Exhibit (5)(a)
ADVISORY AGREEMENT
ADVISORY AGREEMENT made as of this day of July, 1986, by and between
METLIFE - STATE STREET INVESTMENT SERVICES, INC., a corporation organized under
the laws of the Commonwealth of Massachusetts having its principal place of
business in Boston, Massachusetts (the "Manager"), and METLIFE - STATE STREET
INCOME TRUST, a Massachusetts business trust having its principal place of
business in Boston, Massachusetts (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end diversified
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Manager is engaged principally in the business of rendering
investment management services and is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
in separate series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust has established two series, the MetLife - State
Street High Income Fund and the MetLife - State Street Government Securities
Fund, such series (the "Initial Funds"), together with all other series
subsequently established by the Trust with respect to which the Manager renders
management and investment advisory services pursuant to the terms of this
Agreement, being herein collectively referred to as the "Funds" and individually
as a "Fund."
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF MANAGER.
(a) Initial Funds. The Trust hereby appoints the Manager to act as
manager and investment adviser to each of the Initial Funds for the period and
on the terms herein set forth. The Manager accepts such appointment and agrees
to render the services herein set forth, for the compensation herein provided.
(b) Additional Funds. In the event that the Trust establishes one or
more series of shares other than the Initial Funds with respect to which it
desires to retain the Manager to render management and investment advisory
services hereunder, it shall so notify the
Manager in writing, indicating the advisory fee to be payable with respect to
the additional series of shares. If the Manager is willing to render such
services, it shall so notify the Trust in writing, whereupon such series of
shares shall become a Fund hereunder. In such event a writing signed by both the
Trust and the Manager shall be annexed hereto as a part hereof indicating that
such additional series of shares has become a Fund hereunder and reflecting the
agreed upon fee schedule for such Fund to the extent the provisions of Section 4
shall not apply with respect thereto.
2. DUTIES OF MANAGER.
The Manager, at its own expense, shall furnish the following services
and facilities to the Trust:
(a) Investment Program. The Manager shall (i) furnish continuously an
investment program for each Fund, (ii) determine (subject to the overall
supervision and review of the Board of Trustees of the Trust) what investments
shall be purchased, held, sold or exchanged by each Fund and what portion, if
any, of the assets of each Fund shall be held uninvested, and (iii) make changes
on behalf of the Trust in the investments of each Fund. The Manager shall also
manage, supervise and conduct the other affairs and business of the Trust and
each Fund thereof and matters incidental thereto, subject always to the control
of the Board of Trustees of the Trust and to the provisions of the Master Trust
Agreement and By-laws of the Trust, as amended, and the Prospectus of the Trust
as from time to time amended and in effect and the 1940 Act. Subject to the
foregoing, the Manager shall have the authority to engage one or more
sub-advisers in connection with the management of the Funds, which sub-advisers
may be affiliates of the Manager.
(b) Regulatory Reports. The Manager shall furnish to the Trust necessary
assistance in:
(i) the preparation of all reports now or hereafter required by
federal or other laws; and
(ii) the preparation of prospectuses, registration statements and
amendments thereto that may be required by federal or other laws or by the rules
or regulations of any duly authorized commission or administrative body.
(c) Office Space and Facilities. The Manager shall furnish the Trust
office space in the offices of the Manager, or in such other place or places as
may be agreed upon from time to time, and all necessary office facilities,
simple business equipment, supplies, utilities, and telephone service for
managing the affairs and investments of the Trust.
(d) Services of Personnel. The Manager shall provide all necessary
executive and administrative personnel for managing the affairs of the Trust,
including personnel to perform clerical, bookkeeping, accounting and other
office functions. These services are exclusive of the bookkeeping and accounting
services of any dividend disbursing agent,
transfer agent, registrar or custodian. The Manager shall compensate all
personnel, officers and Trustees of the Trust if such persons are also employees
of the Manager or its affiliates.
(e) Fidelity Bond. The Manager shall arrange for providing and
maintaining a bond issued by a reputable insurance company authorized to do
business in the place where the bond is issued against larceny and embezzlement
covering each officer and employee of the Trust and/or the Manager who may
singly or jointly with others have access to funds or securities of the Trust,
with direct or indirect authority to draw upon such funds or to direct generally
the disposition of such funds. The bond shall be in such reasonable amount as a
majority of the Trustees who are not "interested persons" of the Trust, as
defined in the 1940 Act, shall determine, with due consideration given to the
aggregate assets of the Trust to which any such officer or employee may have
access. The premium for the bond shall be payable by the Trust in accordance
with paragraph 3(o).
