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EXHIBIT 5(e)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated November 1, 1991, between Market Street Fund, Inc. (the
"Fund"), a corporation organized under the laws of the State of Maryland, and
Providentmutual Investment Management Company (the "Adviser"), a corporation
organized under the laws of the Commonwealth of Pennsylvania.
WHEREAS, the Fund is a registered investment company under the Investment
Company Act of 1940 ("Investment Company Act") which maintains several
investment portfolios for the use of the Fund's shareholders which are separate
accounts established and maintained by insurance companies;
WHEREAS, one of the Fund's portfolios, the International Portfolio, has
the current objective of achieving long-term capital growth by investing in a
diversified portfolio of marketable equity securities of established non-United
States companies;
WHEREAS, the Fund desires that Providentmutual Investment Management
Company act as investment adviser with respect to the International Portfolio;
WHEREAS, the Investment Company Act prohibits any person from acting as
investment adviser of a registered investment company except pursuant to a
written agreement;
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WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act");
NOW, THEREFORE, the Fund and the Adviser hereby agree as follows:
1. At its own expense and subject to supervision of the Board of Directors
of the Fund ("the Directors"), the Adviser will provide investment advisory
services with respect to the Fund's International Portfolio ("International
Portfolio") in accordance with the Portfolio's investment objectives, policies
and restrictions as stated in the Fund's Prospectus, as from time to time in
effect, the Articles of Incorporation and By-Laws of the Fund, and the
Investment Company Act and appropriate State Insurance Laws, each as amended
from time to time. The Adviser agrees to furnish the services described below
for the compensation provided by this Agreement. The Adviser shall for all
purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Fund in any way, or otherwise be deemed an agent of the Fund.
2. In connection with its obligations hereunder, the Adviser shall,
subject to supervision by the Directors, manage the investment and reinvestment
of the assets of the International Portfolio. Subject to the limitations set
forth in Paragraph 1 above, the Adviser shall:
(a) perform research and obtain and evaluate pertinent economic,
statistical, and financial data relevant to the investment policies of the
International Portfolio as set forth in the Fund's Prospectus, as amended from
time to time;
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(b) consult with the Directors and furnish to the Directors
recommendations with respect to an overall investment plan and any changes
thereto for the International Portfolio for approval, modification, or rejection
by the Directors;
(c) seek out, present, and recommend specific investment opportunities,
consistent with any overall investment plan approved by the Directors;
(d) take such steps as are necessary to implement any overall
investment plan approved by the Directors, including making and carrying out
decisions to acquire or dispose of permissible investments, management of
investments and any other property of the International Portfolio, and providing
or obtaining such services as may be necessary in managing, acquiring or
disposing of investments; and
(e) determine the composition of the assets of the International
Portfolio, including the purchase, retention or sale of the securities and cash
contained in that Portfolio.
3. The Adviser shall effect all purchases and sales of investments for the
International Portfolio in a manner consistent with the limitations set forth in
Paragraph 1 above.
4. The Adviser shall regularly report to the Directors with respect to the
implementation of any approved overall investment plan and any other activities
in connection with management of the assets of the International Portfolio. The
Adviser, either through persons employed by it or at its own expense, shall
furnish to the Directors, at least once every three months, a scheduled of the
investments and other assets held in the International
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Portfolio and a statement of all purchases and sales for the Portfolio made
since the last report.
5. The Adviser shall maintain all accounts, records, memoranda,
instructions, or authorizations relating to the acquisition or disposition of
investments for the International Portfolio as required by law.
The Adviser agrees that all accounts and records which it maintains for
the Fund's International Portfolio shall be the property of the Fund and that
it will surrender promptly to the designated officers of the Fund, or to the
Directors, any or all such accounts and records upon request. The Fund or its
authorized representative shall have the right to copy any records in the
possession of the Adviser which pertain to the International Portfolio of the
Fund. The Adviser further agrees to preserve for the period prescribed by the
rules and regulations of the Securities and Exchange Commission all such
records as are required to be maintained pursuant to said rules. The Adviser
also agrees that it will maintain all records and accounts regarding the
investment activities of the Portfolio in a confidential manner. All such
accounts or records shall be made available, within five (5) business days of a
written request, to the Fund's accountants or auditors during regular business
hours at the Adviser's offices. In addition, the Adviser will provide any
materials, reasonably related to the investment advisory services provided
hereunder, as may be reasonably requested in writing by the Directors, or as
may be required by any governmental agency having jurisdiction over the Fund or
any insurance companies investing in the Fund.
