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EXHIBIT 5.(e)
INVESTMENT ADVISORY AGREEMENT AMENDMENT
This Agreement made and entered into as of September 1, 1990, by and
between Asset Management Fund for Financial Institutions, Inc., a Maryland
corporation (the "Fund"), and Shay Assets Management Co., an Illinois general
partnership (the "Adviser");
W I T N E S S E T H:
WHEREAS, the Fund is an open-end diversified investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund desires to retain the Adviser to render investment
advisory services to the Fund, and the Adviser is willing to render such
services;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth the parties hereto agree as follows:
1. Advisory Services. The Fund hereby appoints the Adviser to
act as investment adviser to the Fund with respect to the portfolio assets
belonging to the classes of the Fund's common stock, $.001 par value ("Fund
Shares"), known as the class of Short-Term Liquidity Portfolio Shares, the
class of Intermediate-Term Liquidity Portfolio Shares, the class of Mortgage
Securities Performance Portfolio Shares and the class of Corporate Bond
Portfolio Shares for the period and on the terms set forth in this Agreement.
The Adviser accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided. The Fund, at its option, may
also appoint the Adviser to act as investment adviser to the Fund hereunder
with respect to the portfolio assets belonging to any other class from time to
time created of Fund Shares, but the Adviser shall not be required to accept
any such appointment. The Fund's classes of Short-Term Liquidity Portfolio
Shares, Intermediate-Term Liquidity Portfolio Shares, Mortgage Securities
Performance Portfolio Shares and Corporate Bond Portfolio Shares, together with
any other class or classes of Fund Shares with respect to which the Adviser
accepts an appointment hereunder as investment adviser, are hereinafter
referred to collectively as "Portfolios" and individually as a "Portfolio."
Adviser shall furnish investment research and advice to the Fund and shall
manage the investment and reinvestment of the assets of the Portfolios and its
business affairs and matters incidental thereto, all subject to the supervision
of the Board of Directors of the Fund, and provisions of the Amended and
Restated Articles of Incorporation, as amended or supplemented, and By-laws of
the Fund and any resolutions, rules or regulations adopted by the Board of
Directors of the Fund. Adviser shall for all purposes herein provided be
deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Directors of the Fund from time
to time, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent for the Fund. The Fund shall also be free to
retain, at its own expense,
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other persons to provide it with any services whatsoever including, but not
limited to, statistical, factual or technical information or advice. The
services of Adviser herein provided are not to be deemed exclusive and Adviser
shall be free to render similar services or other services to others.
2. Duties of Adviser. Subject to the general supervision of the
Board of Directors of the Fund, the Adviser shall, employing its discretion,
manage the investment operations of each Portfolio of the Fund and the
composition of the portfolio of securities and investments (including cash)
belonging to each Portfolio of the Fund, including the purchase, retention and
disposition thereof and the execution of agreements relating thereto, in
accordance with the Fund's investment objective, policies and restrictions for
such Portfolio as stated in the Prospectus (as defined in paragraph 3(f) of
this Agreement) and subject to the following understandings:
(a) The Adviser shall furnish a continuous investment
program for each Portfolio of the Fund and determine from time to time
what investments or securities will be purchased, retained or sold by
the Fund with respect to such Portfolio, and what portion of the
assets belonging to such Portfolio will be invested or held uninvested
as cash.
(b) The Adviser shall use its best judgment in the
performance of its duties under this Agreement.
(c) The Adviser, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Amended and Restated Articles of Incorporation, the By-Laws and
Prospectus of the Fund and with the instructions and directions of the
Board of Directors of the Fund and will conform to and comply with the
requirements of the 1940 Act and all other applicable Federal and
state laws and regulations.
