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EXHIBIT 5.f
MARKET STREET FUND, INC.
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ("Agreement") is made this ____ day of April,
1998 and will be effective as of May 1, 1998, by and between Market Street Fund,
Inc., a corporation organized and existing under the laws of the State of
Maryland (the "Fund"), and Providentmutual Investment Management Company (the
"Manager"), a corporation organized and existing under the laws of the state of
Pennsylvania.
RECITALS
1. The Fund is a series-type, open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), that
currently consists of eleven investment portfolios (each, a "Portfolio"), each
such Portfolio having its own investment objective(s).
2. The Fund issues a separate series of shares of stock for each Portfolio,
which shares represent fractional undivided interests in the Portfolio.
3. The Manager is engaged principally in rendering investment advisory services
and is registered as an investment adviser under the Investment Advisers Act of
1940, as amended (the "Advisers Act").
4. The Fund desires to retain the Manager to provide or to arrange to provide
overall management of the Fund in connection with four Portfolios, including,
but not limited to, investment advisory, accounting, and administrative
services, in the manner and on the terms and conditions set forth in this
Agreement. The four Portfolios are: Allpro Large Cap Growth Portfolio, Allpro
Small Cap Growth Portfolio, Allpro Large Cap Value Portfolio and Allpro Small
Cap Value Portfolio (together, the "Allpro Portfolios").
5. The Manager is willing to provide or to arrange to provide, investment
advisory, accounting, and administrative services to the Fund and each of the
foregoing Portfolios on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Manager hereby agree as follows:
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ARTICLE I
Duties of the Manager
The Fund hereby engages the Manager to act as the Fund's manager to
provide or to arrange to provide directly or through third parties, investment
advisory, accounting, and administrative services to each Allpro Portfolio and
to any additional similar portfolios that the Fund may establish in the future;
and to provide or to arrange to provide the above services subject to the
supervision of the board of directors of the Fund (the "Board"), for the period
and on the terms and conditions set forth in this Agreement. The Manager hereby
accepts such engagement and agrees during such period, at its own expense, to
provide or to arrange to provide, such investment advisory and management
services, and to assume the obligations set forth in this Agreement for the
compensation provided for herein. Subject to the provisions of the 1940 Act and
the Advisers Act, the Manager may retain any affiliated or unaffiliated parties
including, but not limited to, investment adviser(s) and/or investment
sub-adviser(s), administrators, and accountant(s) to perform any or all of the
services set forth in this Agreement.
The Manager, its affiliates and any investment adviser(s),
sub-adviser(s), administrator(s), accountant(s), or other parties performing
services for the Manager shall for all purposes herein be deemed to be
independent contractors and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund or an Allpro
Portfolio in any way or otherwise be deemed agents of the Fund or an Allpro
Portfolio.
The Manager shall, for purposes of this Agreement, have and exercise
full investment discretion and authority to act as agent for the Fund in buying,
selling or otherwise disposing of or managing the Allpro Portfolios'
investments, directly or through sub-advisers, subject to supervision by the
Board.
The Manager and any other party performing services covered by this
Agreement (each such party is hereafter referred to as a "Service Provider")
shall be subject to: (1) the restrictions of the articles of incorporation and
bylaws of the Fund, as amended from time to time; (2) the provisions of the 1940
Act and the Advisers Act; (3) the statements relating to the Allpro Portfolios'
investment objectives, investment policies and investment restrictions as set
forth in the currently effective (and as amended from time to time) registration
statement of the Fund (the "registration statement") under the Securities Act of
1933, as amended (the "1933 Act"); and (4) any applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code").
(a) Investment Advisory Services. The Manager shall provide the Allpro
Portfolios directly or through sub-advisers with such investment research,
advice and supervision as the Fund may from time to time consider necessary for
the proper management of the assets of each Allpro Portfolio, shall furnish
continuously an investment program for each Allpro Portfolio, shall determine
from time to time which securities or other investments shall be purchased, sold
or exchanged and what portions of each Allpro Portfolio shall be held in the
various securities or other investments or cash, and shall take such steps as
are necessary to implement an overall
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investment plan for each Allpro Portfolio, including providing or obtaining such
services as may be necessary in managing, acquiring or disposing of securities,
cash or other investments.
