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EXHIBIT 99.5
INVESTMENT ADVISORY AND MANAGEMENT CONTRACT
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INVESTMENT ADVISORY AND MANAGEMENT CONTRACT
THIS AGREEMENT is made and executed this 30th day of September, 1993, between
SAFECO TAXABLE BOND TRUST ("Trust"), a Delaware business trust and SAFECO ASSET
MANAGEMENT COMPANY ("Manager"), a Washington corporation.
WHEREAS, the Trust is registered with the Securities & Exchange Commission
as a series type, open-end, management investment company under the Investment
Company Act of 1940, as amended ("1940 Act"), and has caused its shares of
beneficial interest to be registered for sale to the public under the Securities
Act of 1933 (the "1933 Act") and various state securities laws; and
WHEREAS, the Trust intends to offer for public sale distinct series of
shares of beneficial interest ("Series"), each Series corresponding to a
distinct portfolio; and
WHEREAS, the Trust wishes to retain the Manager to provide investment
advisory, management, and administrative services to the Trust and each Series
as now exists and as hereafter may be established which are listed in Exhibit A
to this Agreement as amended from time to time; and
WHEREAS, the Manager is willing to furnish such services on the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, it is agreed as follows:
1. Appointment of Manager. The Trust hereby appoints the Manager as
investment adviser and manager of each Series to administer its affairs, subject
to the supervision of the Trust's Board of Trustees, for the period and on the
terms set forth in this Agreement. The Manager hereby accepts such appointment
and agrees to render the services required by this Agreement for the
compensation and upon such other terms and conditions as are set forth in this
Agreement. The Manager shall for all purposes herein be deemed an independent
contractor and, unless otherwise expressly provided or authorized, shall have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
2. Duties of Series. Each Series shall at all times keep the Manager fully
informed with regard to the securities owned by it, its funds available or to
become available for investment, and generally as to the condition of its
affairs. It shall furnish the Manager with such other documents and information
with regard to its affairs as the Manager may from time to time reasonably
request.
3. Duties of Manager.
(a) General. The Manager shall furnish to the Trust space in the offices of
the Manager or in such other place as may be agreed upon from time to time and
all necessary office facilities, equipment and personnel for managing the
affairs and investments and keeping the books of the Trust. Subject to the
supervision of the Trust's Board of Trustees, the Manager shall regularly
provide each Series with investment research, advice, management and supervision
and shall furnish a continuous investment program for each Series' portfolio of
securities consistent with each Series' investment objectives and policies. The
Manager shall determine from time to time what securities will be purchased,
retained or sold by each Series, and shall implement those decisions, all
subject to the provisions of the Trust's Trust Instrument and Bylaws, the 1940
Act, the applicable rules and regulations of the Securities and Exchange
Commission, and other applicable federal and state law, as well
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as the investment objectives and policies of each Series. The Manager will place
orders pursuant to its investment determinations for each Series either directly
with the issuer or with any broker or dealer. In placing orders with brokers and
dealers the Manager will attempt to obtain the best net price and the most
favorable execution of its orders. The Manager shall also provide advice and
recommendations with respect to other aspects of the business and affairs of the
Trust and each Series, and shall perform such other functions of management and
supervision as may be directed by the Board of Trustees of the Trust.
(b) Reports and Records. The Manager, at its expense, shall supply the
Trust's Board of Trustees and officers with all statistical information and
reports reasonably requested by them and reasonably available to the Manager.
The Manager shall oversee the maintenance of all books and records with respect
to the Trust's and each Series' securities transactions and the keeping of the
Trust's and each Series' books of account in accordance with all applicable
federal and state laws and regulations. In compliance with the requirements of
Rule 31a-3 under the 1940 Act, the Manager hereby agrees that any records which
it maintains for the Trust or any Series are the property of the Trust, and
further agrees to surrender promptly to the Trust any of such records upon the
Trust's request. The Manager further agrees to arrange for the preservation of
the records required to be maintained by Rule 31a-1 under the 1940 Act for the
periods prescribed by Rule 31a-2 under the 1940 Act. The Manager shall authorize
and permit any of its directors, officers and employees, who may be elected as
directors or officers of the Trust, to serve in the capacities in which they are
elected.