(d) The Adviser shall determine the securities to be
purchased or sold by the Fund with respect to each Portfolio and, as
agent for the Fund on behalf of such Portfolio, will effect portfolio
transactions pursuant to its determinations either directly with the
issuer or with any broker and/or dealer in such securities; in placing
orders with brokers and/or dealers the Advisers intends to seek the
best price and execution for purchases and sales; the Adviser shall
also determine whether or not the Fund shall enter into repurchase or
reverse repurchase agreements with respect to such Portfolio.
On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of a Portfolio of the Fund as well
as another Portfolio or other Portfolios and/or as well as other
customers, the Adviser may, to the extent permitted by applicable laws
and regulations, but shall not obligated to, aggregate the securities
to be so sold or purchased in order to obtain the best price and
execution. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction,
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will be made by the Adviser in a manner it considers to be equitable
and consistent with its fiduciary obligations to the Fund with respect
to each Portfolio and, if applicable, to such other customers.
(e) The Adviser shall maintain books and records with
respect to the securities transactions of each Portfolio of the Fund
and shall render to the Fund's Board of Directors such periodic and
special reports as the Board of Directors may reasonably request.
(f) The Adviser shall provide the Fund's Custodian with
respect to each Portfolio on each Business Day (as defined in the
Prospectus) with information relating to all transactions concerning
the assets belonging to such Portfolio, except redemptions of and any
subscriptions for Fund Shares of such Portfolios.
3. Delivery of Documents. The Fund has delivered copies of each
of the following documents to the Adviser and will promptly notify and deliver
to it all future amendments and supplements, if any:
(a) Articles of Amendment and Restatement of Articles of
Incorporation, Articles of Amendment of Articles of Incorporation, and
Articles Supplementary to Articles of Amendment and Restatement of the
Fund, filed with the Department of Assessments and Taxation of the
State of Maryland on November 10, 1982, November 2, 1983, January 18,
1984, May 11, 1989 and February 28, 1990 (such Articles of
Incorporation, as presently in effect and as amended from time to
time, being herein called the "Articles of Incorporation").
(b) By-Laws of the Fund (such By-Laws, as presently in
effect and as amended from time to time, being herein called the
"By-Laws:").
(c) Certified resolutions of the Board of Directors of
the Fund authorizing the appointment of the Adviser and approving the
form of this Agreement.
(d) Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-1A (No. 2-78808 (the
"Registration Statement") as filed with the Securities and Exchange
Commission (the "Commission") of August 12, 1982 relating to the Fund,
and all amendments thereto.
(e) Notification of Registration of the Fund under the
1940 Act on Form N-8A as filed with the Commission on August 12, 1982.
(f) Current Prospectus or Prospectuses of the Fund with
respect to the Portfolios (such prospectus or prospectuses as
presently in effect and as amended or supplemented from time to time,
being herein called the "Prospectus").
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4. Employees of Adviser. The Adviser shall authorize and permit
any of its directors, officers and employees who may be elected as Directors or
officers of the Fund to serve in capacities in which they are elected.
5. Books and Records. The Adviser shall keep the Fund's books
and records required to be maintained by it pursuant to paragraph 2(e) of this
Agreement. The Adviser agrees that all records which it maintains for the Fund
are the property of the Fund and it will promptly surrender any of such records
to the Fund upon the Fund's request. The Adviser further agrees to preserve
for the period prescribed by Rule 31a-2 of the Commission under the 1940 Act
any such records as are required to be maintained by the Adviser with respect
to the Fund by Rule 31a-1 of the Commission under the 1940 Act.
6. Expenses. During the term of this Agreement the Adviser will
pay all expenses (including without limitation the compensation of all its
directors, officers and employees serving as Directors or officers of the Fund
pursuant to paragraph 4 of this Agreement) incurred by it in connection with
its activities under this Agreement other than the cost of securities and
investments purchased for the Fund (including taxes and brokerage commissions,
if any).