(f) Portfolio Transactions. The Manager shall place all orders for the
purchase and sale of portfolio securities for the account of each Fund with
brokers or dealers selected by the Manager, although the Trust will pay the
actual brokerage commissions on portfolio transactions in accordance with
paragraph 3(d).
3. ALLOCATION OF EXPENSE
Except for the services and facilities to be provided by the Manager as
set forth in paragraph 2 above, the Trust assumes and shall pay all expenses for
all other Trust operations and activities and shall reimburse the Manager for
any such expenses incurred by the Manager (it being understood that the Trust
shall allocate such expenses between or among its Funds to the extent
contemplated by its Master Trust Agreement). The expenses to be borne by the
Trust shall include, without limitation:
(a) all expenses of organizing the Trust or forming any Fund thereof;
(b) the charges and expenses of any registrar, stock transfer or
dividend disbursing agent, shareholder servicing agent, custodian, or depository
appointed by the Trust for the safekeeping of its cash, portfolio securities and
other property, including the costs of servicing shareholder investment accounts
and bookkeeping, accounting and pricing services;
(c) the charges and expenses of auditors;
(d) brokerage commissions and other costs incurred in connection with
transactions in the portfolio securities of the Trust, including any portion of
such commissions attributable to brokerage and research services as defined in
Section 28(e) of the Exchange Act;
(e) taxes, including issuance and transfer taxes, and corporate
registration, filing or other fees payable by the Trust to federal, state or
other governmental agencies;
(f) expenses, including the cost of printing certificates, relating to
the issuance of shares of the Trust;
(g) expenses involved in registering and maintaining registrations of
the Trust and of its shares with the Securities and Exchange Commission and
various states and other jurisdictions, including reimbursement of actual
expenses incurred by the Manager in performing such functions for the Trust, and
including compensation of persons who are employees of the Manager, in
proportion to the relative time spent on such matters;
(h) expenses related to the redemption of shares of the Trust, including
expenses attributable to any program of periodic redemption;
(i) expenses of shareholders' and Trustees' meetings, including meetings
of committees, and of preparing, printing and mailing proxy statements,
quarterly reports, semi-annual reports, annual reports and other communications
to existing shareholders;
(j) expenses of preparing and setting in type prospectuses, and expenses
of printing and mailing the same to existing shareholders (but not expenses of
printing and mailing of prospectuses and literature used for promotional
purposes);
(k) compensation and expenses of Trustees who are not "interested
persons" within the meaning of the 1940 Act;
(l) expense of maintaining shareholder accounts and furnishing, or
causing to be furnished, to each shareholder a statement of his account,
including the expense of mailing;
(m) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal services rendered in
connection with the Trust's corporate and financial structure and relations with
its shareholders, issuance of shares of the Trust, and registration and
qualification of securities under federal, state and other laws;
(n) the cost and expense of maintaining the books and records of the
Trust, including general ledger accounting;
(o) insurance premiums on fidelity, errors and omissions and other
coverages including the expense of obtaining and maintaining a fidelity bond as
required by Section 17(g) of the 1940 Act;
(p) interest payable on Trust borrowings; and
(q) such other non-recurring expenses of the Trust as may arise,
including expenses of actions, suits, or proceedings to which the Trust is a
party and expenses resulting from the legal obligation which the Trust may have
to provide indemnity with respect thereto.
4. ADVISORY FEE.
For the services and facilities to be provided by the Manager as set
forth in paragraph 2 hereof, the Trust agrees that each Fund shall pay to the
Manager a monthly fee as soon as practical after the last day of each calendar
month, which fee shall be paid at a rate equal to sixty-five one hundredths of
one percent (.65%) on an annual basis of the average daily net asset value of
such Fund for such calendar month, commencing as of the date on which this
Agreement becomes effective with respect to such Fund.
In the case of commencement or termination of this Agreement with
respect to any Fund during any calendar month, the fee with respect to such Fund
for that month shall be reduced proportionately based upon the number of
calendar days during which this Agreement is in effect with respect to such
Fund, and the fee shall be computed based upon the average daily net asset value
of such Fund during such period.
