EXHIBIT NO. 99.5(b)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of this 17th day of November, 1995 by
and between MFS UNION STANDARD TRUST, a Massachusetts business trust (the
"Trust") on behalf of MFS UNION STANDARD RESEARCH FUND, a series of the Trust
(the "Fund"), and Massachusetts Financial Services Company, a Delaware
corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end investment company
registered under the Investment Company Act of 1940; and
WHEREAS, the Adviser is willing to provide business management services to
the Fund 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:
ARTICLE 1: DUTIES OF THE ADVISER. The Adviser shall provide the Fund
with such investment advice and supervision as the latter may from time to
time consider necessary for the proper management of its funds. The Adviser
shall act as Adviser to the Fund 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
Fund shall be held uninvested, subject always to the restrictions of the
Trust's Declaration of Trust, dated September 1, 1993 and By-Laws, as amended
from time to time (respectively, the "Declaration" and the "By-Laws"), and to
the provisions of the Investment Company Act of 1940. Should the Trustees at
any time, however, make any definite determination as to investment policy
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similarly notified that such determination has been revoked.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 Fund, 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 portfolio
securities for the Fund's account with brokers or dealers selected by it, and
to that end the Adviser is authorized as the agent of the Fund to give
instructions to the Custodian of the Fund as to deliveries of securities and
payments of cash for the account of the Fund. In connection with the
selection of such brokers or dealers and the placing of such orders, the
Adviser is directed to seek for the Fund execution at the most favorable
price by responsible brokerage firms at reasonably competitive commission
rates. In fulfilling this requirement the Adviser shall not be deemed to
have acted unlawfully or to have breached any duty, created by this Agreement
or otherwise, solely by reason of its having caused the Fund to 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 the Adviser determined 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 Adviser's overall
responsibilities with respect to the Fund and to other clients of the Adviser
as to which the Adviser exercises investment discretion.
The Adviser may from time to time enter into sub-investment advisory
agreements with one or more investment advisers with such terms and
conditions as the Adviser may determine, provided that such sub-investment
advisory agreements have been approved in accordance with applicable
provisions of the Investment Company Act of 1940. Subject to the provisions
of Article 6, the Adviser shall not be liable for any error of judgment or
mistake of law by any sub-adviser or for any loss arising out of any
investment made by any sub-adviser or for any act or omission in the
execution and management of the Fund by any sub-adviser.
ARTICLE 2: ALLOCATION OF CHARGES AND EXPENSES. The Adviser shall
furnish at its own expense investment advisory and administrative services,
office space, equipment and clerical personnel necessary for servicing the
investments of the Fund and maintaining the Trust's organization, and
investment advisory facilities and executive and supervisory personnel for
managing the investments and effecting the portfolio transactions of the
Fund. The Adviser shall arrange, if desired by the Trust, for Directors,
officers and employees of the Adviser to serve as Trustees, officers or
agents of the Trust if duly elected or appointed to such positions and
subject to their individual consent and to any limitations imposed by law.
It is understood that the Trust will pay all of its own expenses 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, registrar or dividend
disbursing agent of the Trust, expenses of repurchasing and redeeming shares
and servicing shareholder accounts, expenses of preparing, printing and
mailing stock certificates, prospectuses, periodic reports, notices and proxy
statements to shareholders and to governmental officers and commissions,
brokerage and other expenses connected with the execution, recording and
settlement of portfolio security transactions, insurance premiums, fees and
expenses of the custodian for all services to the Trust, including
safekeeping of funds and securities, keeping of books and accounts and
calculation of the net asset value of shares of the Fund, expenses of
shareholder meetings, and expenses relating to the issuance, registration and
qualification of shares of the Trust.
ARTICLE 3: COMPENSATION OF THE ADVISER. For the services to be
rendered and the facilities to be furnished as provided in Articles 1 and 2
above, the Fund shall pay to the Adviser an investment advisory fee computed
and paid monthly at the annual rate of 0.60% of the Fund's average daily net
assets.
The Adviser agrees to pay until December 31, 2000, expenses of the
Trust (except for fees paid under this Agreement or the Fund's Distribution
Plan) such that the Fund's aggregate operating expenses shall not exceed
1.00% per annum of the average daily net assets of the Fund; PROVIDED,
HOWEVER, that this obligation may be terminated or revised at any time by the
Adviser without the consent of the Fund by notice in writing from the Adviser
to the Fund, provided that such termination or revision will not be effective
with respect to the fiscal year within which such notice is given. Such
payments by the Adviser are subject to reimbursement by the Fund, which will
be accomplished by the payment by the Fund of an expense reimbursement fee to
the Adviser computed and paid monthly at a percentage of the average daily
net assets of the Fund for its then current fiscal
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year, with a limitation that immediately after such payment the aggregate
operating expenses of the Fund would not exceed 1.00% of its average daily
net assets. This expense reimbursement terminates for the Fund on the
earlier of the date on which payments made thereunder by such Fund equal the
prior payment of such reimbursable expenses by the Adviser or December 31,
2000.
