EXHIBIT 5
Investment Management Agreement
INVESTMENT MANAGEMENT AGREEMENT
This Agreement, made as of this 1st day of November 1992, by
and between Sit "New Beginning" Mutual Funds, Inc., a Minnesota corporation (the
"Company"), on behalf of each portfolio represented by a series of shares of
common stock of the Company that adopts this Agreement (the "Funds") (the Funds,
together with the date each Fund adopts this Agreement, are set forth in Exhibit
A hereto, which shall be updated from time to time to reflect additions,
deletions or other changes thereto), and Sit Investment Associates, Inc., a
Minnesota corporation ("SIA").
WITNESSETH:
1. INVESTMENT MANAGEMENT SERVICES.
(a) The Company hereby engages SIA on behalf of the Funds, and SIA
hereby agrees to act, as investment adviser for, and to manage the investment of
the assets of, the Funds.
(b) The investment of the assets of each Fund shall at all times be
subject to the applicable provisions of the Articles of Incorporation, Bylaws,
Registration Statement and current Prospectus and the Statement of Additional
Information of the Company and each Fund and shall conform to the policies and
purposes of each Fund as set forth in such documents and as interpreted from
time to time by the Board of Directors of the Company. Within the framework of
the investment policies of each Fund, and except as otherwise permitted by this
Agreement, SIA shall have the sole and exclusive responsibility for the
management of each Fund's investment portfolio and for making and executing all
investment decisions for each Fund. SIA shall report to the Board of Directors
regularly at such times and in such detail as the Board may from time to time
determine appropriate, in order to permit the Board to determine the adherence
of SIA to the investment policies of the Funds.
(c) SIA shall, at its own expense, furnish all office facilities,
equipment and personnel necessary to discharge its responsibilities and duties
hereunder. SIA shall arrange, if requested by the Company, for officers or
employees of SIA to serve without compensation from any Fund as directors,
officers, or employees of the Company if duly elected to such positions by the
shareholders of the applicable Funds or directors of the Company.
(d) SIA hereby acknowledges that all records pertaining to each Fund's
investments are the property of the Company, and in the event that a transfer of
investment management services to someone other than SIA should ever occur, SIA
will promptly, and at its own cost, take all steps necessary to segregate such
records and deliver them to the Company
(e) SIA shall not be liable hereunder for any loss suffered by any Fund
in connection with the matters to which this Agreement relate, except losses
resulting from willful misfeasance, bad faith or gross negligence on the part of
SIA in the performance of its obligations and duties or by reason of its
reckless disregard of its obligations and duties under this Agreement.
(f) SIA may, at its option and at its expense, appoint a subadviser,
which shall assume all or such responsibilities and obligations of SIA pursuant
to this Agreement as shall
be delegated to the subadviser; provided, however, that any discretionary
investment decisions made by the subadviser on behalf of any Fund shall be
subject to approval or ratification by SIA, and provided further that any
appointment of a subadviser and assumption of responsibilities and obligations
of SIA by such subadviser shall be subject to approval by the Board of Directors
of the Company and, to the extent necessary, shareholders of the applicable Fund
or Funds; and provided, further, that the appointment of any subadviser shall in
no way limit or diminish SIA's obligations and responsibilities hereunder.
2. COMPENSATION FOR SERVICES.
In payment for the investment advisory and management services to be
rendered by SIA hereunder, each Fund shall pay to SIA a fee, which fee shall be
paid to SIA on a monthly basis not later than the fifth business day of the
month following the month in which said services were rendered. The fee payable
by each Fund shall be as set forth in Exhibit A hereto. The fee payable by each
Fund shall be based on the average of the net asset values of all of the issued
and outstanding shares of the Fund as determined as at the close of each
business day of the month pursuant to the Articles of Incorporation, Bylaws, and
currently effective Prospectus and Statement of Additional Information of the
Company and the Fund.
3. ALLOCATION OF EXPENSES.
The provisions governing the allocation of expenses between each Fund
and SIA shall be set forth in Exhibit A hereto..
4. FREEDOM TO DEAL WITH THIRD PARTIES.
SIA shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
5. EFFECTIVE DATE, DURATION, TERMINATION, AMENDMENT OF AGREEMENT.
(a) The effective date of this Agreement with respect to each Fund
shall be the date set forth on Exhibit A hereto, which date shall not precede
the date that this Agreement is approved by a vote of the holders of at least a
majority of the outstanding voting securities of such Fund.
