
(b) For purposes of section 8(a) of this Agreement the term,
"Expenses" with respect to a Portfolio means the expenses of the Fund allocated
to such Portfolio in accordance with the Fund's Articles of Incorporation or a
resolution of the Fund's Board of Directors adopted pursuant thereto, including
such Portfolio's pro rata share, allocated as aforesaid, for the general
expenses of the Fund. Notwithstanding the foregoing, the Expenses of a Portfolio
shall include its pro rata share, allocated as aforesaid, of the fees payable to
the Adviser, to the distributor provided that the fees payable to the
distributor, for purposes of computing such Portfolio's Expenses shall not
exceed the fees of the distributor with respect to such Portfolio computed in
accordance with the fee rate (excluding any voluntary fee waivers) set forth in
the Fund's Prospectus with respect to such Portfolio as amended or supplemented
on the date of this Agreement), to the Fund's administrative agent, if any, to
the Fund's transfer agent, if any, and to the Fund's custodian; but the Expenses
of such Portfolio shall exclude any interest, taxes, brokerage commissions and
litigation and indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Fund's business.
9. Limitation of Liability. The Adviser shall not be liable for any error of
judgment or mistake or law or for any loss suffered by any Portfolio of the Fund
in connection with the matters to which this Agreement relates, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services (in which case any award of damages shall be limited
to the period and in the amount set forth in Section 36(b)(3) of the 0000 Xxx)
or a loss resulting from willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement.
10. Effective Date and Term. This Agreement shall become effective as to
each subject Portfolio on December 8, 1997, or on such later date specified for
a Portfolio, provided that the Agreement is approved by a majority of the
outstanding voting shares (as defined in the 0000 Xxx) of the subject Portfolio.
This Agreement shall remain in effect until March 1, 1998, and shall continue in
effect from year to year thereafter as to each subject Portfolio, subject to
termination as hereinafter provided, if such continuance is approved at least
annually by (a) a majority of the outstanding voting shares (as defined in the
0000 Xxx) of each Portfolio or by vote of the Fund's Board of Directors, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by vote of a majority of the Directors of the Fund who are not parties to this
Agreement or "interested persons" (as defined in the 0000 Xxx) of any party to
this Agreement, cast in person at a meeting called for the purpose of voting on
such approval. This Agreement may be terminated by the Fund with respect to any
or all Portfolios at any time, without the payment of any penalty, by the Board
of Directors of the Fund or by vote of a majority of the outstanding voting
shares (as defined in the 0000 Xxx) of the Fund or of the affected Portfolio or
Portfolios, as the case may be, on sixty
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(60) days' written notice to the Adviser, or by the Adviser with respect to
any or all Portfolios at any time, without the payment of any penalty, on ninety
(90) days' written notice to the Fund. This Agreement will automatically and
immediately terminate in the event of its assignment (as defined in the 1940
Act).
11. Amendment of Agreement. This Agreement may be amended by mutual consent,
but the consent of the Fund must be approved (a) by vote of a majority of those
Directors of the Fund who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of any such party, cast in person at a
meeting called for the purpose of voting on such amendment, and (b) by vote of a
majority of the outstanding voting shares (as defined in the 0000 Xxx) of the
Fund or of the affected Portfolio or Portfolios, as the case may be.
12. Notices. Notices of any kind to be given to the Adviser by the Fund
shall be in writing and shall be duly given if mailed or delivered to the
Adviser at 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, XX 00000, Attention: Executive Vice
President, or at such other address or to such other individual as shall be
specified by the Adviser to the Fund in accordance with this section 12. Notices
of any kind to be given to the Fund by the Adviser shall be in writing and shall
be duly given if mailed or delivered to the Fund at Asset Management Fund, Inc.,
000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, XX 00000, Attention: President, or at such other
address or to such other individual as shall be specified by the Fund to the
Adviser in accordance with this section 12.