5. EXPENSE LIMITATION.
The Manager agrees that if the total expenses of any Fund (exclusive of
interest, taxes, payments to fund certain distribution expenses pursuant to the
Trust's 12b-1 Distribution Plan, brokerage expenses and extraordinary items such
as litigation expenses) for any fiscal year of the Trust exceed the lowest
expense limitation imposed in any jurisdiction in which that Fund is then making
sales of its shares or in which its shares are then qualified for sale, if any,
the Manager will pay or reimburse such Fund for that excess up to the amount of
its advisory fees payable with respect to that Fund during that fiscal year. The
amount of the monthly advisory fee payable by any Fund under paragraph 4 hereof
shall be reduced to the extent that the monthly expenses of that Fund, on an
annualized basis, would exceed the foregoing limitation. At the end of each
fiscal year of the Trust, if the aggregate annual expenses chargeable to any
Fund for that year exceed the foregoing limitation based upon the average of the
monthly average net asset value of that Fund for the year, the Manager will
promptly reimburse that Fund for the amount of such excess to the extent not
already reimbursed by reduction of the monthly advisory fee, but if such
expenses are within the foregoing limitation, any excess amount previously
withheld from the monthly advisory fee during that fiscal year will be promptly
paid over to the Manager.
In the event that this Agreement (i) is terminated with respect to any
one or more Funds as of a date other than the last day of the fiscal year of the
Trust or (ii) commences with respect to one or more Funds as of a date other
than the first day of the fiscal year of the Trust, then the expenses of such
Fund or Funds shall be annualized and the Manager shall pay to, or receive from,
the applicable Fund or Funds a pro rata portion of the
amount that the Manager would have been required to pay or would have been
entitled to receive, if any, had this Agreement been in effect with respect to
such Fund or Funds for the full fiscal year.
6. RELATIONS WITH TRUST.
Subject to and in accordance with the Master Trust Agreement and By-laws
of the Trust and the Articles of Organization and By-laws of the Manager, it is
understood that Trustees, officers, agents and shareholders of the Trust are or
may be interested in the Manager (or any successor thereof) as directors,
officers or otherwise, that directors, officers, agents and shareholders of the
Manager (or any successor thereof) are or may be interested in the Trust as
Trustees, officers, agents, shareholders or otherwise, that the Manager (or any
such successor thereof) is or may be interested in the Trust as a shareholder or
otherwise and that the effect of any such adverse interests shall be governed by
said Master Trust Agreement, Articles of Organization and By-laws.
7. LIABILITY OF MANAGER.
The Manager shall not be liable to the Trust for any error of judgment
or mistake of law or for any loss suffered by the Trust in connection with the
matters to which this Agreement relates; provided, however, that no provision of
this Agreement shall be deemed to protect the Manager against any liability to
the Trust or its shareholders to which it might otherwise be subject by reason
of any willful misfeasance, bad faith or gross negligence in the performance of
its duties or the reckless disregard of its obligations and duties under this
Agreement, nor shall any provision hereof be deemed to protect any Trustee or
officer of the Trust against any such liability to which he might otherwise be
subject by reason of any willful misfeasance, bad faith or gross negligence in
the performance of his duties or the reckless disregard of his obligations and
duties. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to each
Initial Fund on the later of (i) the date on which a Registration Statement with
respect to its shares under the Securities Act of 1933, as amended, is first
declared effective by the Securities and Exchange Commission or (ii) the date on
which such Initial Fund commences offering its shares to the public, and, with
respect to any additional Fund, on the date of receipt by the Trust of notice
from the Manager in accordance with paragraph 1(b) hereof that the Manager is
willing to serve as Manager with respect to such Fund. Unless terminated as
herein provided, this Agreement shall remain in full force and effect with
respect to each Initial Fund until the date which is two years after the
effective date of this Agreement, with respect to such Initial Fund and, with
respect to each additional Fund, for two years from the date on which such Fund
becomes a Fund hereunder. Subsequent to such initial periods of effectiveness
this Agreement shall continue in full
force and effect, subject to Section 8(c), for successive one-year periods with
respect to each Fund so long as such continuance with respect to such Fund is
approved at least annually (a) by either the Trustees of the Trust or by vote of
a majority of the outstanding voting securities (as defined in the 0000 Xxx) of
such Fund, and (b) in either event, by the vote of a majority of the Trustees of
the Trust 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 approval. Notwithstanding the foregoing
provisions of this Section 8(a), the continuance of this Agreement with respect
to the Initial Funds or any additional Fund is subject to the approval of this
Agreement by a majority of the outstanding voting securities thereof (as defined
in the 0000 Xxx) at the initial meeting of shareholders after this Agreement
becomes effective with respect thereto.