4. Allocation of Expenses.
(a) (1) Manager shall pay the organizational expenses of the Trust, which
the Trust shall reimburse to Manager over a sixty-month period commencing after
the date of the Trust's initial public offering of its shares. If the Trust
shall not be obligated to reimburse the Manager for aggregate organizational
expenses of a Series in excess of a specified amount, such amount shall be set
forth in Exhibit A as amended from time to time. (2) The Manager shall be
responsible for the compensation (if any) paid to officers of the Trust for
serving in that capacity; the expenses of computing the net asset value per
share of the Trust and each Series; federal and state registration fees for the
Trust and each Series, other than the initial fees to be reimbursed pursuant to
Section 4(a)(1); all expenses of preparing, printing and distributing
advertising and sales literature for the Trust and each Series; and the cost of
fidelity bond and other insurance for the Trust and each Series.
(b) The Trust and each Series shall bear all expenses of their organization,
operations and business not specifically assumed or agreed to be paid by the
Manager as provided in this Agreement. In particular, but without limiting the
generality of the foregoing, the Trust and each Series shall pay:
(1) Custody and Accounting Services. All expenses of the transfer, receipt,
safekeeping, servicing and accounting for the cash, securities, and other
property of the Trust and each Series, including all charges of
depositories, custodians, and other agents, if any;
(2) Shareholder Servicing. All expenses of maintaining and servicing
shareholder accounts, including all charges of the transfer, shareholder
recordkeeping, dividend disbursing, redemption, and other agents of the
Trust and each Series, if any;
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(3) Shareholder Communications. All expenses of preparing, printing, and
distributing reports and certain other communications to shareholders of the
Trust and each Series;
(4) Shareholder Meetings. All expenses incidental to holding meetings of
shareholders of the Trust and each Series, including the printing of notices
and proxy materials and the expenses of any proxy solicitation;
(5) Prospectuses And Statements of Additional Information. All expenses of
preparing, printing and mailing to shareholders of annual or more frequent
revisions of the Prospectus and Statement of Additional Information for the
Trust and each Series;
(6) Communication Equipment. All charges for equipment or services used for
communication between the Manager, the Trust or each Series and the
custodian, transfer agent or any other agent selected by the Trust;
(7) Legal and Accounting Fees and Expenses. All charges for services and
expenses of the Trust's legal counsel and independent auditors;
(8) Trustees' Fees and Expenses. All compensation of trustees, other than
those affiliated with the Manager, and all expenses incurred in connection
with their service;
(9) Issue and Redemption of Fund Shares. All expenses incurred in connection
with the issue, redemption, and transfer of shares of the Trust and each
Series, including the expense of confirming all share transactions, and of
preparing and transmitting the Trust's stock certificates, if certificates
are issued;
(10) Brokerage Commissions. All brokers' commissions and other charges
incident to the purchase, sale, or lending of portfolio securities of the
Trust and Series;
(11) Taxes. All taxes or governmental fees payable by or with respect to the
Trust and each Series to federal, state, or other governmental agencies,
domestic or foreign, including stamp or other transfer taxes;
(12) Nonrecurring and Extraordinary Expenses. Such nonrecurring expenses as
may arise, including the costs of actions, suits, or proceedings to which
the Trust or any Series is a party and the expenses the Trust or any Series
may incur as a result of its legal obligation to provide indemnification to
its trustees, officers, and agents.
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5. Non-Exclusive Services. The services of the Manager to the Trust and each
Series hereunder are not to be deemed exclusive, and the Manager shall be free
to render similar services to others so long as its services hereunder are not
impaired thereby.
6. Compensation for Services.
(a) For the services and facilities to be furnished by the Manager, each
existing Series shall pay the Manager an annual fee computed on the basis of the
average net asset value of the Series as ascertained each business day and paid
monthly in accordance with the schedule set forth in Exhibit A to this
Agreement. For purposes of computing the annual fee, the net asset value of the
Series shall be equal to the difference between its total assets and its total
liabilities (excluding from such liabilities its capital stock and surplus) with
its assets and its liabilities to be valued in accordance with the procedures
set forth in the Trust's Registration Statement.
(b) For the services and facilities to be furnished by the Manager, any new
Series of the Trust which is issued on a future date will pay the Manager a fee
according to a Schedule which will be set forth in an amended Exhibit A to this
Agreement.
(c) If SAFECO Securities, Inc., receives portfolio brokerage commissions
resulting from transactions in the portfolio of any Series ("commissions"), any
management fee earned by Manager will be reduced by the amount of such
commissions so received by SAFECO Securities, Inc.
(d) The Trust and the Manager may mutually agree to reduce the fees payable
by any Series if the reduction is in the best long-range interest of the Trust
and the Manager.