7. Compensation. For the services provided and expenses borne by
the Adviser pursuant to this Agreement, the Fund shall pay to the Adviser
compensation based on an annual percentage of the average daily net assets of
each Portfolio as follows:
Average Daily Net Assets
First Second Third Over
$500 $500 $500 $1.5
Portfolio Million Million Million Billion
--------- ------- ------- ------- -------
Intermediate-Term 0.25% 0.175% 0.125% 0.10%
Liquidity
Mortgage Securities 0.25% 0.175% 0.125% 0.10%
Performance
Corporate Bond 0.35% 0.275% 0.20% 0.10%
First Second Over
$500 $500 $1.0
Portfolio Million Million Billion
--------- ------- ------- -------
Short-Term Liquidity 0.15% 0.125% 0.10%
This fee for each month (increased or decreased as appropriate to take account
of the provisions of paragraph 8) will be paid to the Adviser during the
succeeding month.
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8. Limitation on Expenses.
(a) In the event the daily ratio of Expenses (as defined
in paragraph 8(b) below) to daily net assets of the Fund with respect
to a Portfolio on any day exceeds 0.75 of 1% (such excess hereinafter
called the "Excess Expense" of such Portfolio), the compensation due
to the Adviser under paragraph 7 for that day shall be reduced, but
not below zero, by an amount equal to the Excess Expense of such
Portfolio.
In the event the Expenses (as defined in paragraph (b) below)
of the Fund with respect to a Portfolio for any fiscal year exceed the
lowest applicable annual expense limitation, if any, established
pursuant to the statutes or regulations of any jurisdictions in which
Fund Shares of such Portfolio are then qualified for offer and sale
(such excess hereinafter called the "Blue Sky Excess Expense" of such
Portfolio), the compensation due to the Adviser under paragraph 7 for
the fiscal year in question shall be reduced by an amount equal to the
Blue Sky Excess Expenses of such Portfolio, and if the Blue Sky Excess
Expense of such Portfolio exceeds the fees of the Fund payable to the
Adviser with respect to such Portfolio for the fiscal year in
question, the Adviser shall, to the extent required by such statutes
or regulations, reimburse the Fund for the amount of such excess. If
for any month the Expenses of a Portfolio shall exceed 1/12th of the
percentage of average daily net assets allowable as Expenses, the
payment to the Adviser for that month shall be reduced, and, if
necessary, the Adviser shall make a refund payment to the Fund so that
the Expenses will not exceed such percentage. As of the end of the
Fund's fiscal year, however, the foregoing computations shall be
readjusted so that the aggregate compensation payable to the Adviser
for the year is equal to the percentage set forth herein of the
average daily net assets as determined as described herein throughout
the fiscal year, reduced by an amount equal to the Blue Sky Excess
Expense of such Portfolio. The aggregate of repayments, if any, by
the Adviser to the Fund for the year shall be the amount necessary to
reimburse the Fund for the amount of such excess.
(b) For purposes of paragraph 8(a) of this Agreement, the
term "Expenses" with respect to a Portfolio means the expenses of the
Fund allocated to such Portfolio in accordance with the Fund's
Articles of Incorporation or a resolution of the Fund's Board of
Directors adopted pursuant thereto, including such Portfolio's pro
rata share, allocated as aforesaid, for the general expenses of the
Fund. Notwithstanding the foregoing, the Expenses of a Portfolio
shall include its pro rata share, allocated as aforesaid, of the fees
payable to the Adviser, to Shay Financial Services Co. (the "Sponsor")
provided that the fees payable to the Sponsor, for purposes of
computing such Portfolio's Expenses shall not exceed the fees of the
Sponsor with respect to such Portfolio computed in accordance with the
fee rate (excluding any voluntary fee waivers) set forth in the Fund's
Prospectus with respect to such Portfolio as amended or supplemented
on the date of this Agreement), to the Fund's administrative agent, if
any, to the Fund's transfer agent, if any, and to the Fund's
custodian; but the Expenses of such Portfolio shall exclude any
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interest, taxes, brokerage commissions and litigation and
indemnification expenses and other extraordinary expenses not incurred
in the ordinary course of the Fund's business.
