Exhibit 5(a)
INVESTMENT MANAGEMENT AGREEMENT
XXXXXXX FUND, INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
January 3, 1996
LTCB-MAS Investment Management, Inc.
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
This will confirm the agreement between the undersigned (the
"Fund") and you ("LTCB-MAS") as follows:
1. The Fund is an open-end investment company that consists of
the separate investment portfolios listed on Schedule A hereto, as amended from
time to time (the "Portfolios"). The Fund proposes to engage in the business of
investing and reinvesting the assets of each Portfolio in accordance with the
investment objective and limitations of each Portfolio specified in the Fund's
Articles of Incorporation (the "Articles"), and the currently effective
prospectus, including the documents incorporated by reference therein (the
"Prospectus"), relating to the Fund and each Portfolio, included in the Fund's
Registration Statement, as amended from time to time (the "Registration
Statement"), filed under the Investment Company Act of 1940, as amended (the
"1940 Act"), and the Securities Act of 1933, as amended. Copies of the documents
referred to in the preceding sentence have been furnished to LTCB-MAS. Any
amendments to these documents shall be furnished to LTCB-MAS promptly.
2. Each Portfolio hereby employs LTCB-MAS to (a) be responsible
for the investment and reinvestment of the assets of such Portfolio as specified
in paragraph 1. Consistent with the requirements of the 1940 Act, LTCB-MAS may
engage one or more sub-investment advisers or other investment services
providers (each, an "Investment Services Provider"), on terms satisfactory to
the Fund's Board of Directors, to assist it in carrying out its responsibilities
under this Agreement. If LTCB-MAS so engages an Investment Services Provider
with respect to the management of one or more Portfolios, LTCB-MAS will continue
to
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perform the following services, unless the Fund's Board of Directors otherwise
instructs: (a) supervise the investment program of each such Portfolio in
accordance with the stated investment objective and policies of such Portfolio,
(b) advise and consult with such Investment Services Provider regarding each
such Portfolio's overall investment strategy, and (c) consult with such
Investment Services Provider on at least a weekly basis regarding specific
decisions concerning the purchase, sale or retention of particular securities on
behalf of each such Portfolio.
3. LTCB-MAS shall provide, at its own expense, the office space,
furnishings and equipment and the personnel required by it to perform the
services to be performed hereunder on the terms and for the compensation
provided herein. The Fund shall be responsible for all of the expenses and
liabilities of each Portfolio, including organizational expenses; taxes;
interest; fees (including fees paid to its directors, but excluding any fees
paid to an Investment Services Provider); fees payable to the Securities and
Exchange Commission; state securities qualification fees; costs of preparing and
printing prospectuses; advisory and administration fees; charges of the
custodian and transfer agent; charges of any shareholder servicing agents;
certain insurance premiums; auditing and legal expenses; costs of shareholders'
reports and shareholder meetings; any extraordinary expenses; brokerage fees,
commissions, and transfer taxes, if any, in connection with the purchase or sale
of portfolio securities; and payments, if any, to the distributor of each
Portfolio for activities intended to result in the sale of shares of the
Portfolio.
4. Each Portfolio shall be managed by LTCB-MAS in accordance with
the investment objective and limitations of such Portfolio set forth in the
Articles, the Prospectus, the 1940 Act, the provisions of the Internal Revenue
Code relating to regulated investment companies, other applicable laws and
regulations, and policy decisions adopted by the Fund's Board of Directors from
time to time and communicated to LTCB-MAS in writing. LTCB-MAS shall advise the
Fund's officers and Board of Directors, at such times as the Fund's Board of
Directors may specify, of investments made for the account of each Portfolio and
shall, when requested by the Fund's officers or Board of Directors, supply the
reasons for making such investments.
5. In consideration of LTCB-MAS's undertaking to render the
services described in this agreement, the Fund agrees that LTCB-MAS shall not be
liable under this agreement for any error of judgment or mistake of law or for
any loss suffered by the Fund in connection with the performance of this
agreement, provided that nothing in this agreement shall be deemed to protect or
purport to protect LTCB-MAS against any liability to the Fund or its
stockholders to which LTCB-MAS would otherwise be subject by reason of willful
misfeasance, bad faith or gross
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negligence in the performance of its duties under this agreement or by reason of
its reckless disregard of its obligations and duties hereunder.