(e) If the Manager shall serve for less than the whole of any month, the
monthly management fee payable by each Series shall be prorated.
7. Reimbursements by Manager. The Manager agrees to reimburse a Series for
the amount by which the Series' expenses in any full fiscal year (excluding
taxes and interest expense, brokerage expenses and extraordinary expenses)
exceed the limits prescribed by any state in which the Series shares are
qualified for sale. For the purpose of this calculation, the costs of acquiring
and disposing of portfolio securities shall be charged to the cost of or amount
realized from such securities and shall not be deemed expenses of the Series.
For purposes of determining whether the Series is entitled to reimbursement, the
expenses of the Series are calculated on a monthly basis. If a Series is
entitled to a reimbursement, that month's advisory fee will be reduced or
postponed, with any adjustments made at the end of the fiscal year.
8. Liability of Manager. The Manager assumes no responsibility under this
Agreement other than to render the services called for hereunder, in good faith,
and shall not be responsible for any action of the Trust's Board of Trustees in
following or declining to follow any advice or recommendations of the Manager;
provided, that nothing in this Agreement shall protect the Manager against any
liability to the Trust or its shareholders to which it would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties hereunder.
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9. Books and Records. The Trust shall cause its books and accounts to be
audited at least once each year by a reputable, independent public accountant or
organization of public accountants who shall render a report to the Trust.
10. Affiliation.
(a) It is understood that trustees, officers, shareholders and agents of the
Trust and each Series are or may be interested in the Manager (or any successor
thereof) as directors, officers, shareholders or otherwise, and that the Manager
(or any such successor) is or may be interested in the Trust as a shareholder or
otherwise.
(b) No trustee, officer or employee of the Trust and each Series shall
receive from the Trust any salary or other compensation as such director,
officer or employee while he or she is at the same time a director, officer, or
employee of the Manager or any affiliated company of the Manager. This paragraph
shall not apply to directors or other persons who are not regular members of the
Manager's or any affiliated company's staff.
11. Unrestricted Activities. Nothing in this Agreement shall limit or
restrict the right of any director, officer, or employee of the Manager who may
also be a trustee, officer, or employee of the Trust or any Series, to engage in
any other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar nature
or a dissimilar nature, or limit or restrict the right of the Manager to engage
in any other business or to render services of any kind, including investment
advisory and management services, to any other corporation, firm, individual or
association.
12. Use of Name. In the event this Agreement is terminated by either party
or upon written notice from the Manager at any time, the Trust hereby agrees
that it will eliminate from its corporate name any reference to the name of
"SAFECO." The Trust shall have the non-exclusive use of the name "SAFECO" in
whole or in part only so long as this Agreement is effective or until such
notice is given. Notwithstanding the foregoing and in the event that this
Agreement is terminated by either party, the Manager may elect to permit the
Trust to continue to use the name "SAFECO" under such terms and conditions as
the Manager shall set forth in writing.
13. Effectiveness Date/Renewal. This Agreement will become effective with
respect to each Series on the date first written above or such later date as
indicated on Exhibit A, provided that it shall have been approved by the Trust's
Board of Trustees and by the shareholders of that Series in accordance with the
requirements of the 1940 Act and, unless sooner terminated as provided herein,
will continue in effect for two years from the above written date. Thereafter,
if not terminated, this Agreement shall continue in effect with respect to each
Series for successive annual periods ending on the same date of each year,
provided that such continuance is specifically approved at least annually (i) by
the Trust's Board of Trustees or (ii) with respect to any Series, by a vote of a
majority of the outstanding voting securities of that Series, provided that in
either event the continuance is also approved by a majority of the Trust's
trustees who are neither interested persons (as defined in the 0000 Xxx) of the
Trust or the Manager by vote cast at a meeting called for the purpose of voting
on such continuance.
14. Amendment. This Agreement may be amended by the parties only if the
terms of the amendment are approved by either (i) a majority of the Trust's
Board of Trustees or, (ii) with respect to any given Series, by a vote
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of a majority of the outstanding voting securities of that Series at a duly
called meeting of the shareholders. In either case, the majority of the
trustees, who are neither interested persons of the Trust or the Manager, must
approve the amendment.
15. Termination. This Agreement is terminable with respect to any Series or
in its entirety without penalty by the Trust's Board of Trustees, by vote of a
majority of the outstanding voting securities of each affected Series (as
defined in the 1940 Act), or by the Manager, on not less than 60 days' notice to
the other party and will be terminated upon the mutual written consent of the
Manager and the Trust. This Agreement shall terminate automatically in the event
of its assignment by the Manager and shall not be assignable by the Trust
without the consent of the Manager.