The Fund has furnished or will furnish the Manager (who is authorized
to furnish any Service Provider) with copies of the Fund's registration
statement, the Fund's articles of incorporation and bylaws as currently in
effect and agrees during the continuance of this Agreement to furnish the
Manager with copies of any amendments or supplements thereto before or at the
time the amendments or supplements become effective. The Manager and any Service
Providers will be entitled to rely on all documents furnished by the Fund.
The Manager represents that in performing investment advisory services
for each Allpro Portfolio, the Manager shall make every effort to ensure that:
(1) each Allpro Portfolio continuously qualifies as a regulated investment
company under Subchapter M of the Code or any successor provision; and (2) each
Allpro Portfolio meets the requirements of Section 817(h) of the Code or any
successor provision. Except as instructed by the Board, the Manager shall also
make decisions for the Fund as to the manner in which voting rights, rights to
consent to corporate action, and any other rights pertaining to the Fund's
securities shall be exercised. If the Board at any time makes any determination
as to investment policy and notifies the Manager of such determination, the
Manager shall be bound by such determination for the period, if any, specified
in the notice or until similarly notified that such determination has been
revoked.
The Manager shall take, on behalf of each Allpro Portfolio, all actions
which it deems necessary to implement the investment policies of such Portfolio,
and in particular, to place all orders for the purchase or sale of portfolio
investments for the account of each such Portfolio with brokers, dealers,
futures commission merchants or banks selected by the Manager. The Manager also
is authorized as the agent of the Fund to give instructions to any Service
Provider serving as custodian of the Fund as to deliveries of securities and
payments of cash for the account of each Allpro Portfolio. In selecting brokers
or dealers and placing purchase and sale orders with respect to assets of the
Allpro Portfolios, the Manager is directed at all times to seek to obtain best
execution and price within the policy guidelines determined by the Board and set
forth in the current registration statement. Subject to this requirement and the
provisions of the Act, the Advisers Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and other applicable provisions of law, the Manager
may select brokers or dealers that are affiliated with the Manager or the Fund.
In addition to seeking the best price and execution, the Manager may
also take into consideration research and statistical information, wire,
quotation and other services provided by brokers and dealers to the Manager. The
Manager is also authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if the
Manager determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage, research and other services provided by
such broker or dealer, viewed in terms of either that particular transaction or
the Manager's overall responsibilities with respect to each Allpro Portfolio.
The policies with respect to brokerage allocation, determined
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from time to time by the Board are those disclosed in the currently effective
registration statement. The execution of such transactions shall not be deemed
to represent an unlawful act or breach of any duty created by this Agreement or
otherwise. The Manager will periodically evaluate the statistical data, research
and other investment services provided to it by brokers and dealers. Such
services may be used by the Manager in connection with the performance of its
obligations under this Agreement or in connection with other advisory or
investment operations including using such information in managing its own
accounts.