(b) Amendment. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendments of this Agreement shall be effective
with respect to any Fund until approved by vote of the holders of a majority of
that Fund's outstanding voting securities (as defined in the 1940 Act).
(c) Termination. This Agreement may be terminated with respect to any
Fund at any time, without payment of any penalty, by vote of the Trustees or by
vote of a majority of the outstanding voting securities (as defined in the 0000
Xxx) of that Fund, or by the Manager, in each case on sixty (60) days' prior
written notice to the other party.
(d) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment (as defined in the 1940
Act).
(e) Approval, Amendment or Termination by Individual Fund. Any approval,
amendment or termination of this Agreement shall be effective to continue, amend
or terminate this Agreement with respect to such Fund notwithstanding (i) that
such action has not been approved by the holders of a majority of the
outstanding voting securities of any other Fund affected thereby, and (ii) that
such action has not been approved by the vote of a majority of the outstanding
voting securities of the Trust, unless such action shall be required by any
applicable law or otherwise.
9. SERVICES NOT EXCLUSIVE.
The services of the Manager to the Trust 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.
10. NAME OF TRUST.
It is understood that the names "State Street" and "MetLife" and any
logos associated with those names are the valuable property of, respectively,
State Street
Research & Management Company ("SSRM"), the parent company of the Manager, and
Metropolitan Life Insurance Company, the ultimate parent company of SSRM, and
that the Trust has the right to include such names as a part of its name and the
names of its Funds only so long as this Agreement shall continue. Upon
termination of this Agreement the Trust shall forthwith cease to use the State
Street and MetLife names and logos and shall submit to its shareholders an
amendment to its Master Trust Agreement changing the Trust's name and the names
of any Funds then utilizing such name or names or any portion thereof.
11. PRIOR AGREEMENTS SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject
matter hereof between the parties hereto.
12. NOTICES.
Notices under this Agreement shall be in writing and shall be addressed,
and delivered or mailed postage prepaid, to the other party at such address as
such other party may designate from time to time for the receipt of such
notices. Until further notice to the other party, the address of each party to
this Agreement for this purpose shall be Xxx Xxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000.
13. GOVERNING LAW; COUNTERPARTS.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
14. LIMITATION OF LIABILITY.
The term "MetLife - State Street Income Trust" means and refers to the
Trustees from time to time serving under the Master Trust Agreement of the Trust
dated December 23, 1985 as the same may subsequently hereto have been, or
subsequently hereto may be, amended. It is expressly agreed that the obligations
of the Trust hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Trust as
individuals or personally, but shall bind only the trust property of the Trust,
as provided in the Master Trust Agreement of the Trust. The execution and
delivery of this Agreement have been authorized by the Trustees of the Trust and
signed by the President of the Trust, acting as such, and neither such
authorization nor such execution and delivery shall be deemed to have been made
individually or to impose any personal liability, but shall bind only the trust
property of the Trust as provided in its Master Trust Agreement. The Master
Trust Agreement of the Trust provides, and it is
expressly agreed, that each Fund of the Trust shall be solely and exclusively
responsible for the payment of its debts, liabilities and obligations, and that
no other Fund shall be responsible for the same.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
METLIFE - STATE STREET
Attest: INVESTMENT SERVICES, INC.
/s/ Xxxxxxxxxxx Xxxxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxxxxxx Xxxxxxxx, Xx., Senior Vice President
Clerk
METLIFE - STATE STREET
INCOME TRUST
Attest:
/s/ Xxxxxxxxxxx Xxxxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxx, Xx.
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Xxxxxxxxxxx Xxxxxxxx, Xx., Xxxxxxx X. Xxxxx, Xx.,
Secretary President
