EXHIBIT B
INTERIM MASTER ADVISORY CONTRACT
FFB FUNDS TRUST
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx x0x00
December __, 1995
First Union National Bank of
North Carolina
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
This will confirm the agreement between the
undersigned (the "Trust") and First Union National Bank of North
Carolina (the "Adviser") as follows:
1. The Trust is an open-end investment company
organized as a Massachusetts business trust, and consists of one
or more separate investment portfolios as may be established and
designated by the Trustees from time to time (the "Funds").
This contract shall pertain to any Fund as shall be designated
in a Supplement to this contract ("Supplement"), as further
agreed between the Trust and the Adviser. A separate class of
shares of beneficial interest of the Trust is offered to
investors with respect to each Fund. The Trust engages in the
business of investing and reinvesting the assets of the Funds in
the manner and in accordance with the investment objective and
restrictions specified in the Trust's Declaration of Trust and
the currently effective Prospectus or Prospectuses (the
"Prospectus") relating to the Trust and the Funds included in
the Trust's Registration Statement, as amended from time to time
(the "Registration Statement"), filed by the Trust under the
Investment Company Act of 1940 (the "1940 Act") and the
Securities Act of 1933 (the "1933 Act"). Copies of the
documents referred to in the preceding sentence have been
furnished to the Adviser. Any amendments to those documents
shall be furnished to the Adviser promptly.
2. The Trust employs the Adviser to provide the
investment advisory and administrative services specified
elsewhere in this contract, and the Adviser hereby accepts such
employment. Pursuant to a Master Distribution Contract (the
"Master Distribution Contract") and a Master Administrative
Services Contract (the "Master Administrative Services
Contract") between the Trust and Xxxxxx Xxxx Xxxxx Xxxxx &
Xxxxxx Incorporated (the "Sponsor"), the Trust has employed the
Sponsor to act as distributor for the Funds and to provide to
the Trust management and other services.
3. (a) The Adviser shall, at its expense, (i) employ
or associate with itself such persons as it believes appropriate
to assist it in performing its obligations under this contract
and (ii) provide all advisory, administrative, management and
shareholder services, equipment, facilities and personnel
necessary to perform its obligations under this contract. The
Trust recognizes that in those cases where the Adviser makes
arrangements with its correspondent banks to maintain a
subaccount for certain of their customers who invest in shares
of the Funds, such correspondent banks may also agree to provide
services to subaccount holders of the type provided by the
Adviser to shareholders of record. The Adviser shall obtain the
Trust's prior written approval to each arrangement whereby a
correspondent bank agrees to provide such services. Such
correspondent banks will be compensated for such services
exclusively by the Adviser.
(b) Except as provided in subparagraph (a) in the
Master Administrative Services Contract, the Trust shall be
responsible for all of its expenses and liabilities, including
compensation of its trustees who are not affiliated with the
Sponsor; taxes and governmental fees; interest charges; fees and
expenses of the Trust's independent accountants and legal
counsel; trade association membership dues; fees and expenses of
any custodian (including fees and expenses for keeping books and
accounts and calculating the net asset value of shares of the
Funds), transfer agent, registrar and dividend disbursing agent
of the Trust; expenses of issuing, redeeming, registering and
qualifying for sale the Trust's shares; expenses of preparing
and printing share certificates, prospectuses, shareholders'
reports, notices, proxy statements and reports to regulatory
agencies; the cost of office supplies; travel expenses of all
officers, trustees and employees; insurance premiums; brokerage
and other expenses of executing portfolio transactions; expenses
of shareholders' meetings; organizational expenses; and
extraordinary expenses.
4. (a) The Adviser shall provide to the Trust
investment guidance and policy direction in connection with the
management of the portfolios of the Funds, including oral and
written research analysis, advice, statistical and economic data
and information and judgments, of both a macroeconomic and
microeconomic character, concerning, among other things,
interest rate trends, portfolio composition, credit conditions
of both a general and specific nature and, where applicable, the
average maturity of the portfolio of the Fund.
