Exhibit 5.
MANAGEMENT AGREEMENT
NATIONAL ASSET RESERVE
MANAGEMENT AGREEMENT
AGREEMENT made this 14th day of May, l993 by and between NATIONAL ASSET
RESERVE, a Massachusetts business trust (the "Fund") and NATIONAL SECURITIES &
RESEARCH CORPORATION, a New York corporation (the "Manager").
The Fund is an open-end management investment company registered under the
Investment Company Act of l940, as amended (the "Investment Company Act").
The Fund desires to retain the Manager to render investment advisory
services to the Fund, to administer the Fund's day-to-day business affairs and
to make available to the Fund certain facilities of the Manager, and the Manager
is willing to render such investment advisory and administrative services and
provide the use of such facilities.
The parties agree as follows:
1. The Fund hereby appoints the Manager to act as manager of the Fund and
administrator of its business affairs for the period and on the terms set forth
in this Agreement. The Manager accepts such appointment and agrees to render the
services described, for the compensation provided, in this Agreement.
2. Subject to the supervision of the Trustees, the Manager shall administer
the Fund's business affairs and furnish the Fund with office facilities and with
clerical, bookkeeping and recordkeeping services at such office facilities, and
the Manager shall manage the investment operations of the Fund and the
composition of the Fund's portfolio, including the purchase and retention and
disposition of portfolio securities, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Fund's Prospectus and
Statement of Additional Information (as defined below) subject to the following
understandings:
(a) The Manager shall provide supervision of the Fund's investments
and determine from time to time what investments will be made, held or disposed
of or what securities will be purchased, retained, sold or loaned by the Fund,
and what portion of the assets will be invested or held uninvested as cash.
(b) The Manager shall use its best judgment in the performance of its
duties under this Agreement.
(c) The Manager, in the performance of its duties and obligations
under this Agreement, shall (i) act in conformity with the Declaration of Trust,
By-Laws, Prospectus and Statement of
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Additional Information of the Fund, and with the instructions and directions of
the Trustees and (ii) conform to and comply with the requirements of the
Investment Company Act and all other applicable federal and state laws and
regulations.
(d) (i) The Manager shall determine the securities to be purchased or
sold by the Fund and will place orders pursuant to its determinations with or
through such persons, brokers or dealers to carry out the policy with respect to
brokerage as set forth in the Fund's Prospectus and Statement of Additional
Information or as the Trustees may direct from time to time. In providing the
Fund with investment supervision, the Manager will give primary consideration to
securing the most favorable price and efficient execution. The Manager may also
consider the financial responsibility, research and investment information and
other services and research related products provided by brokers or dealers who
may effect or be a party to any such transactions or other transactions to which
other clients of the Manager may be a party. The Fund recognizes that the
services and research related products provided by such brokers may be useful to
the Manager in connection with its services to other clients.
(ii) When the Manager deems the purchase or sale of a security to be
in the best interest of the Fund as well as other clients, the Manager, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be sold or purchased in order to obtain the most favorable price
or lower brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transactions, will be made by the Manager in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Fund and to such other clients.
(e) The Manager shall maintain, or cause to be maintained, all books
and records required under the Investment Company Act to the extent not
maintained by the custodian of the Fund. The Manager shall render to the
Trustees such periodic and special reports as the Trustees may reasonably
request.
(f) The Manager shall provide the Fund's custodian on each business
day information relating to all transactions concerning the Fund's assets.
(g) The investment management services of the Manager to the Fund
under this Agreement are not to be deemed exclusive, and the Manager shall be
free to render similar services to others.
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3. The Fund has delivered to the Manager copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) Declaration of Trust, as amended, as filed with the Secretary of
the Commonwealth of Massachusetts (such Declaration of Trust, as in effect on
the date hereof and as further amended from time to time, are herein called the
"Declaration of Trust");
(b) By-Laws of the Fund (such By-Laws, as in effect on the date hereof
and as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Trustees authorizing the appointment
of the Manager and approving this Agreement on behalf of the Fund;
(d) Registration Statement on Form N-lA under the Investment Company
Act and the Securities Act of l933, as amended from time to time (the
"Registration Statement"), as filed with the Securities and Exchange Commission
(the "Commission"), relating to the Fund and the Fund's shares of beneficial
interest.
