EXHIBIT 99.5
FINANCIAL INSTITUTIONS SERIES TRUST
SUMMIT CASH RESERVES FUND
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 9th day of July, 1997 by and between FINANCIAL
INSTITUTIONS SERIES TRUST, a Massachusetts business trust (hereinafter referred
to as the "Trust"), and FUND ASSET MANAGEMENT, L.P., a Delaware limited
partnership (hereinafter referred to as the "Investment Manager").
WITNESSETH:
WHEREAS, the Trust is engaged in business as a diversified open-end
investment company registered under the Investment Company Act of 1940, as
amended (hereinafter referred to as the "Investment Company Act"); and
WHEREAS, the Trust is authorized to establish separate series, each of
which will offer a separate class of shares; and
WHEREAS, the Trust has established the SUMMIT CASH RESERVES FUND (the
"Money Fund") as a series of the Trust; and
WHEREAS, the Investment Manager is engaged in business as a registered
investment adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Investment Manager is willing to provide management and
investment advisory services to the Money 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 I
DUTIES OF THE INVESTMENT MANAGER
The Trust hereby retains the Investment Manager to act as the manager and
investment adviser of the Money Fund and to furnish, or arrange for affiliates
to furnish, the investment advisory and management services described below,
subject to the supervision of the Trustees of the Trust, for the period and on
the terms and conditions set forth in this Agreement. The Investment Manager
hereby accepts such employment and agrees during such period, at its expense, to
render, or arrange for the rendering of, such services and to assume the
obligations provided for herein. The Investment Manager 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
Trust in any way or otherwise be deemed an agent of the Trust.
(a) Investment Advisory Services. The Investment Manager shall provide,
or arrange for affiliates to provide, the Trust with such investment research,
advice and supervision as the latter may from time to time consider necessary
for the proper supervision of the funds of the Money Fund. The Investment
Manager shall act as an investment adviser to the Trust and as such shall
furnish continuously an investment program and shall determine from time to time
which securities shall be purchased, sold or exchanged and what portion of the
assets of the Money Fund shall be held in the various money market securities or
cash, subject always to the restrictions of the Declaration of Trust and By-Laws
of the Trust, as amended from time to time, the provisions of the Investment
Company Act and the statements relating to the Trust's investment objectives,
investment policies and investment restrictions as the same are set forth in the
currently effective prospectus and statement of additional information relating
to the shares of beneficial interest of the Money Fund under the Securities Act
of 1933, as amended (the "Prospectus"). The Investment Manager shall also make
decisions for the Trust as to the manner in which voting rights, rights to
consent to corporate action and any other rights pertaining to the Trust's
portfolio securities shall be exercised. Should the Trustees of the Trust at
any time, however, make any definite determination as to investment policy and
notify the Investment Manager thereof in writing, the Investment Manager 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
Investment Manager shall take, on behalf of the Money 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 Money Fund's account with brokers or dealers
selected by it, and to that end, the Investment Manager is authorized as the
agent of the Trust to give instructions to the Custodian of the Money Fund as to
deliveries of securities and payments of cash for the account of the Money Fund.
In connection with the selection of such brokers or dealers and the placing of
such orders, the Investment Manager is directed at all times to conduct
portfolio transactions for the Money Fund in accordance with the policies
determined by the Board of Trustees of the Trust and set forth in the
Prospectus. Subject to this requirement and the provisions of the Investment
Company Act, the Securities Exchange Act of 1934, as amended, and other
applicable provisions of law, the Investment Manager may select brokers or
dealers with which it or the Trust is affiliated.
(b) Management Services. In addition to investment advisory services, the
Investment Manager shall perform, or supervise the performance of, management
and administrative services in connection with the management of the Money Fund
and, on behalf of the Money Fund, conduct relations with custodians,
depositories, transfer agents, dividend disbursing agents, other shareholder
service agents, accountants, attorneys, underwriters, brokers and dealers,
corporate fiduciaries, insurers, banks and such other persons in any such other
capacity deemed to be necessary or desirable. In this connection, the
Investment Manager shall provide the Money Fund with office space, equipment and
facilities and such other services as the Investment Manager shall from time to
time determine to be necessary or useful to perform its obligations under this
Agreement. The Investment Manager shall make reports to the Board of Trustees
of its performance of obligations hereunder and furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Money Fund as it shall determine to be desirable.
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ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
(a) The Investment Manager. The Investment Manager assumes and shall pay
for maintaining the staff and personnel necessary to perform its obligations
under this Agreement, and shall, at its own expense, provide the office space,
equipment and facilities which it is obligated to provide under Article I(b)
hereof, and shall pay all compensation of officers of the Trust and all trustees
of the Trust who are affiliated persons of the Investment Manager.
(b) The Trust. The Trust assumes and shall pay or cause to be paid all
other expenses of the Money Fund (except for the expenses incurred by the
Distributor), including general administrative expenses of the Trust which are
allocated among its separate series on the basis of their respective asset size.