As part of carrying out its obligations to manage the investment and
reinvestment of the assets of each Allpro Portfolio consistent with the
requirements under the 1940 Act, the Manager shall:
(1) Perform research and obtain and analyze pertinent economic,
statistical, and financial data relevant to the investment
policies of each Allpro Portfolio as set forth in the Fund's
registration statement;
(2) Consult with the Board and furnish to the Board
recommendations with respect to an overall investment strategy
for each Allpro Portfolio for approval, modification, or
rejection by the Board;
(3) Seek out and implement specific investment opportunities,
consistent with any investment strategies approved by the
Board;
(4) Take such steps as are necessary to implement any overall
investment strategies approved by the Board for each Allpro
Portfolio, including making and carrying out day-to-day
decisions to acquire or dispose of permissible investments,
managing investments and any other property of the Portfolio,
and providing or obtaining such services as may be necessary
in managing, acquiring or disposing of investments;
(5) Regularly report to the Board with respect to the
implementation of any approved overall investment strategy and
any other activities in connection with management of the
assets of each Allpro Portfolio including furnishing, within
60 days after the end of each calendar quarter, a statement of
investment performance for the period since the last report
and a schedule of investments and other assets of each Allpro
Portfolio as of the end of the quarter;
(6) Maintain all required accounts, records, memoranda,
instructions or authorizations relating to the acquisition or
disposition of investments for each Allpro Portfolio;
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(7) Furnish any personnel, office space, equipment and other
facilities necessary for the operation of each Allpro
Portfolio as contemplated in this Agreement;
(8) Provide the Fund with such accounting or other data concerning
the Fund's investment activities as shall be necessary or
required to prepare and to file all periodic financial reports
or other documents required to be filed with the Securities
and Exchange Commission ("SEC") and any other regulatory
entity;
(9) Assist in determining each business day the net asset value of
the shares of each Allpro Portfolio in accordance with
applicable law; and
(10) Enter into any written investment advisory or investment
sub-advisory contract with another affiliated or unaffiliated
party, subject to any approvals required by Section 15 of the
1940 Act, pursuant to which such party will carry out some or
all of the Manager's responsibilities (as specified in such
investment advisory or investment sub-advisory contract)
listed above.
(b) General Management Services. The Manager shall provide or arrange
to provide all accounting, and administrative services necessary for the
operation of the Fund. The Manager shall provide office space, equipment,
facilities, and such other services as it, subject to review by the Board, shall
from time to time determine to be necessary or useful to perform its obligations
under this Agreement. The Manager shall also be responsible for performance of
various administrative functions of the Fund including:
(1) The calculation of the net asset value and daily income of
each Allpro Portfolio and the net asset value per share at
such times and in such manner as specified in the Fund's
current registration statement and at such other times upon
which the parties hereto may from time to time agree;
(2) Computation of each Allpro Portfolio's yields and total
returns;
(3) Schedule, plan agendas for and conduct meetings of the Board
and shareholders;
(4) Coordinate the efforts of the Fund's counsel and auditors;
(5) Prepare and distribute all required reports, proxy materials
and other communications with shareholders;
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(6) Prepare and file tax returns, reports, registration statements
and other required documents with the Internal Revenue Service
and the SEC and other appropriate government agencies;
(7) The creation and maintenance of such records relating to the
business of the Fund as the Fund may from time to time
reasonably request not otherwise maintained by the Fund's
custodian, transfer agent, accounting services agent or
sub-advisers;.
(8) Provide clerical, secretarial and bookkeeping services, office
supplies, office space, and related services (including
telephone and other utility services); and
(9) Monitor state and federal law as it may apply to the Fund or
the Allpro Portfolios.
The Manager may contract with qualified Service Providers for the
provision of any of the services necessary for the operation of the Fund as
described in this Section (b). Where the Manager engages separate Service
Providers, the Manager shall also, on behalf of the Fund, coordinate the
activities of such Service Providers, as well as other agents, attorneys,
brokers and dealers, insurers, sub-advisers and such other persons in any such
other capacity deemed to be necessary or desirable. The Manager shall make
reports to the Board of its performance hereunder and shall furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Fund as the Board or the Manager shall consider desirable.
ARTICLE II
Allocation of Charges and Expenses
(a) The Manager. The Manager assumes the expense of and shall pay for
maintaining the staff and personnel necessary to perform its obligations under
this Agreement, and shall at its own expense provide the office space, equipment
and facilities that it is obligated to provide under this Agreement, and shall
pay all compensation of officers of the Fund and all directors of the Fund who
are affiliated persons of the Manager, except as otherwise specified in this
Agreement.
(b) The Fund. The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund, including, without limitation: taxes, expenses for
legal and auditing services, costs of printing proxy materials, shareholder
reports and prospectuses (except to the extent that such prospectuses and
shareholder reports are used in connection with the sale and distribution of the
Fund's shares), custody and transfer agency fees, expenses of redeeming shares,
SEC fees, expenses of registering the Fund's shares under state of federal laws,
fees and actual out-of-pocket expenses of directors who are not interested
persons of the Fund, accounting and pricing costs (including the daily
calculation of the net asset value), insurance, interest, brokerage
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expenses, litigation and other extraordinary or nonrecurring expenses, and other
expenses properly payable by an Allpro Portfolio or the Fund.