(b) The Adviser shall also provide to the Trust's
officers administrative assistance in connection with the
operation of the Trust for the account of the Funds.
Administrative services provided by the Adviser shall include
(i) data processing, clerical and bookkeeping services required
in connection with maintaining the financial accounts and
records for the Trust and the Funds, (ii) the compilation of
statistical and research data required for the preparation of
periodic reports and statements of the Fund which are
distributed to the Trust's officers and Board of Trustees, (iii)
handling, or causing to be handled, general shareholder
relations with Fund investors, such as advice as to the status
of their accounts, the current yield and dividends declared to
date and assistance with other questions related to their
accounts, (iv) the compilation of information required in
connection with the Trust's filings with the Securities and
Exchange Commission and (v) such other services as the Adviser
shall from time to time determine, upon consultation with the
Sponsor, to be necessary or useful to the administration of the
Trust and the Funds.
(c) As manager of the assets of the Funds, the
Adviser shall make investments for the account of the Funds in
accordance with the Adviser's best judgment and within the
investment objective and restrictions set forth in the Trust's
Declaration of Trust, the Prospectus, the 1940 Act and the
provisions of the Internal Revenue Code relating to regulated
investment companies, subject to policy decisions adopted by the
Trust's Board of Trustees. The Adviser shall advise the Trust's
officers and Board of Trustees, at such times as the Trust's
Board of Trustees may specify, of investments made for the Funds
and shall, when requested by the Trust's officers or Board of
Trustees, supply the reasons for making particular investments.
It is understood that the Adviser will not use any inside
information pertinent to investment decisions undertaken in
connection with this contract that may be in its possession or
in the possession of any of its affiliates, nor will the Adviser
seek to obtain any such information.
(d) The Adviser shall furnish to the Trust's
Board of Trustees periodic reports on the investment performance
of the Funds and on the performance of its obligations under
this contract and shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall
reasonably request.
(e) On occasions when the Adviser deems the
purchase or sale of a security to be in the best interest of the
Fund as well as other customers, the Adviser, to the extent
permitted by applicable law, may aggregate the securities to be
so sold or purchased in order to obtain the best execution or
lower brokerage commissions, if any. The Adviser may also on
occasion purchase or sell a particular security for one or more
customers in different amounts. On either occasion, and to the
extent permitted by applicable law and regulations, allocation
of the securities so 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 the most equitable and consistent with
its fiduciary obligations to the Funds and to such other
customers.
(f) The Adviser may cause the Funds to pay a
broker which provides brokerage and research services to the
Adviser a commission for effecting a securities transaction in
excess of the amount another broker might have charged. Such
higher commissions may not be paid unless the Adviser determines
in good faith that the amount paid is reasonable in relation to
the services received in terms of the particular transaction or
the Adviser's overall responsibilities to the Fund and any other
of the Adviser's clients.
5. The Adviser shall give the Trust the benefit of
the Adviser's best judgment and efforts in rendering services
under this contract. As an inducement to the Adviser's
undertaking to render these services, the Trust agrees that the
Adviser shall not be liable under this contract for any mistake
in judgment or in any other event whatsoever except for lack of
good faith, provided that nothing in this contract shall be
deemed to protect or purport to protect the Adviser against the
liability to the Trust or its shareholders to which the Adviser
would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of the Adviser's
duties under this contract or by reason of the Adviser's
reckless disregard of its obligations and duties hereunder.