13. Authority. The directors have authorized the execution of this Agreement
in their capacity as directors and not individually and the Adviser agrees that
neither the stockholders nor the directors nor any officer, employee,
representative or agent of the Fund shall be personally liable upon, nor shall
resort be had to their private property for the satisfaction of, obligations
given, executed or delivered on behalf of or by the Fund, that the stockholders,
directors, officers, employees, representatives and agents of the Fund shall not
be personally liable hereunder, and that it shall look solely to the property of
the Fund for the satisfaction of any claim hereunder.
14. Controlling Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of Illinois.
15. Multiple Counterparts. This Agreement may be executed simultaneously in
several counterparts, each of which shall be deemed to be an original, but which
together shall constitute one and the same instrument.
16. Captions. The captions of the sections are for descriptive purposes only
and are not intended to limit or otherwise affect the content of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of December 8, 1997.
ASSET MANAGEMENT FUND, INC.
By: /s/Xxxxxx X. Xxxx
----------------------------
Xxxxxx X. Xxxx
Its: President
ATTEST:
By: /s/Xxxxxx X. Xxxxxxx, Xx.
----------------------------
Xxxxxx X. Xxxxxxx, Xx.
Its: Secretary
SHAY ASSETS MANAGEMENT, INC.
By: /s/Xxxxxx X. Xxxxxxx, Xx.
----------------------------
Xxxxxx X. Xxxxxxx, Xx.
Its: President
ATTEST:
By: /s/Xxxxxx X. Xxxxxxx
----------------------------
Xxxxxx X. Xxxxxxx
Its: Vice President
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SCHEDULE A
DATE ADDED TO
AGREEMENT
PORTFOLIO
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Short U.S. Government Securities Portfolio December 8, 1997
U.S. Government Mortgage Securities Portfolio December 8, 1997
Intermediate Mortgage Securities Portfolio December 8, 1997
Money Market Portfolio December 8, 1997
Adjustable Rate Mortgage (ARM) Portfolio December 8, 1997
ASSET MANAGEMENT FUND, INC.
By: /s/Xxxxxx X. Xxxx
--------------------------
Xxxxxx X. Xxxx
Its: President
ATTEST:
By: /s/Xxxxxx X. Xxxxxxx, Xx.
--------------------------
Xxxxxx X. Xxxxxxx, Xx.
Its: Secretary
SHAY ASSETS MANAGEMENT, INC.
By: /s/Xxxxxx X. Xxxxxxx, Xx.
--------------------------
Xxxxxx X. Xxxxxxx, Xx.
Its: President
ATTEST:
By: /s/Xxxxxx X. Xxxxxxx
--------------------------
Xxxxxx X. Xxxxxxx
Its: Vice President
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SCHEDULE B
FEE SCHEDULE
FIRST SECOND THIRD OVER
PORTFOLIO $500 MILLION $500 MILLION $500 MILLION $1.5 BILLION
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Short U.S. Government Securities .25% .175% .125% .10%
Portfolio
U.S. Government Mortgage Securities .25% .175% .125% .10%
Portfolio
Intermediate Mortgage Securities .35% .275% .20% .10%
Portfolio
FIRST SECOND OVER
$500 MILLION $500 MILLION $1 BILLION
---------------------------------------------------
Money Market Portfolio .15% .125% .10%
FIRST SECOND OVER
$3 BILLION $2 BILLION $5 BILLION
---------------------------------------------------
Adjustable Rate Mortgage (ARM) .45% .35% .25%
Portfolio*
*Expense limitation in section 8(a) is not applicable.
ASSET MANAGEMENT FUND, INC.
By: /s/Xxxxxx X. Xxxx
------------------------
Xxxxxx X. Xxxx
Its: President
ATTEST:
By: /s/Xxxxxx X. Xxxxxxx, Xx.
-----------------------------
Xxxxxx X. Xxxxxxx, Xx.
Its: Secretary
SHAY ASSETS MANAGEMENT, INC.
By: /s/Xxxxxx X. Xxxxxxx, Xx.
------------------------
Xxxxxx X. Xxxxxxx, Xx.
Its: President
ATTEST:
By: /s/Xxxxxx X. Xxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxx
Its: Vice President
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