6. In consideration of the services to be rendered by LTCB-MAS
under this agreement, each Portfolio shall pay LTCB-MAS an investment management
fee calculated and accrued daily and paid monthly, as set forth on Schedule B
hereto, as amended form time to time. For purposes of calculating such fee, the
value per share of the Portfolio's net assets shall be computed in the manner
specified in the Prospectus and the Articles.
7. LTCB-MAS is authorized to select the brokers or dealers that
will execute the purchases and sales of securities for each of the Fund's
Portfolios and is directed to use its best efforts to obtain the best available
price and most favorable execution, except as prescribed herein. Subject to
policies established by the Board of Directors of the Fund, LTCB-MAS may also be
authorized to effect individual securities transactions at commission rates in
excess of the minimum commission rates available, if LTCB-MAS determines in good
faith that such amount of commission is reasonable in relation to the value of
the brokerage or research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the overall responsibilities of
LTCB-MAS with respect to the Fund. The execution of such transactions shall not
be deemed to represent an unlawful act of breach of any duty created by this
Agreement or otherwise. LTCB-MAS will promptly communicate to the officers and
Directors of the Fund such information relating to portfolio transactions as
they may reasonably request.
8. If the aggregate expenses incurred by, or allocated to, a
Portfolio in any fiscal year shall exceed the expense limitations applicable to
the Portfolio imposed by state securities laws or regulations thereunder, as
such limitations may be raised or lowered from time to time, LTCB-MAS shall
reimburse the Portfolio for such excess. LTCB-MAS's reimbursement obligation
will be limited to the amount of fees it received under this agreement during
the period in which such expense limitations were exceeded, unless otherwise
required by applicable laws or regulations. With respect to portions of a fiscal
year in which this contract shall be in effect, the foregoing limitations shall
be prorated according to the proportion which that portion of the fiscal year
bears to the full fiscal year. Any payments required to be made by this
paragraph 8 shall be made once a year promptly after the end of the Fund's
fiscal year.
9. This agreement shall continue in effect for an initial period
of two years from the date hereof and thereafter with respect to each Portfolio
for successive annual periods, provided that such continuance is specifically
approved at least annually (a) by the vote of a majority of that Portfolio's
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outstanding voting securities (as defined in the 0000 Xxx) or by the Fund's
Board of Directors and (b) by the vote, cast in person at a meeting called for
such purpose, of a majority of the Fund's directors who are not parties to this
agreement or "interested persons" (as defined in the 0000 Xxx) of any such
party. This agreement may be terminated by any Portfolio without penalty, at any
time, (1) either by a vote of the Board of Directors or by vote of the
outstanding voting securities of that Portfolio on sixty (60) days' written
notice, or (2) by LTCB-MAS upon ninety (90) days notice to the Fund. This
agreement may remain in effect with respect to a Portfolio even if it has been
terminated in accordance with this paragraph with respect to other Portfolios of
the Fund. This agreement will also terminate automatically in the event of its
assignment (as defined in the 1940 Act).
10. Except to the extent necessary to perform LTCB-MAS,
obligations under this agreement, nothing herein shall be deemed to limit or
restrict the right of LTCB-MAS, or any affiliate of LTCB-MAS, or any employee of
LTCB-MAS, to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association.
11. This agreement shall be governed by the laws of the State of
New York.
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If the foregoing correctly sets forth the agreement between the
Fund and LTCB-MAS, please so indicate by signing and returning to the Fund the
enclosed copy hereof.
Very truly yours,
XXXXXXX FUND, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Title: President
ACCEPTED:
LTCB-MAS INVESTMENT MANAGEMENT, INC.
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Title: President
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SCHEDULE A
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Equity Portfolio
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SCHEDULE B
--------------------
In consideration of the services to be rendered by LTCB-MAS under
this agreement, each Portfolio shall pay LTCB-MAS an investment management fee
calculated and accrued daily and paid monthly, based on the following annual
percentage rates, to the Portfolio's average daily net assets for the month:
Rate
----
Equity Portfolio .50%
For purposes of calculating such fee, the value per share of the Portfolio's
net assets shall be computed in the manner specified in the Prospectus and the
Articles.