6. In consideration of the services to be rendered by
the Adviser under this contract, the Trust shall pay the Adviser
a monthly fee ("fee") with respect to each Fund on the first
business day of each month, based upon the average daily value
(as determined on each business day at the time set forth in the
Prospectus for determining net asset value per share) of the net
assets of the Fund during the preceding month, at annual rates
set forth in a Supplement to this contract with respect to the
Fund, provided, that no fee shall accrue or be payable hereunder
with respect to a Fund until the first day after the day (the
"Approval Date") on which this contract has been approved by the
vote of a majority of the outstanding voting securities of that
Fund (as defined in the 1940 Act). If the fees payable to the
Adviser pursuant to this paragraph 6 begin to accrue before the
end of any month or if this contract terminates before the end
of any month, the fees for the period from that date to the end
of that month or from the beginning of that month to the date of
termination, as the case may be, shall be prorated according to
the proportion which the period bears to the full month in which
the effectiveness or termination occurs. For purposes of
calculating the monthly fees, the value of the net assets of a
Fund shall be computed in the manner specified in the Prospectus
for the computation of net asset value. For purposes of this
contract, a "business day" is any day the New York Stock
Exchange is open for trading.
7. If the aggregate expenses of every character
incurred by, or allocated to, a Fund in any fiscal year, other
than interest, taxes, brokerage commissions and other portfolio
transaction expenses, other expenditures which are capitalized
in accordance with generally accepted accounting principles and
any extraordinary expenses, but including the fees payable under
the Distribution Contract and the fees provided for in paragraph
6 ("includable expenses") shall exceed the expense limitations
applicable to the Fund imposed by state securities laws or
regulations thereunder, as these limitations may be raised or
lowered from time to time, the Adviser shall pay the Fund an
amount equal to 70% of that excess. 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. At the end of each month of the Trust's
fiscal year, the Sponsor will review the includable expenses
accrued during that fiscal year to the end of the period and
shall estimate the contemplated includable expenses for the
balance of that fiscal year. If as a result of that review and
estimation it appears likely that the includable expenses will
exceed the limitations referred to in this paragraph 7 for a
fiscal year with respect to the Fund, the monthly fees relating
to the Fund payable to the Adviser under this contract for such
month shall be reduced, subject to a later adjustment, by an
amount equal to 70% of a pro rata portion (prorated on the basis
of the remaining months of the fiscal year, including the month
just ended) of the amount by which the includable expenses for
the fiscal year (less an amount equal to the aggregate of actual
reductions made pursuant to this provision with respect to prior
months of the fiscal year) are expected to exceed the
limitations provided for in this paragraph 7. For purposes of
the foregoing, the value of the net assets of the Fund shall be
computed in the manner specified in the penultimate sentence of
paragraph 6, and any payments required to be made by the Adviser
shall be made once a year promptly after the end of the Trust's
fiscal year.
8. This contract and any Supplement shall become
effective with respect to a Fund on the date specified in the
Supplement, and shall thereafter continue in effect with respect
to the Fund until the earlier of the Closing Date defined in the
Agreement and Plan of Reorganization dated as of September 19,
1995 approved by shareholders of the Fund or two years from such
date only so long as the continuance is specifically approved at
least annually (a) by the vote of a majority of the outstanding
voting securities of the Fund (as defined in the 1940 Act) or by
the Trust's Board of Trustees and (b) by the vote, cast in
person at a meeting called for the purpose, of a majority of the
Trust's Trustees who are not parties to this contract or
"interested persons" (as defined in the 1940 Act) of any such
party.
This contract and any Supplement thereto may be
terminated with respect to a Fund at any time, without the
payment of any penalty, by a vote of a majority of the
outstanding voting securities of the Fund (as defined in the
1940 Act) or by a vote of a majority of the Trust's entire Board
of Trustees on 60 days' written notice to the Adviser or by the
Adviser on 60 days' written notice to the Trust. This contract
shall terminate automatically in the event of its assignment (as
defined in the 1940 Act).
9. Except to the extent necessary to perform the
Adviser's obligations under this contract, nothing herein shall
be deemed to limit or restrict the right of the Adviser, or any
affiliate of the Adviser, or any employee of the Adviser, to
engage in 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.
10. This contract shall be construed and its
provisions interpreted in accordance with the laws of the state
of New York.
11. This contract may be executed in counterparts,
but all of the copies, together, shall constitute one contract.
12. Any notice given by a party to this Agreement
shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth
above or at such other address as such party may from time to
time specify in writing to the other party.