ARTICLE III
Compensation of the Manager
For the services rendered, the facilities furnished and expenses
assumed by the Manager, the Fund shall pay to the Manager at the end of each
calendar month a fee calculated as a percentage of the average value of the net
assets each day for each Allpro Portfolio during that month at the following
annual rates:
Allpro Large Cap Growth Portfolio 0.__%
Allpro Small Cap Growth Portfolio 0.__%
Allpro Large Cap Value Portfolio 0.__%
Allpro Small Cap Value Portfolio 0.__%
The Manager's fee shall be accrued daily at 1/365th of the applicable
annual rate set forth above. For the purpose of accruing compensation, the net
assets of each Allpro Portfolio shall be determined in the manner and on the
dates set forth in the articles of incorporation of the Fund or the current
registration statement of the Fund and, on days on which the net assets are not
so determined, the net asset value computation to be used shall be as determined
on the immediately preceding day on which the net assets were determined.
In the event of termination of this Agreement, all compensation due
through the date of termination will be calculated on a pro-rated basis through
the date of termination and paid within fifteen business days of the date of
termination.
During any period when the determination of net asset value is
suspended, the net asset value of a Allpro Portfolio as of the last business day
prior to such suspension shall for this purpose be deemed to be the net asset
value at the close of each succeeding business day until it is again determined.
ARTICLE IV
Limitation of Liability of the Manager
The Manager 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 management of the Fund, except for (a) willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties hereunder, and (b) to the extent
specified in section 36(b) of the 1940 Act concerning loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation.
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ARTICLE V
Activities of the Manager
The services of the Manager are not deemed to be exclusive, and the
Manager is free to render services to others, so long as the Manager's services
under this Agreement are not impaired. It is understood that directors,
officers, employees and shareholders of the Fund are or may become interested
persons of the Manager, as directors, officers, employees and shareholders or
otherwise, and that directors, officers, employees and shareholders of the
Manager are or may become similarly interested persons of the Fund, and that the
Manager may become interested in the Fund as a shareholder or otherwise.
It is agreed that the Manager may use any supplemental investment
research obtained for the benefit of the Fund in providing investment advice to
its other investment advisory accounts. The Manager or its affiliates may use
such information in managing their own accounts. Conversely, such supplemental
information obtained by the placement of business for the Manager or other
entities advised by the Manager will be considered by and may be useful to the
Manager in carrying out its obligations to the Fund.
Securities or other investments held by an Allpro Portfolio of the Fund
may also be held by separate investment accounts or other mutual funds for which
the Manager may act as an investment adviser or by the Manager or its
affiliates. Because of different investment objectives or other factors, a
particular security may be bought by the Manager or its affiliates for one or
more clients when one or more clients are selling the same security. If
purchases or sales of securities for an Allpro Portfolio or other entities for
which the Manager or its affiliates act as investment adviser or for their
advisory clients arise for consideration at or about the same time, the Fund
agrees that the Manager may make transactions in such securities, insofar as
feasible, for the respective entities and clients in a manner deemed equitable
to all. To the extent that transactions on behalf of more than one client of the
Manager during the same period may increase the demand for securities being
purchased or the supply of securities being sold, the Fund recognizes that there
may be an adverse effect on price.
It is agreed that, on occasions when the Manager deems the purchase or
sale of a security to be in the best interest of an Allpro Portfolio as well as
other accounts or mutual funds, it may, to the extent permitted by applicable
laws or regulations, but will not be obligated to, aggregate the securities to
be sold or purchased for other accounts or companies in order to obtain
favorable execution and lower brokerage commissions or prices. In that event,
allocation of the securities purchased or sold, as well as the expenses incurred
in the transaction, will be made by the Manager in accordance with any written
procedures maintained by the Manager or, if there are no such written
procedures, in the manner it considers to be most equitable and consistent with
its fiduciary obligations to the Fund and to such other accounts or companies.