(e) Notification of Registration of the Fund under the Investment
Company Act on Form N-8A as filed with the Commission and all amendments
thereto;
(f) Prospectus and Statement of Additional Information included in the
Registration Statement, as amended from time to time. All references in this
Agreement to the Prospectus and the Statement of Additional Information shall be
to such documents as most recently amended or supplemented and in effect.
4. The Manager shall authorize and permit any of its directors, officers
and employees who may be elected as trustees or officers of the Fund to serve in
the capacities in which they are elected. All services to be furnished by the
Manager under this Agreement may be furnished through such directors, officers
or employees of the Manager.
5. The Manager agrees that all records which it maintains for the Fund are
property of the Fund. The Manager will surrender promptly to the Fund any such
records upon the Fund's request. The Manager further agrees to preserve such
records for the periods prescribed in Rule 31a-2 of the Commission under the
Investment Company Act.
6. In connection with the services rendered by the Manager under this
Agreement, the Manager will pay all of the following expenses:
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(a) the salaries and expenses of all personnel of the Fund and the
Manager except the fees of the trustees who are not affiliated persons of the
Manager; and
(b) all expenses incurred by the Manager or by the Fund in connection
with managing the ordinary course of the Fund's business other than those
assumed by the Fund.
The Fund will pay the following:
(a) the fees and expenses of trustees who are not affiliated persons of the
Manager;
(b) fees and expenses related to the provision of fund accounting services;
(c) the fees and expenses of the custodian that relate to (i) the custodial
function and recordkeeping connected with such function (ii) the providing of
records to the Manager useful to the Manager in connection with the Manager's
obligation to maintain the required accounting records of the Fund, (iii) the
pricing of shares of the Fund, including the cost of any pricing services which
may be retained pursuant to the authorization of the Trustees, and (iv) for both
mail and wire orders, the cashiering function in connection with the issuance
and redemption of the Fund's securities;
(d) the fees and expenses of the Fund's transfer agent, which may be the
custodian, that relate to the maintenance of each shareholder account;
(e) the charges and expenses of legal counsel and independent accountants
for the Fund and trustees who are not affiliated persons of the Manager;
(f) brokers' commissions and any issue or transfer taxes chargeable to the
Fund in connection with its securities transactions;
(g) all taxes and corporate fees payable by the Fund to the federal, state
or other governmental agencies;
(h) the fees of any trade association of which the Fund may be a member;
(i) the cost of share certificates representing, and non-negotiable share
deposit receipts evidencing, shares of the Fund;
(j) the fees and expenses involved in registering and maintaining
registration of the shares of the Fund with the Securities and Exchange
Commission, registering the Fund as a
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broker or dealer and qualifying shares of the Fund under state securities laws,
including the preparation and printing of the Fund's registration statement and
prospectus for filing under federal and state securities laws for such purposes;
(k) communications expenses with respect to investor services and all
expenses of shareholders' and Trustees' meetings and of preparing, printing and
mailing reports to shareholders in the amount necessary for distribution to
shareholders;
(l) insurance, litigation and indemnification expenses; and
(m) other extraordinary expenses not incurred in the ordinary course of the
Fund's business.,
7. In the event the expenses of the Fund for any fiscal year (including the
fees payable to the Manager but excluding interest, taxes, brokerage
commissions, distribution fees and litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the lowest applicable annual expense limitation established
pursuant to the statutes or regulations of any jurisdictions in which shares of
the Fund are then qualified for offer and sale, the compensation due the Manager
will be reduced by the amount of such excess, or, if such reduction exceeds the
compensation payable to the Manager, the Manager will pay the Fund the amount of
such reduction which exceeds the amount of such compensation.
8. For the services provided and the expenses assumed pursuant to this
Agreement, the Fund will pay to the Manager as compensation a fee at the annual
rate of .55 of 1% of the Fund's average daily net assets, computed daily and
paid monthly.