If the Adviser shall serve for less than the whole of any period
specified in this Article 3, the compensation to the Adviser shall be
prorated.
ARTICLE 4: SPECIAL SERVICES. Should the Trust have occasion to
request the Adviser to perform services not herein contemplated or to request
the Adviser to arrange for the services of others, the Adviser will act for
the Trust upon request to the best of its ability, with compensation for the
Adviser's services to be agreed upon with respect to each such occasion as it
arises.
ARTICLE 5: COVENANTS OF THE ADVISER. The Adviser agrees that it will
not deal with itself, or with the Trustees of the Trust or the Underwriter as
principals in making purchases or sales of securities or other property for
the account of the Fund, will not take a long or short position in the shares
of the Fund except as provided by the Declaration, and will comply with all
other provisions of the Declaration and By-Laws relative to the Adviser and
its Directors and officers.
ARTICLE 6: 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 and
management of the Fund, 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 Article
6, the term "Adviser" shall include Directors, officers and employees of the
Adviser as well as the corporation itself.
ARTICLE 7: ACTIVITIES OF THE ADVISER. The services of the Adviser to
the Trust are not to be deemed to be exclusive, the Adviser being free to
render services to others. The Adviser may permit other fund clients to use
the words "Massachusetts Financial" or "MFS" in their names. The Trust
agrees that if the Adviser shall for any reason no longer serve as the
Adviser to the Trust, the Trust and the Fund will each change its name so as
to delete the words "Massachusetts Financial" or "MFS". It is understood
that Trustees, officers, and shareholders of the Trust are or may be or
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 Fund and that the Adviser may be or
become interested in the Fund as a shareholder or otherwise.
ARTICLE 8: DURATION, TERMINATION AND AMENDMENTS OF THIS AGREEMENT.
This Agreement shall become effective on the date of its execution and shall
govern the relations between the parties hereto thereafter, and shall remain
in force until November 17, 1997, on which date it will terminate unless its
continuance after November 17, 1997, is specifically approved at least
annually (i) 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 (ii) by
the Trustees of the Trust, or by vote of a majority of the outstanding voting
securities of the Fund. The aforesaid 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.
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This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by vote of a majority of the outstanding voting
securities of the Fund, or by the Adviser, on not more than sixty days' nor
less that thirty 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 vote of a
majority of the outstanding voting securities of the Fund.
ARTICLE 9. SCOPE OF TRUST'S OBLIGATIONS. A copy of the Trust's
Declaration of Trust is on file with the Secretary of State of the
Commonwealth of Massachusetts. The Adviser acknowledges that the obligations
of or arising out of this Agreement are not binding upon any of the Trust's
trustees, officers, employees, agents or shareholders individually, but are
binding solely upon the assets and property of the Trust. If this Agreement
is executed by the Trust on behalf of one or more series of the Trust, the
Adviser further acknowledges that the assets and liabilities of each series
of the Trust are separate and distinct and that the obligations of or arising
out of this Agreement are binding solely upon the assets or property of the
series on whose behalf the Trust has executed this Agreement.
ARTICLE 10: DEFINITIONS. The terms "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 the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as my be granted
by the Securities and Exchange Commission under said Act.
ARTICLE 11: RECORD KEEPING. The Adviser will maintain records in a
form acceptable to the Fund and in compliance with the rules and regulations
of the Securities and Exchange Commission, including but not limited to
records required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the rules thereunder, which at all times will be the property
of the Fund and will be available for inspection and use by the Fund.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, and their respective seals to be hereto affixed,
all as of the day and year first written above. The undersigned officers of
the Trust and the Adviser have executed this Agreement not individually, but
as officers of the Trust and the Adviser, respectively.
MFS UNION STANDARD TRUST
on behalf of
MFS UNION STANDARD RESEARCH FUND,
one of its series
By: A. XXXXX XXXXXXX
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A. Xxxxx Xxxxxxx
Chairman and Trustee, and not individually
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By: XXXXXXX X. XXXXXX
-----------------------------------------
Xxxxxxx X. Xxxxxx
President, and not individually
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