13. The Declaration of Trust establishing the Trust,
filed on March 25, 1987, a copy of which, together with all
amendments thereto (the "Declaration"), is on file in the Office
of the Secretary of the Commonwealth of Massachusetts, provides
that the name "FFB Funds Trust" refers to the trustees under the
Declaration collectively as trustees and not as individuals or
personally, and that no shareholder, trustee, officer, employee
or agent of the Trust shall be subject to claims against or
obligations of the Trust to any extent whatsoever, but that the
Trust estate only shall be liable.
If the foregoing correctly sets forth the agreement
between the Trust and the Adviser, please so indicate by signing
and returning to the Trust the enclosed copy hereof.
Very truly yours,
FFB FUNDS TRUST
By: __________________________
Title:
ACCEPTED:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: ________________________
Title:
INTERIM ADVISORY CONTRACT SUPPLEMENT
FFB Funds Trust
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
December __, 1995
First Union National Bank of
North Carolina
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: FFB Equity Fund
Dear Sirs:
This will confirm the agreement between the undersigned
(the "Trust") and First Union National Bank of North Carolina
(the "Adviser") as follows:
1. The Trust is an open-end management investment company
organized as a Massachusetts business trust and consists of such
separate investment portfolios as have been or may be
established by the Trustees of the Trust from time to time. A
separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio.
FFB Equity Fund (the "Fund") is a separate investment portfolio
of the Trust.
2. The Trust and the Adviser have entered into an Interim
Master Advisory Contract (the "Interim Master Advisory
Contract") pursuant to which the Trust has employed the Adviser
to provide investment advisory and other services specified in
that contract, and the Adviser has accepted such employment.
3. As provided for in paragraph 1 of the Interim Master
Advisory Contract, the Trust hereby adopts the Interim Master
Advisory Contract with respect to the Fund, and the Adviser
hereby acknowledges that the Interim Master Advisory Contract
shall pertain to the Fund, the terms and conditions of such
Interim Master Advisory Contract being hereby incorporated
herein by reference.
4. The term "Fund" as used in the Interim Master Advisory
Contract shall for purposes of this Supplement pertain to the
Fund.
5. As provided for in paragraph 6 of the Interim Master
Advisory Contract and subject to further conditions as set forth
therein, the Trust shall with respect to the Fund pay the
Adviser a monthly fee (payable on the first business day of each
month) at the annual rate of 0.50% of the average daily value
(as determined on each business day at the time set forth in the
Prospectus for determining net asset value per share) of the net
assets of the Fund during the preceding month.
6. This Supplement and the Interim Master Advisory
Contract (together, the "Contract") shall become effective with
respect to the Fund on December __, 1995 and shall thereafter
continue in effect with respect to the Fund until the earlier of
the Closing Date defined in the Agreement and Plan of
Reorganization dated as of September 19, 1995, approved by
shareholders of the Fund or two years from the date hereof only
so long as the continuance is specifically approved at least
annually (a) by the vote of a majority of the outstanding voting
securities of the Fund (as defined in the 1940 Act), or by the
Trust's Board of Trustees and (b) by the vote, cast in person at
a meeting called for that purpose, of a majority of the Trust's
Trustees who are not parties to this Contract or "interested
persons" (as defined in the 1940 Act) of any such party. This
Supplement and the Interim Master Advisory Contract may be
terminated with respect to the Fund at any time, without the
payment of any penalty, by vote of a majority of the outstanding
voting securities of the Fund (as defined in the 1940 Act) or by
a vote of a majority of the Trust's entire Board of Trustees on
60 days' written notice to the Adviser or by the Adviser on 60
days' written notice to the Trust. This Contract shall
terminate automatically in the event of its assignment (as
defined in the 1940 Act).
If the foregoing correctly sets forth the agreement between
the Trust and the Adviser, please so indicate by signing and
returning to the Trust the enclosed copy hereof.
Very truly yours,
FFB FUNDS TRUST
By:______________________
Accepted:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By:______________________________