9. The Manager may rely on information reasonably believed by it to be
accurate and reliable. Neither the Manager nor its officers, directors,
employees or agents or controlling persons shall be liable for any error or
judgment or mistake of law, or for any loss suffered by the Fund in connection
with or arising out of the matters to which this Agreement relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Manager in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
10. This Agreement shall continue in effect for a period of two years from
the date hereof and shall continue in effect thereafter for so long as such
continuance is specifically approved at least annually by the affirmative vote
of (i) a majority of the Trustees, who are not interested persons of the Fund,
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) a majority of the Trustees or the holders of a majority of the
outstanding voting securities of the Fund; provided
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however, that this Agreement may be terminated by the Fund, without the payment
of any penalty, by the Trustees or by vote of a majority of the outstanding
voting securities (as defined in the Investment Company Act) of the Fund, or by
the Manager at any time, without the payment of any penalty, on not more than 60
days' nor less than 30 days' written notice to the other party. This Agreement
shall terminate automatically in the event of its assignment provided that a
transaction which does not, under the Investment Company Act, result in a change
of actual control or management of the Manager's business shall not be deemed to
be an assignment for the purposes of this Agreement.
11. 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 Fund to engage in any other business or to devote his time
and attention in part to the management or other aspect of any business, whether
of a similar or dissimilar nature, and shall not limit or restrict the right of
the Manager to engage in any other business or to render services of any kind to
any other person or entity.
12. During the term of this Agreement, the Fund agrees to furnish the
Manager at its principal office all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
shareholders of the Fund or the public, which refer in any way to the Manager,
prior to use thereof and not to use such material if the Manager reasonably
objects in writing within five business days (or such other time as may be
mutually agreed) after receipt. In the event of termination of the Agreement,
the Fund will continue to furnish to the Manager such other information relating
to the business affairs of the Fund as the Manager at any time, or from time to
time, reasonably requests in order to discharge its obligations hereunder.
13. This Agreement may be amended by mutual agreement, but only after
authorization of such amendments by the affirmative vote of (i) the holders of
the majority of the outstanding voting securities of the Fund and (ii) a
majority of the members of the Trustees who are not interested persons of the
Fund or the Manager, cast in person at a meeting called for the purpose of
voting on such approval.
14. The Manager and the Funds each agree that the name "National" is
proprietary to, and a property right of, the Manager. The Fund agrees and
consents that (i) it will only use the name "National" as part of its name and
for no other purpose, (ii) it will not purport to grant any third party the
right to use the name "National" and (iii) upon the termination of this
Agreement, the Fund shall, upon the request of the Manager, cease to use the
name "National", and shall use its best efforts to cause its officers,
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trustees and shareholders to take any and all actions which the Manager may
request to effect the foregoing.
15. Any notice or other communications required to be given pursuant to
this Agreement shall be deemed to be given if delivered or mailed by registered
mail, postage paid, (l) to the Manager at Xxx Xxxxxxxx Xxxxx, Xxxxxxxxx, XX
00000, Attention: Secretary; or (2) to the Fund, Xxx Xxxxxxxx Xxxxx, Xxxxxxxxx,
XX 00000, Attention: Secretary.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. The terms "interested person," "assignment,"
and "vote of the majority of the outstanding securities" shall have the meaning
set forth in the Investment Company Act.
17. The Declaration of Trust, establishing the Fund, dated February 20,
l992, a copy of which, together with all amendments thereto (the "Declaration"),
is on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "National Asset Reserve" refers to the Trustees under the
Declaration collectively as trustees, but not individually or personally; and no
Trustee, shareholder, officer, employee or agent of the Fund may be held to any
personal liability, nor may resort be had to their private property for the
satisfaction of any obligation or claim or otherwise in connection with the
affairs of the Fund, but the Fund property only shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first written
above.
NATIONAL ASSET RESERVE
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx Xxx Dial
Attest:------------------------ By:-------------------------------
Xxxxxxx X. Xxxxxxx Xxxxxx Ole Dial, Vice President
Assistant Secretary
NATIONAL SECURITIES & RESEARCH
CORPORATION
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx XxXxxxx
Attest:------------------------ By:-------------------------------
Xxxxxxx X. Xxxxxxx Xxxxx XxXxxxx, Senior Vice
Assistant Secretary President and Chief Financial
Officer
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