6. (a) In consideration of the services rendered pursuant to this
Agreement, the Fund shall pay the Adviser monthly compensation at an effective
annual rate of 0.75% of the first $500 million of the average daily net assets
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of the Portfolio and 0.60% of the average daily net assets of the Portfolio in
excess of $500 million.
(b) If this Agreement is terminated at any time, any compensation owed
the Adviser pursuant to subparagraph (a) above shall be payable upon the date of
termination of this Agreement.
7. The Adviser shall be responsible for all expenses incurred in
performing the investment advisory services herein set forth, including costs of
compensating and furnishing office space for officers and employees of the
Adviser connected with investment and economic research, trading and investment
management of the International Portfolio. All brokers' commissions, transfer
taxes and other fees relating to purchases and sales of investments for the
Portfolio shall be paid out of the assets allocated to the Portfolio.
8. The Adviser shall, subject to the supervision of the Directors, arrange
for the placement of orders for the International Portfolio, either directly
with the issuer, with any broker-dealer or underwriter that specializes in the
securities for which the order is made, or with any other broker or dealer
selected by the Adviser, subject to the following limitation: the Adviser shall
use its best judgment to choose brokers who will obtain the best prices and
executions on securities transactions and whose commissions are most reasonable.
In addition to seeking the best price and execution, the Adviser may also take
into consideration research and statistical information and wire and other
quotation services provided to the Adviser. However, the Adviser shall select
only brokers whose commissions it believes are reasonable. The Adviser will
periodically evaluate the statistical data, research and other investment
services provided by brokers and dealers to it. Such services may be
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used by the Adviser in connection with the performance of its obligations under
this Agreement or in connection with other advisory or investment operations.
9. The Adviser shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the International Portfolio in connection with
the subject matter of this Agreement unless such loss arises from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
obligations and duties or by reason of its reckless disregard of its obligations
and duties under this Agreement.
10. The Adviser and any affiliate of the Adviser may engage in any other
business or act as adviser to or investment manager of any other person, even
though the Adviser, any affiliate of the Adviser, or any such other person has
or may have investment policies similar to those for the Portfolio, so long as
the Adviser'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 in the Adviser, as directors, officers, employees,
shareholders or otherwise and that directors, officers, employees and
shareholders of the Adviser are or may become similarly interested in the Fund,
and that the Adviser may become interested in the Fund; and that the existence
of any such dual interest shall not affect the validity hereof or any
transaction hereunder except as otherwise provided in the Articles of
Incorporation or By-laws of the Fund and the Adviser, respectively, or by
specific provisions of applicable law.
It is agreed that the Adviser or its affiliates may use any investment
research obtained for the benefit of the International Portfolio in providing
investment advice to its other investment advisory accounts or for use in
managing their own accounts. Conversely, such supplemental information obtained
by the placement of business for the Adviser or the entities advised by the
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Adviser may be considered by and may be useful to the Adviser in carrying
out its obligations to the Portfolio.
Nothing herein contained shall prevent the Adviser or any affiliate of the
Adviser or any affiliate of the Adviser from buying or selling, or from
recommending or directing any other person to buy or sell, at any time,
securities of the same kind or class recommend by the Adviser to be purchased or
sold for the International Portfolio. When the Adviser deems the purchase or
sale of a security to be in the best interests of the Portfolio as well as other
accounts or companies, it may, to the extent permitted by applicable laws and
regulations, but will not be obligated to, aggregate the securities to be sold
or purchased for the Portfolio with those to be sold or purchased for other
accounts or companies in order to obtain favorable execution and low brokerage
commissions. In that event, allocation of the securities purchased or sold, as
well as the expenses incurred in the transaction, will be made by the Adviser in
the manner it considers to be most equitable and consistent with its fiduciary
obligations to the Portfolio 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 the International Portfolio.