(b) Unless sooner terminated as hereinafter provided, this Agreement
shall continue in effect with respect to each Fund for a period more than two
years from the date of its execution but only as long as such continuance is
specifically approved at least annually by (i) the Board of Directors of the
Company or by the vote of a majority of the outstanding voting securities of the
applicable Fund, and (ii) by the vote of a majority of the directors of the
Company who are not parties to this Agreement or "interested persons" (as
defined in the Investment Company Act of 1940, as amended) of SIA or of the
Company cast in person at a meeting called for the purpose of voting on such
approval.
(c) This Agreement may be terminated with respect to any Fund at any
time, without the payment of any penalty, by the Board of Directors of the
Company or by the vote of a majority of the outstanding voting securities of
such Fund, or by SIA, upon 60 days' written notice to the other party.
(d) This Agreement shall automatically terminate in the event of its
"assignment" (as defined in the Investment Company Act of 1940, as amended).
(e) No amendment to this Agreement shall be effective until approved by
the vote of: (i) a majority of the directors of the Company who are not parties
to this Agreement or "interested persons" (as defined in the Investment Company
Act of 1940, as amended) of SIA or of the Company cast in person at a meeting
called for the purpose of voting on such approval; and (ii) a majority of the
outstanding voting securities of the applicable Fund.
(f) Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities or shares of a Fund
shall mean the lesser of (i) the vote of 67% or more of the voting securities of
such Fund present at a regular or special meeting of shareholders duly called,
if more than 50% of the Fund's outstanding voting securities are present or
represented by proxy, or (ii) the vote of more than 50% of the outstanding
voting securities of such Fund.
6. NOTICES.
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
7. INTERPRETATION; GOVERNING LAW.
This Agreement shall be subject to and interpreted in accordance with
all applicable provisions of law including, but not limited to, the Investment
Company Act of 1940, as amended, and the rules and regulations promulgated
thereunder. To the extent that the provisions herein contained conflict with any
such applicable provisions of law, the latter shall control. The laws of the
State of Minnesota shall otherwise govern the construction, validity and effect
of this Agreement.
IN WITNESS WHEREOF, the Fund and SIA have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
SIT "NEW BEGINNING" MUTUAL FUNDS, INC.
By /S/ Xxxx X. Xxxxxx
Its Vice President and Treasurer
SIT INVESTMENT ASSOCIATES, INC.
By /S/ Xxxxxx X. Sit
Its President
EXHIBIT A
to
INVESTMENT MANAGEMENT AGREEMENT
ANNUAL MANAGEMENT FEE
FUND EFFECTIVE DATE (AS % OF AVERAGE DAILY NET ASSETS)
----------------------------- -------------- ----------------------------------
Sit International Growth Fund
(Series A) November 1, 1992 1.85% of average daily net assets (1)
Sit Balanced Fund
(Series B) December 31, 1993 1.00% of average daily net assets (1)
Sit Developing Markets Fund
(Series C) March 31, 1994 2.00% of average daily net assets (1)
Sit Small Cap Growth Fund
(Series D) March 31, 1994 1.50% of average daily net assets (1)
Sit Science and Technology
Growth Fund
(Series E) November 28, 1997 1.50% of average daily net assets (1)
Sit Regional Growth Fund
(Series F) November 28, 1997 1.25% of average daily net assets (1)
(1) Except for extraordinary expenses (as so designated by a majority of
the directors of the Company, including a majority of said directors
who are not "interested persons" of the Company or of SIA, as defined
in the Investment Company Act of 1940, as amended), interest, brokerage
commissions and other transaction charges relating to investing
activities incurred by the Company on behalf of each aforementioned
Fund, SIA shall bear all of each Fund's expenses.
IN WITNESS WHEREOF, the Company and SIA have caused this Exhibit A to
the Investment Management Agreement dated as of November 1, 1992 between the
Company and SIA to be executed as of October 21, 1997.
SIT MUTUAL FUNDS, INC.
By /s/ Xxxx X. Xxxxxxxxx
Its Vice President
SIT INVESTMENT ASSOCIATES, INC.
By /s/ Xxxxxx X. Sit
Its Chairman
