EXHIBIT NO. 99.5(b)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 1st day of September, 1993, by and
between MFS SERIES TRUST I, a Massachusetts business trust (the "Trust"), on
behalf of MFS LIFETIME MANAGED SECTORS FUND, a series of the Trust (the "Fund"),
and MASSACHUSETTS FINANCIAL SERVICES COMPANY, a Delaware corporation (the
"Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end investment company
registered under the Investment Company Act of 1940; and
WHEREAS, the Adviser is willing to provide business services to the Fund 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:
ARTICLE 1. Duties of the Adviser. The Adviser shall provide the Fund with such
investment advice and supervision as the latter may from time to time consider
necessary for the proper supervision of its funds. The Adviser shall act as
Adviser to the Fund 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 Fund shall be held
uninvested, subject always to the restrictions of the Declaration of Trust of
the Trust, dated July 22, 1986, and By-Laws, each as amended from time to time
(respectively, the "Declaration" and the "By-Laws"), to the provisions of the
Investment Company Act of 1940 and the Rules, Regulations and orders thereunder
and to the Fund's then-current Prospectus and Statement of Additional
Information. 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 Fund's portfolio securities shall be exercised. Should the
Trustees at any time, however, make any definite determination as to the
investment policy 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 shall be revoked. The
Adviser shall take, on behalf of the Fund, 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 portfolio securities
for the Fund's account with brokers or dealers selected by it, and to that end,
the Adviser is authorized as the agent of the Fund to give instructions to the
Custodian of the Fund as to the deliveries of securities and payments of cash
for the account of the Fund. In connection with the selection of such brokers or
dealers and the placing of such orders, the Adviser is directed to seek for the
Fund execution at the most reasonable price by responsible brokerage firms at
reasonably competitive commission rates. In fulfilling this requirement the
Adviser shall not be deemed to have acted unlawfully or to have breached any
duty, created by this Agreement or otherwise, solely by reason of its having
caused the Fund to pay a broker or dealer an amount of commission for effecting
a securities transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction, if the Adviser
determined in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Adviser's overall responsibilities with respect to the fund and to other clients
of the Adviser as to which the Adviser exercises investment discretion.
ARTICLE 2. Allocation of Charges and Expenses. The Adviser shall furnish at its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of the
Fund and maintaining its organization, and investment advisory facilities and
executive and supervisory personnel for managing the investments and effecting
the portfolio transactions of the Fund. The Adviser shall arrange, if desired by
the Trust, for Directors, officers and employees of the Adviser to serve as
Trustees, officers or agents of the Trust if duly elected or appointed to such
positions and subject to their individual consent and to any limitations imposed
by law. It is understood that the Fund will pay all of its own expenses
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 Fund; fees and expenses of
independent auditors, of legal counsel, and of any transfer agent, registrar or
dividend disbursing agent of the Fund; expenses of repurchasing and redeeming
shares and servicing shareholder accounts; expenses of preparing, printing and
mailing stock certificates, shareholder reports, notices, proxy statements and
reports to governmental officers and commissions; brokerage and other expenses
connected with the execution, recording and settlement of portfolio security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of shares of the Fund; expenses of shareholders' meetings; and expenses
relating to the issuance, registration and qualification of shares of the Fund
and the preparation, printing and mailing of prospectuses for such purposes
(except to the extent that any Distribution Agreement to which the Trust is a
party on behalf of the Fund provides that another party is to pay some or all of
such expenses).
ARTICLE 3. Compensation of the Adviser. For the services to be rendered and the
facilities provided, the Fund shall pay to the Adviser an investment advisory
fee computed and paid monthly at a rate equal to .75% of the Fund's average
daily net assets for its then-current fiscal year. Payment of the foregoing fee
is subject to the provision that within 30 days following the close of any
fiscal year of the Fund, the Adviser will pay to the Fund a sum equal to the
amount by which the aggregate expenses of the Fund, but excluding interest,
taxes, brokerage commissions and extraordinary expenses, incurred during such
fiscal year exceed the sum of (a) 1 1/2% of the Fund's average daily net assets
during such fiscal up to and including $40 million, and (b) 1% of its average
daily net assets during such fiscal year in excess of $40 million. The
obligation of the Adviser to reimburse the Fund for expenses incurred during any
year may be terminated or revised at any time by the Adviser without the consent
of the Fund by notice in writing from the Adviser to the Fund. If the Adviser
shall serve for less than the whole of any period specified in this Article 3,
the compensation (including the expense reimbursement) payable to the Adviser
with respect to the Fund will be prorated.
ARTICLE 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, if any, as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the
Investment Company Act of 1940 and the Rules, Regulations or orders thereunder,
will not take a long or short position in the shares of the Fund except as
permitted by the Declaration, and will comply with all other provisions of the
Declaration and the By-Laws and the then-current Prospectus and Statement of
Additional Information of the Fund relative to the Adviser and its Directors and
officers.
ARTICLE 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 and management of
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties and obligations hereunder. As used in this Article 5,
the term "Adviser" shall include Directors, officers and employees of the
Adviser as well as that corporation itself.
ARTICLE 6. Activities of the Adviser. The services of the Adviser to the Fund
are not deemed to be exclusive, the Adviser being free to render investment
advisory and/or other services to others. The Adviser may permit other fund
clients to use the initials "MFS" in their names. The Fund agrees that if the
Adviser shall for any reason no longer serve as the Adviser to the Fund, the
Fund will change its name so as to delete the initials "MFS". It is understood
that the Trustees, officers and shareholders of the Trust are or may be or
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 Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
ARTICLE 7. Duration, Termination and Amendment of this Agreement. This Agreement
shall become effective on the date first above written and shall govern the
relations between the parties hereto thereafter, and shall remain in force until
August 1, 1995 on which date it will terminate unless its continuance after
August 1, 1995 is "specifically approved at least annually" (i) by the vote of a
majority of the Trustees 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 (ii) by the Board of Trustees of the Trust, or by
"vote of a majority of the outstanding voting securities" of the Fund.
This Agreement may be terminated at any time without the payment of any penalty
by the Trustees or by "vote of a majority of the outstanding voting securities"
of the Fund, or by the Adviser, in each case on not more than sixty days' nor
less than thirty 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 "vote of a
majority of the outstanding voting securities" of the Fund.
The terms "specifically approved at least annually", "vote of a majority of the
outstanding voting securities," "assignment", "affiliated person", and
"interested person", when used in this Agreement, shall have the respective
meanings specified, and shall be construed in a manner consistent with, the
Investment Company Act of 1940 and the Rules and Regulations promulgated
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered in their names and on their behalf by the undersigned, thereunto duly
authorized, and their respective seals to be hereto affixed, all as of the day
and year first written above. The undersigned Trustee of the Trust has executed
this Agreement not individually, but as Trustee under the Declaration and the
obligations of this Agreement are not binding upon any of the Trustees or
shareholders of the Trust, individually, but bind only the trust estate
applicable to the Fund.
MFS SERIES TRUST I on behalf
of MFS LIFETIME MANAGED SECTORS FUND
By: A. XXXXX XXXXXXX
A. Xxxxx Xxxxxxx
Chairman and Trustee
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By: A. XXXXX XXXXXXX
A. Xxxxx Xxxxxxx
Chairman