11. This Agreement shall not be effective unless and until it is approved
by the Directors, including a majority of the Directors who are not "interested
persons" (as defined in the Investment Company Act), by vote cast in person at a
meeting called for the purpose of voting such approval and by the parties to
this Agreement. This Agreement shall come into full force and effect on the
later of the date on which it is so approved and November 1, 1991.
12. This Agreement shall continue until December 31, 1991 and thereafter
for successive annual periods ending December 31, of each year, provided such
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continuance is specifically approved at least annually by (i) the
Directors or (ii) by a vote of a majority of the shareholders of the
International Portfolio, provided that in either event the continuance is
also approved by a majority of the Directors who are not "interested
persons" (as defined in the Investment Company Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of
voting such approval. The Fund agrees that it will notify the Adviser in
writing each year of such annual approval.
13. (a) This Agreement shall terminate automatically in the event of its
assignment.
(b) This Agreement may be terminated at any time, without the payment
of any penalty, (i) by a majority of the Directors for cause or upon sixty days
written notice addressed to the Adviser; or (ii) by a vote of a "majority" of
the shareholders as set forth in Paragraph 12 above; or (iii) by the Adviser on
sixty days written notice addressed to the Fund at its principal place of
business. Cause is defined and limited for this purpose to mean willful
misfeasance, bad faith, or gross negligence by the Adviser in the performance of
its duties or reckless disregard by the Adviser of its obligations and duties
under this Agreement.
14. This Agreement shall be construed in accordance with Pennsylvania law.
15. The Fund understands that the Adviser now acts, will continue to act,
or may act in the future, as investment adviser to fiduciary and other managed
accounts including other investment companies, and the Fund has no objection to
the Adviser's so acting, provided that the Adviser duly performs all obligations
under this Agreement.
16. The Fund understands that the persons employed by the Adviser to
assist in the performance of its duties hereunder will not devote their full
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time to such service and nothing contained herein shall be deemed to limit
or restrict the right of the Adviser or any of its affiliates to engage in
and devote time and attention to other businesses or to render services of
whatever kind or nature, provided that the Adviser duly performs all
obligations under this Agreement.
17. This Agreement shall be subject to the provisions of the Investment
Company Act and the Investment Advisers Act and the rules, regulations, and
rulings thereunder, as from time to time in effect, including such exemptions
therefrom, as the Securities and Exchange Commission may grant. The terms used
in this Investment Advisory Agreement, and any amendments thereof, shall be
interpreted and construed in accordance therewith.
Without limiting the generality of the foregoing, the term "assignment"
shall not include any transaction exempted from Section 15(a)(4) of the
Investment Company Act by an order of the Securities and Exchange Commission.
18. The Adviser shall submit to all regulatory and administrative bodies
having jurisdiction over the operations of Provident Mutual Life Insurance
Company of Philadelphia, Providentmutual Life and Annuity Company of America, or
the Fund, present or future, any materials reasonably related to the investment
advisory services provided hereunder, as may be reasonably requested in writing
by the Directors or as may be required by governmental agency having
jurisdiction.
19. In the event of termination for any reason, all records shall promptly
be returned to the Fund free from any claim or retention of rights by the
Adviser.
20. The Adviser shall not disclose or use any records or information
obtained pursuant to this Agreement in any manner whatsoever except as
expressly
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authorized herein and, further, the Adviser will keep confidential any
information pursuant to the service relationship set forth herein and disclose
such information only if the Fund has authorized such disclosure or such
disclosure is expressly required by applicable federal or state regulatory
authorities.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers on the date and year first
above written.
THE MARKET STREET FUND, INC.
WITNESS:
[sig]
---------------------- BY:/s/ XXXXXXX X XXXXX
-----------------------
Providentmutual Investment
Management Company
WITNESS:
[sig]
---------------------- BY:/s/ XXXX X. XXXXX
-----------------------
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