The expenses to be paid by the Trust include, without limitation: redemption
expenses, expenses of portfolio transactions, expenses of registering shares
under Federal and state securities laws, pricing costs (including the daily
calculation of net asset value), expenses of printing shareholder reports and
prospectuses, charges of the Custodian and Transfer Agent, Securities and
Exchange Commission fees, interest, taxes, fees and actual out-of-pocket
expenses of trustees who are not affiliated persons of the Investment Manager,
fees for legal and auditing services, litigation expenses, costs of printing
proxies and other expenses related to shareholder meetings, and other expenses
properly payable by the Trust. The Distributor will pay certain of the expenses
of the Money Fund incurred in connection with the continuous offering of Money
Fund shares.
ARTICLE III
COMPENSATION OF THE INVESTMENT MANAGER
(a) Investment Management Fee. For the services rendered, the facilities
furnished and the expenses assumed by the Investment Manager, the Trust shall
pay to the Investment Manager compensation at the annual rate of 0.50 of 1.00%
(0.50%), commencing on the day following effectiveness hereof.
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily and paid monthly by applying the annual rate to the
average daily net assets of the Money Fund determined as of the close of
business each day. If this Agreement becomes effective subsequent to the first
day of a month or shall terminate before the last day of a month, compensation
for that part of the month this Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees as set forth above. Subject
to the provisions of subsection (b) hereof, payment of the Investment Manager's
compensation for the preceding month shall be made as promptly as possible after
completion of the computations contemplated by subsection (b) hereof. To the
extent the Fund invests in shares of Xxxxxxx Xxxxx Retirement Reserves Money
Fund or shares of any other registered investment company advised by the
Investment Manager or its affiliates, the Investment Manager will not be paid a
separate management fee from the Trust.
(b) Expense Limitations. In the event the operating expenses of the Money
Fund, including amounts payable to the Investment Manager pursuant to subsection
(a) hereof, for any
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fiscal year ending on a date on which this Agreement is in effect exceed the
expense limitations applicable to the Money Fund imposed by applicable state
securities laws or regulations thereunder, as such limitations may be raised or
lowered from time to time, the Investment Manager shall reduce its management
fee by the extent of such excess and, if required pursuant to any such laws or
regulations, will reimburse the Money Fund in the amount of such excess;
provided, however, to the extent permitted by law, there shall be excluded from
such expenses the amount of any interest, taxes, brokerage commissions and
extraordinary expenses (including but not limited to legal claims and
liabilities and litigation costs and any indemnification related thereto) paid
or payable by the Money Fund. Whenever the expenses of the Money Fund exceed a
pro rata portion of the applicable annual expense limitations, the estimated
amount of reimbursement under such limitations shall be applicable as an offset
against the monthly payment of the fee due to the Investment Manager. Should two
or more such expense limitations be applicable as at the end of the last
business day of the month, that expense limitation which results in the largest
reduction in the Investment Manager's fee shall be applicable.
ARTICLE IV
LIMITATION OF LIABILITY OF THE INVESTMENT MANAGER
The Investment Manager shall not be liable for any error of judgement or
mistake of law or for any loss arising out of any investment or for any act or
omission in the management of the Money Fund, 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
Article IV, the term "Investment Manager" shall include directors, officers and
employees of the Investment Manager as well as that corporation itself.
ARTICLE V
ACTIVITIES OF THE INVESTMENT MANAGER
The services of the Investment Manager to the Money Fund are not to be
deemed to be exclusive, the Investment Manager being free to render services to
others. It is understood that trustees, officers, employees and shareholders of
the Trust and Money Fund are or may become interested in the Investment Manager,
as directors, officers, employees and shareholders or otherwise and that
directors, officers, employees and shareholders of the Investment Manager are or
may become similarly interested in the Fund and Money Fund, and that the
Investment Manager may become interested in the Trust and Money Fund as
shareholder or otherwise.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date first above written
and shall remain in force until June 30, 1999 and thereafter, but only so long
as such continuance is specifically approved at least annually by (i) the Board
of Trustees of the Trust, or by the vote of a majority of the outstanding voting
securities of the Money Fund, and (ii) a majority of those Trustees who are not
interested persons of any party to this Agreement cast in person at a meeting
called for the purpose of voting on such approval.
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This Agreement may be terminated at any time, without the payment of any
penalty, by the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Money Fund, or by the Investment Manager,
on sixty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) the vote of a majority of outstanding voting
securities of the Money Fund, and (ii) a majority of those Trustees of the Trust
who are not interested persons of any party to this Agreement cast in person at
a meeting called for the purpose of voting on such approval.
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
The terms "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 in the Investment
Company Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of New York and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of New York or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE X
PERSONAL LIABILITY
The Declaration of Trust establishing Financial Institutions Series Trust,
dated July 10, 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 "Financial Institutions Series Trust"
refers to the Trustees under the Declaration collectively as Trustees, but not
as individuals or personally; and no Trustee, shareholder, officer, employee or
agent of Financial Institutions Series Trust shall be held to any personal
liability, nor shall resort be had to their private property for the
satisfaction of any obligation or claim or otherwise in connection with the
affairs of said Financial Institutions Series Trust, but the Trust Estate only
shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
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FINANCIAL INSTITUTIONS SERIES TRUST
By_________________________________
FUND ASSET MANAGEMENT, L.P.
By_________________________________
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