EXHIBIT D
INVESTMENT ADVISORY AGREEMENT
THE PREMIUM PORTFOLIOS
GOVERNMENT INCOME PORTFOLIO
INVESTMENT ADVISORY AGREEMENT, dated as of September 13, 1993, by and
between The Premium Portfolios, a New York trust (the "Trust"), and CITIBANK,
N.A., a national banking association ("Citibank" or the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an openend investment company
registered under the Investment Company Act of 1940 (collectively with the
rules and regulations promulgated thereunder, the "1940 Act"), and
WHEREAS, the Trust wishes to engage the Adviser to provide certain
investment advisory services for the series of the Trust designated as
Government Income Portfolio (the "Portfolio"), and the Adviser is willing to
provide such investment advisory services for the Portfolio 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:
1. Duties of the Adviser. The Adviser shall provide the Portfolio with
such investment advice and supervision as the Trust may from time to time
consider necessary for the proper supervision of the Portfolio's investment
assets. Citibank shall act as the Adviser for the Portfolio 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 Portfolio shall be held uninvested, subject
always to the restrictions of the Trust's Declaration of Trust, dated
September 13, 1993, and Bylaws, as each may be amended from time to time
(respectively, the "Declaration" and the "By-Laws"), to the provisions of
the 1940 Act, and to the then-current Registration Statement of the Trust
with respect to the Portfolio. 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 Portfolio's securities shall
be exercised. Should the Board of Trustees of the Trust at any time,
however, make any definite determination as to investment policy applicable
to the Portfolio 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such notice or until similarly notified that such determination has been
revoked. The Adviser shall take, on behalf of the Portfolio, 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 securities for the Portfolio's account with the brokers or dealers
selected by it, and to that end the Adviser is authorized as the agent of
the Trust to give instructions to the custodian of the Portfolio as to
deliveries of securities and payments of cash for the account of the
Portfolio. In connection with the selection of such brokers or dealers and
the placing of such orders, the Adviser is directed to seek for the
Portfolio in its best judgment, prompt execution in an effective manner at
the most favorable price. Subject to this requirement of seeking the most
favorable price, securities may be bought from or sold to brokerdealers who
have furnished statistical, research and other information or services to
the Adviser or the Portfolio, subject to any applicable laws, rules and
regulations. In making purchases or sales of securities or other property
for the account of the Portfolio, the Adviser may deal with itself or with
the Trustees of the Trust or the Trust's exclusive placing agent, to the
extent such actions are permitted by the 1940 Act.
2. Allocation of Charges and Expenses. The Adviser shall furnish at
its own expense all necessary services, facilities and personnel in
connection with its responsibilities under Section 1 above. It is
understood that the Trust will pay from the assets of the Portfolio all of
its own expenses allocable to the Portfolio 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 Trust; fees and expenses of independent
auditors, of legal counsel and of any transfer agent, administrator,
distributor, shareholder servicing agent, registrar or dividend disbursing
agent of the Trust; expenses of issuing and redeeming interests and
servicing investor accounts; expenses of preparing, printing and mailing,
notices, proxy statements and reports to governmental officers and
commissions and to investors in the Portfolio; expenses connected with the
execution, recording and settlement of security transactions; insurance
premiums; fees and expenses of the custodian for all services to the
Portfolio, including safekeeping of funds and securities and maintaining
required books and accounts; expenses of calculating the net asset value
of the Portfolio; and expenses of meetings of the Portfolio's investors.
3. Compensation of the Adviser. For the services to be rendered,
the Trust shall pay to the Adviser from the assets of the Portfolio an
investment advisory fee computed and paid monthly at an annual rate equal
to 0.35% of the Portfolio's average daily net assets for the Portfolio's
then-current fiscal year. If Citibank serves as Adviser for less than the
whole of any period specified in this Section 3, the compensation to
Citibank, as Adviser, shall be prorated.
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
principal underwriter or distributor, as principals in making purchases or
sales of securities or other property for the account of the Portfolio,
except as permitted by the 1940 Act, will not take a long or short
position in shares of the Portfolio except as permitted by the Declaration,
and will comply with all other provisions of the Declaration and ByLaws
and the thencurrent Registration Statement applicable to the Portfolio
relative to the Adviser and its Directors and officers.
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
of securities transactions for the Portfolio, except for 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. As used in this Section 5, the term "Adviser" shall include
Directors, officers and employees of the Adviser as well as Citibank
itself.
6. Activities of the Adviser. The services of the Adviser to the
Portfolio are not to be deemed to be exclusive, Citibank being free to
render investment advisory and/or other services to others. It is
understood that Trustees, officers, and investors of the Trust are or may
be or may 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 Trust and that the
Adviser may be or may become interested in the Trust as an investor or
otherwise.
7. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written and shal
govern the relations between the parties hereto thereafter, and shall
remain in force indefinitely, provided that its continuance is
"specifically approved at least annually" (a) by the vote of a majority of
the Trustees of the Trust who are not "interested persons" 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 (b) by
the Board of Trustees of the Trust or by "vote of a majority of the
outstanding voting securities" of the Portfolio.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Portfolio, or by the Adviser, in each case on not more than
60 days' nor less than 30 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 the
"vote of a majority of the outstanding voting securities" of the Portfolio.
The terms "specifically approved at least annually", "vote of a majority
of the outstanding voting securities", "assignment", "affiliated person", and
"interested persons", when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
Each party acknowledges and agrees that all obligations of the Trust under
this Agreement are binding only with respect to the Portfolio; that any
liability of the Trust under this Agreement with respect to the Portfolio, or
in connection with the transactions contemplated herein with respect to the
Portfolio, shall be discharged only out of the assets of the Portfolio; and
that no other series of the Trust shall be liable with respect to this
Agreement or in connection with the transactions contemplated herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
The undersigned Trustee or officer of the Trust has executed this
Agreement not individually, but as Trustee or officer under the Trust's
Declaration of Trust, dated September 13, 1993, as amended, and the obligations
of this Agreement are not binding upon any of the Trustees or officers of the
Trust individually.
THE PREMIUM PORTFOLIOS CITIBANK, N.A.
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Title: President Title: Vice President