The Fund recognizes that in some cases this procedure may adversely affect the
size of the position obtainable for an Allpro Portfolio.
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ARTICLE VI
Books and Records
The Manager hereby undertakes and agrees to maintain, in the form and
for the period required by Rule 31a-2 and Rule 2a-7 under the 1940 Act, all
records relating to the an Allpro Portfolio's investments that are required to
be maintained by the Fund pursuant to the requirements of Rule 31a-1 and Rule
2a-7 of the 1940 Act.
The Manager agrees that all books and records which it or any other
Service Provider maintains for the Fund are the property of the Fund and further
agrees to surrender promptly to the Fund any such books, records or information
upon the Fund's request. All such books and records shall be made available,
within five business days of a written request, to the Fund's accountants or
auditors during regular business hours at the Manager's offices. The Fund or its
authorized representative shall have the right to copy any records in the
possession of the Manager or a Service Provider that pertain to the Fund. Such
books, records, information or reports shall be made available to properly
authorized government representatives consistent with state and federal law
and/or regulations. In the event of the termination of this Agreement, all such
books, records or other information shall be returned to the Fund free from any
claim or assertion of rights by the Manager.
The Manager further agrees that it will not disclose or use any records
or information obtained pursuant to this Agreement in any manner whatsoever
except as authorized in this Agreement and that it will keep confidential any
information obtained pursuant to this Agreement and disclose such information
only if the Fund has authorized such disclosure, or if such disclosure is
required by federal or state regulatory authorities.
ARTICLE VII
Duration and Termination of this Agreement
This Agreement shall not become effective unless and until it is
approved by the Board, including a majority of directors who are not parties to
this Agreement or interested persons of any such party, and by the vote of a
majority of the outstanding voting shares of each Allpro Portfolio of the Fund.
This Agreement shall come into full force and effect on the date which it is so
approved, provided that it shall not become effective as to any subsequently
created similar Portfolio until it has been approved by the Board specifically
for such Portfolio. As to each Allpro Portfolio, the Agreement shall continue in
effect for two years and shall thereafter continue in effect from year to year
so long as such continuance is specifically approved for each Allpro Portfolio
at least annually by (1) the Board, or by the vote of a majority of the
outstanding shares of the series representing an interest in the Portfolio; and
(2) a majority of those directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such approval.
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This Agreement may be terminated at any time as to any Allpro Portfolio
or to all the Allpro Portfolios, without the payment of any penalty, by the
Board, or by vote of a majority of the outstanding series of shares representing
an interest in the applicable Allpro Portfolio, or by the Manager, on 60 days
written notice to the other party. If this Agreement is terminated only with
respect to one or more, but less than all, of the Allpro Portfolios, or if a
different adviser is appointed with respect to a new Allpro Portfolio, the
Agreement shall remain in effect with respect to the remaining Allpro
Portfolios. This Agreement shall automatically terminate in the event of its
assignment.
ARTICLE VIII
Amendments of this Agreement
This Agreement may be amended as to each Allpro Portfolio by the
parties only if such amendment is specifically approved by (a) the vote of a
majority of the outstanding shares of the Portfolio, and (b) a majority of those
directors who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on such
approval.
ARTICLE IX
Definitions of Certain Terms
The terms "assignment," "affiliated person," and "interested person,"
when used in this Agreement, shall have the respective meanings specified in the
1940 Act. The term "majority of the outstanding shares" an Allpro Portfolio
means the lesser of (a) 67% or more of the shares of the class representing an
interest in the Portfolio present at a meeting if the holders of more than 50%
of such shares are present or represented by proxy, or (b) more than 50% of the
shares of the class representing an interest in the Portfolio.
ARTICLE X
Governing Law
This Agreement shall be construed in accordance with laws of the State
of Maryland, and applicable provisions of the 1940 Act, the Advisers Act, and
the 1934 Act.
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ARTICLE XI
Severability
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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
Market Street Fund, Inc.
By: _________________________________
Title: ______________________________
ATTEST:
________________________________________
PIMC
By: _________________________________
Title: ______________________________
ATTEST:
_________________________________________
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