16. Limitation of Liability. Manager is hereby expressly put on notice of
(i) the limitation of shareholder, officer and trustee liability as set forth in
the Trust Instrument of the Trust and (ii) of the provisions in the Trust
Instrument permitting the establishment of separate Series and limiting the
liability of each Series to obligations of that Series. Manager hereby agrees
that obligations assumed by the Trust pursuant to this Agreement are in all
cases assumed on behalf of a particular Series and each such obligation shall be
limited in all cases to that Series and its assets. Manager agrees that it shall
not seek satisfaction of any such obligation from the shareholders or any
individual shareholder of the Trust nor from the officers or trustees of any
individual officer or trustee of the Trust.
17. Defined Terms. For the purpose of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignment," and "interested
persons," shall have the respective meanings specified in the Investment Company
Act of 1940 when such terms are used in reference to the Trust and the Series.
18. Entire Agreement/Enforcement of Rights. This Agreement embodies the
entire agreement between the Manager and the Trust with respect to the services
to be provided by the Manager to the Trust and each Series and supersedes any
prior written or oral agreement between those parties. In the event that either
party should be required to take legal action in order to enforce its rights
under this Agreement, the prevailing party in any such action or proceeding
shall be entitled to recover from the other party costs and reasonable
attorneys' fees.
19. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed in counterparts, each of which taken together shall
constitute one and the same instrument. Manager understands that the rights and
obligations of each Series under the Trust Instrument are separate and distinct
from those of any and all other Series.
20. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington and, to the extent it
involves any United States statute, in accordance with the laws of the United
States.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as of the day and year first above written.
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ATTEST: SAFECO TAXABLE BOND TRUST
________________________ By_________________________________
Xxxx X. Xxxxxxx Xxxxx X. Xxxx
Secretary President
ATTEST: SAFECO ASSET MANAGEMENT COMPANY
________________________ By_________________________________
Xxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
Secretary President
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EXHIBIT A
SAFECO TAXABLE BOND TRUST
SAFECO INTERMEDIATE-TERM U.S. TREASURY FUND
FEE SCHEDULE
Net Assets Annual Fee
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For assets up to and including $250,000,000 .55 of 1%
For assets in excess of $250,000,000 and
up to and including $500,000,000 .45 of 1%
For assets in excess of $500,000,000 and
up to and including $750,000,000 .35 of 1%
For assets over $750,000,000 .25 of 1%
ORGANIZATIONAL EXPENSES
Not applicable.
SAFECO Asset Management Company SAFECO Taxable Bond Trust
on behalf of
SAFECO Intermediate-Term
U.S. Treasury Fund
By:_____________________________ By:_______________________
Its: President Its: President
Attest:_________________________ Attest:___________________
Secretary Secretary
As of 9-30-93
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EXHIBIT A
SAFECO TAXABLE BOND TRUST
SAFECO U.S. GOVERNMENT SECURITIES FUND
FEE SCHEDULE
Net Assets Annual Fee
---------- ----------
For assets up to and including $250,000,000 .65 of 1%
For assets in excess of $250,000,000 and
up to and including $500,000,000 .55 of 1%
For assets in excess of $500,000,000 and
up to and including $750,000,000 .45 of 1%
For assets over $750,000,000 .35 of 1%
ORGANIZATIONAL EXPENSES
Not applicable.
SAFECO Asset Management Company SAFECO Taxable Bond Trust
on behalf of
SAFECO U.S. Government
Securities Fund
By:____________________________ By:_______________________
Its: President Its: President
Attest:________________________ Attest:___________________
Secretary Secretary
As of 9-30-93
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EXHIBIT A
SAFECO TAXABLE BOND TRUST
SAFECO HIGH YIELD BOND FUND
FEE SCHEDULE
Net Assets Annual Fee
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For assets up to and including $250,000,000 .65 of 1%
For assets in excess of $250,000,000 and
up to and including $500,000,000 .55 of 1%
For assets in excess of $500,000,000 and
up to and including $750,000,000 .45 of 1%
For assets over $750,000,000 .35 of 1%
ORGANIZATIONAL EXPENSES
Not applicable.
SAFECO Asset Management Company SAFECO Taxable Bond Trust
on behalf of
SAFECO High Yield Bond Fund
By:_____________________________ By:_______________________
Its: President Its: President
Attest:_________________________ Attest:___________________
Secretary Secretary
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