EXHIBIT NO. 99.5(a)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 1st day of September, 1993, by and
between MFS SERIES TRUST I, a Massachusetts business trust (the "Trust"), on
behalf of MFS CASH RESERVE FUND (the "Fund"), a series of the Trust, 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
Declaration of Trust of the Trust, dated July 22, 1986, 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.
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 on
behalf of the Fund 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 monthly at a rate equal to .55% of the Fund's
average daily net assets for its then-current fiscal year. Payment of the
foregoing fee is subject to the provision that within 30 days following the
close of any fiscal year of the Fund, the Adviser will pay to the Fund a sum
equal to the amount by which the aggregate expenses of the Fund, but excluding
interest, taxes, brokerage commissions and extraordinary expenses, incurred
during such fiscal year exceed the sum of (a) 2 1/2% of the first $30 million
of the Fund's average daily net assets, and (b) 2% of the next $70 million of
the Fund's average daily net assets, and (c) 1 1/2% of the remaining average
daily net assets of the Fund. The obligation of the Adviser to reimburse the
Fund for expenses incurred during any year 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. If the Adviser shall serve for less than the whole
of any period specified in this Article 3, the compensation (including the
expense reimbursement) payable to the Adviser with respect to the Fund will be
prorated.
ARTICLE 4. 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 principla
underwriter, 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 5. 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 5, the term "Adviser" shall include Directors, officers and employees
of the Adviser as well as that corporation itself.
ARTICLE 6. 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 Fund, and that the Adviser may be or
become interested in the Fund as a shareholder or otherwise.
ARTICLE 7. 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 August 1, 1995 on which date it will terminate unless its
continuance after August 1, 1995 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.
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.
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 and the obligations of this Agreement are not binding upon any of
the Trustees or shareholders of the Trust, individually, but bind only the
trust estate applicable to the Fund.
MFS SERIES TRUST I on behalf
of MFS CASH RESERVE FUND
By: A. XXXXX XXXXXXX
A. Xxxxx Xxxxxxx
Chairman and Trustee
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By: A. XXXXX XXXXXXX
A. Xxxxx Xxxxxxx
Chairman