9. Limitation of Liability. The Adviser shall not be liable for
any error of judgment or mistake or law or for any loss suffered by any
Portfolio of the Fund in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3) of
the 0000 Xxx) or a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
10. Effective Date and Term. This Agreement shall become
effective as to each subject Portfolio on September 1, 1990, or on such later
date specified for a Portfolio, provided that the Agreement is approved by a
majority of the outstanding voting shares (as defined in the 0000 Xxx) of the
subject Portfolio. This Agreement shall remain in effect until March 1, 1992
and shall continue in effect from year to year thereafter as to each subject
Portfolio, subject to termination as hereinafter provided, if such continuance
is approved at least annually by (a) a majority of the outstanding voting
shares (as defined in the 0000 Xxx) of each Portfolio or by vote of the Fund's
Board of Directors, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by vote of a majority of the Directors of the
Fund who are not parties to this Agreement or "interested persons" (as defined
in the 0000 Xxx) of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval. This Agreement may be
terminated by the Fund with respect to any or all Portfolios at any time,
without the payment of any penalty, by the Board of Directors of the Fund or by
vote of a majority of the outstanding voting shares (as defined in the 0000
Xxx) of the Fund or of the affected Portfolio or Portfolios, as the case may
be, on 60 (sixty) days' written notice to the Adviser, or by the Adviser with
respect to any or all Portfolios at any time, without the payment of any
penalty, on 90 (ninety) days' written notice to the Fund. This Agreement will
automatically and immediately terminate in the event of its assignment (as
defined in the 1940 Act).
11. Amendment of Agreement. This Agreement may be amended by
mutual consent, but the consent of the Fund must be approved (a) by vote of a
majority of those Directors of the Fund 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 amendment, and (b)
by vote of a majority of the outstanding voting shares (as defined in the 0000
Xxx) of the Fund or of the affected Portfolio or Portfolios, as the case may
be.
12. Notices. Notices of any kind to be given to the Adviser by
the Fund shall be in writing and shall be duly given if mailed or delivered
to the Adviser at 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, XX 00000, Attention:
Executive Vice President, or at such other address or to such other individual
as shall be specified by the Adviser to the Fund in accordance with this
paragraph 12. Notices of any kind to be given to the Fund by the Adviser shall
be in writing
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and shall be duly given if mailed or delivered to the Fund at Asset Management
Fund for Financial Institutions, Inc., 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, XX
00000, Attention: President, or at such other address or to such other
individual as shall be specified by the Fund to the Adviser in accordance
with this paragraph 12.
13. Authority. The Directors have authorized the execution of
this Agreement in their capacity as Directors and not individually and the
Adviser agrees that neither the stockholders nor the Directors nor any officer,
employee, representative or agent of the Fund shall be personally liable upon,
nor shall resort be had to their private property for the satisfaction of,
obligations given, executed or delivered on behalf of or by the Fund, that the
stockholders, Directors, officers, employees, representatives and agents of the
Fund shall not be personally liable hereunder, and that it shall look solely to
the property of the Fund for the satisfaction of any claim hereunder.
14. Controlling Law. This Agreement shall be governed by and
construed in accordance with the laws of the state of Illinois.
15. Multiple Counterparts. This Agreement may be executed
simultaneously in several counterparts, each of which shall be deemed to be an
original, but which together shall constitute one and the same instrument.
16. Captions. The captions of the sections are for descriptive
purposes only and they are not intended to limit or otherwise affect the
content of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of September 1, 1990.
ASSET MANAGEMENT FUND FOR
FINANCIAL INSTITUTIONS, INC.
By: /s/
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Its: President
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ATTEST:
By: /s/
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Its: Secretary
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SHAY ASSETS MANAGEMENT CO.
By:/s/
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Its:Executive Vice President
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ATTEST:
By: /s/
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Its: Secretary
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