EXHIBIT NO. 99.5(d)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of the 1st day of July,
1998, by and between MFS SERIES TRUST II, a Massachusetts business trust
(the "Trust"), on behalf of MFS CHARTER INCOME 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 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 supervision 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 Amended and Restated Declaration of Trust,
dated February 3, 1995, and By-Laws, each as amended from time to time
(respectively, the "Declaration" and the "By-Laws"), to the provisions of
the Investment Company Act of 1940 and the Rules, Regulations and orders
thereunder and to the Fund's then-current Prospectus and Statement of
Additional Information. 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 Fund's portfolio securities shall
be exercised. Should the Trustees at any time, however, make any definite
determination as to the 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 shall be 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 the 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 reasonable
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 its 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 Fund 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 Fund; fees and expenses of independent auditors, of
legal counsel, and of any transfer agent, registrar or dividend
disbursing agent of the Fund; expenses of repurchasing and redeeming
shares and servicing shareholder accounts; expenses of preparing,
printing and mailing stock certificates, shareholder reports, notices,
proxy statements and reports 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 Fund, including
safekeeping of funds and securities and maintaining required books and
accounts; expenses of calculating the net asset value of shares of the
Fund; expenses of shareholders' meetings; and expenses relating to the
issuance, registration and qualification of shares of the Fund and the
preparation, printing and mailing of prospectuses for such purposes
(except to the extent that any Distribution Agreement to which the Trust
is a party provides that another party is to pay some or all of such
expenses).
ARTICLE 3. COMPENSATION OF THE ADVISER. For the services to be
rendered and the facilities provided, the Fund shall pay to the Adviser
an investment advisory fee computed and paid annually at a rate equal
0.90% of the Fund's average daily net assets. If the Adviser shall serve
for less than the whole of any period specified in this Article 3, the
compensation to the Adviser will 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 on behalf of the Fund 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
Trust's distributor, if any, as principals in making purchases or sales
of securities or other property for the account of the Fund, except as
permitted by the Investment Company Act of 1940 and the Rules,
Regulations or orders thereunder, will not take a long or short position
in the shares of the Fund except as permitted by the Declaration, and
will comply with all other provisions of the Declaration and the By-Laws
and the then-current Prospectus and Statement of Additional Information
of the Fund 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 and
obligations hereunder. As used in this Article 6, the term "Adviser"
shall include Directors, officers and employees of the Adviser as well as
that corporation itself.
ARTICLE 7. ACTIVITIES OF THE ADVISER. The services of the
Adviser to the Fund are not deemed to be exclusive, the Adviser being
free to render investment advisory and/or other services to others. The
Adviser may permit other fund clients to use the initials "MFS" in their
names. The Fund agrees that if the Adviser shall for any reason no longer
serve as the Adviser to the Fund, the Fund will change its name so as to
delete the initials "MFS." It is understood that the 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 Trust, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
ARTICLE 8. DURATION, TERMINATION AND AMENDMENT OF THIS
AGREEMENT. This Agreement shall become effective on the date first above
written and shall govern the relations between the parties hereto
thereafter, and shall remain in force until June 30, 2000 on which date
it will terminate unless its continuance after June 30, 2000 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 Board of Trustees of the
Trust, or by "vote of a majority of the outstanding voting securities" of
the Fund.
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, in each
case on not more than sixty days' nor less than 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 "specifically approved at
least annually," "vote of a majority of the outstanding voting
securities," "assignment," "affiliated person," and "interested person,"
when used in this Agreement, shall have the respective meanings
specified, and shall be construed in a manner consistent with, the
Investment Company Act of 1940 and the Rules and Regulations promulgated
thereunder, subject, however, to such exemptions as may 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 Trust 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 Trust and will be available for
inspection and use by the Trust.
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 Trustee of the Trust has executed this Agreement not
individually, but as Trustee under the Declaration.
MFS SERIES TRUST II, on behalf of
MFS CHARTER INCOME FUND,
one of its series
By:
----------------------------
Xxxxx X. Xxxxxxxxx, Xx.
Assistant Secretary
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By:
----------------------------
Xxxxxx X. Xxxxx
Senior Executive Vice President
